AMERITRANS CAPITAL CORPORATION
325,000 Units(1)
UNDERWRITING AGREEMENT
December ____, 2001
NOBLE INTERNATIONAL INVESTMENTS, INC.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Ladies and Gentlemen:
Ameritrans Capital Corporation, a Delaware corporation (the "Company"),
hereby confirms its agreement (the "Agreement") with the several underwriters
named in Schedule I hereto (the "Underwriters"), for whom you have been duly
authorized to act as representative (in such capacity, the "Representative"), as
set forth below. If you are the only Underwriter, all references herein to the
Representative shall be deemed to be to the Underwriters. Capitalized terms used
in this Agreement without definition have the meanings specified in the
Prospectus (as hereinafter defined).
1. Securities.
(a) Subject to the terms and conditions herein contained, the Company
proposes to issue and sell to the several Underwriters, on a firm
commitment basis, an aggregate of 325,000 units (each a "Unit",
collectively, the "Firm Securities), each Unit" consisting of (i) one share
of common stock, par value $.0001 per share, of the Company (the "Common
Stock"); (ii) one share of 9.375% cumulative participating redeemable
preferred stock of the Company, face value $12.00 per share, (the
"Preferred Stock"(2)); and (iii) one redeemable warrant of the Company,
exercisable into one share of Common Stock ("Warrant"(2)). The Company also
proposes to issue and sell to the several Underwriters not more than 48,750
additional Units if requested by the Representative as provided in Section
3 of this Agreement. Any and all Units to be purchased by the Underwriters
pursuant to such option are referred to herein as the "Option Securities",
and the Firm Securities and any Option Securities are collectively referred
to herein as the "Securities".
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(1) Plus an option to purchase from Ameritrans Capital Corporation up to 48,750
additional Units to cover over-allotments.
(2) The rights, preferences and privileges of the Preferred Stock are as set
forth in the Certificate of Designations attached hereto as Exhibit A, and
the terms of the Warrant shall be as set forth in the Warrant Agreement
attached hereto as Exhibit B.
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(b) Additionally, subject to the approval of the Securities and
Exchange Commission (the "SEC"), the Company has granted a right to the
Representative or its nominee to receive on the Firm Closing Date (as
defined in Section 2(a) below) a unit purchase option (the "Unit Purchase
Option"(3)) to purchase up to 32,500 Units, upon exercise of the Unit
Purchase Option in accordance with the terms of such option.
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the several Underwriters that:
(a) A registration statement on Form N-2 (File No. 333-______) with
respect to the Securities, including a prospectus subject to completion has
been prepared in conformity in all material respects with the requirements
of the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Act Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and the Investment
Company Act of 1940, as amended (the "Investment Company Act" and, together
with the Act, the "Acts"), and the rules and regulations thereunder (the
"Investment Company Act Rules and Regulations" and, together with the Act
Rules and Regulations, the "Rules and Regulations"); such registration
statement has been filed with the Commission under the Act, and one or more
amendments to such registration statement may have been so filed. After the
execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has
been declared by the Commission to be effective under the Act, either (A)
if the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify the
Preliminary Prospectus (as hereinafter defined) that it supplements
containing such information as is required or permitted by Rules 434, 430A
and 497 under the Act or (B) if the Company does not rely on Rule 434 under
the Act, a prospectus in the form most recently included in an amendment to
such registration statement (or, if no such amendment shall have been
filed, in such registration statement), with such changes or insertions as
are required by Rule 430A under the Act or permitted by Rule 497 under the
Act, and in the case of either clause (i)(A) or (i)(B) of this sentence as
have been provided to and approved by the Representative prior to the
execution of this Agreement, or (ii) if such registration statement, as it
may have been amended, has not been declared by the Commission to be
effective under the Act, an amendment to such registration statement,
including a form of prospectus, a copy of which amendment has been
furnished to and approved by the Representative prior to the execution of
this Agreement. The Company may also file a related registration statement
with the Commission pursuant to Rule 462(b) under the Act for the purpose
of registering certain additional Securities, which registration shall be
effective upon filing with the Commission. As used in this Agreement, the
term "Original Registration Statement" means the registration statement
initially filed relating to the Securities, as amended at the time when it
was or is declared effective, including all financial schedules and
exhibits thereto and including any information omitted therefrom pursuant
to Rule 430A under the Act and included in the Prospectus (as hereinafter
defined); the term "Rule 462(b) Registration Statement" means any
registration statement filed with the Commission pursuant to Rule 462(b)
under the Act (including the Original Registration Statement and any
Preliminary Prospectus or Prospectus
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(3) The terms of the Unit Purchase Option shall be as set forth in the form of
Unit Purchase Option attached hereto as Exhibit C.
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incorporated therein at the time such Original Registration Statement
becomes effective); the term "Registration Statement" includes both the
Original Registration Statement and any Rule 462(b) Registration Statement;
the term "Preliminary Prospectus" means each prospectus subject to
completion filed with such Registration Statement or any amendment thereto
(including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective); the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
497(h)(2) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule
497(b), (c) or (h)(1) under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 497 under the
Act, the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the
requirements of Rule 434 under the Act. Any reference herein to the "date"
of a Prospectus that includes a Term Sheet shall mean the date of such Term
Sheet.
(b) Neither the Commission nor any state regulatory authority has
issued or, to the Company's knowledge, threatened to issue any order
preventing or suspending use of any Preliminary Prospectus. When any
Preliminary Prospectus was filed with the Commission it (i) contained all
statements required to be stated therein in accordance with, and complied
in all material respects with the requirements of, the Act and the Rules
and Regulations and (ii) did 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. When the Registration Statement or any amendment
thereto was or is declared effective and at all times subsequent thereto up
to and including the Closing Dates (as defined in Section 3(b) hereof), it
(i) contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material respects
with the requirements of, the Act and the Rules and Regulations and (ii)
did not or will not include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading. When the Prospectus or any Term Sheet that is a part thereof or
any amendment or supplement to the Prospectus is filed with the Commission
pursuant to Rule 497 (or, if the Prospectus or part thereof or such
amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective) and on the
Firm Closing Date and any Option Closing Date (both as hereinafter
defined), the Prospectus, as amended or supplemented at any such time, (i)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with
the requirements of, the Act and the Rules and Regulations and (ii) did not
or will not include any untrue statement of a material fact or omit to
state any material fact necessary in order to
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make the statements therein, in the light of the circumstances under which
they were made, not misleading. The foregoing provisions of this paragraph
(b) do not apply to statements or omissions made in any Preliminary
Prospectus, the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Representative specifically for use therein. There
is no franchise, lease, contract, agreement or other document required to
be described in the Registration Statement or Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed
therein as required and the exhibits that have been filed are complete and
correct copies of the documents of which they purport to be copies; and all
descriptions of any such franchises, leases, contracts, agreements or other
documents contained in the Registration Statement are accurate and complete
descriptions of such documents in all material respects and fairly present
the information required to be shown with respect thereto by Form N-2 under
the Acts.
