EXHIBIT 1.1
EXECUTION COPY
DVI, INC.
$55,000,000
9 7/8% Senior Notes due 2004
UNDERWRITING AGREEMENT
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December 16, 1998
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXXX INC.
LIBRA INVESTMENTS, INC.
FLEET SECURITIES, INC.
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
DVI, Inc., a Delaware corporation (the "Company"), hereby confirms its
agreement with the several underwriters named in Schedule 1 hereto (the
"Underwriters") for whom you have been authorized to act as representatives (in
such capacities, the "Representatives") as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.
1. Securities. Subject to the terms and conditions herein
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contained, the Company proposes to issue and sell to the several Underwriters
$55,000,000 aggregate principal amount of its 9 7/8% Senior Notes due 2004 (the
"Securities"), to be issued pursuant to an indenture dated as of January 27,
1997, (the "Indenture") between the Company and U.S. Bank Trust National
Association (formerly known as First Trust National Association), as trustee
(the "Trustee") as supplemented by a supplemental indenture (the "Supplemental
Indenture") to be dated as of December 23, 1998.
2. Registration Statement. The Company has filed with the
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Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (Registration
No. 333-50895), including a prospectus, relating to certain of its securities
(including debt securities) and the offering thereof from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended (the
"Act"). As provided in Section 6(a) hereof, a prospectus supplement reflecting
the terms of the Securities, the terms of the offering thereof and the other
matters set forth therein has been prepared and will be filed pursuant to Rule
424 under the Act. Such prospectus supplement, in the form first filed after the
date hereof pursuant to Rule 424, is herein referred to as the "Prospectus
Supplement." Such registration statement, as amended as of the date hereof,
including the exhibits thereto and the documents incorporated by reference
therein, is herein called the "Registration Statement," and the basic prospectus
included therein relating to all offerings of securities under the Registration
Statement, as supplemented by the Prospectus Supplement, is herein called the
"Prospectus," except that, if such basic Prospectus is amended or supplemented
on or prior to the date on which the Prospectus Supplement is first filed
pursuant to Rule 424, the term "Prospectus" shall refer to the basic Prospectus
as so amended or supplemented and as supplemented by the Prospectus Supplement,
in either case including the documents filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that are incorporated by reference therein. The term "Preliminary
Prospectus" shall refer to each basic prospectus or prospectus supplement which
is subject to completion.
3. Representations and Warranties of the Company. The Company
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represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) The Registration Statement has been declared effective by the
Commission and no stop order suspending the effectiveness of the
Registration Statement has been issued under the Act and no proceedings for
that purpose have been instituted or are pending or, to the knowledge of
the Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied with or
withdrawn. The Company meets the requirements for use of Form S-3 under
the Act and on the original effective date of the Registration Statement,
on the effective date of the most recent post-effective amendment thereto,
if any, and on the date of the filing by the Company of any annual report
on Form 10-K after the original filing of the Registration Statement, the
Registration Statement complied in all material respects with the
requirements of the Act and the rules and regulations of the Commission
thereunder (the "Regulations"), the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
Commission under the Trust Indenture Act (the "Trust Indenture Act
Regulations") and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; on the date hereof and at the
Closing Date (as defined below), (A) the Registration Statement and any
amendments and supplements thereto, comply and will comply in all material
respects with the requirements of the Act, the Regulations, the Trust
Indenture Act and the Trust Indenture Act Regulations, (B) neither the
Registration Statement nor any amendment or supplement thereto includes or
will include an untrue statement of a
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material fact or omits or will omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading and (C) neither any Preliminary Prospectus nor the Prospectus
nor any amendment or supplement thereto includes or will include an untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
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however, that the Company makes no representations or warranties as to
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statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter, directly or through you, expressly for use in the Registration
Statement or the Prospectus, or as to statements in the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of the Trustee filed
as an exhibit to the Registration Statement. At the Closing Date, the
Indenture will comply in all material respects with the requirements of the
Trust Indenture Act and the Trust Indenture Act Regulations.
(b) The documents incorporated by reference in the Prospectus, at the
time they were filed with the Commission, complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of
the Commission thereunder, and when read together with the other
information in the Prospectus, do not and will not, on the date hereof and
at the Closing Date, include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(c) The Company and each of its subsidiaries have been duly organized
and are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation. The Company and each of
DVI Financial Services Inc., DVI Business Credit Corporation and MSF
Holding Ltd. are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective properties
or the conduct of their respective businesses requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the condition, financial or otherwise, business, net
worth or results of operations of the Company and its subsidiaries,
considered as a whole (a "Material Adverse Effect"). The subsidiaries
listed on Schedule 2 hereto constitute all of the active subsidiaries of
the Company. All of the other subsidiaries of the Company do not actively
conduct business, have not entered into any material existing agreements
and do not have any material liabilities of any kind, and the Company does
not currently intend for any of such subsidiaries to conduct business,
enter into agreements or incur material liabilities in the future.
