4,600,000 Shares
DELTA FINANCIAL CORPORATION
Common Stock
UNDERWRITING AGREEMENT
________, 1996
NATWEST SECURITIES LIMITED
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
As Representatives of the
several Underwriters
c/o NatWest Securities Limited
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Dear Sirs:
Delta Financial Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to you and to the other underwriters named in
Schedule I hereto (collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), an aggregate of 4,000,000 shares (the
"Firm Shares") of the Company's common stock, $.01 par value (the "Common
Stock"). The Company has also agreed to grant to you and the other Underwriters
an option (the "Option") to purchase up to an additional 600,000 shares of
Common Stock (the "Option Shares"), on the terms and for the purposes set forth
in Section 1(b) hereof. The Firm Shares and the Option Shares are hereinafter
collectively referred to as the "Shares."
The Company and all of the stockholders of the Company identified on
Schedule II hereto (individually an "Existing Stockholder" and collectively
referred to as the "Existing Stockholders") confirm as follows their agreement
with the Representatives and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, (i) the Company agrees to sell to the several
Underwriters and (ii) each of the Underwriters, severally and not jointly,
agrees to purchase from the Company at a purchase price of
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$__________ per share, the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I, plus such additional number of Firm Shares which
such Underwriter may become obligated to purchase pursuant to Section 9 hereof.
(b) Subject to all the terms and conditions of this
Agreement, the Company grants the Option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 600,000 Option Shares
at the same price per share as the Underwriters shall pay for the Firm Shares.
The Option may be exercised only to cover over-allotments in the sale of the
Firm Shares by the Underwriters and may be exercised in whole or in part at any
time (but not more than once) on or before the 30th day after the date of this
Agreement (or the next business day if the 30th day is not a business day), upon
notice (the "Option Shares Notice") in writing or by telephone (confirmed in
writing) by the Representatives to the Company no later than 5:00 p.m., New York
City time, at least two and no more than five business days before the date
specified for closing in the Option Shares Notice (the "Option Closing Date")
setting forth the aggregate number of Option Shares to be purchased and the time
and date for such purchase. On the Option Closing Date, the Company will issue
and sell to the Underwriters the number of Option Shares set forth in the Option
Shares Notice, and each Underwriter will purchase such percentage of the Option
Shares as is equal to the percentage of Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be made to
the Representatives for the accounts of the Underwriters against payment of the
purchase price by certified or official bank checks payable in New York Clearing
House (next-day) funds to the order of the Company at the office of Stroock &
Stroock & ▇▇▇▇▇, counsel to the Company Seven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇. Such payment shall be made at 10:00 a.m., New York City time, on October
___, 1996, or at such other time or place or on such other date, not later than
seven business days after the date of this Agreement, as may be agreed upon by
the Company and the Representatives (such date is hereinafter referred to as the
"Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as the Representatives shall
request at least two business days prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the Shares,
the Company agrees to make such certificates available for inspection at least
24 hours prior to the Closing Date or the Option Closing Date, as the case may
be.
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The cost of original issue tax stamps, if any, in connection with the
issuance, sale and delivery of the Shares by the Company to the respective
Underwriters shall be borne by the Company. The Company will pay and save each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance, sale or
delivery to such Underwriter of any Shares.
3. Representations and Warranties of the Company and the
Existing Stockholders.
(a) The Company and each of the Existing Stockholders
jointly and severally represent, warrant and covenant to each Underwriter that:
(i) A registration statement on Form S-1 (File No.
333-11289) with respect to the Shares, including a preliminary prospectus (as
defined below) and such amendments to such registration statement as may have
been required to the date of the Agreement, has been prepared by the Company 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 "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Company will next file
with the Commission one of the following: (A) prior to effectiveness of such
registration statement, a further amendment thereto, including the form of final
prospectus, (B) a final prospectus in accordance with Rules 430A and 424(b) of
the Rules and Regulations or (C) a term sheet (the "Term Sheet") as described in
and in accordance with Rules 434 and 424(b) of the Rules and Regulations. As
filed, the final prospectus, if one is used, or the Term Sheet and the latest
preliminary prospectus sent or given to purchasers of the Shares by the
Underwriters prior to or at the same time as the confirmation of such sale, if a
final prospectus is not used, shall include all Rule 430A Information (as
defined below) and, except to the extent that you shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the date and time that this Agreement was executed and delivered by the
parties hereto, or, to the extent not completed at such date and time, shall
contain only such specific additional information and other changes (beyond that
contained in the latest preliminary prospectus) as the Company shall have
previously advised you in writing would be included or made therein.
The term "Registration Statement" shall mean such registration statement at
the time such registration statement becomes effective and, in the event any
post-effective amendment thereto becomes effective prior to the Closing Date (as
defined below), shall also mean such registration statement as so amended;
provided, however, that such term shall also include all (A) Rule 430A
Information deemed to be included in such registration statement at the time
such registration statement becomes effective as provided by Rule 430A of the
Rules and Regulations and (B) any registration statement filed pursuant to Rule
462(b) of the Rules and Regulations relating to the Shares. The term
"preliminary prospectus" shall mean any preliminary prospectus
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relating to the Shares and delivered to you as well as any preliminary
prospectus included in the Registration Statement at the time it becomes
effective that omits Rule 430A Information. The term "Prospectus" shall mean:
(A) the prospectus relating to the Shares in the form in which it is first filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations; (B) if
a Term Sheet is not used and no filing pursuant to Rule 424(b) of the Rules and
Regulations is required, the form of final prospectus included in the
Registration Statement at the time it becomes effective; or (C) if a Term Sheet
is used, the Term Sheet in the form in which it is first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations, together with
the latest preliminary prospectus sent or given to purchasers of the Shares by
the Underwriters prior to or at the same time as the confirmation of such sale.
The term "Rule 430A Information" shall mean information with respect to the
Shares and the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A of the Rules and
Regulations.
(ii) The Commission has not issued any order
preventing or suspending the use of any preliminary prospectus or Prospectus.
Each preliminary prospectus has conformed in all material respects to the
requirements of the Act and the Rules and Regulations and, as of its date, has
not included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. At the time the
Registration Statement becomes effective, and at all times subsequent thereto up
to and including the Closing Date, and if later, the Option Closing Date, the
Registration Statement and the Prospectus, and any amendments or supplements
thereto, did and will contain all material statements and information required
to be included therein by the Act and the Rules and Regulations and did and will
in all material respects conform to the requirements of the Act and the Rules
and Regulations, and the Registration Statement did not and will not include any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and neither the Prospectus, nor any amendment or supplement thereto, will
include any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary, in light of the circumstances under
which they were made, to make the statements therein not misleading. The
foregoing representations and warranties in this Section 3(a)(ii) do not apply
to any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company has not
distributed any offering material in connection with the offering or sale of the
Shares other than the Registration Statement, the preliminary prospectus, the
Prospectus or any other materials, if any, permitted by the Act.
(iii) Delta Funding Corporation, a New York corporation (the "Subsidiary"),
is a wholly-owned subsidiary of the Company. Except for the Subsidiary, the
Company does not have any other subsidiaries and does not own, directly or
indirectly, any other shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity. Each of the
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Company and the Subsidiary is a corporation duly organized, validly existing and
in good standing under the laws of its respective jurisdiction of incorporation.