(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective (i) the
Company has filed a Rule 462(b) Registration Statement in compliance with
and that is effective upon filing pursuant to Rule 462(b) and has received
confirmation of its receipt and (ii) the Company has given irrevocable
instructions for transmission of the applicable filing fee in connection
with the filing of the Rule 462(b) Registration Statement, in compliance
with Rule 111 promulgated under the Act or the Commission has received
payment of such filing fee.
(d) 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 and 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
its subsidiaries, taken as a whole.
(e) The Company and each of its subsidiaries (i) have full power
(corporate and other) to own or lease their respective properties and
conduct their respective businesses; (ii) are in compliance with, 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) in conformity with, all applicable
federal, state, local and foreign laws, rules and regulations of any court
or governmental agency or body except non-compliance which would not result
in a Material Adverse Effect (as defined in Section 2(m) below); (iii) have
no knowledge, other than as set forth in the Registration Statement and the
Prospectus, of any prospective change in any of such federal, state, local
or foreign laws, rules or regulations which, when made effective, would
have a Material Adverse Effect; and (iv) the Company has full power
(corporate and other) to enter into this Agreement, to perform its
obligations hereunder (including to issue, sell and deliver the
Securities), and carry out all the terms and provisions hereof to be
carried out by it. The Company and each of its subsidiaries are in
possession of and operating in compliance in all material respects with all
franchises, grants, registrations, qualifications, authorizations,
licenses, permits, easements, consents, certificates and orders required
for the conduct of their respective businesses as now being conducted and
as
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described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), or
for the ownership, leasing and operation of their respective properties,
all of which are valid and in full force and effect and no such franchise,
grant, registration, consent, certificate or order contains a materially
burdensome restriction not adequately disclosed in the Registration
Statement or the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(f) 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 otherwise set forth in the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus), are owned beneficially by the Company free and clear of any
security interests, liens, encumbrances, equities or claims.
(g) 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. The Firm Securities
and the Option Securities to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and nonassessable, free of any
preemptive or similar rights and will conform to the description thereof in
the Prospectus, and good and marketable title to the Securities will pass
to the Underwriters on the Closing Dates free and clear of any lien,
encumbrance, security interest, claim or restriction whatsoever except for
(a) those restrictions imposed under the Company's credit agreements filed
as exhibits to the Registration Statement and (b) those restrictions
imposed generally under the Investment Company Act, the Investment Company
Act Rules and Regulations, the Small Business Investment Act of 1958, as
amended (the "1958 Act") and the Regulations of the Small Business
Administration ("SBA"). No holder of 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 securities owned by such holder under
the Act in the public offering contemplated by this Agreement.
(h) The capital stock of the Company conforms to the description
thereof contained in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(i) Except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any such
capital stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company or any such subsidiary to
issue any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(j) The audited consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Registration
Statement and the
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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
changes in financial condition 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 summary consolidated financial data and selected financial
data set forth under the captions "Summary Consolidated Financial Data" and
"Selected Financial Information," respectively, 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 have been prepared in
conformity with the requirements of the Acts and the Rules and Regulations.
(k) Xxxxxx & Xxxxxxxx LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
its report with respect to the audited consolidated financial statements
and schedules included 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 and
the Act Rules and Regulations.
(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 a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
(m) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries or any of their affiliated persons,
as defined under the Investment Company Act, is a party or of which any
property of the Company or any of its subsidiaries or any of their
affiliated persons is subject, which, if determined adversely to the
Company or any of such subsidiaries or any of their affiliated persons,
might individually or in the aggregate (i) prevent or materially and
adversely affect the transactions contemplated by this Agreement, (ii)
suspend the effectiveness of the Registration Statement, (iii) prevent or
suspend the use of the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) in any jurisdiction or
(iv) result in a Material Adverse Effect; and to the Company's knowledge no
such proceedings are threatened or contemplated against the Company or any
of its subsidiaries or any of their affiliated persons by governmental
authorities or others. Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
the Company is not a party nor subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body or
other governmental agency or body. "Material Adverse Effect" means, when
used in connection with the Company and its subsidiaries, any development,
change or effect that could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of operations of the
Company and its subsidiaries taken as a whole.
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(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 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 by the SBA, the NASD (as defined in Section 6(a))
or as required under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as amended) is
not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the
Act, or (ii) violate its charter, by-laws or other organizational documents
or constitute a default in the performance of any note or other evidence of
indebtedness or any indenture, mortgage, deed of trust, note agreement or
other contract, lease or other instrument to which it is a party or by
which it is bound, or to which any of its property or assets is subject
other than defaults which would not, individually or in the aggregate,
result in a Material Adverse Effect and, as of the Closing Dates, no
condition or event shall have occurred which, with notice or a lapse of
time or both, would constitute a default under such instruments or
agreements or result in the imposition of any penalty or acceleration of
any indebtedness other than such defaults, penalties or acceleration which
would not, individually or in the aggregate, result in a Material Adverse
Effect.
(o) The Company and its subsidiary Elk Associates Funding Corporation
("Elk") have duly elected to be treated by the Commission under the
Investment Company Act as business development companies and all required
action has been taken by the Company and Elk under Section 54 of the
Investment Company Act to qualify the Company and Elk as business
development companies and under the Acts to make the public offering and
consummate the sale of the Securities as provided in this Agreement.
(p) Elk is licensed as a Small Business Investment Company ("SBIC") by
the SBA under the 1958 Act, and Elk is operating in full compliance with
the 1958 Act and all SBA Regulations applicable to SBICs.
(q) The Company intends to direct the investment of the proceeds of
the Offering as defined in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) in such a manner as to
comply with the requirements of Subchapter M of the Internal Revenue Code
of 1986, as amended, and, immediately after the Closing Date, the Company
will be eligible to qualify as a regulated investment company under
Subchapter M of the Code.
(r) The Company and its subsidiaries have performed all material
obligations required to be performed by them under all contracts required
by Item 24 of Form N-2 under the Act to be filed as exhibits to the
Registration Statement, and neither the Company, any of its subsidiaries
nor any other party to such contract is in default under or in breach of
any such obligations except such as would not result in a Material Adverse
Effect. Neither the Company nor any of the Subsidiaries has received any
notice of such default or breach.
(s) 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
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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 (except as provided in this
Agreement).
(t) The Company has not distributed and, prior to the later of (i) the
Closing Dates and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection with
the offering and sale of the Securities other than the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or other materials, if
any permitted by the Act.
