EXHIBIT 1.1
QUANTA CAPITAL HOLDINGS LTD.
10.25% SERIES A PREFERRED SHARES
UNDERWRITING AGREEMENT
December 14, 2005
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
as Representative of the several Underwriters
c/o Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Quanta Capital Holdings Ltd., a Bermuda exempted company (the
"Company") confirms its agreement with each of the Underwriters listed on
Schedule I hereto (collectively, the "Underwriters"), for whom Friedman,
Billings, ▇▇▇▇▇▇ & Co., Inc. is acting as representative (in such capacity,
the "Representative"), with respect to (i) the sale by the Company of
3,000,000 shares (the "Initial Shares") of 10.25% Series A Preferred
Shares, par value $0.01 per share, of the Company (the "Preferred Shares"),
and the purchase by the Underwriters, acting severally and not jointly, of
the respective number of shares of Preferred Shares set forth opposite the
names of the Underwriters in Schedule I hereto, and (ii) the grant of the
option described in Section 1(b) hereof to purchase all or any part of
450,000 additional shares of Preferred Shares to cover over-allotments (the
"Option Shares"), if any, from the Company to the Underwriters, acting
severally and not jointly, in the respective proportion as set forth
opposite the names of the Underwriters in Schedule I hereto. The 3,000,000
shares of Preferred Shares to be purchased by the Underwriters and all or
any part of the 450,000 shares of Preferred Shares subject to the option
described in Section l(b) hereof are hereinafter called, collectively, the
"Shares."
The Company understands that the Underwriters propose to make a
public offering of the Shares as soon as the Underwriters deem advisable
after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the Commission"), a registration statement on Form S-3 (No. 333-129255)
and a related preliminary prospectus for the registration of the Shares
under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations thereunder (the "Securities Act Regulations").
The Company has prepared and filed such amendments to the registration
statement and such amendments or supplements to the related preliminary
prospectus as may have been required to the date hereof, and will file such
additional amendments or supplements as may hereafter be required. The
registration statement has been declared effective under the Securities Act
by the Commission. The registration
statement, as amended at the time it was declared effective by the
Commission (and, if the Company files a post-effective amendment to such
registration statement which becomes effective prior to the Closing Time
(as defined below), such registration statement as so amended) and
including all information deemed to be a part of the registration statement
pursuant to incorporation by reference, Rule 430B of the Securities Act
Regulations or otherwise, is hereinafter called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
Securities Act Regulations is hereinafter called the "Rule 462(b)
Registration Statement," and after such filing the term "Registration
Statement" shall include the 462(b) Registration Statement. The term "Base
Prospectus" means the prospectus dated November 2, 2005 included in the
Registration Statement including the information incorporated by reference
therein. The term "Prospectus Supplement" means the prospectus supplement
specifically relating to the Shares, in the form first filed with the
Commission pursuant to Rule 424 under the Securities Act, including any
amendment or supplement thereto and all information incorporated by
reference therein. The term "Prospectus" means the Base Prospectus together
with the Prospectus Supplement. The term "Preliminary Prospectus" means any
preliminary form of the Prospectus in the form filed with the Commission
pursuant to Rule 424 of the Securities Act Regulations.
The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus.
The term "Disclosure Package" means (i) the Base Prospectus and
the Preliminary Prospectus, as most recently amended or supplemented
immediately prior to the Initial Sale Time (as defined herein), (ii) the
Issuer Free Writing Prospectuses (as defined below), if any, identified in
Schedule II hereto, and (iii) any other Free Writing Prospectus (as defined
below) that the parties hereto shall hereafter expressly agree to treat as
part of the Disclosure Package.
The term "Issuer Free Writing Prospectus" means any issuer free
writing prospectus, as defined in Rule 433 of the Securities Act
Regulations. The term "Free Writing Prospectus" means any free writing
prospectus, as defined in Rule 405 of the Securities Act Regulations.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the
purchase price per share of $24.2125, the Company agrees to sell to the
Underwriters 3,000,000 Initial Shares and each Underwriter agrees,
severally and not jointly, to purchase from the Company the number of
Initial Shares set forth in Schedule I opposite such Underwriter's name,
plus any additional number of Initial Shares which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 9
hereof, subject in each case, to such
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adjustments among the Underwriters as the Representative in its sole
discretion shall make to eliminate any sales or purchases of fractional
shares.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the
purchase price per share set forth in paragraph (a), the Company hereby
grants an option to the Underwriters, acting severally and not jointly, to
purchase from the Company, all or any part of the Option Shares, plus any
additional number of Option Shares which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 9 hereof. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering
and distribution of the Initial Shares upon notice by the Representative to
the Company setting forth the number of Option Shares as to which the
several Underwriters are then exercising the option and the time and date
of payment and delivery for such Option Shares. Any such time and date of
delivery shall be determined by the Representative, but shall not be later
than three full business days (or earlier, without the consent of the
Company, than two full business days) after the exercise of such option,
nor in any event prior to the Closing Time, as hereinafter defined. If the
option is exercised as to all or any portion of the Option Shares, the
Company will sell the total number of Option Shares then being purchased
and each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Shares then being
purchased which the number of Initial Shares set forth in Schedule I
opposite the name of such Underwriter bears to the total number of Initial
Shares, subject in each case to such adjustments among the Underwriters as
the Representative in its sole discretion shall make to eliminate any sales
or purchases of fractional shares.
2. Payment and Delivery:
(a) Initial Shares. The Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representative may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representative, including, at the option of
the Representative, through the facilities of The Depository Trust Company
("DTC") for the account of such Underwriter, against payment by or on
behalf of such Underwriter of the purchase price therefor by wire transfer
of Federal (same-day) funds to the account specified to the Representative
by the Company upon at least forty-eight hours' prior notice. The Company
will cause the certificates representing the Initial Shares to be made
available for checking and packaging not later than 1:00 p.m. New York City
time on the business day prior to the Closing Time (as defined below) with
respect thereto at the office of Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at the office of DTC
or its designated custodian, as the case may be (the "Designated Office").