(d) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement and the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus; and the
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Company has full power (corporate and other) to enter into this Agreement
and to carry out all the terms and provisions hereof to be carried out by
it.
(e) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and, except as set forth on Schedule 2 hereto, are,
directly or indirectly, owned of record and beneficially by the Company
free and clear of any security interests, liens, encumbrances, equities or
claims.
(f) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus. All of the issued
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. No holder of
outstanding debt securities of the Company or any of its Subsidiaries is
entitled as such to any preemptive or other rights to subscribe for any of
the Securities, and no holder of debt securities of the Company has any
right which has not been fully exercised or waived to require the Company
to register the offer or sale of any debt securities owned by such holder
under the 1933 Act in connection with the public offering contemplated by
this Agreement. No holder of debt securities has the right to require the
Company to register such holder's debt securities under the Act in
connection with this Registration Statement.
(g) The Indenture has been qualified under the Trust Indenture Act
and, as of the Closing Date, the Indenture, as supplemented by the
Supplemental Indenture will be duly qualified under the Trust Indenture
Act. The Indenture has been duly authorized, executed and delivered by the
Company. The Supplemental Indenture has been duly authorized by the
Company and, as of the Closing Date, will have been duly executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Trustee, will be a legal, valid, binding and enforceable
instrument of the Company.
(h) The issuance, execution and delivery of the Securities have been
duly authorized by the Company and, on and as of the Closing Date, the
Securities will have been duly executed by the Company and, assuming due
authentication by the Trustee, will be the legal, valid, binding and
enforceable obligations of the Company, entitled to the benefits of the
Indenture.
(i) The statements set forth under the headings "Description of the
Notes" and "Description of Debt Securities" in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) are
complete and accurate in all material respects.
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(j) The consolidated financial statements and schedules of the Company
and its consolidated subsidiaries included or incorporated by reference in
the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) fairly present the
financial position of the Company and its consolidated subsidiaries and the
results of operations and cash flows as of the dates and periods therein
specified. Such financial statements and schedules have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
"Selected Financial Information and Other Data" in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present, on the basis stated in the Prospectus (or such Preliminary
Prospectus), the information included therein and such financial data has
been compiled on a basis consistent with the audited consolidated financial
statements included or incorporated by reference in the Registration
Statement.
(k) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included or incorporated by reference in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), are independent public accountants
as required by the Act, the Exchange Act and the related published rules
and regulations thereunder.
(l) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
(m) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
described therein (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), and, to the knowledge of the Company, no
such proceedings have been threatened against the Company or any of its
subsidiaries or with respect to any of their respective properties; and no
contract or other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) or filed as
required.
(n) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement, the Securities,
the Indenture and the Supplemental
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Indenture and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained, such as may be required under state securities
or blue sky laws or (ii) conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective properties
are bound, or the charter documents or by-laws of the Company or any of its
subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
applicable to the Company or any of its subsidiaries.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus, (i)
neither the Company nor any of its subsidiaries has sustained any material
loss or interference with their respective businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental
proceeding and (ii) there has not been any material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or otherwise), business, net worth or results of
operations of the Company or any of its subsidiaries, except in each case
as described in or contemplated by the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus.
(p) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) since the filing of the Registration Statement
(A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(q) None of the Company, its subsidiaries or any employee of the
Company or its subsidiaries has made any payment of funds of the Company or
its subsidiaries prohibited by law and no funds of the Company or its
subsidiaries have been set aside to be used for any payment prohibited by
law.
(r) The Company believes that as of December 31, 1998, it will have
sufficient cash or borrowings available (other than cash or borrowings
available as a result of the receipt of the net proceeds from the issuance
of the Securities or the application of the proceeds therefrom) to repay in
full all amounts then outstanding under its warehouse facility with
Prudential Securities Credit Corporation expiring on such date.
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(s) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
(i) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent, nor entered into
any material transaction not in the ordinary course of business; (ii) the
Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock; (iii) there has not been any material change in the
capital stock of the Company and its consolidated subsidiaries; and (iv)
there has not been any change in the short-term debt or long-term debt of
the Company or any of its consolidated subsidiaries other than in the
ordinary course of business consistent with past practice as described in
the Prospectus, except in each case described in clauses (i) through (iv)
as described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(t) Except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), (i) the Company and each of its subsidiaries have good and
marketable title in fee simple to all material real property and marketable
title to all material personal property owned by each of them, in each case
free and clear of any security interests, liens, encumbrances, equities,
claims and other defects, except such as do not materially and adversely
affect the value of such property and do not interfere with the use made or
proposed to be made of such property by the Company or such subsidiary, and
(ii) any real property and buildings held under lease by the Company or any
such subsidiary are held under valid, subsisting and enforceable leases,
with such exceptions as are not material and do not interfere with the use
made or proposed to be made of such property and buildings by the Company
or such subsidiary.
