________ Shares
XXXXXX & XXXXXX GROUP, INC.
Common Stock
FORM OF
UNDERWRITING AGREEMENT
New York, New York
__________, 2003
Punk, Xxxxxx & Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx & Xxxxxx Group, Inc., a New York corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
an aggregate of [ ] shares of common stock, $0.001 par value per share (the
"Firm Shares"), of the Company to you. The Company also proposes to sell upon
the terms and conditions contained in Section 2 hereof, up to [ ] additional
common shares (the "Additional Shares" which together with the Firm Shares are
hereinafter collectively referred to as the "Shares").
The Company wishes to confirm as follows its agreement with you in
connection with the purchases of the Shares]from the Company.
1. Registration Statement and Prospectus. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933 (the "1933 Act"),
the Investment Company Act of 1940 (the "1940 Act"), and the rules and
regulations of the Commission promulgated under the 1933 Act (the "1933 Act
Rules and Regulations") and the 1940 Act (the "1940 Act Rules and Regulations"
and, together with the 1933 Act Rules and Regulations, the "Rules and
Regulations"), a registration statement on Form N-2 (File Nos. 333-110064 and
811-07074), under the 1933 Act and the 1940 Act including a prospectus subject
to completion, relating to the Shares, a statement of additional information
relating to the Shares and an election to be treated as a business development
company under the 1940 Act. Such registration statement, as amended at the
time when it becomes effective and as thereafter amended for purposes of the
1933 Act by any post-effective amendment, is referred to in this Agreement as
the "Registration Statement." The prospectus and statement of additional
information in the form included in the Registration Statement or, if the
prospectus and statement of additional information included in the
Registration Statement omit certain information in reliance upon Rule 430A
under the 1933 Act and such information is thereafter included in a prospectus
or statement of additional information filed with the Commission pursuant to
Rule 497(h) under the 1933 Act or as part of a post-effective amendment to the
Registration Statement after the Registration Statement becomes effective, the
prospectus and statement of additional information as so filed, are referred
to in this Agreement as the "Prospectus." The prospectus subject to completion
in the form included in the Registration Statement at the time of the initial
filing of such Registration Statement with the Commission and as such
prospectus is amended from time to time until the date of the Prospectus are
collectively referred to in this Agreement as the "Prepricing Prospectus." Any
reference in this Agreement to the Registration Statement, any Prepricing
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to General Instructions
(F) of Form N-2 under the 1933 Act and the 1940 Act, as of the date of the
Registration Statement, such Prepricing Prospectus or the Prospectus, as the
case may be, and any reference to any amendment or supplement to the
Registration Statement, any Prepricing Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934 (the "1934 Act") which, upon filing, are
incorporated by reference therein. As used herein, the term "Incorporated
Documents" means the documents which at the time are incorporated by reference
in the Registration Statement, any Prepricing Prospectus, the Prospectus, or
any amendment or supplement thereto.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
the Firm Shares to the Underwriter and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all
the terms and conditions set forth herein, the Underwriter agrees to purchase
from the Company at a purchase price of $[ ] per Share] (the "purchase price
per Share"), the number of Firm Shares set forth above.
The Company hereby also agrees to sell to the Underwriter, and upon
the basis of the representations, warranties and agreements of the Company
herein contained and subject to all the terms and conditions set forth herein,
the Underwriter shall have the right for [30] days from the date of the
Prospectus to purchase from the Company up to [ ] Additional Shares at the
purchase price per share for the Firm Shares. The Additional Shares may be
purchased solely for the purpose of covering over-allotments, if any, made in
connection with the offering of the Firm Shares.
3. Terms of Public Offering. The Company has been advised by you that
you propose to make a public offering of the Shares as soon after the
Registration Statement has become effective and this Agreement has been
executed and delivered as in your judgment is advisable, and initially to
offer the Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to you of
the Firm Shares and payment therefor shall be made at the offices of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times Square, New York, New York, at
10:00 a.m., New York, New York time, on __________, 2003 (the "Closing Date").
The place of closing for the Firm Shares and the Closing Date may be varied by
agreement between you and the Company.
Delivery to you of and payment for any Additional Shares to be
purchased by you shall be made at the offices of Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP, Four Times Square, New York, New York, at 10:00 a.m., New York,
New York time, on such date or dates (the "Additional Closing Date") (which
may be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than three nor later than ten business days after the
giving of the notice hereinafter referred to) as shall be specified in a
written notice from you to the Company of your determination to purchase a
number, specified in such notice, of Additional Shares. You may give such
notice to the Company at any time within [30] days after the date of the
Prospectus. The place of closing for the Additional Shares and the Additional
Closing Date may be varied by agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such
denominations as you shall request prior to 1:00 p.m., New York, New York time
(or such other time as the parties agree), not later than the second full
business day preceding the Closing Date or the Additional Closing Date, as the
case may be. Such certificates shall be made available to you in New York, New
York for inspection and packaging not later than 9:30 a.m., New York, New York
time, on the business day immediately preceding the Closing Date or the
Additional Closing Date, as the case may be. The certificates evidencing the
Firm Shares and any Additional Shares to be purchased hereunder shall be
delivered to you on the Closing Date or the Additional Closing Date, as the
case may be, against payment of the purchase price therefor by wire transfer
immediately available funds to the account specified in writing, not later
than the close of business two days next preceding the Closing Date or the
Additional Closing Date, as the case may be. Payment for the Firm Shares sold
by the Company hereunder shall be delivered by you to the Company.
5. Covenants and Agreements of the Company. The Company covenants and
agrees with you as follows:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective under the 1933 Act before
the offering of the Shares may commence, the Company will use its best
efforts to cause the Registration Statement or such post-effective
amendment to become effective under the 1933 Act as soon as possible.
If the Registration Statement has become effective and the Prospectus
contained therein omits certain information at the time of
effectiveness pursuant to Rule 430A of the 1933 Act Rules and
Regulations, the Company will file a prospectus including such
information pursuant to Rule 497(h) of the 1933 Act Rules and
Regulations, as promptly as practicable, but no later than the second
business day following the earlier of the date of the determination of
the offering price of the Shares or the date the Prospectus is first
used after the effective date of the Registration Statement. If the
Registration Statement has become effective and the Prospectus
contained therein does not so omit such information, the Company will
file a Prospectus or certification pursuant to Rule 497(c) or (j), as
the case may be, of the 1933 Act Rules and Regulations as promptly as
practicable, but no later than the fifth business day following the
date of the later of the effective date of the Registration Statement
or the commencement of the public offering of the Shares after the
effective date of the Registration Statement. The Company will advise
you promptly and, if requested by you, will confirm such advice in
writing (i) when the Registration Statement or such post-effective
amendment has become effective, (ii) when the Prospectus has been
timely filed pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act
Rules and Regulations or (iii) when the certification permitted
pursuant to Rule 497(j) of the 1933 Act Rules and Regulations has been
timely filed, whichever is applicable.