The time and date of such delivery and payment shall be 9:30 a.m., New York
City time, on the fourth business day after the date hereof (unless another
time and date shall be agreed to by the Representative and the
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Company). The time at which such payment and delivery of both Initial
Shares and Option Shares are actually made is hereinafter sometimes called
the "Closing Time" and the date of delivery of both Initial Shares and
Option Shares is hereinafter sometimes called the "Date of Delivery."
(b) Option Shares. Any Option Shares to be purchased by each
Underwriter hereunder, in definitive form, and in such authorized
denominations and registered in such names as the Representative may
request upon at least forty-eight hours' prior notice to the Company shall
be delivered by or on behalf of the Company to the Representative,
including, at the option of the Representative, through the facilities of
DTC for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Representative by the
Company upon at least forty-eight hours' prior notice. The Company will
cause the certificates representing the Option Shares to be made available
for checking and packaging at least twenty-four hours prior to the Date of
Delivery with respect thereto at the Designated Office. The time and date
of such delivery and payment shall be 9:30 a.m., New York City time, on the
date specified by the Representative in the notice given by the
Representative to the Company of the Underwriters' election to purchase
such Option Shares or on such other time and date as the Company and the
Representative may agree upon in writing.
3. Representations and Warranties of the Company:
The Company represents and warrants to the Underwriters that:
(a) the Company has an authorized capitalization as set forth in both
the Prospectus and the Disclosure Package; the outstanding shares of
capital stock of the Company and each material subsidiary of the Company
(each, a "Subsidiary") that is a corporation have been duly and validly
authorized and issued and are fully paid and non-assessable, and all of the
outstanding shares of capital stock of the Subsidiaries that are
corporations are directly or indirectly owned of record and beneficially by
the Company and all of the membership interests in each Subsidiary that is
a limited liability company have been duly and validly authorized and
issued and fully paid, and all of the outstanding membership interests in
each Subsidiary that is a limited liability company are directly or
indirectly owned of record and beneficially by the Company; except as
disclosed in both the Prospectus and the Disclosure Package, there are no
outstanding (i) securities or obligations of the Company or any of the
Subsidiaries convertible into or exchangeable for any capital stock or
membership interests of the Company or any such Subsidiary, (ii) warrants,
rights or options to subscribe for or purchase from the Company or any such
Subsidiary any such capital stock or membership interests or any such
convertible or exchangeable securities or obligations, or (iii) obligations
of the Company or any such Subsidiary to issue any shares of capital stock
or membership interests, any such convertible or exchangeable securities or
obligation, or any such warrants, rights or options;
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(b) each of the Company and the Subsidiaries (all Subsidiaries of
which are named in Exhibit 21 to the Company's Annual Report for 2004 on
Form 10-K) has been duly incorporated or formed and is validly existing as
a corporation or limited liability company, as applicable, in good standing
under the laws of its respective jurisdiction of organization with full
corporate or limited liability company, as applicable, power and authority
to own its respective properties and to conduct its respective businesses
as described in each of the Registration Statement, the Prospectus and the
Disclosure Package and, in the case of the Company, to execute and deliver
this Agreement and to consummate the transactions contemplated herein;
(c) the Company and all of the Subsidiaries are duly qualified or
licensed and are in good standing in each jurisdiction in which they
conduct their respective businesses or in which they own or lease real
property or otherwise maintain an office and in which the failure,
individually or in the aggregate, to be so qualified or licensed would
reasonably be expected to have a material adverse effect on the assets,
business, operations, earnings, prospects, properties or condition
(financial or otherwise), present or prospective, of the Company and the
Subsidiaries taken as a whole, (any such effect or change, where the
context so requires, is hereinafter called a "Material Adverse Effect" or
"Material Adverse Change"); except as disclosed in both the Prospectus and
the Disclosure Package, no Subsidiary is prohibited or restricted, directly
or indirectly, in any material respect from paying dividends to the
Company, or from making any other distribution with respect to such
Subsidiary's capital stock or from repaying to the Company or any other
Subsidiary any amounts which may from time to time become due under any
loans or advances to such Subsidiary from the Company or such other
Subsidiary, or from transferring any such Subsidiary's property or assets
to the Company or to any other Subsidiary; other than as disclosed in both
the Prospectus and the Disclosure Package, the Company does not own,
directly or indirectly, any capital stock or other equity securities of any
other corporation or any ownership interest in any partnership, joint
venture or other association;
(d) the Company and the Subsidiaries are in compliance in all material
respects with all applicable laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with affiliates, except
where the failure to comply would not reasonably be expected to have a
Material Adverse Effect;
(e) neither the Company nor any 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), its respective
organizational documents, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company or any Subsidiary is a party
or by which any of them or their respective properties is bound, except for
such breaches or defaults which would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect;
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(f) the execution, delivery and performance of this Agreement, and
consummation of the transactions contemplated herein will not (A) 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), (i) any provision of the
organizational documents of the Company or any Subsidiary, or (ii) any
provision of any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Company or
any Subsidiary is a party or by which any of them or their respective
properties may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable
to the Company or any Subsidiary, except in the case of this clause (ii)
for such breaches or defaults which would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect; or (B)
result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or any Subsidiary;
(g) this Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and by general equitable principles,
and except to the extent that the indemnification and contribution
provisions of Section 10 hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof;
(h) no approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board, body,
authority or agency, domestic or foreign, is required in connection with
the Company's execution, delivery and performance of this Agreement, its
consummation of the transactions contemplated herein, and its sale and