(u) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the Company's knowledge, is threatened or
imminent that could result in a Material Adverse Effect, except as
described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(v) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all patents, patent applications, trademarks, service
marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed by them in connection with
their respective businesses, or necessary in order to conduct their
respective businesses, as presently conducted, and neither the Company nor
any such subsidiary has received, or has reason to believe that it may
receive, any notice of infringement of or conflict with asserted rights of
any third party or otherwise with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect,
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except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(w) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged. Neither the Company nor any of the subsidiaries have been
refused any insurance coverage sought or applied for, which refusal has
had, or could have in the future, a Material Adverse Effect. Neither the
Company nor any subsidiary has reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not result in a Material Adverse
Effect, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(x) DVI Financial Services Inc. is not currently prohibited, directly
or indirectly, from repaying to the Company any indebtedness pursuant to
the Intercompany Note (as defined in the Prospectus), except as described
in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(y) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local
or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any subsidiary has received any
notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(z) The Company and each of its subsidiaries conduct their respective
operations in a manner that does not subject it or them to registration as
an investment company under the Investment Company Act of 1940, as amended,
and the transactions contemplated hereby will not cause the Company or any
of its subsidiaries to become an investment company subject to registration
thereunder.
(aa) The Company and each of its subsidiaries have filed all foreign,
federal, state and local tax returns that are required to be filed or have
requested extensions thereof (except in any case in which the failure so to
file would not have a Material Adverse Effect) and have paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently being
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contested in good faith or as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(bb) Neither the Company nor any of its subsidiaries is in violation
of any federal, state or foreign law or regulation relating to occupational
safety and health or to the storage, handling or transportation of
hazardous or toxic materials and the Company and its subsidiaries have
received all permits, licenses or other approvals required of them under
applicable federal, state and foreign occupational safety and health and
environmental laws and regulations to conduct their respective businesses,
and the Company and each of its subsidiaries is in compliance with all
terms and conditions of any such permit, license or approval, except any
such violation of law or regulation, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals which would not, singly
or in the aggregate, result in a Material Adverse Effect, except as
described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(cc) Except for the shares of capital stock of the subsidiaries owned
by either the Company or another subsidiary and the equity interests set
forth on Schedule 2, neither the Company nor any such subsidiary owns any
shares of stock or other equity securities of any corporation or any equity
interest in any firm, partnership, association or other entity, except as
described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(dd) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(ee) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default, in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective properties is
bound or may be affected in any respect that could have a Materially
Adverse Effect.
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(ff) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, or if the
Prospectus is not in existence, the most recent Preliminary Prospectus,
there has not been any downgrading in the ratings of any of the Company's
debt securities or preferred stock or any of the debt securities of any of
its subsidiaries or affiliates, including, without limitation any of the
Company's securitized debt securities or any action threatening such a
downgrading or placing the Company or any of its subsidiaries or affiliates
under special surveillance by any "nationally recognized rating agency" (as
defined in Rule 436 (g) under the Act); nor does the Company have any
knowledge of any facts or circumstances that are likely to cause such
downgrading, threatened downgrading or the placing of the Company or any of
its subsidiaries or affiliates under such surveillance.
(gg) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty as of the date of such
certificate by the Company to each Underwriter as to the matters covered
thereby.
4. Purchase, Sale and Delivery of the Securities. (a) On the basis
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of the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
1 hereto at an aggregate purchase price of $51,144,113, plus accrued interest,
if any, from December 23, 1998 to the date of delivery of the Securities. One
or more certificates in definitive form for the Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Underwriters request
upon notice to the Company at least 48 hours prior to the Closing Date, shall be
delivered by or on behalf of the Company to the Underwriters, against payment by
or on behalf of the Underwriters of the purchase price therefor by wire
transfer. Such delivery of and payment for the Securities shall be made at the
offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
at 9:30 a.m., New York time, on December 23, 1998, or at such other place, time
or date as the Underwriters and the Company may agree upon or as the
Underwriters may determine pursuant to Section 9 hereof, such time and date of
delivery against payment being herein referred to as the "Closing Date." The
Company will make such certificate or certificates for the Securities available
for checking and packaging by the Underwriters at the offices in New York, New
York of the Trustee or of Prudential Securities Incorporated at least 24 hours
prior to the Closing Date.