(b) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of any request made by
the Commission for amendment of or a supplement to the Registration
Statement, including a Rule 462(b) Registration Statement, the
Prospectus or any Prepricing Prospectus (or any amendment or supplement
to any of the foregoing) or for additional information, (ii) of the
issuance by the Commission, any state securities commission, any
national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or
any official of any order suspending the effectiveness of the
Registration Statement, prohibiting or suspending the use of the
Prospectus, any Prepricing Prospectus or any sales material (as
hereinafter defined), of any notice pursuant to Section 8(e) of the
1940 Act, of the suspension of qualification of the Shares for offering
or sale in any jurisdiction, or the initiation or contemplated
initiation of any proceeding for any such purposes, (iii) of receipt by
(A) the Company, any affiliate of the Company or attorney of the
Company of any other material communication from the Commission, or (B)
the Company, any affiliate of the Company or attorney of the Company of
any other material communication from the Commission, any state
securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official relating, in
the case of either clause (A) or (B), to the Company (if such
communication relating to the Company is received by such person within
three years after the date of this Agreement), the Registration
Statement, the Form N-8A, the Prospectus, any Prepricing Prospectus,
any Sales Material (as hereinafter defined) (or any amendment or
supplement to any of the foregoing) or this Agreement, and (iv) within
the period of time referred to in paragraph (f) below, of any material,
adverse change in the condition (financial or other), business,
business prospects, properties, net assets or results of operations of
the Company (other than as a result of changes in market conditions
generally) or of the happening of any event known to the Company which
makes any statement of a material fact made in the Registration
Statement, the Prospectus, any Prepricing Prospectus or any Sales
Material (or any amendment or supplement to any of the foregoing)
untrue or which requires the making of any additions to or changes in
the Registration Statement, the Prospectus, any Prepricing Prospectus
or any Sales Material (or any amendment or supplement to any of the
foregoing) in order to state a material fact required by the 1933 Act,
the 1940 Act or the Rules and Regulations to be stated therein or
necessary in order to make the statements therein (in the case of a
prospectus or any sales material, in light of the circumstances under
which they were made) not misleading or of the necessity to amend or
supplement the Registration Statement, the Prospectus, any Prepricing
Prospectus or any Sales Material (or any amendment or supplement to any
of the foregoing) to comply with the 1933 Act, the 1940 Act, the Rules
and Regulations or any other law or order of any court or regulatory
body. If at any time the Commission shall issue any order suspending
the effectiveness of the Registration Statement, prohibiting or
suspending the use of the Prospectus or any Sales Material (or any
amendment or supplement to any of the foregoing) or suspending the
qualification of the Shares for offering or sale in any jurisdiction,
the Company will use its best efforts to obtain the withdrawal of such
order at the earliest possible time. If at any time any national
securities exchange, any state securities commission, any arbitrator,
any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official shall issue any order suspending
the effectiveness of the Registration Statement, prohibiting or
suspending the use of the Prospectus or any Sales Material (or any
amendment or supplement to any of the foregoing) or suspending the
qualification of the Shares for offering or sale in any jurisdiction,
the Company will use its reasonable best efforts to obtain the
withdrawal of such order at the earliest possible time.
(c) Within five years from the date hereof, the Company will
not (i) file any amendment (except any post-effective amendment
required by Rule 8b-16 of the 1940 Act which is filed with the
Commission after the later of (x) one year from the date of this
Agreement or (y) the date on which the distribution of the Shares is
completed) to the Registration Statement or make any amendment or
supplement to the Prospectus, any Prepricing Prospectus or any Sales
Material (or any amendment or supplement to any of the foregoing)
unless (i) you shall have been previously advised thereof and been
given a reasonable opportunity to review such filing, amendment or
supplement and have not objected to such filing, amendment or
supplement after being so advised or (ii) so long as, in the opinion
of counsel for the Underwriter, a Prospectus is required to be
delivered in connection with sales of Shares by the Underwriter or
dealer, file any information, documents or reports pursuant to the
1933 Act, the 1940 Act or the 1934 Act, without delivering a copy of
such information, documents or reports to you, prior to or
concurrently with such filing.
(d) Prior to the execution and delivery of this Agreement,
the Company has delivered to you, without charge, in such quantities
as you have reasonably requested, copies of each form of any
Prepricing Prospectus. The Company consents to the use, in accordance
with the provisions of the 1933 Act and with the securities or Blue
Sky laws of the jurisdictions in which the Shares are offered by the
Underwriter and by dealers, prior to the date of the Prospectus, of
each Prepricing Prospectus so furnished by the Company.
(e) As soon after the execution and delivery of this
Agreement as reasonably possible and thereafter from time to time,
for such period as in the opinion of counsel for the Underwriter a
prospectus is required by the 1933 Act to be delivered in connection
with sales of Shares by any Underwriter or dealer and for so long a
period as you may request for the distribution of Shares, the Company
will promptly deliver to the Underwriter and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or
supplement thereto) as you may reasonably request. The Company
consents to the use of the Prospectus (and of any amendments or
supplements thereto) in accordance with the provisions of the 1933
Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares are offered by the Underwriter and by all dealers to
whom Shares may be sold, both in connection with the offering or sale
of the Shares and for such period of time thereafter as the
Prospectus is required by law to be delivered in connection with
sales of Shares by the Underwriter or any dealer. If during such
period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriter is required
to be set forth in the Registration Statement or the Prospectus (as
then amended or supplemented) or should be set forth therein in order
to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading
in any material respect or if it is necessary to supplement or amend
the Registration Statement or the Prospectus to comply with the 1933
Act, the 1940 Act, the Rules and Regulations or any other applicable
law, rule or regulation, the Company will forthwith notify you of
such event, prepare and, subject to the provisions of paragraphs __
above, promptly file with the Commission and use its best efforts to
cause to become effective as promptly as possible an appropriate
amendment or supplement thereto and will furnish as promptly as
reasonably possible to the Underwriter and dealers, without charge,
such number of copies thereof as they may reasonably request;
provided, however, that if such amendment or supplement is required
solely as a result of a material misstatement in or material omission
from the information furnished in writing by or on behalf of the
Underwriter to the Company expressly for use in the Registration
Statement or the Prospectus (such information, as described in
Section 12 of this Agreement, being referred to herein as the
"Underwriter Information"), then the Company shall deliver such
amendment or supplement at cost.
(f) The Company will cooperate with you and with your
counsel in connection with any registration or qualification of the
Shares for offering and sale by the Underwriter and by dealers as may
be required under the applicable securities or Blue Sky laws of such
jurisdictions as you may designate and will file such consents to
service of process or other documents necessary or appropriate in
order to effect such registration or qualification for so long as
required to complete the distribution of the Shares; provided,
however, that the foregoing shall not apply to the extent that the
Shares are "covered securities" that are exempt from state regulation
of securities offerings pursuant to Section 18 of the 1933 Act.