Each of the Company and the Subsidiary has full power and authority to conduct
all the activities conducted by it, to own or lease all the assets owned or
leased by it and to conduct its business as described in the Registration
Statement and the Prospectus. The issued shares of capital stock of the
Subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable and are owned beneficially by the Company free and clear of all
claims, liens, charges and encumbrances. Each of the Company and the Subsidiary
is duly licensed or qualified to do business and in good standing as a foreign
corporation in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such licensing
or qualification necessary, except where the failure to so qualify would not
have a material adverse effect on the Company and the Subsidiary, taken as a
whole.
(iv) The outstanding shares of Common Stock have been,
and the Shares to be issued and sold by the Company upon such issuance will be,
duly authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right. The Company has an authorized,
issued and outstanding capitalization as set forth in the Prospectus. The
description of the Common Stock in the Registration Statement and the Prospectus
is complete and accurate in all respects. The certificates representing the
Shares are in due and proper form and the holders of the Shares after making
payment therefor will not be subject to personal liability solely by reason of
being such holders. Except as set forth in the Prospectus, the Company does not
have outstanding any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock.
(v) The financial statements of the Company and
the Subsidiary, together with the notes thereto, included in the Registration
Statement and the Prospectus present fairly the financial condition of the
Company and the Subsidiary as of the respective dates thereof and the results of
operations and cash flows of the Subsidiary for the respective periods covered
thereby, all in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the entire period involved,
except as otherwise disclosed in the Prospectus. No other financial statements
or schedules of the Company or the Subsidiary are required by the Act or the
Rules and Regulations to be included in the Registration Statement or the
Prospectus. The financial information appearing in the Prospectus under the
captions "Summary Financial Information," "Capitalization" and "Selected
Financial Data" present fairly the information set forth therein at the dates
and for the periods indicated and have been compiled on a basis consistent with
that of the audited financial statements included in the Prospectus. KPMG Peat
Marwick LLP (the "Accountants"), who has reported on such financial statements,
is an independent accounting firm with respect to the Company and the Subsidiary
as required by the Act and the Rules and Regulations.
(vi) The Company and the Subsidiary maintain a
system of internal accounting control sufficient to provide reasonable
assurance that (A) transactions are
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executed in accordance with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(vii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
set forth in or contemplated by the Registration Statement and the Prospectus,
(A) there has not been any change in the capitalization of the Company or the
Subsidiary, or any material adverse change in the business, properties,
condition (financial or otherwise) or results of operations of the Company and
the Subsidiary, taken as a whole, arising for any reason whatsoever, (B) neither
the Company nor the Subsidiary has incurred any material liabilities or
obligations, direct or contingent, nor has the Company or the Subsidiary entered
into any material transactions other than pursuant to this Agreement and the
transactions referred to herein, and (C) neither the Company nor the Subsidiary
has paid or declared any dividends or other distributions of any kind on any
class of its capital stock or repurchased or redeemed any of its capital stock.
(viii) The Company is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(ix) Except as set forth in the Registration
Statement and the Prospectus, there are no actions, suits or proceedings
pending or, to the best of the Company's and each of the Existing Stockholders'
knowledge, threatened against the Company or the Subsidiary or any of their
respective officers in their capacity as such, before or by any Federal or state
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling, decision or finding
might materially adversely affect the business, properties, condition (financial
or otherwise) or results of operations of the Company and the Subsidiary, taken
as a whole.
(x) Each of the Company and the Subsidiary has (A)
all governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business and own or lease its
properties as contemplated in the Prospectus, other than governmental licenses,
permits, consents, orders, approvals and other authorizations where the failure
to have such would not have a material adverse effect on the business,
properties, condition (financial or otherwise) or results of operations of the
Company and the Subsidiary, taken as a whole, (B) complied in all respects with
all laws, regulations and orders applicable to it or its business, except for
violations which would not have a material adverse effect on the business,
properties, condition (financial or otherwise) or results of operations of the
Company and the Subsidiary, taken as a whole, and (C) performed all its
obligations required to be performed by it, and is not in default (and, to the
best knowledge of the Company and each of
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the Existing Stockholders, no other party under any contract or other agreement
to which it is a party is in default and no event has occurred which, with
notice or lapse of time or both, would constitute a default), under any
indenture, mortgage (under which the Company or the Subsidiary is mortgagor),
deed of trust (under which the Company or the Subsidiary is trustor), voting
trust agreement, loan agreement, bond, debenture, note agreement, lease,
contract, permit or other agreement or instrument (collectively, a "contract or
other agreement") to which it is a party or by which its property is bound or
affected, except for defaults (or failures to perform) which would not have a
material adverse effect on the business, prospects, condition (financial or
otherwise) or results of operations of the Company and the Subsidiary, taken as
a whole. Neither the Company nor the Subsidiary has received any claim or notice
from any official authority in any jurisdiction that it is required to be
qualified or licensed to do business in any such jurisdiction in which it is not
so qualified or licensed. Neither the Company nor the Subsidiary is in violation
of any provision of its certificate of incorporation or by-laws.
(xi) The Company has full right, power and authority
to enter into this Agreement and the Tax Agreement (defined in Section 6(m)
below) and perform the transactions contemplated hereby and thereby. Each of
this Agreement and Tax Agreement has been duly authorized, executed and
delivered by the Company, constitutes a valid and binding agreement of the
Company and is enforceable against the Company in accordance with the terms
hereof and thereof, except (A) as the Company's obligations may be affected by
bankruptcy, insolvency, reorganization, moratorium or similar laws, or by
equitable principles relating to creditors' rights generally, and (B) that the
rights to indemnity and contribution may be limited by Federal and state laws
and the public policy underlying such laws. The performance of this Agreement
and the Tax Agreement and the consummation of the transactions contemplated
hereby and by the Tax Agreement and as described in the Prospectus under the
captions "Reorganization and Termination of S Corporation Status" and "Use of
Proceeds" will not, alone or upon notice or the passage of time or both result
in the creation or imposition of any lien, charge or encumbrance upon any of the
Company's or the Subsidiary's assets pursuant to the terms or provisions of, or
result in a breach or violation of or conflict with any of the terms or
provisions of, or constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under (A) the Company's or the Subsidiary's certificate of
incorporation or bylaws; (B) any contract or other agreement to which the
Company or the Subsidiary is a party or by which the Company or the Subsidiary
or any of their respective properties is bound or affected, other than a breach
or default which would not have a material adverse effect on the business,
properties, condition (financial or otherwise) or results of operations of the
Company and the Subsidiary, taken as a whole; or (C) any judgment, ruling,
decree, order, law, statute, rule or regulation of any court or other
governmental agency or body applicable to the business or properties of the
Company or the Subsidiary.
(xii) No consent, approval, authorization or order of,
or any filing or declaration with, any court or governmental agency or body is
required for the consummation by the Company or the Subsidiary of the
transactions contemplated by this Agreement, the Tax Agreement or as described
in the Prospectus under the captions "Reorganization and Termination
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of S Corporation Status" and "Use of Proceeds" except such as have been obtained
under the Act or the Rules and Regulations and such as may be required under
state securities or Blue Sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Shares to be sold by the
Company.