delivery of the Shares, other than (A) such as have been obtained, or will
have been obtained at the Closing Time or the relevant Date of Delivery, as
the case may be, under the Securities Act and the Securities Exchange Act
of 1934 (the "Exchange Act"), (B) such approvals as have been obtained in
connection with the approval of the quotation of the Shares on NASDAQ, (C)
any necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters, (D) such approvals, authorizations, consents, orders or
filings under the rules and regulations of the NASD and (E) such filings
and approvals as may be required in such jurisdictions outside the United
States where the Underwriters choose to market the Shares and such as may
be required and have been obtained from the Bermuda Monetary Authority;
(i) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state or local law, regulation or rule,
domestic or foreign, and has obtained all necessary authorizations,
consents and approvals from other persons, required in order to conduct
their respective businesses as described in both the Prospectus and the
Disclosure
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Package, except to the extent that any failure to have any such licenses,
authorizations, consents or approvals, to make any such filings or to
obtain any such authorizations, consents or approvals would not reasonably
be expected to, individually or in the aggregate, have a Material Adverse
Effect; neither the Company nor any of the Subsidiaries is required by any
applicable law to obtain accreditation or certification from any
governmental agency or authority in order to provide the products and
services which it currently provides or which it proposes to provide as set
forth in both the Prospectus and the Disclosure Package, except for such
accreditations or certifications that the failure of which to obtain would
not reasonably be expected to individually or in the aggregate, have a
Material Adverse Effect; neither the Company nor any of the Subsidiaries is
in violation of, in default under, or has received any notice regarding a
possible violation, default or revocation of any such license,
authorization, consent or approval or any federal, state, domestic or
foreign law, regulation or rule or any decree, order or judgment, domestic
or foreign, applicable to the Company or any of the Subsidiaries the effect
of which would reasonably be expected to result in a Material Adverse
Change;
(j) each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the Securities Act and no
stop order suspending the effectiveness of the Registration Statement or
any Rule 462(b) Registration Statement has been issued under the Securities
Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated or threatened by the
Commission, and the Company has complied to the Commission's satisfaction
with any request on the part of the Commission for additional information;
(k) the Preliminary Prospectus and the Prospectus when filed and the
Registration Statement as of each effective date and as of the date hereof
complied or will comply, and the Prospectus and any further amendments or
supplements to the Registration Statement, the Preliminary Prospectus or
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, comply, in all material respects with the
requirements of the Securities Act and the Securities Act Regulations;
(l) the Registration Statement, as of each effective date and as of
the date hereof, did not, does not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Preliminary Prospectus does not, and the Prospectus as supplemented by any
Issuer Free Writing Prospectus or any amendment or supplement thereto will
not, as of the applicable filing date and at the Closing Time and on each
Date of Delivery (if any), contain an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in or omitted from
the Registration Statement, the Preliminary Prospectus or the Prospectus in
reliance upon and in conformity with the information concerning the
Underwriters and
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furnished in writing by or on behalf of the Underwriters through the
Representative to the Company expressly for use therein (that information
being limited to that described in the last sentence of the first paragraph
of Section 10(b) hereof);
(m) each document incorporated by reference in the Prospectus and the
Disclosure Package, when it became effective or was filed with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and
the Securities Act Regulations and the Exchange Act Regulations, and none
of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and any further documents so
filed and incorporated by reference in the Prospectus and the Disclosure
Package or any further amendment or supplement thereto, when such documents
become effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the Securities Act Regulations and
the rules and regulations under the Exchange Act (the "Exchange Act
Regulations") and will not include an 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 the light of the circumstances
under which they were made, not misleading;
(n) as of 6:00 p.m. (Eastern time) on the date of this Agreement (the
"Initial Sale Time"), the Disclosure Package did not, and at each Closing
Time, the Disclosure Package will not, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
warranty or representation with respect to any statement contained in or
omitted from the Disclosure Package in reliance upon and in conformity with
the information concerning the Underwriters and furnished in writing by or
on behalf of the Underwriters through the Representative to the Company
expressly for use therein (that information being limited to that described
in the last sentence of the first paragraph of Section 10(b) hereof);
(o) each Issuer Free Writing Prospectus, as of its issue date and at
all subsequent times through the completion of the public offer and sale of
the Shares did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in
the Registration Statement, including any document incorporated by
reference therein that has not been superseded or modified;
(p) the Company is eligible to use Free Writing Prospectuses in
connection with this offering pursuant to Rules 164 and 433 under the
Securities Act; any Free Writing Prospectus that the Company is required to
file pursuant to Rule 433(d) under the Securities Act Regulations has been,
or will be, filed with the Commission in accordance with the Securities Act
Regulations; and each Free Writing Prospectus that the Company
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has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act Regulations or that was prepared by or on behalf of or used
by the Company complies or will comply in all material respects with the
requirements of the Securities Act and the Securities Act Regulations;
(q) except for the Issuer Free Writing Prospectuses, if any,
identified in Schedule II hereto, and any electronic road show relating to
the offering, the Company has not prepared, used or referred to, and will
not, without the prior consent of the Representative, prepare, use or refer
to, any Free Writing Prospectus;
(r) the Preliminary Prospectus, the Prospectus and any Issuer Free
Writing Prospectuses (to the extent any such Issuer Free Writing Prospectus
was required to be filed with the Commission) delivered to the Underwriters
for use in connection with this offering have been and will be identical to
the versions of such documents transmitted to the Commission for filing via
the Electronic Data Gathering Analysis and Retrieval System ("▇▇▇▇▇"),
except to the extent permitted by Regulation S-T;