(u) 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 liabilities or obligations, direct or contingent, or entered into
any other transactions not in the ordinary course of business, (ii) 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, (iii) there has not been any material adverse change or
development involving a material prospective change in the condition
(financial or otherwise), properties, business, management, prospects, net
worth, capital stock, investment objectives, investment policies or results
of operations of the Company and its subsidiaries taken as a whole, or any
change in the capital stock, or material change in the short-term or
long-term debt, of the Company and its subsidiaries taken as a whole and
(iv) there has been no dividend or distribution of any kind declared, paid
or made by the Company or its subsidiaries on any class of their respective
capital stock.
(v) The Company and each of its subsidiaries have, and as of the
respective Closing Dates will have, good and marketable title in fee simple
to all items of real property and good and marketable title to all personal
property owned, or proposed to be 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
any real property and buildings held under lease by the Company or any such
subsidiary are held, and will be held as of the respective Closing Dates,
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, in each
case except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(w) Neither the Company or any its subsidiaries is involved in any
labor dispute which would result in a Material Adverse Effect nor, to the
Company's knowledge, is any such dispute imminent or threatened. Neither
the Company nor any of its subsidiaries is aware that (i) any executive,
key employee or significant group of employees of the Company or any of its
subsidiaries plans to terminate employment with the Company or any of its
subsidiaries or (ii) any such executive or key employee is subject to any
noncompete, nondisclosure,
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confidentiality, employment, consulting or similar agreement that would be
violated by the present or proposed business activities of the Company or
its subsidiaries. Neither the Company nor any of its subsidiaries has or
expects to have any liability for any prohibited transaction or funding
deficiency or any complete or partial withdrawal liability with respect to
any pension, profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to which the
Company or any of its subsidiaries makes or ever has made a contribution
and in which any employee of the Company or any of its subsidiaries is or
has ever been a participant. With respect to such plans, the Company and
each of its subsidiaries are in compliance in all material respects with
all applicable provisions of ERISA, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(x) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material 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. The Company's and its subsidiaries' businesses
as now conducted and as proposed to be conducted do not and will not
infringe or conflict with in any material respect any patents, trademarks,
service marks, tradenames, copyrights, trade secrets, licenses or any other
intellectual property or franchise right of any person. Neither the Company
nor any such subsidiary has received any notice of infringement of or
conflict with asserted rights of any third party 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
Affect, 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 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 such subsidiary has been refused
any insurance coverage sought or applied for; and neither the Company nor
any such subsidiary has any 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 have a Material Adverse
Affect, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(z) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(aa) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has received
any notice of proceedings relating to the revocation or modification of any
such
9
certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Affect, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(bb) The Company and 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 Affect and have paid all taxes required
to be paid by them and any other assessment, fine or penalty levied against
them, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being 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).
(cc) Neither the Company nor any of its subsidiaries is in violation
of any federal or state 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 and state occupational safety and health and environmental laws and
regulations to conduct their respective businesses, and the Company and
each such subsidiary is in compliance with all terms and conditions of any
such permits, licenses 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,
have a Material Adverse Affect, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(dd) Each certificate signed by any officer of the Company and
delivered to the Representative or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
(ee) Except for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, neither the
Company nor any such subsidiary owns any shares of stock or any other
equity securities of any corporation or has 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).
(ff) There are no holders of securities of the Company, who, by reason
of the filing of the Registration Statement, have the right (and have not
waived such right) to request the Company to register under the Act, or to
include in the Registration Statement, securities held by them.
(gg) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
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
10
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(hh) 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 material adverse respect with regard to property,
business or operations of the Company and its subsidiaries.
(ii) The Company has obtained the written agreement described in
Section 5(j) of this Agreement from each of its officers, directors and
holders of Securities listed on Schedule 7(h) hereto.
(jj) Other than as contemplated by this Agreement or as disclosed in
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), there is no broker, finder or other party that is
entitled to receive from the Company or its subsidiaries any brokerage or
finders' fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(kk) Neither the Company or any of its subsidiaries, nor any director,
officer, agent or employee acting on behalf of the Company or its
subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity, (ii) made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate
funds, (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977 or (iv) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(ll) To the Company's knowledge, neither the Company or any of its
subsidiaries, nor any employee or agent of the Company or any of its
subsidiaries has made any payment of funds of the Company or any of its
subsidiaries or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
3. Purchase, Sale and Delivery of the Securities. (a) On the basis 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, at a purchase
price of _______________ per Unit, which represents the public offering price
set forth in the Prospectus less an underwriting discount of ten percent (10%),
the number of Firm Securities set forth opposite the name of such Underwriter in
Schedule I hereto. One or more certificates in definitive form for the Firm
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 Representative request upon notice to the Company at least 48 hours prior to
the Firm Closing Date, shall be delivered by or on behalf of the Company to the
Representative for
11
the respective accounts of the Underwriters, against payment by or on behalf of
the Underwriters of the purchase price therefor by wire transfer in same-day
funds (the "Wired Funds") to the account of the Company. Such delivery of and
payment for the Firm Securities shall be made at the offices of Klehr, Harrison,
Xxxxxx, Xxxxxxxxx & Xxxxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000
at 9:30 A.M., New York time, on __________, 2002, or at such other place, time
or date as the Representative and the Company may agree upon or as the
Representative may determine pursuant to Section 9 hereof, all in accordance
with Rule 15c6-1 of the Exchange Act (as defined in Section 8 herein), such time
and date of delivery against payment being herein referred to as the "Firm
Closing Date". The Company will make such certificate or certificates for the
Firm Securities available for checking and packaging by the Representative at
the offices in New York, New York of the Company's transfer agent or registrar
or of Noble International Investments, Inc. at least 24 hours prior to the Firm
Closing Date.
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option
to purchase, severally and not jointly, the Option Securities (the
"Over-Allotment Option"). The purchase price to be paid for any Option
Securities shall be the same price per Unit as the price per Unit for the
Firm Securities set forth above in paragraph (a) of this Section 3. The
option granted hereby may be exercised as to all or any part of the Option
Securities from time to time within forty-five days after the date of the
Prospectus (or, if such 45th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the Nasdaq SmallCap
Market (as defined in Section 5(m) herein) is open for trading). The
Underwriters shall not be under any obligation to purchase any of the
Option Securities prior to the exercise of such option. The Representative
may from time to time exercise the option granted hereby by giving notice
in writing or by telephone (confirmed in writing) to the Company setting
forth the aggregate number of Option Securities as to which the several
Underwriters are then exercising the option and the date and time for
delivery of and payment for such Option Securities. Any such date of
delivery shall be determined by the Representative but shall not be earlier
than two business days or later than five business days after such exercise
of the option and, in any event, shall not be earlier than the Firm Closing
Date. The time and date set forth in such notice, or such other time on
such other date as the Representative and Company may agree upon or as the
Representative may determine pursuant to Section 9 hereof, is herein called
the "Option Closing Date" with respect to such Option Securities, and
together with the Firm Closing Date, the "Closing Dates." Upon exercise of
the option as provided herein, the Company shall become obligated to sell
to each of the several Underwriters, and, subject to the terms and
conditions herein set forth, each of the Underwriters, severally and not
jointly, shall become obligated to purchase from the Company, the same
percentage of the total number of the Option Securities as to which the
several Underwriters are then exercising the option as such Underwriter is
obligated to purchase of the aggregate number of Firm Securities, as
adjusted by the Representative in such manner as it deems advisable to
avoid fractional shares. If the option is exercised as to all or any
portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered
on the related Option Closing Date in the manner, and upon the terms and
conditions, set forth in paragraph (a) of this Section 3, except that
reference therein to the Firm Securities and the Firm
12
Closing Date shall be deemed, for purposes of this paragraph (b), to refer
to such Option Securities and Option Closing Date, respectively.