(xiii) Each of the Company and the Subsidiary has
good and marketable title to all properties and assets described in the
Prospectus as owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
to the business of the Company and the Subsidiary, taken as a whole. Each of the
Company and the Subsidiary has valid, subsisting and enforceable leases for the
properties described in the Prospectus as leased by it, with such exceptions as
are not material and do not materially interfere with the use made and proposed
to be made of each of such properties by the Company and the Subsidiary, taken
as a whole.
(xiv) There is no material document or contract of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which is
not described or filed as required. All such contracts to which the Company or
the Subsidiary is a party have been duly authorized, executed and delivered by
the Company or the Subsidiary, constitute valid and binding agreements of the
Company or the Subsidiary and are enforceable against the Company or the
Subsidiary in accordance with the terms thereof, except (A) as the Company's or
the Subsidiary's obligations may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws, or by equitable principles relating
to creditors' rights generally, and (B) that the remedies of specific
performance, injunction and other forms of equitable relief are subject to
certain tests of equity, jurisdiction, equitable defenses and the discretion of
the court before which any proceeding therefor may be brought.
(xv) No statement, representation, warranty or
covenant made by the Company in this Agreement or made in any certificate or
document required by this Agreement to be delivered to the Representatives was
or will be, when made, inaccurate, untrue or incorrect.
(xvi) Neither the Company, the Subsidiary nor any of
their respective directors, officers or controlling persons has taken, directly
or indirectly, any action intended, or which might reasonably be expected, to
cause or result, under the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(xvii) Except as set forth in the Registration
Statement and the Prospectus, no holder of securities of the Company has
rights to the registration of any securities of the Company as a result of the
filing of the Registration Statement.
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(xviii) The Shares have been approved for listing on the
New York Stock Exchange, subject only to notice of issuance.
(xix) Neither the Company nor the Subsidiary is involved
in any material labor dispute nor, to the knowledge of the Company or each of
the Existing Stockholders, is any such dispute threatened.
(xx) Each of the Company and the Subsidiary owns or
possesses, or can acquire on reasonable terms, all material patents, patent
applications, trademarks, service marks, trade names, licenses, copyrights and
unpatented and/or unpatentable proprietary or other confidential information
currently employed by it in connection with its businesses, and neither the
Company nor the 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 effect on the
business, properties, condition (financial or otherwise) or results of
operations of the Company and the Subsidiary, taken as a whole.
(xxi) Neither the Company nor the Subsidiary nor, to
the Company's or each of the Existing Stockholders' knowledge, any employee or
agent of the Company or the Subsidiary, has made any payment of the funds of the
Company or the Subsidiary or received or retained any funds in violation of any
law, rule or regulation or of a character required to be disclosed in the
Prospectus.
(xxii) Each of the Company and the Subsidiary is
insured by insurers of recognized financial responsibility or self-insured
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged including, without limitation, those
losses and risks typically covered by general liability, workers compensation
and errors and omissions policies; neither the Company nor the Subsidiary has
been refused any insurance coverage sought or applied for; and neither the
Company nor the Subsidiary has any reason to believe that it will not be able to
renew its respective existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers or continue to be
self-insured as may be necessary to continue its business at a cost that would
not materially adversely affect the business, properties, condition (financial
or otherwise) or results of operations of the Company and Subsidiary, taken as a
whole.
(xxiii) The business, operations and facilities of each of
the Company and the Subsidiary have been and are being conducted in compliance
in all material respects with all applicable laws, ordinances, rules,
regulations, licenses, permits, approvals, plans, authorizations or requirements
relating to occupational safety and health, or pollution, or protection of
health or the environment (including, without limitation, those relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic substances, materials or wastes into ambient
air, surface water, ground water or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
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handling of chemical substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes, whether solid, gaseous or liquid in nature) of
any governmental department, commission, board, bureau, agency or
instrumentality of the United States, any state or political subdivision
thereof, or any foreign jurisdiction, and all applicable judicial or
administrative agency or regulatory decrees, awards, judgments and orders
relating thereto; and neither the Company nor the Subsidiary has received any
notice from any governmental instrumentality or any third party alleging any
violation thereof or liability thereunder (including, without limitation,
liability for costs of investigating or remediating sites containing hazardous
substances and/or damages to natural resources).
(xxiv) Each of the Company and the Subsidiary has filed
all foreign, Federal, state and local tax returns that are required to be filed
or has requested extensions thereof (except in any case in which the failure so
to file would not have a material adverse effect on the Company and the
Subsidiary, taken as a whole) and has paid all taxes which it believes in good
faith were required to be paid by it and any other assessment, fine or penalty
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as described in the Prospectus. Effective as of July 1, 1985, the
Subsidiary validly elected to treat the Subsidiary as an S Corporation (as
defined in Section 1361 of the Internal Revenue Code of 1986, as amended (the
"Code") and the corresponding provision of any prior version of the Internal
Revenue Code) for Federal and state income tax purposes and the Subsidiary has
continued to so qualify as an S Corporation in each such jurisdiction since
that date until ________, 1996 at which time the Subsidiary validly terminated
such S Corporation status.
(xxv) There are no material outstanding loans or
advances or material guarantees of indebtedness by the Company or the
Subsidiary to or for the benefit of any of the Company's or the Subsidiary's
officers or directors or any of the members of the families of any of them.
(xxvi) The certificates issued by trusts established
under pooling and servicing agreements to which the Subsidiary is a party have
been issued and sold in compliance with all applicable federal and state
securities laws.
(xxvii) Neither the Company nor the Subsidiary has
incurred any liability for any finder's fees or similar payments in connection
with the transactions herein contemplated.
(b) In addition to the foregoing, the Existing
Stockholders jointly and severally represent and warrant to, and agree with,
the Underwriters that:
(i) Each Existing Stockholder has full right, power
and authority to enter into this Agreement and the Tax Agreement. The
execution, delivery and performance of this Agreement and the Tax Agreement by
each of the Existing Stockholders and the sale of
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the Shares and the consummation of the transactions contemplated by this
Agreement and the Tax Agreement will not conflict with or result in a breach of
any of the terms or provisions, or constitute a default or cause an acceleration
of any obligation under any license, indenture, lease, mortgage, deed of trust,
bank loan, credit agreement, or other material agreement or instrument to which
an Existing Stockholder is a party or by which an Existing Stockholder is bound,
or to which any of the property or assets of an Existing Stockholder is subject,
or any order of any court or governmental agency or authority entered into in
any proceeding to which an Existing Stockholder was or is a party or by which an
Existing Shareholder is bound, or violate or conflict with any applicable
foreign, federal, state or local law, rule, administrative regulation or
ordinance or administrative or court decree applicable to an Existing
Stockholder or an Existing Stockholder's property.
(ii) Each Existing Stockholder has full right, power
and authority to enter into the Contribution Agreement (as defined in the
Registration Statement and Prospectus) and to consummate the transactions
contemplated by the Contribution Agreement and to sell, transfer and deliver to
the Company all of the shares of capital stock of the Subsidiary owned by such
Existing Stockholder free and clear of all voting trust arrangements, liens,
encumbrances, security interests, restrictions and claims whatsoever.
(iii) Other than as permitted by the Act, no Existing
Stockholder has distributed, nor will any Existing Stockholder distribute, any
prospectus or other offering material in connection with the offering and sale
of the Shares.