(s) the Company filed the Registration Statement with the Commission
before using any Issuer Free Writing Prospectus;
(t) there are no actions, suits, proceedings, inquiries or
investigations pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary or any of their respective officers
and directors or to which the properties, assets or rights of any such
entity are subject, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority, arbitral panel or agency which would not reasonably be expected
to result in a judgment, decree, award or order having a Material Adverse
Effect;
(u) the financial statements, including the notes thereto, included in
(or incorporated by reference into) each of the Registration Statement, the
Prospectus and the Disclosure Package present fairly the consolidated
financial position of the entities to which such financial statements
relate (the "Covered Entities") as of the dates indicated and the
consolidated results of operations and changes in financial position and
cash flows of the Covered Entities for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles as applied in the United States and on a
consistent basis during the periods involved and in accordance with
Regulation S-X promulgated by the Commission; the financial statement
schedules included in the Registration Statement and the amounts in both
the Prospectus and the Disclosure Package under the captions "Prospectus
Summary - Summary Historical Consolidated Financial Information" and
"Selected Historical Consolidated Financial Information" fairly present the
information shown therein and have been compiled on a basis consistent with
the financial statements included in each of the Registration Statement,
the Prospectus and the Disclosure Package; the amounts in both the
Prospectus and the Disclosure Package in the table under the caption
"Prospectus Summary - Recent Developments" and under the caption
"Capitalization" fairly present in
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all material respects the information shown therein and have been compiled
on a basis consistent with the financial statements included in each of the
Registration Statement, the Prospectus and the Disclosure Package; no other
financial statements or supporting schedules are required to be included in
the Registration Statement, the Prospectus or the Disclosure Package;
(v) to the best of the Company's knowledge, PricewaterhouseCoopers
LLP, whose reports on the consolidated financial statements of the Company
and the Subsidiaries are filed with the Commission as part of each of the
Registration Statement, the Prospectus and the Disclosure Package or are
incorporated by reference therein, and any other accounting firm that has
certified Company financial statements and delivered its reports with
respect thereto, are, and were during the periods covered by their reports,
independent registered public accounting firms as required by the
Securities Act and the Securities Act Regulations registered with the
Public Company Accounting Oversight Board;
(w) subsequent to the respective dates as of which information is
given in each of the Registration Statement, the Prospectus and the
Disclosure Package, and except as may be otherwise stated in such
documents, there has not been (A) any Material Adverse Change or any
development that could reasonably be expected to result in a Material
Adverse Change, whether or not arising in the ordinary course of business,
(B) any transaction that is material to the Company and the Subsidiaries
taken as a whole, contemplated or entered into by the Company or any of the
Subsidiaries other than in the ordinary course of business, (C) any
obligation, contingent or otherwise, directly or indirectly incurred by the
Company or any Subsidiary outside the ordinary course that is material to
the Company and Subsidiaries taken as a whole or (D) any dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock;
(x) the Shares conform in all material respects to the description
thereof contained in the Registration Statement, the Prospectus and the
Disclosure Package;
(y) there are no persons with registration or other similar rights to
have any equity or debt securities, including securities which are
convertible into or exchangeable for equity securities, registered pursuant
to the Registration Statement in connection with the sale of the Shares or
otherwise registered by the Company under the Securities Act, except for
those registration or similar rights which have been waived with respect to
the offering contemplated by this Agreement, all of which registration or
similar rights are fairly summarized in the Prospectus;
(z) the Shares have been duly authorized and, when issued and duly
delivered against payment therefor as contemplated by this Agreement, will
be validly issued, fully paid and non-assessable, free and clear of any
pledge, lien, encumbrance, security interest or other claim (except as set
forth in the Company's Bye-laws and Certificate of Designation related to
the Shares), and the issuance and sale of the Shares by the
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Company is not subject to preemptive or other similar rights arising by
operation of law, under the organizational documents of the Company or
under any agreement to which the Company or any Subsidiary is a party or
otherwise;
(aa) application has been made for listing the Shares on NASDAQ;
(bb) the Company has not taken, and will not take, directly or
indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(cc) neither the Company nor any of its affiliates (i) is required to
register as a "broker" or "dealer" in accordance with the provisions of the
Exchange Act, or the Exchange Act Regulations, or (ii) directly, or
indirectly through one or more intermediaries, controls or has any other
association with (within the meaning of Article I of the By-laws of the
National Association of Securities Dealers, Inc. (the "NASD")) any member
firm of the NASD;
(dd) the Company has not relied upon the Representative or legal
counsel for the Representative for any legal, tax or accounting advice in
connection with the offering and sale of the Shares;
(ee) any certificate signed by any officer of the Company or any
Subsidiary delivered to the Representative or to counsel for the
Underwriters pursuant to or in connection with this Agreement shall be
deemed a representation and warranty by the Company to each Underwriter as
to the matters covered thereby;
(ff) the form of certificate used to evidence the Preferred Shares
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the organizational
documents of the Company and the requirements of the NASDAQ;
(gg) the Company and the Subsidiaries have good and marketable title
in fee simple to all real property, if any, and good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except
such as are disclosed in both the Prospectus and the Disclosure Package or
such as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such
property by the Company and the Subsidiaries; and any real property and
buildings held under lease by the Company or any Subsidiary are held under
valid, existing and enforceable leases, with such exceptions as are
disclosed in both the Prospectus and the Disclosure Package or are not
material to the Company and its Subsidiaries as a whole and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or such Subsidiary;
-11-
(hh) the descriptions in each of the Registration Statement, the
Prospectus and the Disclosure Package of the legal or governmental
proceedings, contracts, leases and other legal documents therein described
present fairly in all material respects the information required to be
shown, and there are no legal or governmental proceedings, contracts,