(c) In connection with the distribution and sale of the Firm
Securities as contemplated by the Prospectus, the Company hereby grants to
the Representative the right to receive on the Firm Closing Date and the
Unit Purchase Option. The Unit Purchase Option will be exercisable into
32,500 Units for a five-year period, commencing one year after the
effective date of the Registration Statement, at an exercise price of
$22.80 per Unit. The Unit Purchase Option will only be issued and
exercisable after the Company receives a no-action letter or exemptive
relief from the SEC stating that the issuance of such Unit Purchase Option
would not violate certain provisions of the Investment Company Act. In lieu
of issuing the Unit Purchase Option, the Company has agreed to take any and
all actions reasonably requested by the Representative (and pay all costs
associated therewith) in connection with requesting the no-action letter or
exemptive relief.
(d) The Company hereby acknowledges that the wire transfer by or on
behalf of the Underwriters of the purchase price for any Securities does
not constitute closing of a purchase and sale of the Securities. Only
execution and delivery of a receipt for Securities by the Underwriters
indicates completion of the closing of a purchase of the Securities from
the Company. Furthermore, in the event that the Underwriters wire funds to
the Company prior to the completion of the closing of a purchase of
Securities, the Company hereby acknowledges that until the Underwriters
execute and deliver a receipt for the Securities, by facsimile transmission
or otherwise, the Company will not be entitled to the Wired Funds and shall
return the Wired Funds to the Underwriters as soon as practicable (by wire
transfer of same-day funds) upon demand. In the event that the closing of a
purchase of Securities is not completed and the Wired Funds are not
returned by the Company to the Underwriters on the same day the Wired Funds
were received by the Company, the Company agrees to pay to the Underwriters
in respect of each day the Wired Funds are not returned by it, in same-day
funds, interest on the amount of such Wired Funds in an amount representing
the Underwriters' cost of financing as reasonably determined by Noble
International Investments, Inc.
(e) It is understood that you, individually and not as the
Representative, 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.
4. Offering by the Underwriters. Upon your authorization of the release of
the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each of
the Underwriters that:
(a) The Company will (i) if the Company and the Representative have
determined not to proceed pursuant to Rule 430A, use its best efforts to
cause the Registration Statement to become effective, (ii) if the Company
and the Representative have determined to proceed pursuant to Rule 430A,
use its best efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to Rule 430A and Rule 497 of
the Act Rules and Regulations and (iii) if the Company and the
Representative have determined to deliver Prospectuses pursuant to Rule 434
of the Act Rules and Regulations, to use its best efforts to comply with
all the applicable provisions thereof. During any time when a Prospectus
relating to the Securities is required to be delivered under the Act, the
Company (i) will comply with all requirements imposed upon it by the Act
and the Act Rules and Regulations to the extent necessary to permit the
continuance of sales of or dealings in the Securities in accordance with
the provisions hereof and of the Prospectus, as then amended or
supplemented, and (ii) will not file with the Commission the Prospectus,
Term Sheet or the amendment referred to in the second sentence of Section
2(a) hereof, any amendment or supplement to such Prospectus, Term Sheet or
any amendment to the Registration Statement or any Rule 462(b) Registration
Statement of which the Representative previously have been advised and
furnished with a copy for a
13
reasonable period of time prior to the proposed filing and as to which
filing the Representative shall not have given their consent. The Company
will prepare and file with the Commission, in accordance with the Act Rules
and Regulations, promptly upon request by the Representative or counsel for
the Underwriters, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or
advisable in connection with the distribution of the Securities by the
several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the
Representative, promptly after receiving notice thereof, of the time when
the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus or any amendment or supplement thereto
has been filed and will provide evidence satisfactory to the Representative
of each such filing or effectiveness.
(b) The Company will advise the Representative, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the 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 Original Registration Statement or
any Rule 462(b) Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will use its best
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.
(c) The Company will arrange for the qualification of the Securities
for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representative may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(d) 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 Option 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 or the Act Rules and Regulations, the Company will promptly
notify the Representative thereof and, subject to Section 5(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.
(e) The Company will, without charge, provide (i) to the
Representative and to counsel for the Underwriters [a signed copy of the
Original Registration Statement and each
14
a conformed copy of the Registration Statement originally filed with
respect to the Securities and each amendment thereto (in each case
including exhibits thereto) or any Rule 462(b) Registration Statement,
certified by the Secretary or an Assistant Secretary of the Company to be
true and complete copies thereof as filed with the Commission by electronic
transmission, (ii) to each other Underwriter, a conformed copy of such
Registration Statement or any Rule 462(b) 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 Representative may
reasonably request; without limiting the application of clause (iii) of
this sentence, the Company, not later than (A) 6:00 P.M., New York City
time, on the date of determination of the public offering price, if such
determination occurred at or prior to 10:00 A.M., New York City time, on
such date or (B) 2:00 P.M., New York City time, on the business day
following the date of determination of the public offering price, if such
determination occurred after 10:00 A.M., New York City time, on such date,
will deliver to the Underwriters, without charge, as many copies of the
Prospectus and any amendment or supplement thereto as the Representative
may reasonably request for purposes of confirming orders that are expected
to settle on the Firm Closing Date.
(f) The Company will make generally available to its secuirtyholders
and to the Representative not later than forty-five days after the end of
the period covered thereby, a consolidated earnings statement of the
Company and its subsidiaries that shall comply with Section 11(a) of the
Act and Rule 158 thereunder and cover a period of at least 12 consecutive
months beginning not later than the first day of the Company's fiscal
quarter next following the effective date of this Agreement.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the prior
written consent of Noble International Investments, Inc., on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant
any option to purchase or otherwise sell or dispose (or announce any offer,
sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) of any Securities for a period of
180 days after the date hereof, except pursuant to this Agreement and
except for issuances pursuant to the exercise of employee stock options
outstanding on the date hereof, pursuant to the Company's dividend
reinvestment plan or pursuant to the terms of convertible securities of the
Company outstanding on the date hereof.