(iv) None of the Existing Stockholders nor any trustee
or beneficiary of the Existing Stockholders is affiliated as a director,
officer, partner, stockholder, or otherwise with any securities broker or dealer
which is a member of the NASD or any other organization that owns or controls
any member of the NASD.
(v) No statement, representation, warranty or
covenant made by the Existing Stockholders in this Agreement or made in any
certificate or document required by this Agreement to be delivered to the
Representatives was or will be, when made, inaccurate, untrue or incorrect.
(c) Any certificate signed by any officer of the
Company and delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty jointly and severally made by the
Company and each of the Existing Stockholders to each Underwriter as to the
matters covered thereby and shall be deemed incorporated herein in its entirety
and shall be effective as if such representation and warranty were made herein;
and any certificate signed by the Existing Stockholders as such and delivered to
the Representatives or to counsel for the Underwriters shall also be deemed a
representation and warranty jointly and severally made by the Company and each
of the Existing Stockholders to each Underwriter as to the matters covered
thereby and shall also be deemed incorporated herein in its entirety and shall
be effective as if such representation and warranty were made herein.
11
4. Agreements of the Company and Existing Shareholders. The Company
hereby covenants and agrees with the Underwriters as to the matters set forth in
subparagraphs (a) through (o) below and each of Existing Stockholders covenants
and agree with the Underwriters as to the matters set forth in subparagraph (p)
below:
(a) The Company will not, either prior to the Effective
Date or thereafter during such period as the Prospectus is required by law to
be delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a period of time prior to the filing thereof as is
reasonable under the circumstances and the Representatives shall not have
objected thereto in good faith.
(b) If the Registration Statement is not yet effective, the
Company will use its best efforts to cause the Registration Statement to become
effective not later than the time indicated in Section 6(a) hereof. The Company
will notify the Representatives promptly, (i) when the Registration Statement
has become effective and when any post-effective amendment thereto becomes
effective, (ii) of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose or the threat thereof, (iv) of the happening of any event
during the period mentioned in the second sentence of Section 4(f) that in the
judgment of the Company makes any material statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (v) of receipt by the Company or any representative or attorney of the
Company of any other communication from the Commission relating to the Company,
the Registration Statement, any preliminary prospectus or the Prospectus. If at
any time the Commission shall issue any order suspending the effectiveness of
the Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal of such order as promptly as practicable. If the Company
has omitted any information from the Registration Statement pursuant to Rule
430A, the Company will use its best efforts to comply with the provisions of and
make all requisite filings with the Commission pursuant to said Rule 430A and to
notify the Representatives promptly of all such filings.
(c) If, at any time when a Prospectus relating to the
Shares is required to be delivered under the Act, 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 the Registration Statement, as then
amended or supplemented, would include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein
not misleading, or if for any other reason it is necessary at any time to amend
or supplement the Prospectus or the Registration Statement to comply with the
Act or the Rules and Regulations, the Company will promptly notify the
12
Representatives thereof and, subject to Section 4(b) 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.
(d) The Company furnish to the Representatives, without
charge, six signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.
(e) The Company will comply with all the provisions of
any undertakings contained in the Registration Statement.
(f) On the Effective Date, and thereafter from time to
time, the Company will deliver to each of the Underwriters, without charge, as
many copies of the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which should be set forth in
Prospectus in order to make any statement therein, in light of the circumstances
under which it was made, not misleading, or in the Registration Statement in
order to make any statement therein not misleading, or if it is necessary to
supplement or amend the Prospectus or the Registration Statement to comply with
law, the Company will forthwith prepare and duly file with the Commission an
appropriate supplement or amendment thereto, and will deliver to the
Underwriters, without charge, such number of copies thereof as the
Representatives may reasonably request.
(g) The Company will cooperate with the Representatives
and counsel to the Underwriters in connection with the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such state and foreign jurisdictions as the Representatives may
reasonably request; provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to general service of process or
taxation in any jurisdiction where it is not now so subject.
(h) During the period of five years commencing on the
Effective Date, the Company will furnish to the Representatives and each other
Underwriter who may so request copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish to
the Representatives and each other Underwriter who may so request a copy of each
13
annual or other report it shall be required to file with the Commission;
provided that the failure to comply with this Section 4(h) shall not constitute
a material breach of this Agreement.
(i) The Company will make generally available to holders
of its securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the calendar quarter in
which the Effective Date falls, an earnings statement (which need not be audited
but shall be in reasonable detail) for a period of 12 months ended commencing
after the Effective Date, and satisfying the provisions of Section 11(a) of the
Act (including Rule 158 of the Rules and Regulations).
(j) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company
will pay, or reimburse if paid by the Representatives on a pro rata basis based
on the number of Firm Shares to be sold to each of them, all costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, including but not limited to costs and expenses of or relating to (i)
the preparation, printing and filing of the Registration Statement and exhibits
to it, each preliminary prospectus, the Prospectus and any amendment or
supplement to the Registration Statement or the Prospectus, (ii) the preparation
and delivery of certificates representing the Shares, (iii) the printing of this
Agreement, the Agreement Among Underwriters, any Dealer Agreements and any
Underwriters' Questionnaire, (iv) furnishing (including costs of shipping and
mailing) such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, (v) the listing of the
Shares on the New York Stock Exchange, (vi) any filings required to be made by
the Underwriters with the NASD, and the reasonable fees, disbursements and other
charges of counsel for the Underwriters in connection therewith, (vii) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant to Section
4(g), including the reasonable fees, disbursements and other charges of counsel
to the Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (viii) counsel to the
Company and (ix) the transfer agent for the Shares.
(k) If (i) the sale of the Shares is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 6 is not satisfied, (ii) this Agreement shall be terminated pursuant to
any of the provisions hereof (otherwise than pursuant to Section 9 in which
event each party shall be solely responsible for payment of such party's
out-of-pocket expenses without limitation of any right or liability provided for
under Section 9) or (iii) for any reason the Company shall be unable to perform
its respective obligations hereunder, the Company will reimburse the several
Underwriters for all out-of-pocket expenses (including the fees, disbursements
and other charges of counsel to the Underwriters) reasonably incurred by them in
connection herewith.
(l) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result, under the Act or
14
otherwise, in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.
(m) The Company will apply the net proceeds from the
offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds" and shall file such reports with
the Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.
(n) The Company will not for a period of 180 days after the
commencement of the public offering of the Shares, without the prior written
consent of the Representatives, directly or indirectly, offer to sell, sell,
contract to sell, grant any option to purchase or otherwise dispose (or announce
any offer, sale, grant of any option to purchase or other disposition) of any
shares of Common Stock or any securities convertible into, or exercisable or
exchangeable for shares of Common Stock (other than the grant of options in the
ordinary course pursuant to the Company's stock option plan or the grant of
options for correspondent brokers up to a maximum of ______ options). It is
acknowledged that the restriction contained in this Section 4(n) shall not be
applicable to the Option Shares being sold by the Company to the Underwriters
pursuant to this Agreement.
(o) If at anytime 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
Common Stock 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 the
Representatives 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 the
Representatives, responding to or commenting on such rumor, publication or
event.