(b) It is understood that you, individually and not as one of the
Underwriters, may (but shall not be obligated to) make payment on behalf of any
Underwriter or Underwriters for any of the Securities to be purchased by such
Underwriter or Underwriters. No such payment shall relieve such Underwriter or
Underwriters from any of its or their obligations hereunder.
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5. Offering by the Underwriters. Upon your authorization of the
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release of the Securities, the several Underwriters shall offer the Securities
for sale to the public upon the terms set forth in the Prospectus.
6. Covenants of the Company. The Company covenants and agrees with
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each of the Underwriters that:
(a) Immediately following the execution of this Agreement, the Company
will prepare a Prospectus Supplement that complies with the Act and the
Regulations and that sets forth the principal amount of the Securities and
their material terms, the name of each Underwriter participating in the
offering and the principal amount of the Securities that each severally has
agreed to purchase, the price at which the Securities are to be purchased
by the Underwriters from the Company, any initial public offering price,
any selling concession and reallowance and any delayed delivery
arrangements, and such other information as you and the Company deem
appropriate in connection with the offering of the Securities. The Company
will promptly transmit copies of the Prospectus Supplement to the
Commission for filing pursuant to Rule 424 under the Act and will furnish
to the Underwriters as many copies of any Preliminary Prospectus and the
Prospectus as you shall reasonably request. The copies of any Preliminary
Prospectus and Prospectus Supplement furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(b) During the period when the Prospectus is required by the Act to
be delivered in connection with the sale of the Securities, the Company
will, subject to Section 6(c) hereof, file promptly all documents required
to be filed with the Commission pursuant to Section 13 or 14 of the
Exchange Act.
(c) During the period when the Prospectus is required by the Act to
be delivered in connection with the sale of the Securities, the Company
will inform you of its intention to file any amendment to the Registration
Statement, any supplement to the Prospectus or any document that would as a
result thereof be incorporated by reference in the Prospectus; will furnish
you with copies of any such amendment, supplement or other document a
reasonable time in advance of filing and will not file any such amendment,
supplement or other document in a form to which you shall reasonably
object.
(d) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or any order
directed at any document incorporated by reference in the Registration
Statement or the Prospectus or any amendment or supplement thereto or any
order preventing or suspending the use of any Preliminary Prospectus or the
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Prospectus or any amendment or supplement thereto, (ii) the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission
for amending the Registration Statement, for amending or supplementing any
Preliminary Prospectus or the Prospectus or for additional information.
The Company will use commercially reasonable efforts to prevent the
issuance of any such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.
(e) The Company will use its best efforts to arrange for the
qualification of the Securities for offering and sale under the securities
or blue sky laws of such jurisdictions as the Underwriters may designate
and to continue such qualifications in effect for as long as may be
necessary to complete the distribution of the Securities, provided,
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however, that in connection therewith the Company shall not be required to
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qualify as a foreign corporation or to execute a general consent to service
of process in any jurisdiction.
(f) If, at any time prior to the later of (i) the final date when a
Prospectus relating to the Securities is required to be delivered under the
Act or (ii) the Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other reason it
is necessary at any time to amend or supplement the Prospectus to comply
with the Act, the Exchange Act or the Trust Indenture Act or the respective
rules or regulations of the Commission thereunder, the Company will
promptly notify the Underwriters thereof and, subject to Section 6(a)
hereof, will prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission or
effects such compliance.
(g) The Company will, without charge, provide (i) to the Underwriters
and to counsel for the Underwriters a signed copy of the registration
statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto), (ii) to each
other Underwriter a conformed copy of such registration statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long
as a Prospectus relating to the Securities is required to be delivered
under the Act, as many copies of each Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto as the Underwriters may
reasonably request; without limiting the application of clause (iii) of
this sentence, the Company, not later than 6:00 PM, New York City time, on
the business day following the date of determination of the public offering
price, will deliver to the Underwriters, without charge, as many copies of
the Prospectus and any amendment or supplement thereto as the Underwriters
12
may reasonably request for purposes of confirming orders that are expected
to settle on the Closing Date.
(h) The Company, as soon as practicable, will make generally available
to its security holders and to the Underwriters a consolidated earnings
statement of the Company and its subsidiaries that satisfies the provisions
of Section 11(a) of the Act and Rule 158 thereunder.
(i) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(j) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, grant any
option to purchase or otherwise transfer or dispose (or announce any offer,
transfer, offer of sale, contract of sale, grant of any option to purchase
or other sale or disposition) of any debt securities of the Company that
are substantially similar to the Securities during the period commencing on
the date hereof and terminating on the earlier of (a) the Closing Date and
(b) the date of notice to the Company by the Underwriters of the
termination of trading restrictions with respect to the Securities, except
pursuant to this Agreement.
(k) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) (A) sell (except pursuant to this Agreement), bid
for, purchase, or pay anyone any compensation for soliciting purchases of,
the Securities or (B) pay or agree to pay to any person any compensation
for soliciting another to purchase any other securities of the Company.