leases, or other documents of a character required to be described in the
Registration Statement, the Prospectus or the Disclosure Package or to be
filed as exhibits to the Registration Statement which are not described or
filed as required; all agreements between the Company or any of the
Subsidiaries and third parties expressly referenced in both the Prospectus
and the Disclosure Package are legal, valid and binding obligations of the
Company or one or more of the Subsidiaries, enforceable in accordance with
their respective terms, except to the extent enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general equitable principles;
(ii) the Company and each Subsidiary owns or possesses adequate
licenses or other rights to use all patents, trademarks, service marks,
trade names, copyrights, software and design licenses, trade secrets,
manufacturing processes, other intangible property rights and know-how
(collectively "Intangibles") necessary to entitle the Company and each
Subsidiary to conduct its business as described in both the Prospectus and
the Disclosure Package except where the failure to own or possess, or to be
able to acquire, such Intangibles would reasonably be expected to have a
Material Adverse Effect, and neither the Company nor any Subsidiary has
received notice of infringement of or conflict with (and the Company knows
of no such infringement of or conflict with) asserted rights of others with
respect to any Intangibles which would reasonably be expected to have a
Material Adverse Effect;
(jj) (x) the Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15(e) under the
Exchange Act), which (i) are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made
known to the Company's principal executive officer and its principal
financial officer by others within those entities, particularly during the
periods in which the periodic reports required under the Exchange Act are
being prepared, (ii) have been evaluated for effectiveness as of the end of
the last fiscal quarter covered by the Registration Statement, and (iii)
are effective in all material respects to perform the functions for which
they were established, and (y) based on the evaluation of the Company's
disclosure controls and procedures described above, the Company is not
aware of (i) any significant deficiency or material weakness in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Company's ability to record,
process, summarize and report financial information, or (ii) any fraud,
whether or not material, that involves management or other employees who
have a significant role in the Company's internal control over financial
reporting. Since the most recent evaluation of the Company's disclosure
controls and procedures described above, there have been no significant
changes in internal control over financial reporting or in other factors
that could significantly affect internal control over financial reporting;
-12-
(kk) the Company is not aware of any significant deficiency or
material weaknesses existing in the design or implementation of the
internal controls over financial reporting of the Company that adversely
affects the Company's ability to record, process, summarize and report to
management or the Board of Directors material financial information
relating to the Company;
(ll) each of the Company and the Subsidiaries has filed on a timely
basis all necessary federal, state, local and foreign income and franchise
tax returns required to be filed through the date hereof and have paid all
taxes shown as due thereon other than those being contested in good faith
and for which adequate reserves have been provided or any of those
currently payable without penalty or interest; and no tax deficiency has
been asserted against any such entity, nor does any such entity know of any
tax deficiency which has been threatened against any such entity which, if
determined adversely to any such entity, could have a Material Adverse
Effect; all tax liabilities are adequately provided for on the respective
books of such entities;
(mm) each of the Company and the Subsidiaries maintains insurance
(issued by insurers of recognized financial responsibility) of the types
and in the amounts generally deemed adequate for their respective
businesses and consistent with insurance coverage maintained by similar
companies in similar businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company and the
Subsidiaries against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full
force and effect;
(nn) neither the Company nor any of the Subsidiaries is in violation,
or has received notice of any violation with respect to, any applicable
environmental, safety or similar law applicable to the business of the
Company or any of the Subsidiaries; the Company and the Subsidiaries have
received all permits, licenses or other approvals required of them under
applicable federal and state occupational safety and health and
environmental laws and regulations to conduct their respective businesses,
and the Company and the Subsidiaries are in compliance with all terms and
conditions of any such permit, license or approval, except any such
violation of law or regulation, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals which would not
reasonably be expected to, individually or in the aggregate, result in a
Material Adverse Change;
(oo) neither the Company nor any Subsidiary is in violation of or has
received notice of any violation with respect to any federal or state law
relating to discrimination in the hiring, promotion or pay of employees,
nor any applicable federal or state wages and hours law, nor any state law
precluding the denial of credit due to the neighborhood in which a property
is situated, the violation of any of which would reasonably be expected to
have a Material Adverse Effect;
-13-
(pp) the Company and each of the Subsidiaries are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company or any of the
Subsidiaries would have any liability; the Company and each of the
Subsidiaries have not incurred and do not expect to incur liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (ii) Section 412 or 4971 of the Internal Revenue Code
of 1986, as amended, including the regulations and published
interpretations thereunder ("Code"); and each "pension plan" for which the
Company and each of its Subsidiaries would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification;
(qq) neither the Company nor any of the Subsidiaries nor, to the best
of the Company's knowledge, any officer or director purporting to act on
behalf of the Company or any of the Subsidiaries has at any time (i) made
any contributions to any candidate for political office, or failed to
disclose fully any such contributions, in violation of law, (ii) made any
payment to any state, federal or foreign governmental officer or official,
or other person charged with similar public or quasi-public duties, other
than payments required or allowed by applicable law, (iii) made any payment
outside the ordinary course of business to any investment officer or loan
broker or person charged with similar duties of any entity to which the
Company or any of the Subsidiaries sells or from which the Company or any
of the Subsidiaries buys loans or servicing arrangements for the purpose of
influencing such agent, officer, broker or person to buy loans or servicing
arrangements from or sell loans to the Company or any of the Subsidiaries,
or (iv) engaged in any transactions, maintained any bank account or used
any corporate funds except for transactions, bank accounts and funds which
have been and are reflected in the normally maintained books and records of