(i) 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, 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 (except as provided in this
Agreement).
15
(j) The Company will obtain the agreements described in Section 7(h)
hereof prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date,
any rumor, publication or event relating to or affecting the Company shall
occur as a result of which in your opinion the market price of the
Securities has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus), the Company will, after notice from you
advising the Company to the effect set forth above, forthwith prepare,
consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern
time on the date of this Agreement and (ii) the time confirmations are sent
or given, as specified by Rule 462(b)(2).
(m) The Company will use its best efforts to cause the Securities to
be duly included for quotation on The Nasdaq Stock Market's National Market
(the "Nasdaq SmallCap Market") prior to the Firm Closing Date. The Company
will ensure that the Securities remain included for quotation on the Nasdaq
SmallCap Market following the Firm Closing Date.
(n) The Company will maintain a transfer agent and registrar for the
Securities.
(o) The Company will supply the Representative with copies of all
written correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Securities under the
Act and under the Nasdaq SmallCap Market.
(p) The Company will furnish to its securityholders annual reports
containing financial statements audited by independent certified public
accountants and with quarterly summary financial information in reasonable
detail which may be unaudited. During the period of five years from the
date hereof, the Company will deliver to the Representative and, upon
request, to each of the other Underwriters, as soon as they are available,
copies of each annual report of the Company and each other report furnished
by the Company to its securityholders and will deliver to the
Representative, (i) as soon as they are available, copies of any other
reports (financial or other) which the Company shall publish or otherwise
make available to its securityholders as such, (ii) as soon as they are
available, copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange or the Nasdaq
SmallCap Market and (iii) from time to time such other information
concerning the Company as the Representative may reasonably request. So
long as the Company has active subsidiaries, such financial statements will
be on a consolidated basis to the extent the accounts of the Company and
its subsidiaries are consolidated in reports furnished to its
securityholders generally. Separate financial statements shall be furnished
for subsidiaries
16
whose accounts are not consolidated but which at the time are significant
subsidiaries as defined in the Act Rules and Regulations.
(q) Prior to the Closing Dates, the Company will furnish to the
Representative, as soon as they have been prepared, copies of any unaudited
interim consolidated financial statements of the Company and its
subsidiaries for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the
Prospectus.
(r) Prior to the Closing Dates, unless required under the Acts or the
Rules and Regulations, the Company will issue no press release or other
communications directly or indirectly and hold no press conference with
respect to the Company or any of its subsidiaries, the financial condition,
results of operation, business, prospects, assets or liabilities of any of
them, or the offering of the Securities, without the prior written consent
of the Representative, which shall not be unreasonably withheld. [For a
period of 12 months following the later of the (i) Firm Closing Date and
(ii) the Option Closing Date, as the case may be, the Company will use its
best efforts to provide to the Representative copies of each press release
or other public communications with respect to the financial condition,
results of operations, business, prospects, assets or liabilities of the
Company at least 24 hours prior to the public issuance thereof or such
longer advance period as may reasonably be practicable.]
(s) During the period of five years hereafter, the Company will
furnish to the Representative, and upon request of the Representative, to
each of the Underwriters, (i) as soon as practicable after the end of each
fiscal year, copies of the annual report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and
statements of income, shareholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent certified public
accountants, (ii) as soon as practicable after the filing thereof, copies
of each proxy statement, Annual Report on Form 10-K, Quarterly Report on
Form 10-Q, Report on Form 8-K or other report filed by the Company with the
Commission, or the Nasdaq SmallCap Market or any national securities
exchange, (iii) as soon as available, copies of any report or communication
of the Company mailed generally to its securityholders and (iv) all public
reports and all reports and financial statements furnished by the Company
to the Commission pursuant to the Investment Company Act and the Investment
Company Act Rules and Regulations thereunder.
(t) The Company agrees to retain Noble International Investments, Inc.
as a financial advisor for the Company for a period of two years from and
after the date of the Prospectus, at a fee of $3,000 per month, plus
out-of-pocket expenses; such fee, aggregating $72,000, shall be due and
payable in full at the closing of the Units.
6. Expenses.
(a) 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 11 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect
to the transactions, including any costs of printing the registration
statement originally filed with
17
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus and the Prospectus and
any amendment or supplement thereto, this Agreement, the Master Selected
Dealer Agreement if any, and any blue sky memoranda, (ii) all arrangements
relating to the delivery to the Underwriters of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants
and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees,
and all taxes related thereto, (v) the qualification of the Securities
under state securities and blue sky laws, including filing fees and fees
and disbursements of counsel for the Underwriters relating thereto, (vi)
the filing fees of the Commission and the National Association of
Securities Dealers, Inc. (the "NASD") relating to the Securities, (vii) any
quotation of the Securities on the Nasdaq SmallCap Market, (viii) any
meetings with prospective investors in the Securities (other than as shall
have been specifically approved by the Representative to be paid for by the
Underwriters), (ix) advertising relating to the offering of the Securities
(other than as shall have been specifically approved by the Representative
to be paid for by the Underwriters) and (x) all other costs, fees and
expenses incurred by the Company incident to the performance of the
Company's obligations hereunder, which are not otherwise specifically
provided for in this Section. 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 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 11 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 counsel fees and
disbursements) 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.]
(b) In addition to the foregoing, the Company agrees to pay to the
Underwriters at the closing a non-accountable expense allowance in the
amount of 3.0% of the gross dollar amount of the offering to the public
(including the Over-Allotment Option, if exercised), out of which a
forty-five thousand ($45,000) dollar advance payment has been made. The
Underwriters shall pay their own costs and expenses, including the costs
and expenses of their counsel, any transfer taxes on the Securities which
they may sell, and the expenses of advertising any offering of the
Securities made by the Underwriters.
7. Conditions of the Underwriters' Obligations. The respective obligations
of the several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representative's sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm 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) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of
the time of execution hereof,
18
the Original Registration Statement or such amendment and, if the Company
has elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have been declared effective not later than the earlier of
(i) 11:00 A.M., New York time, on the date on which the amendment to the
registration statement originally filed with respect to the Securities or
to the Registration Statement, as the case may be, containing information
regarding the [initial] public offering price of the Securities has been
filed with the Commission and (ii) the time confirmations are sent or given
as specified by Rule 462(b)(2), or with respect to the Original
Registration Statement, or such later time and date as shall have been
consented to by the Representative; if required, the Prospectus or any Term
Sheet that constitutes a part thereof and any amendment or supplement
thereto shall have been filed with the Commission in the manner and within
the time period required by Rules 434 and 497 under the Act; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto 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 Representative, 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) There shall not have occurred any event that resulted in or could
reasonably result in a Material Adverse Effect or any change in the
investment objectives, investment policies, capital stock, short-term or
long-term debt of the Company and the Subsidiaries (as defined in Section
7(d)(i) below) taken as a whole, such that (i) the Registration Statement
or the Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact which, in the opinion of the Representative, is
material, or omits to state a fact which, in the opinion of the
Representative, is required to be stated therein or is necessary to make
the statements therein not misleading in any material respect or (ii) it is
inadvisable in the sole judgment of the Representative to proceed with the
public offering or to purchase the Securities as contemplated hereby.