(p) Each Existing Stockholder will not, directly or
indirectly, for a period of 180 days after the commencement of the public
offering of the Shares, without the prior written consent of the
Representatives, directly or indirectly, offer to sell, contract to sell,
transfer (other than a transfer among the Existing Stockholders), grant any
option to purchase or otherwise dispose (or announce any offer, sale, transfer,
grant of any option to purchase or other disposition) of any shares of Common
Stock or any securities at any time convertible into, or exercisable or
exchangeable for shares of Common Stock.
5. Representations and Warranties of NatWest Securities Limited.
Upon the Company's authorization of the release of the Firm Shares, the several
Underwriters propose to offer the Firm Shares for sale to the public upon the
terms set forth in the Prospectus. NatWest Securities Limited represents and
agrees that: (a) it has not offered or sold and, prior to the expiry of six
months from the offering, will not offer or sell any Shares to persons in the
United
15
Kingdom prior to admission of the Shares to listing in accordance with Part IV
of the Financial Services ▇▇▇ ▇▇▇▇ (the "Act") except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (whether as principal or agent) for the purposes of their businesses
or otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations Act 1995 or the Act; (b) it has complied and
will comply with all applicable provisions of the Act with respect to anything
done by it in relation to the Shares in, from or otherwise involving the United
Kingdom; and (c) it has only issued or passed on, and will only issue or pass
on, in the United Kingdom any document received by it in connection with the
issue of the Shares, other than any document which consists of or any part of
listing particulars, supplemental listing particulars or any other document
required or permitted to be published by listing rules under Part IV of the Act,
to a person who is of a kind described in Article 11(3) of the Financial
Services ▇▇▇ ▇▇▇▇ (Investment Advertisements) (Exemptions) Order 1996 or is a
person to whom the document may otherwise lawfully be issued or passed on.
6. Conditions of the Obligations of the Underwriters. The obligations
of each Underwriter hereunder are subject to the satisfaction of the following
conditions as of the Closing Date and, if any Option Shares are purchased
hereunder, as of the Option Closing Date:
(a) Notification that the Registration Statement has become
effective shall be received by the Representatives not later than 5:00 p.m.,
New York City time, on the date of this Agreement or at such later date and time
as shall be consented to in writing by the Representatives and all filings
required by Rule 424 of the Rules and Regulations and Rule 430A shall have been
made.
(b)(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 threatened by the Commission, (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 before or threatened or contemplated by the Commission or the
authorities of any such 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 and (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 the Representatives and the Representatives did
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer of the Company and the Senior Vice
President--Finance of the Company (who may, as to proceedings threatened or
contemplated, rely upon the best of their information and belief), to the effect
of clauses (i), (ii) and (iii) of this clause (b).
(c) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) there shall
not have been a material adverse change
16
in the general affairs, business, properties, condition (financial or otherwise)
or results of operations of the Company and the Subsidiary, taken as a whole,
whether or not arising from transactions in the ordinary course of business, in
each case other than as set forth in or contemplated by the Registration
Statement and the Prospectus and (ii) neither the Company nor the Subsidiary
shall have sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether or not covered
by insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree, which is not set forth in the Registration
Statement and the Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares by the Underwriters at the initial public offering price.
(d) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall have
been no litigation or other proceeding instituted against the Company, the
Subsidiary or any of either of their respective officers or directors in their
capacities as such, before or by any Federal, state or local court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling, decision or
finding would materially and adversely affect the business, properties,
condition (financial or otherwise) or results of operations of the Company and
the Subsidiary, taken as a whole.
(e) Each of the representations and warranties of the
Company and the Existing Stockholders contained herein shall be true and
correct in all material respects at the Closing Date and, with respect to the
Option Shares, at the Option Closing Date, as if made on such date and all
covenants and agreements herein contained to be performed on the part of the
Company and the Existing Stockholders and all conditions herein contained to be
fulfilled or complied with by the Company and the Existing Stockholders at or
prior to the Closing Date and, with respect to the Option Shares, at or prior to
the Option Closing Date, shall have been duly performed, fulfilled or complied
with.
(f) The Representatives shall have received an opinion,
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, from Stroock & Stroock & ▇▇▇▇▇, counsel to the Company and the
Existing Stockholders, to the effect that:
(i) Each of the Company and the Subsidiary has been
duly organized and is validly existing as a corporation in good standing under
the laws of its respective jurisdiction of incorporation, with full corporate
power and authority to own its properties and conduct its business as described
in the Registration Statement and the Prospectus, and in the case of the
Company, to execute and deliver this Agreement and to issue, sell and deliver
the Shares as herein contemplated.
(ii) The Company has full corporate power and
authority to enter into this Agreement and the Tax Agreement and consummate
the transactions provided for herein
17
and therein. This Agreement and the Tax Agreement have been duly authorized,
executed and delivered by the Company. This Agreement and the Tax Agreement,
assuming due authorization, execution and delivery by each other party hereto
and thereto, are each valid and binding agreements of the Company, enforceable
against the Company in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting creditors' rights generally or by general principles of
equity relating to the availability of remedies and except as rights to
indemnity and contribution may be limited by Federal or State securities laws or
the public policy underlying such laws.
(iii) (A) The Shares, when issued and delivered to and
paid for by the Underwriters, will be duly authorized and validly issued and
fully paid and nonassessable, and (B) the Shares, when issued and delivered to
and paid for by the Underwriters, will be free of any pledge, lien, encumbrance,
claim or preemptive or similar right.
(iv) (A) The Company has an authorized share
capitalization as set forth under the heading "Capitalization" in the
Registration Statement and the Prospectus; and (B) the outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid, nonassessable, and free of statutory and contractual preemptive
or similar rights.
(v) (A) The capital stock of the Company,
including the Shares, conforms in all material respects to the description
thereof contained in the Registration Statement and the Prospectus; (B) the
certificates for the Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of being such
holders; and (C) the Shares have been duly authorized for listing on the New
York Stock Exchange.
(vi) The Registration Statement and the Prospectus
(except as to the financial statements and schedules contained therein as to
which such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act.
(vii) The Registration Statement has become effective
under the Act and, to the best of such counsel's knowledge after due inquiry,
no stop order proceedings with respect thereto are pending or threatened under
the Act.
(viii) No approval, authorization, consent or order of or
filing with any national, state or local governmental or regulatory commission,
board, body, authority or agency is required in connection with the issuance and
sale of the Shares as contemplated hereby other than such as has been obtained
or made (specifying the same) and registration of the Shares under the Act
(except such counsel need express no opinion as to any necessary qualification
under the securities or Blue Sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters).
18
(ix) The execution, delivery and performance of this
Agreement and the Tax Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby and the consummation
of the transactions described in the Prospectus under the captions
"Reorganization and Termination of S Corporation Status" and "Use of Proceeds"
do not and will not conflict with, or result in any breach of, or constitute a
default under (nor constitute any event which with notice, lapse of time or both
would constitute a breach of or default under), any provision of the certificate
of incorporation or bylaws of the Company or the Subsidiary or under any
provisions of any indenture, lease, mortgage (under which the Company or the
Subsidiary is mortgagor), trust (under which the Company or the Subsidiary is
trustor), bank loan, credit agreement or other material agreement or instrument
to which the Company or the Subsidiary is a party or by which the Company or the
Subsidiary or their respective properties, except with respect to any property
acquired by the Company or the Subsidiary through foreclosure or similar means,
are bound or affected, or under any law, regulation or rule or any decree,
judgment or order applicable to the Company or the Subsidiary.