the Company and the Subsidiaries;
(rr) except as otherwise disclosed in both the Prospectus and the
Disclosure Package, there are no material outstanding loans, extensions of
credit or advances or material guarantees of indebtedness by the Company or
any of the Subsidiaries to or for the benefit of any of the officers or
directors of the Company or any of the Subsidiaries or any of the members
of the families of any of them;
(ss) all securities issued by the Company, any of the Subsidiaries or
any trusts established by the Company or any Subsidiary, have been issued
and sold in compliance with (i) all applicable federal and state securities
laws, (ii) the laws of the applicable jurisdiction of incorporation of the
issuing entity and, (iii) to the extent applicable to the issuing entity,
the requirements of the NASDAQ;
-14-
(tt) in connection with this offering, the Company has not offered and
will not offer its Preferred Shares or any other securities convertible
into or exchangeable or exercisable for Preferred Shares in a manner in
violation of the Securities Act; and the Company has not distributed and
will not distribute any offering material in connection with the offer and
sale of the Shares except for the Preliminary Prospectus, the Prospectus,
any Issuer Free Writing Prospectus or the Registration Statement;
(uu) the Company has not incurred any liability for any finder's fees
or similar payments in connection with the issuance of the Shares
contemplated hereby;
(vv) no relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of the
Subsidiaries on the other hand, which is required by the Securities Act and
the Securities Act Regulations to be described in the Registration
Statement, the Prospectus or the Disclosure Package and which is not so
described;
(ww) neither the Company nor any of the Subsidiaries is and, after
giving effect to the offering and sale of the Shares, will be an
"investment company" or an entity "controlled" by an "investment company",
as such terms are defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act");
(xx) there are no existing or, to the knowledge of the Company,
threatened labor disputes with the employees of the Company or any of the
Subsidiaries which are likely to have, individually or in the aggregate, a
Material Adverse Effect;
(yy) the Company, the Subsidiaries and any of the officers and
directors of the Company and the Subsidiaries, in their capacities as such,
are, and at the Closing Time and any Date of Delivery will be, in
compliance in all material respects with the provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated
thereunder;
(zz) nothing in this Agreement shall be deemed to create a
partnership, joint venture or agency relationship between the parties. The
Representative undertakes to perform such duties and obligations only as
expressly set forth herein. Such duties and obligations of the
Representative with respect to the Shares shall be determined solely by the
express provisions of this Agreement, and the Representative shall not be
liable except for the performance of such duties and obligations with
respect to the Shares as are specifically set forth in this Agreement. The
Company acknowledges and agrees that: (i) the purchase and sale of the
Shares pursuant to this Agreement, including the determination of the
public offering price of the Shares and any related discounts and
commissions, is an arm's-length commercial transaction between the Company,
on the one hand, and the Representative, on the other hand, and the Company
is capable of evaluating and understanding and understands and accepts the
terms, risks and conditions of the transactions contemplated by this
Agreement; (ii) in connection with each transaction contemplated hereby and
the process leading to such transaction the Underwriters are and
-15-
have been acting solely as principals and are not financial advisors,
agents or fiduciaries of the Company or its respective affiliates,
stockholders, creditors or employees or any other party; (iii) the
Representative has not assumed or will not assume an advisory, agency or
fiduciary responsibility in favor of the Company with respect to any of the
transactions contemplated hereby or the process leading thereto
(irrespective of whether the Representative has advised or is currently
advising the Company on other matters); and (iv) the Representative and its
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company and that the Representative
has no obligation to disclose any of such interests. The Company
acknowledges that the Representative disclaims any implied duties
(including any fiduciary duty), covenants or obligations arising from the
Representative's performance of the duties and obligations expressly set
forth herein. The Company hereby waives and releases, to the fullest extent
permitted by law, any claims that the Company may have against the
Representative with respect to any breach or alleged breach of agency or
fiduciary duty; and
(aaa) the Company has not entered into any agreement to consummate any
amalgamation, merger or consolidation the result of which is that,
immediately after such transaction, the holders of all of the Company's
outstanding common shares immediately prior to such transaction hold 50% or
less of the aggregate voting power of the common shares of the entity
surviving such transaction.
4. Certain Covenants:
The Company hereby agrees with each Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such jurisdictions (both domestic and
foreign) as the Representative may designate and to maintain such
qualifications in effect as long as requested by the Representative for the
distribution of the Shares, provided that the Company shall not be required
to qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except service of process with respect to
the offering and sale of the Shares);
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause such post-effective amendment to become
effective as soon as possible and will advise the Representative promptly
and, if requested by the Representative, will confirm such advice in
writing, when such post-effective amendment has become effective;
(c) to prepare the Prospectus in a form approved by the Underwriters
and file such Prospectus with the Commission pursuant to Rule 424(b) under
the Securities Act not later than 10:00 a.m. (New York City time), on the
day following the execution and delivery of this Agreement or on such other
day as the parties may mutually agree and to furnish promptly (and with
respect to the initial delivery of such Prospectus, not later than
-16-
10:00 a.m. (New York City time) on the day following the execution and
delivery of this Agreement or on such other day as the parties may mutually
agree to the Underwriters copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration Statement)
in such quantities and at such locations as the Underwriters may reasonably
request for the purposes contemplated by the Securities Act Regulations,
which Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the version transmitted to the Commission
for filing via ▇▇▇▇▇, except to the extent permitted by Regulation S-T;
(d) to advise the Representative promptly and (if requested by the
Representative) to confirm such advice in writing, when the Registration
Statement has become effective and when any post-effective amendment
thereto becomes effective under the Securities Act Regulations;
(e) to furnish a copy of each proposed Free Writing Prospectus to the
Representative and counsel for the Underwriters and obtain the consent of
the Representative prior to referring to, using or filing with the
Commission any Free Writing Prospectus pursuant to Rule 433(d) under the