(g) As soon as practicable, but in no event later than the
last day of the 18th full calendar month following the end of the
calendar quarter in which the effective date of the Registration
Statement falls, the Company will make generally available to its
security holders an earnings statement, which need not be audited,
which earnings statement shall satisfy the provisions of Section
11(a) of the 1933 Act and Rule 158 of the 1933 Act Rules and
Regulations.
(h) During the period of three years hereafter, the Company
will furnish or will have furnished to you as soon as available, (i)
a copy of each report of the Company mailed to shareholders or filed
with the Commission (other than reports on Form N-SAR) or furnished
to the NASD or any national securities exchange or (ii) from time to
time such other information concerning the Company as you may
reasonably request.
(i) If this Agreement shall terminate or be terminated after
execution pursuant to any provisions hereof or if this Agreement
shall be terminated by the Underwriter because of any inability,
failure or refusal on the part of the Company to comply with any
material terms in this Agreement or because any of the conditions in
Section 10 of this Agreement required to be complied with or
fulfilled by it are not satisfied, then the Company agrees to
reimburse the Underwriter for all out-of-pocket expenses (including
reasonable fees and expenses of counsel for the Underwriter) incurred
by you in connection herewith.
(j) The Company will direct the investment of the net
proceeds of the offering of the Shares in accordance in all material
respects with the statements under the caption "Use of Proceeds" set
forth in the Prospectus.
(k) The Company will file the requisite copies of the
Prospectus with the Commission in a timely fashion pursuant to Rule
497(c) or Rule 497(h) of the 1933 Act Rules and Regulations,
whichever is applicable or, if applicable, will file in a timely
fashion the certification permitted by Rule 497(j) of the 1933 Act
Rules and Regulations and will advise you of the time and manner of
such filing.
(l) The Company will use its best efforts to have the Shares
approved, subject to notice of issuance, for trading on the NASD
National Market concurrently with the effectiveness of the
Registration Statement and to comply with the rules or regulations of
the NASD in relation thereto.
(m) Except to the Underwriter as provided in this Agreement
or pursuant to any dividend reinvestment plan of the Company
described in the Prospectus, the Company will not directly or
indirectly issue, sell, contract to sell or otherwise dispose of, any
common shares of the Company or any securities convertible into or
exercisable or exchangeable for common shares of the Company or grant
any rights, options or warrants to purchase common shares of the
Company, for a period of 180 days after the date of the Prospectus,
without your prior written consent.
(n) Except as stated in this Agreement and in the
Prospectus, the Company will not take, directly or indirectly, any
action designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Shares in
violation of federal securities laws.
(o) The Company will direct the investment of the proceeds
of the offering of the Shares so as to comply with the requirements
of Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), to qualify as a regulated investment company under the Code.
(p) The Company will comply with all applicable securities
and other applicable laws, rules and regulations, including, without
limitation, the Xxxxxxxx-Xxxxx Act of 2002, and will use its best
efforts to cause the Company's directors and officers, in their
capacities as such, to comply with such laws, rules and regulations,
including, without limitation, the provisions of the Xxxxxxxx-Xxxxx
Act of 2002.
(q) The Company will comply with all provisions of any
undertakings contained in the Registration Statement.
6. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Underwriter on the date hereof, and shall be
deemed to represent and warrant to the Underwriter on the Closing Date and the
Additional Closing Date, that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any
amendment or supplement thereto or filed pursuant to Rule 497 of the
1933 Act Rules and Regulations, complied when so filed in all
material respects with the provisions of the 1933 Act, the 1940 Act
and the Rules and Regulations (except that this representation and
warranty does not apply to statements in or omissions from the
Prepricing Prospectus (and any amendment or supplement thereto) made
in reliance upon and in conformity with the Underwriter Information)
and the Commission has not issued any order preventing or suspending
the use of the Prepricing Prospectus.
(b) The registration statement, in the form in which it
became or becomes effective and also in such form as it may be when
any post-effective amendment thereto shall become effective, the
Prospectus and any amendment or supplement thereto when filed with
the Commission under Rule 497 of the 1933 Act Rules and Regulations
and the Form N-8A when originally filed with the Commission and any
amendment or supplement thereto when filed with the Commission
complied or will comply in all material respects with the provisions
of the 1933 Act, the 1940 Act and the Rules and Regulations and each
of the Registration Statement, and the Prospectus (or any supplement
or amendment to any of them) did not or will not at any such times
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading; except that
this representation and warranty does not apply to statements in or
omissions from the Registration Statement and the Prospectus (and any
amendment or supplement to either of them) made in reliance upon and
in conformity with the Underwriter Information.
(c) All the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and are free of any preemptive or similar rights;
the Shares have been duly authorized and, when issued and delivered
to the Underwriter against payment therefor in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable
and free of any preemptive or similar rights; except as set forth in
the Prospectus, the Company is not a party to or bound by any
outstanding options, warrants, or similar rights to subscribe for, or
contractual obligations to issue, sell, transfer or acquire, any of
its capital stock or any securities convertible into or exchangeable
for any of such capital stock; and the capital stock of the Company
conforms in all respects to the description thereof in the
Registration Statement or the Prospectus (or any amendment or
supplement to either of them). Except for the Shares and the shares
of common stock issued in accordance with Section 14(a) of the 1940
Act, no other shares of capital stock are issued or outstanding and
the capitalization of the Company conforms to the description thereof
in the Registration Statement and the Prospectus (or any amendment or
supplement to either of them) as of the date set forth therein.
(d) The Company has been duly formed and is validly existing
in good standing as a corporation under the laws of the State of New
York, with full trust power and authority to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement to either of them) and is duly registered and qualified to
conduct business and is in good standing in each jurisdiction or
place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where
the failure so to register or to qualify does not or would not have a
material, adverse effect on the condition (financial or other),
business, business prospects, properties, net assets or results of
operations of the Company (a "Material Adverse Effect").
(e) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened, against the Company,
or to which the Company or any of its properties is subject, (i) that
are required to be described in the Registration Statement or the
Prospectus (and any amendment or supplement to either of them) but
are not described therein or (ii) which might individually or in the
aggregate prevent the transactions contemplated by this Agreement,
and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement to either
of them) or to be filed as an exhibit to the Registration Statement
that are not described therein or filed as an exhibit thereto. The
contracts so filed as exhibits are accurate and complete in all
respects. All such contracts to which the Company is a party have
been duly authorized, executed and delivered by the Company,
constitute valid and binding agreements of the Company and are
enforceable against the Company in accordance with the terms thereof,
except as enforceability thereof may be limited by (A) the
application of bankruptcy, reorganization, insolvency and other laws
affecting creditors' rights generally, (B) equitable principles being
applied at the discretion of a court before which any proceeding may
be brought and (C) limitations of public policy and a court's
discretion with respect to the enforceability of any indemnification
rights. The Company has not received notice or been made aware that
any other party is in breach of or default under any such contracts.