7. Expenses.
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The Company will pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 12 hereof, including all costs and expenses
incident to (a) the printing or other production of documents with respect
to the transactions, including any costs of printing the registration
statement originally filed with respect to the Securities and any amendment
thereto, any Preliminary Prospectus and the Prospectus and any amendment or
supplement thereto, the Indenture, the Supplemental Indenture, this
Agreement and any blue sky memoranda, (b) all arrangements relating to the
delivery to the Underwriters of copies of the foregoing documents, (c) the
fees and disbursements of the counsel, the accountants and any other
experts or advisors retained by the Company, (d) preparation, issuance and
delivery to the Underwriters of any certificates evidencing the
13
Securities, including transfer agent's and registrar's fees, (e) the
qualification of the Securities under state securities and blue sky laws,
including filing fees and reasonable fees and disbursements of counsel for
the Underwriters relating thereto, (f) the fees and disbursements of the
Trustee, (g) the filing fees of the Commission and the National Association
of Securities Dealers, Inc. relating to the Securities, (h) any meetings
with prospective investors in the Securities (other than as shall have been
specifically approved by the Underwriters to be paid for by the
Underwriters), (i) any fees charged by investment rating agencies for the
rating of Securities and (j) the fees associated with any listing of the
Securities on any securities exchange. If the sale of the Securities
provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 8 hereof is not
satisfied, because this Agreement is terminated pursuant to Section
12(a)(i) hereof or because of any failure, refusal or inability on the part
of the Company to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses
(including fees and disbursements of counsel) that shall have been incurred
by them in connection with the proposed purchase and sale of the
Securities. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions
covered by this Agreement.
8. Conditions of the Underwriters' Obligations. The obligations of
-------------------------------------------
the several Underwriters to purchase and pay for the Securities shall be
subject, in the Underwriters' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Closing Date, as if made on and as of the Closing Date, to
the accuracy of the statements of the Company's officers made pursuant to the
provisions hereof, to the performance by the Company of its covenants and
agreements hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no order directed at any
document incorporated by reference in the Registration Statement shall have been
issued, and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company or the Underwriters, shall be
contemplated by the Commission; and the Company shall have complied with any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise).
(b) The Underwriters shall have received an opinion, dated the Closing
Date, of Xxxxxx & Xxxxx, counsel for the Company, to the effect that:
(i) the Company and each of its subsidiaries (other than non-U.S.
subsidiaries) listed in Schedule 2 hereto (the "Subsidiaries") have been
duly
14
incorporated and are validly existing in good standing under the laws of
their respective jurisdictions of incorporation;
(ii) the Company and each of DVI Financial Services Inc. and DVI
Business Credit Corporation are duly qualified to transact business as
foreign corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective properties
or the conduct of their respective businesses requires such qualification,
except where the failure to be so qualified does not amount to a material
liability or disability to the Company and each of such subsidiaries, taken
as a whole;
(iii) the Company and each of DVI Financial Services Inc. and DVI
Business Credit Corporation have corporate power to own or lease their
respective properties and conduct their respective businesses as described
in the Registration Statement and the Prospectus, and the Company has
corporate power to enter into this Agreement, the Indenture and the
Supplemental Indenture and to carry out all the terms and provisions hereof
and thereof to be carried out by it;
(iv) the issued shares of capital stock of each of DVI Financial
Services Inc. and DVI Business Credit Corporation have been duly authorized
and validly issued, are fully paid and nonassessable and, to the best
knowledge of such counsel, are owned of record, directly or indirectly, by
the Company free and clear of any perfected security interests;
(v) the execution and delivery of the Indenture and the Supplemental
Indenture have been duly authorized by all necessary corporate action of
the Company, and the Indenture and the Supplemental Indenture have been
duly executed and delivered by the Company, and the Indenture, as
supplemented by the Supplemental Indenture, has been duly qualified under
the Trust Indenture Act, and, assuming due authorization, execution and
delivery by the Trustee, is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law);
(vi) the issuance, offering and sale of the Securities by the Company
to the Underwriters pursuant to this Agreement have been duly authorized by
all necessary corporate action of the Company and the Securities have been
duly issued, executed and delivered by the Company and, assuming due
authentication by the Trustee in the manner provided in the Indenture, when
paid for as provided in this Agreement, will be the valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, and entitled to the benefits of the Indenture, as
supplemented by the Supplemental Indenture, subject to applicable
bankruptcy,
15
insolvency and similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law);
(vii) as of the dates shown the Company has an authorized
capitalization as set forth under the heading "Capitalization" in the
Prospectus;
(viii) the statements set forth under the headings "Description of
the Notes" and "Description of Debt Securities" in the Prospectus, insofar
as such statements constitute a summary of certain provisions of the
Indenture, the Supplemental Indenture or the Securities, provide in all
material respects a fair summary of such provisions;
(ix) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(x) to such counsel's best knowledge (A) no legal or governmental
proceedings are pending to which the Company or any of the Subsidiaries is
a party or to which the property of the Company or any of the Subsidiaries
is subject that are required to be described in the Registration Statement
or the Prospectus and are not described therein, and no such proceedings
have been threatened against the Company or any of the Subsidiaries or with
respect to any of their respective properties and (B) no contract or other
document is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement that
is not described therein or filed as required;