(x) To the best of such counsel's knowledge after due
inquiry, neither the Company nor the Subsidiary is in breach of, or in default
under (nor has any event occurred which with notice, lapse of time or both would
constitute a breach of or default under), any indenture, mortgage (under which
the Company or the Subsidiary is mortgagor), trust (under which the Company or
the Subsidiary is trustor), lease, bank loan, credit agreement or any other
agreement or instrument to which the Company or the Subsidiary is a party or by
which the Company or the Subsidiary or their respective properties are bound or
affected or under any law, regulation or rule or any decree, judgment or order
applicable to the Company or the Subsidiary, which breach or default would have
a material adverse effect on the business, properties, assets, operations or
condition (financial or otherwise) of the Company and the Subsidiary, taken as a
whole.
(xi) To the best of such counsel's knowledge after
due inquiry, there are no contracts, licenses, agreements, leases or documents
of a character which are required to be filed as exhibits to the Registration
Statement or to be summarized or described in the Prospectus which have not been
so filed, summarized or described, and the summaries or descriptions thereof are
correct.
(xii) To the best of such counsel's knowledge after
due inquiry, there are no actions, suits or proceedings pending or threatened
against the Company or the Subsidiary or any of their respective properties at
law or in equity or before or by any commission, board, body, authority or
agency which are required to be described in the Prospectus but are not so
described.
(xiii) To the best of such counsel's knowledge after due
inquiry, there is no person who has the right, contractual or otherwise, to
request the Company to register pursuant to the Act shares of capital stock of
the Company upon the issue and sale of the Shares
19
to the Underwriters hereunder, except to the extent that (A) such shares are
included in the Registration Statement, (B) such rights were waived or not
exercised or (C) such person was excluded from including any such shares in the
Registration Statement.
(xiv) The statements in the Registration Statement
and the Prospectus under the following caption: "Description of Capital Stock"
insofar as they are descriptions of laws, regulations and rules, of legal and
governmental proceedings or of contracts, agreements, leases and other legal
documents, or refer to statements of law or legal conclusions, have been
reviewed by such counsel and are accurate in all material respects.
(xv) The Company is not an "investment company" or a
person "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(xvii) The declaration, payment or nonpayment of the
Contingent Dividend (as such term is defined in the Registration Statement and
Prospectus) in the maximum possible amount will not be a taxable event to the
Company or the Subsidiary.
(xviii) All of the issued and outstanding shares of the
Subsidiary have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned of record and beneficially by the Company free and
clear of all perfected, and to the best knowledge of such counsel, other liens,
encumbrances, claims, security interests or other defects of title whatsoever.
(xix) With respect to each Existing Stockholder, each
of this Agreement and the Tax Agreement has been duly authorized, executed and
delivered by or on behalf of each such Existing Stockholder; and the performance
of this Agreement and the Tax Agreement and the consummation of the transactions
herein and therein contemplated by such Existing Stockholder will not result in
a breach or violation of any of the terms and provisions of, or constitute a
material default under any license, indenture, lease, mortgage, deed of trust,
bank loan, credit agreement, or other material agreement or instrument to which
any such Existing Stockholder is a party or by which it is bound or to which any
of the property of such Existing Stockholder is subject, or any laws; and
(xx) This Agreement and the Tax Agreement are legal,
valid and binding agreements of each Existing Stockholder enforceable in
accordance with their terms, except as enforceability of the same may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally.
In addition, such counsel shall state that such counsel have participated
in conferences with officers and other representatives of the Company, the
Existing Stockholders, representatives of the independent public accountants of
the Company and representatives of the Underwriters at which the contents of the
Registration Statement and the Prospectus were
20
discussed and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (except as and to the
extent stated in clauses (v)(A), (vi)(A), (xii) and (xv) of above), on the basis
of the foregoing nothing has come to the attention of such counsel that causes
them to believe that the Registration Statement, or any amendment thereto, at
the time such Registration Statement or amendment became effective and at all
times up to and including the Closing Date, or if later, the Option Closing
Date, as the case may be, 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 not misleading or that the
Prospectus as of the date thereof and at all times up to and including the
Closing Date, or if later, the Option Closing Date, contained or contains any
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 (it being
understood that such counsel need express no comment with respect to the
financial statements and schedules included in the Registration Statement or the
Prospectus).
(g) The Representatives shall have received an opinion,
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, from the Law Offices of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, counsel to the Company,
to the effect that:
(i) Each of the Company and the Subsidiary is
duly qualified or licensed to do business as a foreign corporation in each
jurisdiction in which it conducts business or owns property and in which the
failure, individually or in the aggregate, to be so licensed or qualified could
have a material adverse effect on the properties, assets, operations, business
or condition (financial or otherwise) of the Company and the Subsidiary, taken
as a whole.
(ii) The execution, delivery and performance of this
Agreement and the Tax Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby and the consummation
of the transactions described in the Prospectus under the captions
"Reorganization and Termination of S Corporation Status" and "Use of Proceeds"
do not and will not conflict with, or result in any breach of, or constitute a
default under (nor constitute any event which with notice, lapse of time or both
would constitute a breach of or default under) any provisions of any license to
which the Company or the Subsidiary is a party or by which the Company or the
Subsidiary or their respective properties, except with respect to any property
acquired by the Company or the Subsidiary through foreclosure or similar means,
are bound or affected, or under any law, regulation or rule or any decree,
judgment or order applicable to the Company or the Subsidiary.
(iii) To the best of such counsel's knowledge after due
inquiry, neither the Company nor the Subsidiary is in breach of, or in default
under (nor has any event occurred which with notice, lapse of time or both would
constitute a breach of or default under), any license to which the Company or
the Subsidiary is a party or by which the Company or the
21
Subsidiary or their respective properties, except with respect to any property
acquired by the Company or the Subsidiary through foreclosure or similar means,
are bound or affected or under any law, regulation or rule or any decree,
judgment or order applicable to the Company or the Subsidiary, which breach or
default would have a material adverse effect on the business, properties,
assets, operations or condition (financial or otherwise) of the Company and the
Subsidiary, taken as a whole.
(iv) The statements in the Registration Statement and
the Prospectus under the following captions: "Risk Factors -- Legislative and
Regulatory Risk" and "Business -- Regulation" insofar as they are descriptions
of laws, regulations and rules, of legal and governmental proceedings or of
contracts, agreements, leases and other legal documents, or refer to statements
of law or legal conclusions, have been reviewed by such counsel and are accurate
in all material respects.
(h) The Representatives shall have received an opinion,
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, from Manatt, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, counsel to the Underwriters,
which opinion shall be satisfactory in all respects to the Representatives.
(i) (i) Concurrently with the filing with the Commission of
Amendment No. __ to the Registration Statement, the Accountants shall have
furnished to the Representatives a letter, dated the date of its delivery,
addressed to the Representatives and in form and substance satisfactory to the
Representatives, confirming that they are independent accountants with respect
to the Company as required by the Act and the Rules and Regulations and stating
their conclusions and findings with respect to all financial and certain other
statistical and numerical information contained in the Registration Statement.