(c) No legal or governmental action, suit or proceeding affecting the
Company or the Subsidiaries which is material and adverse to the Company
and/or the Subsidiaries or which affects or may affect the Company's
ability to perform its obligations under this Agreement shall have been
instituted or threatened and there shall have occurred no material adverse
development in any existing action, suit or proceeding.
(d) The Representative shall have received an opinion, dated the Firm
Closing Date, of Stursberg & Xxxxx, counsel for the Company, to the effect
that:
(i) the Company and each of its subsidiaries listed in Exhibit
21.1 to the Registration Statement (the "Subsidiaries") have been duly
organized and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation and
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 the Subsidiaries, taken as
a whole;
19
(ii) the Company and each of the Subsidiaries 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 and to carry out all the terms and provisions hereof to be
carried out by it including, without limitation, to issue, sell and
deliver to the Underwriters the Securities to be issued and sold
hereunder;
(iii) the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except as otherwise set forth in the
Prospectus, are owned beneficially by the Company free and clear of
any perfected security interests or, to the best knowledge of such
counsel, any other security interests, liens, encumbrances, equities
or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in the 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, have been issued
in compliance with all applicable federal and state securities laws
and were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities; the
Securities have been duly authorized by all necessary corporate action
of the Company and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued, fully
paid and nonassessable; the Securities have been duly included for
trading on the Nasdaq SmallCap Market, no holders of outstanding
shares of capital stock of the Company are entitled as such to any
preemptive or other rights to subscribe for any of the Securities; and
no holders of securities of the Company are entitled to have such
securities registered under the Registration Statement;
(v) the statements set forth under the heading "Description of
Capital Stock" in the Prospectus, insofar as such statements purport
to summarize certain provisions of the capital stock of the Company,
provide a fair summary of such provisions; and the statements set
forth under the heading "Legal Proceedings" in the Prospectus, insofar
as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, provide a fair summary
of such legal matters, documents and proceedings;
(vi) 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;
(vii) (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[, to the best knowledge
of such counsel,] 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;
20
(viii) 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 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 by the SBA, the NASD or
as 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, known to such
counsel, to which the Company or any of the Subsidiaries is a party or
by 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 any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Company or Subsidiaries;
(ix) there are no outstanding securities of the Company or the
Subsidiaries convertible or exchangeable into or evidencing the right
to purchase or subscribe for any shares of capital stock of the
Company or the Subsidiaries and except as disclosed in the Prospectus,
there are no outstanding or authorized options, warrants or rights of
any character obligating the Company or the Subsidiaries to issue any
shares of its capital stock or any securities convertible or
exchangeable into or evidencing the right to purchase or subscribe for
any shares of such stock; and there is no holder of any securities of
the Company or the Subsidiaries 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
Securities or the right to have any shares of 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 Act of any shares of Common Stock or
other securities of the Company;
(x) the Registration Statement and all post-effective amendments
thereto, if any, have become effective under the Act; any and all
filings, if any, required by Rules 497, 434 and 430A of the Act Rules
and Regulations have been made; and, to the knowledge of such counsel,
no stop order proceedings with respect thereto have been instituted or
are pending or threatened under the Act; any required filing of the
Prospectus, any Term Sheet that constitutes a part thereof, and any
supplement thereto pursuant to Rule 497 of the Act Rules and
Regulations has been made in the manner and within the time period
required by Rule 497;
(xi) the Original Registration Statement and each amendment
thereto, any Rule 462(b) Registration Statement and the Prospectus (in
each case, other than the financial statements and other financial
information contained 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 and the Act Rules and Regulations;
(xii) if the Company elects to rely on Rule 434, the Prospectus
is not "materially different", as such term is used in Rule 434, from
the prospectus included in the Registration Statement at the time of
its effectiveness or an effective post-effective amendment thereto
(including such information that is permitted to be omitted pursuant
to Rule 430A);
21
(xiii) in connection with the Registration Statement, such
counsel has participated in discussions and conferences with certain
of the officers and Representative of the Company, Representative of
the Underwriters, counsel to the Underwriters, and the independent
accountants for the Company at which the contents of the Registration
Statement and the Prospectus were discussed. Such counsel has no
reason to believe that either the Registration Statement, as of its
effective date, or the Prospectus, or any amendment or supplement
thereto, as of their respective effective or issue dates, or as of the
date hereof, 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, in light of the
circumstances under which they were made, not misleading. The
descriptions in the Registration Statement and Prospectus of statutes
and legal and governmental proceedings are accurate and fairly present
the information required to be shown. There are no legal proceedings
pending or, to such counsel's knowledge, threatened against the
Company which are required to be disclosed in the Registration
Statement and Prospectus, except as described therein. Such counsel
expresses no opinion as to the financial statements or other financial
or statistical data contained in the Registration Statement or the
Prospectus;
(xiv) such counsel has read all contracts and other documents
specifically enumerated in the Registration Statement and the
Prospectus, and such contracts and other documents are fairly
summarized or described therein, fairly present the information
required to be shown; conform in all material respects to the
descriptions thereof contained therein, and are filed as exhibits
thereto, if required, and to such counsel's knowledge, there are no
contracts or documents required to be so summarized or disclosed or so
filed which have not been so summarized or disclosed or so filed;
(xv) such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries;
(xvi) the execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions herein
contemplated, and the compliance with the terms of this Agreement do
not and will not conflict with or result in a breach of any of the
terms or provisions of or violate or constitute a default under their
respective charters or by-laws or other constituent documents of the
Company or the Subsidiaries or, (i) any indenture, mortgage or other
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 or any material portion of their respective properties is
bound, or (ii) to such counsel's knowledge, after due inquiry, any
judgment, order or decree of any government, governmental
instrumentality or court having jurisdiction over the Company or any
of the Subsidiaries or any material portion of its properties, or
(iii) any existing statute, rule or regulation applicable to the
Company or the Subsidiaries, where, with respect to clauses (i), (ii)
and (iii) of this paragraph, such violation or default could
reasonably be expected to have a Material Adverse Effect;
(xvii) the Company has duly elected to be treated under the
Investment Company Act as a business development company and all
required action has been taken by the Company under the Acts to make
the public offering and consummate the sale of the Securities as
provided in this Agreement; the provisions of the respective corporate
charters and by-laws of
22
the Company and the Subsidiaries and the investment policies and
restrictions described in the Prospectus comply with the requirements
of the Investment Company Act;
(xviii) the Securities are duly approved, subject to official
notice of issuance, for quotation on the Nasdaq SmallCap Market and a
registration statement has been filed pursuant to Section 12 of the
Exchange Act for the Securities and has been declared effective; and
(xix) except as described in the Prospectus, neither the Company
nor any of the Subsidiaries owns any interest in any corporation,
partnership, joint venture, trust or other business entity.