(xi) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement, the Securities and
the Indenture and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained and such as may be required under state
securities or blue sky laws, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, lease or other agreement or
instrument specifically described in the Registration Statement or any
material contract or agreement listed on a schedule to such opinion and to
which the Company or any of the Subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the Company or
any of the Subsidiaries, or to such counsel's best knowledge any statute or
any judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator specifically naming the Company or
any of the Subsidiaries or any rule or regulation of any governmental
authority and applicable to the Company or any of the Subsidiaries;
16
(xii) the Registration Statement is effective under the Act; the
required filing of the Prospectus, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to such
counsel's best knowledge, no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to such
counsel's best knowledge, are contemplated by the Commission;
(xiii) the Registration Statement originally filed, Pre-Effective
Amendment No. 1 thereto and the Prospectus and each document incorporated
by reference therein (in each case, other than the financial statements,
schedules and any other financial, economic or statistical data contained
or incorporated by reference therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act and
the respective rules and regulations of the Commission thereunder;
(xiv) pursuant to Section 3 (c) (5) of the Investment Company Act of
1940, as amended (the "1940 Act"), and based on no-action letters issued by
the staff of the Commission with respect to Sections 3 (c) (5) (A) or (B)
of the 1940 Act, the Company is not, and the transactions contemplated by
this Agreement will not cause the Company to become an investment company
subject to registrations thereunder; and
(xv) to such counsel's best knowledge, DVI Financial Services Inc. is
not currently prohibited, directly or indirectly, from repaying to the
Company any indebtedness pursuant to the Intercompany Note (as defined in
the Prospectus), except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xvi) the statements made in the Prospectus under the caption
"Certain U.S. Federal Income Tax Consequences", to the extent that they
constitute a summary of the United States federal tax laws referred to
therein, are accurate in all material respects and fairly summarize in all
material respects the United States federal tax laws referred to therein.
Such counsel shall also state that they have no reason to believe that
the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of its date or the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. Counsel may state
that this belief is based upon its participation in the preparation of the
Registration Statement and the Prospectus and its review and discussion of the
contents thereof but is without independent investigation or verification.
17
Such counsel need not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectus, except to the limited extent stated in paragraphs
(viii) and (xvi) above. In addition, such counsel need not express any opinion
or belief as to the financial statements or schedules or any other financial,
economic or statistical data contained in the Registration Statement or the
Prospectus.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials. Such counsel may state that as to
matters on which its opinion is expressed to its "best knowledge" such counsel
is responsible for knowledge of only those facts (i) set forth in certificates
of responsible officers of the Company, (ii) described in the Registration
Statement or (iii) within the actual knowledge of those attorneys in such
counsel's firm that have performed services for the Company in connection with
the transactions contemplated by this Agreement.
Such counsel may state that its opinions are limited to matters of
United States federal law, the laws of the state of New York and Delaware
corporate law and that its references in its opinions to governmental
authorities are to federal and New York authorities. References to the
Registration Statement and the Prospectus in this paragraph (b) shall include
any amendment or supplement thereto at the date of such opinion.
(c) The Underwriters shall have received an opinion, dated the Closing
Date, of Xxxxxx X. Xxxxxx, General Counsel of the Company and of DVI Financial
Services Inc., to the effect that:
(i) to such counsel's best knowledge (A) no legal or governmental
proceedings are pending to which the Company or any of its subsidiaries is
a party or to which the property of the Company or any of its subsidiaries
is subject that are required to be described in the Registration Statement
or the Prospectus and are not described therein, and no such proceedings
have been threatened against the Company or any of its subsidiaries or with
respect to any of their respective properties and (B) no contract or other
document is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement that
is not described therein or filed as required;
(ii) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement, the Securities and
the Indenture and the consummation of the other transactions herein
contemplated do not conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, lease or other agreement or instrument,
known to such counsel, to which the Company or any of its subsidiaries is a
18
party or by which the Company or any of its subsidiaries or any of their
respective properties are bound, or the charter documents or by-laws of the
Company or any of its subsidiaries, or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority or
any arbitrator and specifically naming the Company or any of its
subsidiaries or any rule or regulation of any governmental authority and
applicable to the Company or any of its subsidiaries; and
(iii) to the best of such counsel's knowledge (A) no default exists,
and (B) no event has occurred which, with notice or lapse of time or both,
would constitute a default, in the due performance and observance of any
term, covenant or condition of any indenture, mortgage, deed of trust,
lease or other agreement or instrument, known to such counsel, to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries or any of their respective properties is bound or
may be affected which would have a Material Adverse Effect.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials. Such counsel may also state that,
wherever such counsel's opinion with respect to the existence or absence of
facts is stated to be "to the best of such counsel's knowledge" or "known to
such counsel", such statements are intended to signify that, during the course
of such counsel's representation of the Company, no information has come to the
attention of such counsel which gives such counsel actual knowledge of facts
contrary to the existence or absence of the facts indicated.