Securities Act, other than the Issuer Free Writing Prospectuses, if any,
identified in Schedule II hereto;
(f) to comply with the requirements of Rules 164 and 433 of the
Securities Act Regulations applicable to any Issuer Free Writing
Prospectus, including timely filing with the Commission, legending and
record keeping, as applicable;
(g) to advise the Representative immediately, confirming such advice
in writing, of (i) the receipt of any comments from, or any request by, the
Commission for amendments or supplements to the Registration Statement, the
Preliminary Prospectus, the Prospectus or any Issuer Free Writing
Prospectus, or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the
use of the Preliminary Prospectus, the Prospectus or any Issuer Free
Writing Prospectus, or of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes and, if the
Commission or any other government agency or authority should issue any
such order, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; to advise the Representative
promptly of any proposal to amend or supplement the Registration Statement,
the Preliminary Prospectus, the Prospectus or any Issuer Free Writing
Prospectus and to file no such amendment or supplement to which the
Representative shall reasonably object in writing;
(h) upon request, to furnish to the Underwriters for a period of three
years from the date of this Agreement (i) as soon as available, copies of
all annual, quarterly and current reports or other communications supplied
to holders of shares of stock of the Company, (ii) as soon as practicable
after the filing thereof, copies of all reports filed by
-17-
the Company with the Commission, the NASD or any securities exchange and
(iii) such other information as the Underwriters may reasonably request
regarding the Company and the Subsidiaries;
(i) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to
the Shares (or in lieu thereof the notice referred to in Rule 173(a) under
the Securities Act Regulations) is required to be delivered under the
Securities Act Regulations which, in the judgment of the Company or in the
reasonable opinion of the Representative or counsel for the Underwriters,
would require the making of any change in the Prospectus or the Disclosure
Package so that the Prospectus would not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the Prospectus or the
Disclosure Package to comply with any law and, during such time, to
promptly prepare and furnish to the Underwriters copies of the proposed
amendment or supplement before filing any such amendment or supplement with
the Commission and afford the Representative a reasonable opportunity to
comment on any such proposed amendment or supplemental prior to filing any
such amendment or supplement with the Commission and thereafter promptly
furnish at the Company's own expense to the Underwriters and to dealers,
copies in such quantities and at such locations as the Representative may
from time to time reasonably request of an appropriate amendment or
supplement to the Prospectus or the Disclosure Package as so amended or
supplemented will not, in the light of the circumstances when it (or in
lieu thereof the notice referred to in Rule 173(a) under the Securities Act
Regulations) is so delivered, be misleading, or so that the Prospectus or
the Disclosure Package will comply with the law;
(j) to file promptly with the Commission any amendment or supplement
to the Registration Statement, any Preliminary Prospectus, the Prospectus
or any Issuer Free Writing Prospectus that may, in the judgment of the
Company or the Representative, be required by the Securities Act or
requested by the Commission;
(k) prior to filing with the Commission any amendment or supplement to
the Registration Statement, any Preliminary Prospectus, the Prospectus or
any Issuer Free Writing Prospectus, with respect to the Shares to furnish a
copy thereof to the Representative and counsel for the Underwriters and
obtain the consent of the Representative (not to be unreasonably withheld)
to the filing;
(l) to furnish promptly to each Representative a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith
or incorporated by reference therein) and such number of conformed copies
of the foregoing as the Representative may reasonably request;
-18-
(m) to furnish promptly to each Representative, before filing with the
Commission, during the period referred to in paragraph (i) above, a copy of
any document proposed to be filed with the Commission pursuant to Section
13, 14, or 15(d) of the Exchange Act and during the period of three years
hereafter to file all such documents in the manner and within the time
periods required by the Exchange Act and the Exchange Act Regulations;
(n) to apply the net proceeds of the sale of the Shares in accordance
with its statements under the caption "Use of Proceeds" in the Prospectus
and the Disclosure Package;
(o) to make generally available to its security holders and to deliver
to the Representative as soon as practicable, an earnings statement
complying with the provisions of Section 11(a) of the Securities Act (in
form, at the option of the Company, complying with the provisions of Rule
158 of the Securities Act Regulations,) covering a period of 12 months
beginning after the effective date of the Registration Statement;
(p) to use its best efforts to cause the Shares to be listed on NASDAQ
and when so listed to use its best efforts to maintain the quotation of the
Shares on NASDAQ and to file with NASDAQ all documents and notices required
by NASDAQ of companies that have securities that are traded and quotations
for which are reported by NASDAQ;
(q) to engage and maintain, at its expense, a registrar and transfer
agent for the Shares;
(r) to refrain during a period of 90 days from the date of the
Prospectus, without the prior written consent of the Representative, from,
directly or indirectly, (i) offering, pledging, selling, contracting to
sell, selling any option or contract to purchase, purchasing any option or
contract to sell, granting any option for the sale of, or otherwise
disposing of or transferring, (or entering into any transaction or device
which is designed to, or could be expected to, result in the disposition by
any person at any time in the future of), any preferred share or any
securities convertible into or exercisable or exchangeable for preferred
shares, or filing any registration statement under the Securities Act with
respect to any of the foregoing, or (ii) entering into any swap, option,
future, derivative or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the preferred shares, whether any such swap,
option, future, derivative or transaction described in clause (i) or (ii)
above is to be settled by delivery of preferred shares or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
the Shares to be sold hereunder;
(s) not to, and to use its best efforts to cause its officers,
directors and affiliates not to, (i) take, directly or indirectly prior to
termination of the underwriting syndicate contemplated by this Agreement,
any action designed to stabilize or manipulate the price of any security of
the Company, or which may cause or result in, or which might in the future
reasonably be expected to cause or result in, the stabilization or
manipulation
-19-
of the price of any security of the Company, to facilitate the sale or
resale of any of the Shares, (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of the Shares or (iii) pay or agree
to pay to any person any compensation for soliciting any order to purchase
any other securities of the Company;
(t) that the Company will comply with all of the provisions of any
undertakings in the Registration Statement.