In rendering such opinions, such counsel may set forth that as to certain
matters of fact, where appropriate, such counsel is relying on one or more
certificates of public officials, governmental agencies or officers of the
Company. In addition, as to matters of law, counsel for the Company may rely as
to matters involving the application of laws other than the laws of the United
States, except for laws dealing with matters within the jurisdiction of the laws
of New York, the laws of Delaware 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
satisfactory to the Underwriters' counsel) of other counsel reasonably
acceptable to the Underwriters' 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.
(e) The Representative shall have received an opinion, dated the Firm
Closing Date, of Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx LLP, counsel
for the Underwriters, with respect to the issuance and sale of the Firm
Securities, the Registration Statement and the Prospectus, and such other
related matters as the Representative may reasonably require, and the
Company and the Subsidiaries 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 all matters of law upon the opinions of Stursberg & Xxxxx.
(f) The Representative shall have received from Xxxxxx & Kliegman LLP
a letter or letters dated, respectively, the date hereof and the Firm
Closing Date, in form and substance satisfactory to the Representative, to
the effect that:
(i) they are independent accountants within the meaning of the
Act and the Act Rules and Regulations;
(ii) in their opinion, the audited consolidated condensed
financial statements and schedules [and pro forma financial
statements] examined by them and included in the Registration
Statement and the Prospectus comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published rules and regulations;
23
(iii) on the basis of (A) their review in accordance with
standards established by the American Institute of Certified Public
Accountants of any unaudited interim consolidated condensed financial
statements of the Company and its consolidated subsidiaries as
indicated in their report included in the Registration Statement and
Prospectus, (B) a reading of the unaudited amounts for sales, net
sales, net loss before income taxes or total or per share amounts of
net loss of the Company and its consolidated subsidiaries for the
years ended ______________ and the six months ended _____________ and
of the unaudited consolidated condensed financial statements of the
Company and its consolidated subsidiaries for the periods from which
such amounts are derived, carrying out certain specified procedures
(which do not constitute an examination made in accordance with
generally accepted auditing standards) that would not necessarily
reveal matters of significance with respect to the comments set forth
in this paragraph (iii), (C) a reading of the minute books of the
shareholders, the board of directors and any committees thereof of the
Company and each of its consolidated subsidiaries and (D) inquiries of
certain officials of the Company and its consolidated subsidiaries who
have responsibility for financial and accounting matters, nothing came
to their attention that caused them to believe that:
1. the unaudited consolidated condensed financial statements of the
Company and its consolidated subsidiaries included in the Registration
Statement and the Prospectus do not comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited consolidated
condensed financial statements included in the Registration Statement
and the Prospectus;
2. the unaudited amounts for sales, net sales, net loss before income
taxes or total or per share amounts of the Company and its
consolidated subsidiaries included in the Registration Statement and
the Prospectus do not agree with the amounts set forth in any
unaudited consolidated condensed financial statements for those same
periods or were not determined on a basis substantially consistent
with that of the corresponding amounts in the audited consolidated
condensed financial statements included in the Registration Statement
and the Prospectus; and
3. at a specific date not more than five business days prior to the
date of such letter, there were any changes in the capital stock or
long-term debt of the Company and its consolidated subsidiaries or any
decreases in net current assets or stockholders' equity of the Company
and its consolidated subsidiaries, in each case compared with amounts
shown on the September 30, 2001 consolidated balance sheet included in
the Registration Statement and the Prospectus, or for the period from
October 1, 2001 to such specified date there were any decreases, as
compared with the prior comparable period, in sales, net sales, net
loss before income taxes or total or per share amounts of net loss of
the Company and its consolidated subsidiaries except in all instances
for changes, decreases or, increases set forth in such letter; and
24
4. they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries and are
included in the Registration Statement and the Prospectus under the
captions ______________ and in Exhibit 11 to the Registration
Statement, and have compared such amounts, percentages and financial
information with such records of the Company and its consolidated
subsidiaries and with information derived from such records and have
found them to be in agreement, excluding any questions of legal
interpretation; and
5. on the basis of a reading of the unaudited pro forma consolidated
condensed financial statements included in the Registration Statement
and the Prospectus, carrying out certain specified procedures that
would not necessarily reveal matters of significance with respect to
the comments set forth in this paragraph (5), inquiries of certain
officials of the Company and its consolidated subsidiaries who have
responsibility for financial and accounting matters and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the unaudited pro forma combined financial
statements, nothing came to their attention that caused them to
believe that the unaudited pro forma combined financial statements do
not comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the
pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
In the event that the letters referred to above set forth any such changes,
decreases or increases, it shall be a further condition to the obligations of
the Underwriters that (A) such letters shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Representative deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representative, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (f) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(g) The Representative shall have received a certificate, dated the
Firm 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 Firm
Closing Date; the Registration Statement, as amended as of each of the
Closing Dates, 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 Firm 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
25
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 Firm 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, (i) neither
the Company nor any of the Subsidiaries has incurred any material
liabilities or obligations, direct or contingent, or entered into any
other transactions not in the ordinary course of business, (ii) there
has not been any material adverse change in the condition (financial
or otherwise), properties, business, management, prospects, net worth,
capital stock, investment objectives, investment policies or results
of operations of the Company and the Subsidiaries taken as a whole, or
any change in the capital stock, or material change in the short-term
or long-term debt, of the Company and the Subsidiaries taken as a
whole and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company or the Subsidiaries on any class
of their respective capital stock.
(h) The Representative shall have received from each person who is a
director or officer of the Company or who owns ________ shares of Common
Stock an agreement to the effect that such person or entity, will not,
directly or indirectly, without the prior written consent of Noble
International Investments, Inc., on behalf of the Underwriters, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase
or otherwise sell or dispose (or announce any offer, sale, offer of sale,
contract of sale, pledge, grant of any option to purchase or other sale or
disposition) of any Securities for a period of 180 days after the date of
this Agreement.
(i) On or before the Firm Closing Date, the Representative and counsel
for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from
the Company.
(j) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq SmallCap
Market.
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 Representative and
counsel for the Underwriters. The Company shall furnish to the Representative
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representative and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and pay
for any Option Securities shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Securities, except that all references
to the Firm Securities and the Firm Closing Date shall be deemed to refer to
such Option Securities and the related Option Closing Date, respectively.