(ii) On the date of the execution and delivery of this Agreement, or, if the
Company elects to rely on Rule 430A, on the date of the Prospectus, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, which shall confirm, on the basis of a review in accordance
with the procedures set forth in the letter from the Accountants, that nothing
has come to their attention during the period from the date of the letter
referred to in the prior sentence to a date (specified in the letter) not more
than three business days prior to the date of the execution and delivery of this
Agreement which would require any change in their letter dated the date of
Amendment No. __ to the Registration Statement if it were required to be dated
and delivered on the date of the execution and delivery of this Agreement. (iii)
At the Closing Date and, as to the Option Shares, the Option Closing Date, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, which shall confirm, on the basis of a review in accordance
with the procedures set forth in the letter from the Accountants, that nothing
has come to their attention during the period from the date of the letter
referred to in the prior sentence to a date (specified in the letter) not more
than three business days prior to the Closing Date or the Option Closing Date,
as the case may be, which would require any change in their letter dated the
date of Amendment No. __ to the Registration Statement if it were required to be
dated and delivered at the Closing Date or the Option Closing Date, as the case
22
(j) At the Closing Date and, as to the Option Shares, the
Option Closing Date, there shall be furnished to the Representatives an
accurate certificate, dated the date of its delivery, signed by each of the
Chief Executive Officer and the Senior Vice President--Finance of the Company in
form and substance satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the Prospectus and (A) as
of the date of such certificate, (x) the Registration Statement does not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading and (y) the Prospectus does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and (B) in the case
of the certificate delivered at the Closing Date and the Option Closing Date,
since the Effective Date no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading in any material respect.
(ii) Each of the representations and warranties of the
Company contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material respects.
(iii) Each of the covenants required herein to be
performed by the Company on or prior to the date of such certificate has been
duly, timely and fully performed and each condition herein required to be
complied with by the Company on or prior to the delivery of such certificate has
been duly, timely and fully complied with.
(k) The Representatives shall have received from ▇▇▇▇▇,
▇▇▇▇▇ & Company LLP a certificate, dated the Closing Date, in form and
substance satisfactory to the Representatives, to the effect that, in their
opinion, the Subsidiary has been an S Corporation under Subchapter S of the Code
and comparable laws of the State of New York since July 1, 1985 until _________,
1996, at which time the Subsidiary validly terminated such S Corporation status.
(l) The Shares shall be qualified for sale in such states as
the Representatives may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have been
approved for listing on the New York Stock Exchange, subject only to notice of
issuance.
23
(n) Prior to the date of this Agreement, there shall have
been furnished to the Representatives copies of the executed Tax
Indemnification Agreement between the Company and the Existing Stockholders (the
"Tax Agreement").
(o) The Representatives shall have received a certificate
of each Existing Stockholder dated the Closing Date or the Option Closing
Date, as the case may be, to the effect that the representations and warranties
of such Existing Stockholder set forth in Sections 3(a) and 3(b) of this
Agreement are true and correct as of such date and the Existing Stockholder has
complied with all agreements and satisfied all the conditions on the part of
such Existing Stockholder to be performed or satisfied at or prior to such date.
(p) The Company and the Existing Stockholders shall have
furnished to the Representatives such certificates, in addition to those
specifically mentioned herein, as the Representatives may have reasonably
requested as to the accuracy and completeness at the Closing Date and the Option
Closing Date of any statement in the Registration Statement or the Prospectus,
as to the accuracy at the Closing Date and the Option Closing Date of the
representations and warranties of the Company as to the performance by the
Company of its respective obligations hereunder, or as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the
Underwriters.
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 counsel for the Representatives. The Company will
furnish to the Representatives such conformed copies of such opinions,
certificates, letters and other documents as the Representatives shall
reasonably request.
7. Indemnification.
(a) The Company and the Existing Stockholders, jointly and severally, will
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all losses, claims, fines, penalties, settlement, liabilities,
expenses and damages (including any and all investigative, legal and other
expenses reasonably incurred in connection with any action, suit or proceeding
or any claim asserted), to which they, or any of them, may become subject under
the Act, the Exchange Act or other Federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, fines, penalties,
settlement, liabilities, expenses or damages arise out of or are based on (i)
any untrue statement or alleged untrue statement made by the Company or the
Existing Stockholders in Section 3 of this Agreement, (ii) any untrue statement
or alleged untrue statement of any material fact contained in (A) any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus and (B)
any application or other document, or any amendment or supplement thereto,
executed
24
by the Company, the Subsidiary or the Existing Stockholders or based upon
written information furnished by or on behalf of the Company, the Subsidiary or
the Existing Stockholders filed in any jurisdiction in order to qualify the
Shares under the securities or Blue Sky laws thereof or filed with the
Commission or any securities association or securities exchange (each, an
"Application") or (iii) the omission or alleged omission to state in any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or any
Application a material fact required to be stated therein or necessary to make
the statements therein (A) in case of the Registration Statement or Application
or any amendment or supplement thereto, not misleading or (B) in the case of the
preliminary prospectus, or Prospectus or any amendment or supplement thereto,
not misleading in light of the circumstances under which they were made, and
will reimburse as incurred, each Underwriter and each such other person for any
legal or other expenses reasonably incurred by such Underwriter or such other
person in connection with investigating, defending or appearing as a third-party
witness in connection with any such loss, claim, fine, penalty, settlement,
liability or damages or any action in respect thereof; provided, however, that
(i) neither the Company nor the Existing Stockholders will be liable to the
extent that such loss, claim, fine, penalty, settlement, liability, expense or
damage arises from the sale of the Shares in the public offering to any person
by an Underwriter and is based solely on an untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives on behalf of any Underwriter expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus; and (ii)
the liability of the Existing Stockholders shall be limited to an amount equal
to the aggregate face amount of the Distribution Notes (as such term is defined
in the Prospectus) plus the aggregate amount received pursuant to the Contingent
Dividend (the "Maximum Amount"). This indemnity agreement will be in addition to
any liability that the Company or the Existing Stockholders might otherwise
have. The Company and the Existing Shareholders may agree, as among themselves
and without limiting the rights of the Underwriters or the obligations of the
Company and the Existing Shareholders under this Agreement, as to the respective
amounts of such liability for which they each will be responsible. Neither the
Company nor the Existing Stockholders will, without the prior written consent of
each Underwriter, 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 the Underwriter or
any person who controls 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 each Underwriter and each such controlling person from
all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each direct Company,
each officer of the Company who signs the Registration Statement and each of the
Existing Stockholders from and against any losses, claims, fines, penalties,
settlements, liabilities, expenses and damages to which the
25
Company, the Existing Stockholders and any such director, officer or controlling
person may become subject under the Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claims, fines,
penalties, settlements, liabilities, expenses and damages arise out of or are
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus or any Application, or material fact required to be stated therein or
(ii) the omission or the alleged omission to state in the Registration
Statement, any preliminary prospectus or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus, or any Application,
a material fact required to be stated therein or necessary to make the
statements therein (A) in the case of the Registration Statement or Application
or any amendment or supplement thereto, not misleading, and (B) in the case of
any preliminary prospectus or the Prospectus or any amendment or supplement
thereto, not misleading in light of the circumstances in which they were made,
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 each
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly 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, the
Existing Stockholders and any such director, officer or controlling person in
connection with investigating or defending any such loss, claim, fine, penalty,
settlement, damage, liability or any action in respect thereof. The Company and
the Existing Stockholders acknowledge that, for all purposes under this
Agreement, the statements set forth in the third, seventh and eighth paragraphs
under the heading "Underwriting" and the information in the first two paragraphs
below the map on the inside front cover of any preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by the Representatives on behalf of the Underwriters
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus. This indemnity agreement will be in addition to
any liability that each Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 7, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 7 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel satisfactory to the
26
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnified party, (ii)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred and upon receipt of substantiation of such charges as the indemnifying
party may reasonably request.