(f) The Company is not (i) in violation of its Certificate
of Incorporation, by-laws or other organizational documents, (ii) in
violation of any law, ordinance, administrative or governmental rule
or regulation applicable to the Company or of any decree of the
Commission, any state securities commission, any national securities
exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any other
agency or any body or official having jurisdiction over the Company
or (iii) in breach or default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any material agreement,
indenture, lease or other instrument to which the Company is a party
or by which it or any of its properties may be bound, except, in the
case of (ii) and (iii) above, for violations, breaches or defaults
that do not or would not have, either individually or in the
aggregate, a Material Adverse Effect on the Company; and there does
not exist any state of facts which constitutes an event of default on
the part of the Company as defined in such documents or which, with
notice or lapse of time or both, would constitute such an event of
default (except for any such event of default that would not have a
Material Adverse Effect).
(g) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement or any of the
Company Agreements [not defined] by the Company, nor the consummation
by the Company of the transactions contemplated hereby or thereby (i)
requires any consent, approval, authorization or order of or
registration or filing with the Commission, any state securities
commission, any national securities exchange, any arbitrator, any
court, regulatory body, administrative agency or other governmental
body, agency or official having jurisdiction over the Company (except
(A) such as have been obtained or made prior to the date of this
Agreement, (B) for compliance with the securities or Blue Sky laws of
various jurisdictions which have been or will be effected in
accordance with this Agreement and (C) for compliance with the filing
requirements of the NASD Division of Corporate Finance) or conflicts
or will conflict with or constitutes or will constitute a breach of
the Declaration, bylaws, or other organizational documents of the
Company or (ii) (A) conflicts or will conflict with or constitutes or
will constitute a breach of or a default under any agreement,
indenture, lease or other instrument to which the Company is a party
or by which it or any of its properties may be bound or (B) violates
or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any of its
properties or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
pursuant to the terms of any agreement or instrument to which it is a
party or by which it may be bound or to which any of the property or
assets of the Company is subject except, in the case of (ii) above,
for conflicts, breaches, defaults, violations or encumbrances that do
not or would not have, either individually or in the aggregate, a
Material Adverse Effect on the Company. As of the date hereof, the
Company is not subject to any order of any court or of any
arbitrator, governmental authority or administrative agency that has
or would have, either individually or in the aggregate, a Material
Adverse Effect on the Company.
(h) Since the date as of which information is given in the
Registration Statement and the Prospectus (and any amendment or
supplement to either of them), except as otherwise stated therein,
(i) there has been no change that has or would have a Material
Adverse Effect on the Company; (ii) there have been no material
transactions entered into by the Company other than those in the
ordinary course of its business or described in the Prospectus (and
any amendment or supplement thereto); and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its common stock.
(i) PricewaterhouseCoopers LLP, who have audited the
Statement of Assets and Liabilities included in, and whose report
appears in, the Registration Statement and the Prospectus (and any
amendment or supplement to either of them), are independent public
accountants with respect to the Company as required by the 1933 Act,
the 1940 Act and the Rules and Regulations. To the best of the
Company's knowledge and belief, Xxxxxx Xxxxxxxx LLP, who previously
expressed their opinions on certain of the audited financial
statements included in the Registration Statements and the Prospectus
(but have not consented to inclusion of such opinions in the
registration statements), at all times at which they served as public
accountants, were independent public accountants with respect to the
Company within the meaning of the Securities Act and the applicable
Rules and Regulations.
(j) The financial statements, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement or the Prospectus (or any amendment or
supplement to either of them) present fairly the financial position
of the Company on the basis stated in the Registration Statement at
the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved except as
disclosed therein; and the other financial and statistical
information and data included in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) are accurately
derived from such financial statements and the books and records of
the Company. No other financial statements or schedules are required
to be included in the Registration Statement.
(k) The Company, subject to the Registration Statement
having been declared effective and the filing of the Prospectus under
Rule 497 under the 1933 Act Rules and Regulations, has taken all
action required to be taken by it under the 1933 Act, the 1940 Act
and the Rules and Regulations to make the public offering and
consummate the sale of the Shares as contemplated by this Agreement.
(l) The execution and delivery of and the performance by the
Company of its obligations under this Agreement and the Company
Agreements have been duly and validly authorized by the Company and
this Agreement and each of the Company Agreements have been duly
executed and delivered by the Company and (assuming due and valid
authorization, execution and delivery by the other parties hereto and
thereto) this Agreement and each Company Agreement constitutes the
valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited by federal or
state securities laws and subject to the qualification that the
enforceability of the Company's obligations hereunder and thereunder
may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles
(regardless of whether enforcement is sought in a proceeding in
equity or at law).
(m) Except as disclosed in or contemplated by the
Registration Statement or the Prospectus (or any amendment or
supplement to either of them), subsequent to the respective dates as
of which such information is given in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them),
the Company has not incurred any debt, liability or obligation,
indirect, direct or contingent, and there has not been any change in
the capital stock or capitalization of the Company.
(n) The Company has not distributed without your consent to
the public any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the
Prepricing Prospectus included in Pre-Effective Amendment No. 2 to
the registration statement (the "Red Xxxxxxx Preliminary
Prospectus"), the Prospectus and the Sales Material (or any other
material, if any, permitted by the 1933 Act, the 1940 Act or the
Rules and Regulations).
(o) (i) The Company has such licenses, permits, and
authorizations of governmental or regulatory authorities ("permits")
as are necessary to own its property and to conduct its business in
the manner described in the Prospectus (and any amendment or
supplement thereto); (ii) the Company has fulfilled and performed all
its obligations with respect to such permits and no event has
occurred which allows or, after notice or lapse of time, would allow,
revocation or termination thereof or results in any other impairment
of the rights of the Company under any such permit, subject in each
case to such qualification as may be set forth in the Prospectus (and
any amendment or supplement thereto); and, (iii) except as described
in the Prospectus (and any amendment or supplement thereto), none of
such permits contains any restriction that is materially burdensome
to the Company; except where the failure to obtain or perform its
obligations with respect to such permits, or the restrictions set
forth in such permits, as set forth in clauses (i), (ii) and (iii),
either individually or in the aggregate, does or would not have a
Material Adverse Effect on the Company.