Such counsel may state that his opinions are limited to matters of
United States federal law, the laws of the state of Pennsylvania and Delaware
corporate law and that its references in its opinions to governmental
authorities are to federal and Pennsylvania authorities. References to the
Registration Statement and the Prospectus in this paragraph (c) shall include
any amendment or supplement thereto at the date of such opinion.
(d) The Underwriters shall have received an opinion, dated the Closing
Date, of Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, with respect to the
issuance and sale of the Securities, the Registration Statement and the
Prospectus, and such other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters. In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials to the extent satisfactory in form
and scope to such counsel.
References to the Registration Statement and the Prospectus in this
paragraph (d) shall include any amendment or supplement thereto at the date of
such opinion.
19
(e) The Underwriters shall have received from Deloitte & Touche LLP a
letter or letters dated, respectively, the date hereof and the Closing Date, in
form and substance satisfactory to the Underwriters.
(f) The Underwriters shall have received a certificate, dated the
Closing Date, of the principal executive officer and the principal financial or
accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Closing Date,
the Registration Statement, as amended as of the Closing Date, does not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading, and
the Prospectus, as amended or supplemented as of the Closing Date, does not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
the Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued, and no proceedings for
that purpose have been instituted or threatened or, to the best of the
Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries have sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, and there has not been any material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or otherwise), management, business prospects, net
worth or results of operations of the Company or any of its subsidiaries,
except in each case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto).
(g) On or before the Closing Date, the Underwriters and counsel for
the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Underwriters and counsel
for the Underwriters. The Company shall furnish to the Underwriters such
conformed copies of such opinions, certificates, letters and
20
documents in such quantities as the Underwriters and counsel for the
Underwriters shall reasonably request.
9. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter or such controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company in Section 3 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Securities under the securities or
blue sky laws thereof or filed with the Commission or any securities
association or securities exchange (each an "Application") or
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
-------- -------
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; provided, further,
that the Company will not be liable to any Underwriter or any person controlling
such Underwriter with respect to any such untrue statement or omission made in
any Preliminary Prospectus that is corrected in the Prospectus (or any amendment
or supplement thereof) if the person asserting any such loss, claim, damage or
liability purchased Securities from such Underwriter but was not sent or given a
copy of the Prospectus (as amended or
21
supplemented), other than the documents incorporated by reference therein, at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act. This indemnity agreement will be in addition to any
liability which the Company may otherwise have. The Company will not, without
the prior written consent of the Underwriter or Underwriters purchasing, in the
aggregate, more than fifty percent (50%) of the Securities, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not any such Underwriter or any person who controls any
such Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of all
of the Underwriters and such controlling persons from all liability arising out
of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company, any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or alleged omission to state therein a material
fact required to be stated in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 9. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
22
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
-------- -------
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 9 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Underwriters in the case of
paragraph (a) of this Section 9, representing the indemnified parties under such
paragraph (a) who are parties to such action or actions), (ii) the indemnifying
party does not promptly retain counsel satisfactory to the indemnified party or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), 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 proceeds
23
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault of the parties 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 the Underwriters, the parties' relative
intents, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances. The Company and the Underwriters agree that it would not
be equitable if the amount of such contribution were determined by pro rata or
per capita allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take into
account the equitable considerations referred to above in this paragraph (d).
Notwithstanding any other provision of this paragraph (d), no Underwriter shall
be obligated to make contributions hereunder that in the aggregate exceed the
total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company.
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of this Section 9, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 9
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement and Prospectus as required by the Act. The
parties are advised that federal or state policy, as interpreted by the courts
in certain jurisdictions, may be contrary to certain provisions of this Section
9, and the parties hereto hereby expressly waive and relinquish any right or
ability to assert such public policy as a defense to a claim under this Section
9 and further agree not to attempt to assert any such defense.