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Existing Stockholders
or the Underwriters, the Company, the Existing Stockholders and the Underwriters
will contribute to the total losses, claims, fines, penalties, settlements,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company or the Existing Stockholders
from persons other than the Underwriters, such as persons who control the
Company within the meaning of the Act or the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for contribution) to which the Company , the Existing
Stockholders and any one or more of the Underwriters may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company and the Existing Stockholders, on the one hand, and the Underwriters
on the other. The relative benefits received by the Company and the Existing
Stockholders, on the one hand, and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Existing Stockholders bears
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
27
page of the Prospectus; provided that the benefit to the Existing Stockholders
shall be deemed to be the Maximum Amount. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault of the Company and the Existing Stockholders, on the one
hand, the Underwriters, on the other, with respect to the statements or
omissions which resulted in such loss, claim, fine, penalty, settlement,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Existing Stockholders,
or the Representatives on behalf of the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, the Existing Stockholders
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 7(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, fine, penalty, settlement,
liability, expense or damage, or action in respect thereof, referred to above in
this Section 7(d) shall be deemed to include, for purpose of this Section 7(d),
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 7(d), (i) no Underwriter shall be
required to contribute, cumulatively, any amount in excess of the underwriting
discounts or commissions received by it less any amounts paid by such
Underwriter as indemnification pursuant to Section 7(b) hereof and (ii) no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 7(d) are several in
proportion to their respective underwriting obligations and not joint. For
purposes of this Section 7(d), any person who controls a party to this Agreement
within the meaning of the Act or the Exchange Act will have the same rights to
contribution as that party, and each director or officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 7(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 7(d). No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in
this Section 7 and the representations and warranties of the Company and the
Existing Stockholders contained in this Agreement shall remain operative and in
full force and effect regardless of
28
(i) any investigation made by or on behalf of the Underwriters or (ii)
acceptance of any of the Shares and payment therefor.
8. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time prior to the Closing Date (or, with
respect to the Option Shares, on or prior to the Option Closing Date), by notice
to the Company from the Representatives, without liability on the part of any
Underwriter to the Company or the Existing Stockholders, if, prior to delivery
and payment for the Shares (or the Option Shares, as the case may be), in the
sole judgment of the Representatives, (a) trading in any of the equity
securities of the Company shall have been suspended by the Commission or by an
exchange that lists the Shares, (b) trading in securities generally on the New
York Stock Exchange or the International Stock Exchange of the United Kingdom
shall have been suspended or limited or minimum or maximum prices shall have
been generally established on any of such exchanges, 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 of such exchanges
or by order of the Commission or any court or other governmental authority, (c)
a general banking moratorium shall have been declared by Federal, New York State
or United Kingdom authorities or (d) any material adverse change in the
financial or securities markets in the United States or United Kingdom or any
outbreak or material escalation of hostilities or declaration by the United
States or the United Kingdom of a national emergency or war or other calamity or
crisis shall have occurred, the effect of any of which is such as to make it, in
the sole judgment of the Representatives, impracticable or inadvisable to market
the Shares on the terms and in the manner contemplated by the Prospectus. Any
termination pursuant to this Section 8 shall be without liability of any party
to any other party except as provided in Sections 4(j) and 7.
9. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of Firm Shares,
the other Underwriters shall be obligated, severally, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 9 by more than one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without
29
liability on the part of any non-defaulting Underwriter or the Company for the
purchase or sale of any Shares under this Agreement. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken pursuant to
this Section 9 shall not relieve any defaulting Underwriter from liability to
the Company or the Underwriters in respect of any default of such Underwriter
under this Agreement.
10. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company or the Existing Stockholders, at the office
of the Company, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇, or (b) if to the Underwriters, to the Representatives at
the office of NatWest Securities Limited, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇, with a copy to NatWest Securities Limited, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇, Senior Director. Any such notice shall be effective only upon
receipt. Any notice under Section 8 or 9 may be made by telex, facsimile or
telephone, but if so made by telex or telephone such notice shall be
subsequently confirmed in writing.
11. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers, the
Existing Stockholders 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 (a) any investigation made by or
on behalf of the Company, any of its officers or directors, the Existing
Stockholders, any Underwriter or any controlling person referred to in Section 7
hereof and (b) delivery and payment for the Shares. The respective agreements,
covenants, indemnities and other statements set forth in Sections 4(j), 4(k) and
7 hereof shall remain in full force and effect regardless of any termination or
cancellation of this Agreement.
12. Beneficiaries. This Agreement has been and is made solely for the
benefit of the several Underwriters, the Existing Stockholders, the Company and
of the controlling persons, directors and officers referred to in Section 7, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" as used in this Agreement shall not include a purchaser, as such
purchaser, of Shares from any of the several Underwriters.
13. Action by Representatives. Any action required or
permitted to be taken by the Representatives under this Agreement may be taken
by them jointly or by NatWest Securities Limited alone.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflict of laws.
30
15. Counterparts. This Agreement may be signed in two or
more counterparts with the same effect as if the signatures thereto and hereto
were upon the same instrument.
16. Amendments and Waivers. This Agreement may be amended,
modified or altered, and any of its provisions waived, only in a writing
signed on behalf of the Company, the Existing Stockholders and the
Underwriters.
17. Severability. In case any provision in this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
31
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Existing Stockholders and the several Underwriters.
Very truly yours,
DELTA FINANCIAL CORPORATION
By: _________________________
Its: ________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: ___________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇ GRANTOR RETAINED
ANNUITY TRUST
By: ___________________________
Its: Trustee
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ GRANTOR RETAINED
ANNUITY TRUST
By: ___________________________
Its: Trustee
▇▇▇▇ ▇. ▇▇▇▇▇▇
By: ___________________________
32
Confirmed as of the date first above mentioned:
NATWEST SECURITIES LIMITED
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
Acting on behalf of
themselves and as the
Representatives of the
other several Underwriters
named in Schedule I hereof.
By: NATWEST SECURITIES LIMITED
By: _____________________________
Its: ____________________________
33
SCHEDULE I
UNDERWRITERS
Number of
Underwriter Firm Shares to be Purchased
----------- ---------------------------
NatWest Securities Limited
Prudential Securities Incorporated..
▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
Total
34
SCHEDULE II
EXISTING STOCKHOLDERS
1. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
2. ▇▇▇▇ ▇. ▇▇▇▇▇▇ Grantor Retained Annuity Trust,
Trustees: ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇
3. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Grantor Retained Annuity Trust,
Trustees: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇
4. ▇▇▇▇ ▇. ▇▇▇▇▇▇
35