(p) The Company has maintained and continues to maintain a
system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in
accordance with the Board of Directors' general or specific
authorization and with the investment policies and restrictions of
the Company and the applicable requirements of the 1940 Act, the 1940
Act Rules and Regulations and the Code; (ii) transactions are
recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles, to
calculate net asset value and fee accruals, to maintain
accountability for assets and to maintain compliance with the books
and records requirements under the 1940 Act and the 1940 Act Rules
and Regulations; (iii) access to assets is permitted only in
accordance with the Board of Directors' general or specific
authorization; and (iv) the recorded account for assets is compared
with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(q) The conduct by the Company of its business (as described
in the Prospectus) does not require it to be the owner, possessor,
licensee of, or otherwise require it to have the right to use, any
patents, patent licenses, trademarks, service marks or trade names
(collectively, "Intellectual Property") which it does not own,
possess, license or otherwise have the right to use, except where the
failure to own, possess, license or otherwise have the right to use
such Intellectual Property, individually or in the aggregate, does or
would not have a Material Adverse Effect on the Company.
(r) Except as stated in this Agreement and in the Prospectus
(and any amendment or supplement thereto), the Company has not taken
and will not take, directly or indirectly, any action designed to or
which could cause or result in or which will constitute stabilization
or manipulation of the price of the Shares in violation of federal
securities laws and, to the Company's knowledge, no such action has
been, or will be, taken by any affiliates of the Company.
(s) The Company has duly elected to be a business
development company under the 1940 Act and the Rules and Regulations;
no order of suspension or revocation of such election under the 1940
Act and the Rules and Regulations has been issued or proceedings
therefor initiated or, to the knowledge of the Company, threatened by
the Commission. The Company is, and at all times through the
completion of the transactions contemplated hereby, will be, in
compliance in all material respects with the 1933 Act and the 1940
Act. No person is serving as an officer, director, trustee or
investment adviser of the Company except in accordance with the
provisions of the 1940 Act and the 1940 Act Rules and Regulations.
The Company has not received any notice from the Commission pursuant
to Section 8(e) of the 1940 Act with respect to the 1940 Act
Notification or the Registration Statement (or any amendment or
supplement to either of them).
(t) All advertising, sales literature, "prospecting
letters," "prospectus wrappers," envelopes, prospectuses omitted from
the Registration Statement pursuant to the 1933 Act Rules and
Regulations or other promotional material prepared or authorized in
writing by the Company for use or distribution to the public for use
in connection with the offering and sale of the Shares (including the
client brochure and the broker flyer each filed with the NASD on [ ],
2003) (collectively, "Sales Material") complied and comply in all
respects with the applicable requirements of the 1933 Act, the 1933
Act Rules and Regulations and the rules and interpretations of the
NASD and no Sales Material contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading (except that this representation and warranty does not
apply to statements in or omissions from the Sales Material made in
reliance upon and in conformity with the Underwriter Information).
(u) No holder of any security of the Company has any right
to require registration of any Shares, capital stock or any other
security of the Company because of the filing of the registration
statement or consummation of the transactions contemplated by this
Agreement.
(v) The Company intends to direct the investment of the
proceeds of the offering of the Shares in such a manner as to comply
with the requirements of Subchapter M of the Code.
(w) None of the promotional material for use by brokers in
connection with the marketing of the Shares (including any "broker
kits," "road show slides," "road show scripts," "broker post-cards"
and "broker reference cards" authorized in writing by or prepared by
the Company for use in connection with the offering and sale of the
Shares (collectively, "Broker Material") when read together with the
Prospectus, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading
(except that this representation and warranty does not apply to
statements in or omissions from the Broker Material made in reliance
upon and in conformity with the Underwriter Information), and no
Broker Material was or has been made available by the Company by
means of an Internet web site or similar electronic means.
(x) The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus or the Prospectus.
(y) Except as disclosed in the Registration Statement or the
Prospectus (or any amendment or supplement to either of them), to the
Company's knowledge, after due inquiry, no director of the Company is
an "interested person" (as defined in the 0000 Xxx) of the Company or
an "affiliated person" (as defined in the 0000 Xxx) of the
Underwriter.
(z) The Shares have been approved for trading on the NASD
National Market.
(aa) The officers and directors of the Company are insured
by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary for
directors' and officers' liability insurance of a public company and
as would cover claims which could be made in connection with the
issuance of the Common Stock; and the Company has no reason to
believe that it will not be able to renew its existing directors' and
officers' liability insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to cover its officers and directors.
(bb) The Company has good and valid title to all property
(real and personal) described in the Prospectus as being owned by it,
free and clear of all liens, claims, security interests or other
encumbrances except (i) such as are described in the financial
statements included in, or elsewhere in, the Prospectus or (ii) such
as are not materially burdensome and do not interfere in any material
respect with the use of the property or the conduct of the business
of the Company. All property (real and personal) held under lease by
the Company is held by it under valid, subsisting and enforceable
leases with only such exceptions as in the aggregate are not
materially burdensome and do not interfere in any material respect
with the conduct of the business of the Company, except as described
in the Prospectus.
(cc) The Company has not, or to the knowledge of the
Company, any other person associated with or acting on behalf of the
Company, including, without limitation, any director, officer, agent
or employee of the Company or any of its subsidiaries, has not,
directly or indirectly, at any time during the past five years (i)
made any unlawful contribution to any candidate for political office,
or failed to disclose fully any contribution in violation of law, or
(ii) made any payment to any federal, state or foreign governmental
official, or other person charged with similar public or quasi-public
duties (other than payments required or permitted by the laws of the
United States or any jurisdiction thereof or applicable foreign
jurisdictions); (iii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.
(dd) All offers, sales, conversions and redemptions of the
Company's capital stock and other securities through the date hereof
were made in compliance with the 1933 Act, the 1940 Act, the Rules
and Regulations and all other applicable state and federal laws or
regulations, except to the extent any noncompliance would not have a
Material Adverse Effect.
(ee) All federal, state, local and foreign tax returns
required to be filed by or on behalf of the Company (and its
predecessors) with respect to the six full fiscal years ended prior
to the date of this Agreement have been filed (or are the subject of
valid extension) with the appropriate federal, state, local and
foreign authorities and all such tax returns, as filed, are accurate
in all material respects. All federal, state, local and foreign taxes
(including estimated tax payments) required to be shown on all such
tax returns or claimed to be due from or with respect to the business
of the Company (and its predecessors) with respect to such six full
fiscal years have been paid or reflected as a liability on the
financial statements of the Company for appropriate periods, except
for those taxes or claims therefor which are being contested by the
Company in good faith and for which appropriate reserves are
reflected in the Company's financial statements. All deficiencies
asserted as a result of any federal, state, local or foreign tax
audits have been paid or finally settled and no issue has been raised
in any such audit which, by application of the same or similar
principles, reasonably could be expected to result in a proposed
deficiency for any other period not so audited. There are no
outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, state, local or foreign tax
return for any period. On the Closing Date, and Additional Closing
Date, if any, all stock transfer and other taxes which are required
to be paid in connection with the sale of the shares to be sold by
the Company to the Underwriter will have been fully paid by the
Company and all laws imposing such taxes will have been complied
with.