26
8. 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
Securities Exchange Act of 1934 (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 or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are caused by, related to or based upon or arising out of or in
connection with:
(i) any untrue statement or alleged untrue statement made by the
Company in Section 2 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");
(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; or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials, including,
without limitation, slides, videos, films and tape recordings used in
connection with the marketing of the Securities, including, without
limitation, statements communicated to securities analysts employed by
the Underwriters;
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 such 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 Representative specifically for use therein; and 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 thereto) 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 supplemented) 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, unless such failure to deliver the Prospectus (as amended or supplemented)
was a result
27
of noncompliance by the Company with Section 5(d) and (e) of this Agreement.
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 or 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 the Prospectus or any amendment or supplement
thereto, or any Application or (ii) the omission or the 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 Representative 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
8 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 8, 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 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the 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
28
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 so 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 8 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 Representative in the case
of paragraph (a) of this Section 8, representing the indemnified parties
under such paragraph (a) who are parties to such action or actions) or (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 8 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 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
29
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 II (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 [Noble International Investments, Inc.
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.
9. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities
hereunder and the aggregate number of such Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent or
less of the aggregate number of Firm Securities or Option Securities to be
purchased by all of the Underwriters at such time hereunder, the other
Underwriters may make arrangements satisfactory to the Representative for
the purchase of such Securities by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representative), but
if no such arrangements are made by the Firm Closing Date or the related
Option Closing Date, as the case may be, the other Underwriters shall be
obligated severally in proportion to their respective commitments hereunder
to purchase the Firm Securities or Option Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase. If one or more
Underwriters so default with respect to an aggregate number of Securities
that is more than ten percent of the aggregate number of Firm Securities or
Option Securities, as the case may be, to be purchased by all of the
Underwriters at such time hereunder, and if arrangements satisfactory to
the Representative 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 Representative) 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 10 hereof. In the event of
any default by one or more Underwriters as described in this Section 9, the
Representative shall have the right to postpone the Firm Closing Date or
the Option Closing Date, as the case may be, established as provided in
Section 3 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 Firm Securities or Option Securities, as the
case may be. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 9. Nothing herein
shall relieve any defaulting Underwriter from liability for its default.
30
10. 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 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with respect to the
Firm Securities or any Option Securities in the sole discretion of the
Representative by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, 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 Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of its subsidiaries shall have, in the
sole judgment of the Representative, 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 event resulting in a Material
Adverse Effect, except in each case as described in or contemplated by
the Prospectus (exclusive of any amendment or supplement thereto);
(ii) trading in the Securities shall have been suspended by the
Commission or the Nasdaq SmallCap Market or trading in securities
generally on the Nasdaq SmallCap Market shall have been suspended or
minimum or maximum prices shall have been established on such
exchange;
(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 any terrorist attack involving the
United States or any interests of 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 U.S.
financial markets that, in the sole judgment of the Representative,
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 11 shall be
without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by Underwriters. The statements set forth in the
last paragraph on the front cover page and under the heading "Underwriting" in
any Preliminary
31
Prospectus or the Prospectus (to the extent such statements relate to the
Underwriters) constitute the only information furnished by any Underwriter
through the Representative to the Company for the purposes of Sections 2(b) and
8 hereof. The Underwriters confirm that such statements (to such extent) are
correct.
13. Notices. All communications hereunder shall be in writing and, if sent
to any of the Underwriters, shall be mailed, delivered or sent by confirmed
facsimile transmission to the Representative c/o Noble International
Investments, Inc., 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, XX 00000
(facsimile no.: _____________), Attention: __________________________, with a
copy to Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx LLP, 000 X. Xxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000 (facsimile no. (000) 000-0000), Attention: Xxxxxxx X.
Xxxxxxx, Esquire, except that notices given to an Underwriter pursuant to
Section 6 hereof shall be sent to such Underwriter at the address furnished by
the Representative or, if sent to the Company, shall be mailed, delivered or
sent by confirmed facsimile transmission to 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx
Xxxx, XX 00000 (facsimile no.: (000) 000-0000), Attention: Xxxx X. Xxxxxxx,
Esquire, with a copy to Stursberg & Xxxxx, 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000-0000 (facsimile no.: (000) 000-0000), Attention: Xxxxxx
Xxxxxxxxx, Esquire.
14. 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 Representative, 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 8 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 8 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.
15. 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 Delaware, without giving effect to any
provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of Delaware, and
by execution and delivery of this Agreement, the Company accepts for itself and
in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. The Company designates and
appoints___________, and such other persons as may hereafter be selected by the
Company irrevocably agreeing in writing to so serve,
32
as its agent to receive on its behalf service of all process in any such
proceedings in any such court, such service being hereby acknowledged by the
Company to be effective and binding service in every respect. If any agent
appointed by the Company refuses to accept service, the Company hereby agrees
that service of process sufficient for personal jurisdiction in any action
against the Company in the State of Delaware may be made by registered or
certified mail, return receipt requested, to the Company at its address provided
in Section 13 hereof, and the Company hereby acknowledges that such service
shall be effective and binding in every respect. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of any Underwriter to bring proceedings against the Company in the courts
of any other jurisdiction.
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.
33
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,
AMERITRANS CAPITAL CORPORATION
By:
------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
NOBLE INTERNATIONAL INVESTMENTS, INC.
By
------------------------
Name:
Title:
For itself and a Representative.
34
SCHEDULE I
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- ------------
-----------------
Total:
35
SCHEDULE 7(H)
LOCK-UP AGREEMENTS
I. The Company
The Company shall have executed a lock-up agreement with respect to the
period from the initial filing of the Registration Statement through the Firm
Closing Date, which shall be in addition to the separate lock-up agreement
pursuant to the terms of this Agreement.
II. Officers, Directors and Certain Other Persons and Entities
The following officers and directors of the Company and certain other
persons and entities shall have executed a lock-up agreement with respect to the
period from the initial filing of the Registration Statement through 180 days
after the date of the final prospectus filed with the Commission pursuant to
Rule 497 promulgated under the Act, or if no filing under Rule 497 is made, the
date of the final prospectus included in the Registration Statement when
declared effective under the Act:
III. Current Employees
The following current employees or consultants of the Company shall have
executed a lock-up agreement with respect to the 90-day period after the date of
the final prospectus filed with the Commission pursuant to Rule 497 promulgated
under the Act, or if no filing under Rule 497 is made, the date of the final
prospectus included in the Registration Statement when declared effective under
the Act:
IV. Institutional Investors
The following shareholders of the Company shall have executed a lock-up
agreement with respect to the 60-day period following the date of the final
prospectus filed with the Commission pursuant to Rule 497 promulgated under the
Act, or if no filing under Rule 497 is made, the date of the final prospectus
included in the Registration Statement when declared effective under the Act:
36