10. Default of Underwriters. If one or more Underwriters default in
-----------------------
their obligations to purchase Securities hereunder and the aggregate principal
amount of such Securities that such defaulting Underwriter or Underwriters agree
but failed to purchase is ten
24
percent or less of the aggregate principal amount of Securities to be purchased
by all of the Underwriters at such time hereunder, the other Underwriters may
make arrangements satisfactory to the Underwriters for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Underwriters), but if no such arrangements are made
by the Closing Date, the other Underwriters shall be obligated severally in
proportion to their respective commitments hereunder to purchase the Securities
that such defaulting Underwriter or Underwriters agreed but failed to purchase.
If one or more Underwriters so default with respect to an aggregate principal
amount of Securities that is more than ten percent of the aggregate principal
amount of Securities to be purchased by all of the Underwriters at such time
hereunder, and if arrangements satisfactory to the Underwriters are not made
within 36 hours after such default for the purchase by other persons (who may
include one or more of the non-defaulting Underwriters, including the
Underwriters), of the Securities with respect to which such default occurs, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or the Company other than as provided in Section 11 hereof. In the
event of any default by one or more Underwriters as described in this Section
10, the Underwriters shall have the right to postpone the Closing Date
established as provided in Section 4 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Securities. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10. Nothing herein shall relieve any defaulting
Underwriter from liability for its default.
11. Survival. The respective representations, warranties,
--------
agreements, covenants, indemnities and other statements of the Company, its
officers, and the several Underwriters set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, any Underwriter or any
controlling person referred to in Section 9 hereof and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 6 and 9 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
12. Termination. (a) This agreement may be terminated with respect
-----------
to the securities in the sole discretion of the Representatives by notice to the
Company given prior to the Closing Date, in the event that the Company shall
have failed, refused or been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Closing Date,
(i) the Company or any of its subsidiaries shall have, in the sole
judgment of the Underwriters, sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any labor dispute or any legal or governmental proceeding or there shall
have been any material adverse change, or any development
25
involving a prospective material adverse change (including without
limitation a change in management or control of the Company), in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto) which makes it impracticable or
inadvisable to proceed with the completion of the offering of the
Securities;
(ii) trading in the Company's Common Stock shall have been suspended
by the Commission or the New York Stock Exchange or trading in securities
generally on the New York Stock Exchange or Nasdaq National Market shall
have been suspended or minimum or maximum prices shall have been
established on either such exchange or market system;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or material
adverse change in general economic, political or financial conditions
having an effect on the financial markets or the market for the Securities
that, in the sole judgment of the Underwriters, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended as of
the date hereof.
(b) Termination of this Agreement pursuant to this Section 12 shall be
without liability of any party to any other party except as provided in Section
11 hereof.
13. Information Supplied by Underwriters. The statements under the
------------------------------------
heading "Underwriting" in the Preliminary Prospectus or the Prospectus (to the
extent such statements relate to the Underwriters) constitute the only
information furnished by any Underwriter to the Company for the purposes of
Sections 3(a) and 9 hereof. The Underwriters confirm that such statements (to
such extent) are correct.
14. Notices. All communications hereunder shall be in writing and,
-------
if sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: High
Yield Securities Department; and if sent to the Company, shall be delivered or
sent by mail, telex or facsimile transmission and confirmed in writing to the
Company at DVI, Inc., 000 Xxxx Xxxx, Xxxxxxxxxx, XX 00000, Attention: Chief
Financial Officer (facsimile number (000) 000-0000), with a copy to Xxxxxx &
Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention: Xxxx X. Xxxxx
(facsimile number (000) 000-0000).
26
15. Successors. This Agreement shall inure to the benefit of and
----------
shall be binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 9 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Underwriters contained in Section 9 of this
Agreement shall also be for the benefit of the directors of the Company, the
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. No purchaser of Securities from any
Underwriter shall be deemed a successor because of such purchase.
16. Applicable Law. The validity and interpretation of this
--------------
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
17. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
27
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and each
of the several Underwriters.
Very truly yours,
DVI, INC.
/s/ Xxxxxx X. Xxxxxxxxx
By: ___________________________________
Name:
Title: Executive Vice President and
Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXXX INC.
LIBRA INVESTMENTS, INC.
FLEET SECURITIES, INC.
By: PRUDENTIAL SECURITIES INCORPORATED
/s/ Xxxxxx Xxxxxxxx
By: ___________________________________
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
For itself and on behalf of the
Underwriters
SCHEDULE 1
UNDERWRITERS
Underwriter Principal Xxxxxx
----------- ----------------
Prudential Securities Incorporated.............. $46,750,000
Xxxxx Xxxxxxx Inc............................... 2,750,000
Libra Investments, Inc.......................... 2,750,000
Fleet Securities, Inc........................... 2,750,000
-----------
Total........................................... $55,000.000
===========