(ff) Except as set forth in the Prospectus, there are no
transactions with "affiliates" (as defined in Rule 405 promulgated
under the 0000 Xxx) or any officer, director or security holder of
the Company (whether or not an affiliate) which are required by the
1933 Act, the 1940 and the Rules and Regulations thereunder to be
disclosed in the Registration Statement.
(gg) The Company has procured lock-up agreements from each
of the Company's most senior executive officers and directors.
(hh) To the Company's knowledge, no officer, director or 10%
shareholder of the Company has a direct or indirect affiliation or
association with any member of the NASD, except as discussed in the
questionnaires delivered by the Company to the Underwriter or
disclosed in the Prospectus.
(ii) The statistical and market-related data included in the
Prospectus is based on or derived from sources which the Company
believes to be reliable and accurate in all material respects.
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the 1933 Act and the 1940 Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof and of any Prepricing
Prospectus to the Underwriter and dealers; (ii) the printing and delivery
(including, without limitation, postage, air freight charges and charges for
counting and packaging) of such copies of the Registration Statement, the
Prospectus, each Prepricing Prospectus, the Blue Sky memoranda, the Power of
Attorney and Custody Agreement, this Agreement and all amendments or
supplements to any of them as may be reasonably requested for use in
connection with the offering and sale of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws or Blue Sky laws, including the reasonable attorneys'
fees and out-of-pocket expenses of the counsel for the Underwriter in
connection therewith; (iv) the filing fees incident to securing any required
review by the NASD of the fairness of the terms of the sale of the Shares and
the reasonable fees and disbursements of the Underwriter's counsel relating
thereto; (v) the cost of preparing stock certificates; (vi) the costs and
charges of any transfer agent or registrar; (vii) the cost of the tax stamps,
if any, in connection with the issuance and delivery of the Shares to the
Underwriter; (viii) all other fees, costs and expenses referred to in Item 26
of the Registration Statement, (ix) the transportation, lodging, graphics and
other expenses incidental to the Company's preparation for and participation
in the "roadshow" for the offering contemplated hereby, and (x) all other
costs and expenses incident to the performance of the obligations of the
Company hereunder which are not otherwise specifically provided for in this
Section 7. Notwithstanding the foregoing, in the event that the proposed
offering is terminated for the reasons set forth in Section 11 hereof, the
Company agrees to reimburse the Underwriter as provided in this Section 7.
8. Indemnification and Contribution. Subject to the limitations in
this paragraph below and to the other limitations set forth in this Section 8,
the Company agrees to indemnify and hold harmless you and your directors,
officers, employees and agents, and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses, including, without limitation, reasonable costs of
investigation and attorneys' fees and expenses (collectively, "Damages")
arising out of or based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Prepricing Prospectus or in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except to the extent that any such Damages arise out of or are
based upon an untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in reliance upon and
in conformity with the information furnished in writing to the Company by or
on your behalf expressly for use in connection therewith, or (ii) any
inaccuracy in or breach of the representations and warranties of the Company
contained herein or any failure of the Company to perform its respective
obligations hereunder or under law; provided, however, that with respect to
any untrue statement or omission made in any Prepricing Prospectus, the
indemnity agreement contained in this paragraph shall not inure to the benefit
of the Underwriter (or to the benefit of any person controlling the
Underwriter or to any officer, director, employee or agent of the Underwriter)
from whom the person asserting any such losses, claims, damages or liabilities
purchased the Shares concerned if both (y) a copy of the Prospectus was not
sent or given to such person at or prior to the written confirmation of the
sale of such Shares to such person as required by the 1933 Act, and (z) the
untrue statement or omission in the Prepricing Prospectus was corrected in the
Prospectus. This indemnification shall be in addition to any liability that
the Company may otherwise have.
In addition to its other obligations under this Section 8, the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based
upon any statement or omission, or any inaccuracy in the representations and
warranties of the Company herein or failure to perform its obligations
hereunder, all as set forth in this Section 8, subject to the limitations set
forth in this Section 8, it will reimburse the Underwriter on a quarterly
basis for all reasonable legal or other out-of-pocket expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriter for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Underwriter shall promptly
return it to the person(s) from whom it was received, together with interest
compounded daily determined on the basis of the base lending rate announced
from time to time by Chase Manhattan Bank, N.A. (the "Prime Rate"). Any such
interim reimbursement payments which are not made to the Underwriter within 30
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request.
If any action or claim shall be brought against the Underwriter or
any person controlling the Underwriter in respect of which indemnity may be
sought against the Company, the Underwriter or such controlling person shall
promptly notify in writing the party(s) against whom indemnification is being
sought (the "indemnifying party" or "indemnifying parties"), and such
indemnifying party(s) shall assume the defense thereof, including the
employment of counsel reasonably acceptable to the Underwriter or such
controlling person and payment of all fees and expenses incurred by such
counsel. The Underwriter or any such controlling person shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the Underwriter or such controlling person unless (i) the indemnifying
party(s) has (have) agreed in writing to pay such fees and expenses, (ii) the
indemnifying party(s) has (have) failed to assume the defense and employ
counsel reasonably acceptable to the Underwriter or such controlling person or
(iii) the named parties to any such action (including any impleaded parties)
include both the Underwriter or such controlling person and the indemnifying
party(s), and the Underwriter or such controlling person shall have been
advised by its counsel that one or more legal defenses may be available to the
Underwriter which may not be available to the Company, or that representation
of such indemnified party and any indemnifying party(s) by the same counsel
would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been proposed) due
to actual or potential differing interests between them (in which case the
indemnifying party(s) shall not have the right to assume the defense of such
action on behalf of the Underwriter or such controlling person
(notwithstanding its (their) obligation to bear the fees and expenses of such
counsel)). It is understood, however, that the indemnifying parties shall, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for the Underwriter
and controlling persons not having actual or potential differing interests.
The indemnifying party(s) shall not be liable for any settlement of any such
action effected without its (their) written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, the indemnifying party(s) agrees to indemnify and hold harmless the
Underwriter and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment, but in
the case of a judgment only to the extent stated in the immediately preceding
paragraph.
The Underwriter agrees to indemnify and hold harmless the Company,
its directors, its officers who sign the Registration Statement, and any
person who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Underwriter, but only with respect to
information furnished in writing by or on behalf of the Underwriter through
you expressly for use in the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto. If any action
or claim shall be brought or asserted against the Company, any of its
directors, any such officers, or any such controlling person based on the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be
sought against the Underwriter pursuant to this paragraph, the Underwriter
shall have the rights and duties given to the Company by the preceding
paragraph (except that if the Company shall have assumed the defense thereof
the Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the Underwriter's expense), and the
Company, its directors, any such officers, and any such controlling persons
shall have the rights and duties given to the Underwriter by the immediately
preceding paragraph.
If the indemnification provided for in this Section 8 is unavailable
or insufficient for any reason whatsoever to an indemnified party under the
first or fourth paragraph of this Section 8 in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then an indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriter on the other hand from the offering and sale of
the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriter on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriter on the other hand, shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriter, in each
case as set forth in the table on the cover page of the Prospectus; provided
that, in the event that the Underwriter shall have purchased any Additional
Shares hereunder, any determination of the relative benefits received by the
Company or the Underwriter from the offering of the Shares shall include the
net proceeds (before deducting expenses) received by the Company, and the
underwriting discounts and commissions received by the Underwriter, from the
sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of
the Prospectus. The relative fault of the Company on the one hand and the
Underwriter on the other hand 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 on the one hand or by the Underwriter on
the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 8, the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price of the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification, reimbursement or interim
payment or contribution under this Section 8 shall be subject to the
requirements of Release No. 11330 and Section 17(i) of the 1940 Act and,
subject thereto, shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity, contribution and reimbursement agreements contained in this
Section 8 and the representations and warranties of the Company, respectively,
set forth in this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf of the
Underwriter or any person controlling the Underwriter, the Company, its
directors or officers or any person controlling the Company, (ii) acceptance
of any Shares and payment therefor hereunder and (iii) any termination of this
Agreement. A successor to the Underwriter or any person controlling the
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in the second and fifth
paragraphs of this Section 8, including the amounts of any requested
reimbursement payments and the method of determining such amounts, shall be
settled by arbitration conducted pursuant to the Code of Arbitration Procedure
of the NASD. Any such arbitration must be commenced by service of a written
demand for arbitration or written notice of intention to arbitrate, therein
electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in the second and fifth
paragraphs of this Section 8, and would not resolve the ultimate propriety or
enforceability of the obligation to reimburse expenses which is created by the
provisions of the second and fifth paragraphs of this Section 8.
9. Conditions of Underwriter's Obligations. The obligation of the
Underwriter to purchase the Firm Shares hereunder are subject to the following
conditions:
(a) The Registration Statement shall have become effective
not later than 5:30 p.m., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by
you, and all filings required by Rules 497(h), 430A and 462 under the
1933 Act shall have been timely made, no order pursuant to Section
8(e) of the 1940 Act shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the
Company, threatened by the Commission and any request of the
Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have
been complied with to your satisfaction.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration
Statement and Prospectus, (i) there shall not have been any change in
the capital stock of the Company or any material change in the
indebtedness (other than in the ordinary course of business) of the
Company, (ii) except as set forth or contemplated by the Registration
Statement or the Prospectus, no material oral or written agreement or
other transaction shall have been entered into by the Company which
is not in the ordinary course of business and which could reasonably
be expected to result in a material reduction in the future earnings
of the Company, (iii) no casualty loss or damage (whether or not
insured) to the property of the Company shall have been sustained
which has or could reasonably be expected to have a Material Adverse
Effect, (iv) no legal or governmental action, suit or proceeding
affecting the Company or any of its properties which is material to
the Company and its subsidiaries taken as a whole or which affects or
could reasonable be expected to affect the transactions contemplated
by this Agreement shall have been instituted or threatened, and (v)
there shall not have been any change in the condition (financial or
otherwise), business, management, results or operations or prospects
of the Company or its subsidiaries having a Material Adverse Effect
which makes it impractical or inadvisable in your judgment to proceed
with the public offering or purchase the Shares as contemplated
hereby.
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, as counsel for the Company, dated the Closing
Date, satisfactory to you and your counsel, in substantially the form
attached hereto as Exhibit A.
(d) You shall have received on the Closing Date an opinion
of Xxxxxxxxx Traurig, LLP., as counsel for the Underwriter, dated the
Closing Date with respect to the issuance and sale of the Firm
Shares, the Registration Statement and other related matters as you
may reasonably request, and the Company and its counsel shall have
furnished to your counsel such documents as they may reasonably
request for the purpose of enabling them to pass upon such matters.
(e) You shall have received letters addressed to you and
dated the date hereof and the Closing Date from the firm of
PricewaterhouseCoopers LLP, independent certified public accountants,
substantially in the forms heretofore approved by you.
(f) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall be pending or, to the knowledge of the Company,
shall be threatened or contemplated by the Commission at or prior to
the Closing Date; (ii) no order suspending the effectiveness of the
Registration Statement or the qualification or registration of the
Shares under the securities or Blue Sky laws of any jurisdiction
shall be in effect and no proceeding for such purpose shall be
pending or, to the knowledge of the Company, threatened or
contemplated by the Commission or the authorities of any
jurisdiction; (iii) any request for additional information on the
part of the staff of the Commission or any such authorities shall
have been complied with to the satisfaction of the staff of the
Commission or such authorities; (iv) after the date hereof no
amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was first
submitted to you and you did not object thereto in good faith; and
(v) all of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all respects
on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive
officer and the chief financial officer of the Company (or such other
officers as are acceptable to you) to the effect set forth in this
Section 9(f) and in Sections 9(b) and 9(g) hereof.
(g) The Company shall not have failed in any material
respect at or prior to the Closing Date to have performed or complied
with any of its agreements herein contained and required to be
performed or complied with by it hereunder at or prior to the Closing
Date.
(h) The Company shall have furnished or caused to have been
furnished to you such further certificates and documents as you shall
have reasonably requested.
(i) At or prior to the effective date of the Registration
Statement, you shall have received a letter from the Corporate
Financing Department of the NASD confirming that such Department has
determined to raise no objections with respect to the fairness or
reasonableness of the underwriting terms and arrangements of the
offering contemplated hereby.
(j) At or prior to the Closing Date, you shall have received
Lock-Up Agreements from each of the Company's executive officers' and
directors.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
The obligation of the Underwriter to purchase Additional Shares
hereunder are subject to the satisfaction on and as of the Additional Closing
Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 9 shall be dated as of the
Additional Closing Date and the opinions called for by paragraph (c) shall be
revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 9
shall not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by you by notifying the Company of such
termination in writing or by telegram at or prior to such Closing Date, but
you shall be entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become
effective upon the later of (a) the execution and delivery hereof by the
parties hereto, and (b) release of notification of the effectiveness of the
Registration Statement by the Commission; provided, however, that the
provisions of Section 8 shall at all times be effective.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of the
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and
then only as to the Additional Shares, as the case may be, (i) trading in the
Company's common stock shall have been suspended by the Commission or the
Nasdaq/NMS, (ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or Nasdaq/NMS shall have been suspended or
materially limited, or minimum or maximum prices shall have been generally
established on such exchange, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by any such exchange or by order
of the Commission or any court or other governmental authority, (iii) a
general moratorium on commercial banking activities shall have been declared
by either federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic
conditions or other material event the effect of which on the financial
markets of the United States is such as to make it, in your good faith
judgment, impracticable or inadvisable to market the Shares or to enforce
contracts for the sale of the Shares. Notice of such cancellation shall be
promptly given to the Company and its counsel by telegraph, telecopy or
telephone and shall be subsequently confirmed by letter.
12. Information Furnished by the Underwriter. The Company
acknowledges that (i) the paragraph immediately following footnote (3) on the
cover page of the Prospectus, and (ii) the information under the caption
"Underwriting" in any Prepricing Prospectus and in the Prospectus, constitute
the only information furnished by or on your behalf as such information is
referred to in Sections 6(a), 6(b) and 9 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5 and 12
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered (i) if to the Company, to the office of
the Company at 000 Xxxx 00 Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxxxx, Chairman, President and Chief Executive Officer
(with copy to Xxxxxxx X. Xxxxx, Esq., Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, Four Times Square, New York, New York 10036), or (ii) if to you, to Punk,
Xxxxxx & Company, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention
Sagiv Shiv, Managing Director (with copy to Xxxxxxxxx Xxxxxxx, LLP., 0000
Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000, Attention: Xxxx X. Xxxxxxx, Esq.).
This Agreement has been and is made solely for the benefit of the
Underwriter, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof, to the extent provided
herein, and no other person shall acquire or have any right under or by virtue
of this Agreement. Neither of the terms "successor" and "successors and
assigns" as used in this Agreement shall include a purchaser from you of any
of the Shares in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument. This Agreement shall be
effective when, but only when, at least one counterpart hereof shall
have been executed on behalf of each party hereto.
The Company and the Underwriter each hereby irrevocably waive any
right they may have to a trial by jury in respect to any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Underwriter.
Very truly yours,
XXXXXX & XXXXXX GROUP, INC.
By:____________________________
Xxxxxxx X. Xxxxxx
Chairman and
Chief Executive Officer
CONFIRMED as of the date first above mentioned.
Punk, Xxxxxx & Company
By:_____________________________
Name:______________________________
Title:
EXHIBIT A
Form of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP Opinion
1. The Company has been created and is in good standing and has a legal
existence under the laws of the State of New York.
3. The Company has the power and authority to execute, deliver and
perform all of its obligations under the Underwriting Agreement and
the Transaction Documents and the execution and delivery of the
Underwriting Agreement and the Transaction Documents and the
consummation by the Company of all of the transactions contemplated
thereby have been duly authorized by all requisite action on the part
of the Company Each of the Underwriting Agreement and the Transaction
Documents has been duly authorized, executed and delivered by the
Company.
4. Each of the Transaction Documents constitutes the valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms under the Applicable Laws of the State of
New York.
5. The execution and delivery by the Company of the Underwriting
Agreement and each of the Transaction Documents and the performance
by the Company of its obligations under the Underwriting Agreement
and each of the Transaction Documents, each in accordance with its
terms, do not (A) conflict with the Certificate of Incorporation or
By-Laws of the Company, or (B) conflicts or will conflict with or
constitutes or will constitute a breach of, or default under or
creates or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company,
pursuant to any Applicable Contract. We do not express any opinion,
however, as to whether the execution, delivery or performance by the
Company of the Underwriting Agreement or the Transaction Documents
will constitute a violation of, or a default under, any covenant,
restriction or provision with respect to financial ratios or tests or
any aspect of the financial condition or results of operations of the
Company.
6. Neither the execution, delivery or performance by the Company of its
obligations under the Underwriting Agreement or the Transaction
Documents nor the compliance by the Company with the terms and
provisions thereof will contravene any provision of Applicable Law or
the 1940 Act or the 1940 Act Rules and Regulations in any material
respect.
7. No Governmental Approval, which has not been obtained or taken and is
not in full force and effect, is required to authorize, or is required
in connection with, the execution and delivery of the Underwriting
Agreement or any of the Transaction Documents or the enforceability of
any of the Transaction Documents against the Company.
8. Neither the execution, delivery or performance by the Company of its
obligations under the Underwriting Agreement or the Transaction
Documents nor compliance by the Company with the terms and provisions
thereof will contravene any Applicable Order.
9. The Company has duly elected to be a business development company under
the 1940 Act; and the Certificate of Incorporation and By-Laws comply
in all material respects with the 1940 Act and the 1940 Act Rules and
Regulations.
10. The Shares have been duly authorized by all necessary action of the
Company under the laws of the State of New York and, when issued to
and paid for by the Underwriters in accordance with the Underwriting
Agreement, will be validly issued, fully paid and non-assessable; the
form of certificate that may be used to evidence the Common Shares
complies in all material respects with the applicable requirements of
the Certificate of Incorporation, the By-Laws, the laws of the State
of New York and the rules of the NASDAQ National Market, in each case
as in effect on the date hereof. In rendering the opinion set forth
in this paragraph 9, we have assumed that if a holder of Common
Shares requests a certificate representing such holder's Common
Shares, that such certificate will conform to the specimen examined
by us and will have been signed by an authorized officer of the
transfer agent and registrar for the Common Shares and registered by
such transfer agent and registrar.
11. No holders of outstanding Common Shares are entitled as such to any
preemptive or other similar rights with respect to the Shares under
any Applicable Contract, under the Certificate of Incorporation or
the By-Laws or under the laws of the State of New York.
12. No legal or governmental proceedings are pending to which the Company
is a party that are required to be described in the Registration
Statement or the Prospectus and are not so described therein, and no
contract or other document is required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to
the Registration Statement that is not described therein or filed as
required.
13. The filing of the Prospectus pursuant to Rule 497(h) under the 1933
Act Rules and Regulations has been made in the manner and within the
time period required by Rule 497(h) of the 1933 Act Rules and
Regulations.
14. No facts have come to our attention that have caused us to believe
that the Registration Statement, at the time it became effective,
appears on its face to be appropriately responsive in all material
respects with the applicable requirements of the Securities Act, the
Rules and Regulations, the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder and does not contain an
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as of its
date and as of the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except
that in each case we do not express any view as to the financial
statements and other financial and/or statistical data included
therein or excluded therefrom or any of the schedules, appendices or
exhibits (other than exhibit L) included or incorporated by reference
to the Registration Statement.
15. Although the discussion in the Prospectus under the heading
"Taxation" does not purport to discuss all possible United States
federal income tax consequences relating to the taxation of the
Company and the purchase, ownership and disposition of the Shares,
such discussion constitutes, in all material respects, a fair summary
of law and is based on our understanding of the Company's operations
as disclosed in the Prospectus.