(u) the Company will use its commercially reasonable efforts to
maintain, and cause each of the Subsidiaries to maintain, in accordance
with applicable law a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any
amendments or supplements thereto (including costs of counsel and
independent accountants to the Company), and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including costs
of mailing and shipment), (ii) the preparation, issuance and delivery of
the certificates for the Shares to the Underwriters, including any stock or
other transfer taxes or duties payable upon the sale of the Shares to the
Underwriters, (iii) the printing of this Agreement and any dealer
agreements and furnishing of copies of each to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification
of the Shares for offering and sale under state laws that the Company and
the Representative have mutually agreed are appropriate and the
determination of their eligibility for investment under state law as
aforesaid (including the legal fees and filing fees and other disbursements
of counsel for the Underwriters and the printing and furnishing of copies
of any blue sky surveys or legal investment surveys to the Underwriters and
to dealers, (v) filing for review of the public offering of the Shares by
the NASD (including the legal fees and filing fees and other disbursements
of counsel for the Underwriters relating thereto), (vi) the fees and
expenses of any transfer agent or registrar for the Shares and
miscellaneous expenses referred to in the Registration Statement, (vii) the
fees and expenses incurred in connection with the inclusion of the Shares
in NASDAQ, (viii) making road show presentations with respect to
-20-
the offering of the Shares, (ix) preparing and distributing one copy each
of the transaction documents for the Underwriters and its legal counsel and
(x) the performance of the Company's other obligations hereunder. Upon the
request of the Representative, the Company will provide funds in advance
for filing fees.
(b) The Company agrees to reimburse the Representative for its
reasonable out-of-pocket expenses in connection with the performance of its
activities under this Agreement, including, but not limited to, costs such
as printing, facsimile, courier service, direct computer expenses,
accommodations and travel, the fees and expenses of the Underwriters'
outside legal counsel and actuaries and any other advisors, accountants,
appraisers, etc. (including without limitation, the fees and expenses of
counsel with respect to state securities or blue sky laws and obtaining the
filing for review of the public offering of the Shares by the NASD, all of
which shall be reimbursed by the Company pursuant to the provisions of
subsection (a) above).
(c) The Company agrees with each Underwriter to pay (directly or by
reimbursement) all fees and expenses incident to the performance of their
obligations under this Agreement which are otherwise specifically provided
for herein.
6. Conditions of the Underwriters' Obligations:
(a) The obligations of the Underwriters hereunder to purchase Shares
at the Closing Time or on each Date of Delivery, as applicable, are subject
to the accuracy of the representations and warranties on the part of the
Company hereunder on the date hereof and at the Closing Time and on each
Date of Delivery, as applicable, the performance by the Company of its
obligations hereunder and to the satisfaction of the following further
conditions at the Closing Time or on each Date of Delivery, as applicable:
(i) The Company shall furnish to the Underwriters at the Closing
Time and on each Date of Delivery an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, counsel for the Company and the Subsidiaries, addressed to
the Underwriters and dated the Closing Time and each Date of
Delivery and in form and substance satisfactory to Sidley ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, to the effect
reasonably requested by the Representative.
(ii) The Company shall furnish to the Underwriters at the Closing
Time and on each Date of Delivery an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇, Bermuda counsel for the Company and the Subsidiaries,
addressed to the Underwriters and dated the Closing Time and each
Date of Delivery and in form and substance satisfactory to Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, to the
effect reasonably requested by the Representative.
-21-
(iii) The Company shall furnish to the Underwriters at the
Closing Time and on each Date of Delivery an opinion of ▇▇▇▇
▇▇▇▇▇▇▇▇▇ P.C., Colorado counsel for the Company and the
Subsidiaries, addressed to the Underwriters and dated the Closing
Time and each Date of Delivery and in form and substance
satisfactory to Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Underwriters, to the effect reasonably requested by the
Representative.
(iv) The Company shall furnish to the Underwriters at the Closing
Time and on each Date of Delivery an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
Indiana counsel for the Company and the Subsidiaries, addressed
to the Underwriters and dated the Closing Time and each Date of
Delivery and in form and substance satisfactory to Sidley ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, to the effect
reasonably requested by the Representative.
(v) The Company shall furnish to the Underwriters at the Closing
Time and on each Date of Delivery an opinion of A & L Goodbody
Solicitors, Irish counsel for the Company and the Subsidiaries,
addressed to the Underwriters and dated the Closing Time and each
Date of Delivery and in form and substance satisfactory to Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, to the
effect reasonably requested by the Representative.
(vi) The Company shall furnish to the Underwriters at the Closing
Time and on each Date of Delivery an opinion of ▇▇▇▇▇▇'▇, United
Kingdom counsel for the Company and the Subsidiaries, addressed
to the Underwriters and dated the Closing Time and each Date of
Delivery and in form and substance satisfactory to Sidley ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇ LLP, to the effect reasonably requested by the
Representative.
(vii) The Company shall furnish to the Underwriters at the
Closing Time and on each Date of Delivery an opinion of internal
counsel for the Company which is at least an associate general
counsel, addressed to the Underwriters and dated the Closing Time
and each Date of Delivery and in form and substance satisfactory
to Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, to the effect reasonably
requested by the Representative.
(viii) On the date of this Agreement and at each Date of
Delivery, the Representative shall have received from
PricewaterhouseCoopers LLP letters dated the respective Dates of
Delivery thereof and addressed to the Representative, in form and
substance satisfactory to the Representative, containing
statements and information of the type specified in AU Section
634 "Letters for Underwriters and Certain other Requesting
Parties" issued by the American Institute of Certified Public
Accountants with respect to
-22-
the financial statements, and certain financial information of
the Company and the Subsidiaries included or incorporated by
reference in the Registration Statement, the Prospectus and the
Disclosure Package, and such other matters customarily covered by
comfort letters issued in connection with registered public
offerings.
(ix) The Representative shall have received at the Closing Time
and on each Date of Delivery the favorable opinion of Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, dated the Closing Time or such Date of
Delivery, addressed to the Representative and in form and
substance satisfactory to the Representative.
(x) No amendment or supplement to the Registration Statement, the
Prospectus or any document in the Disclosure Package shall have
been filed to which the Representative shall have objected in
writing.
(xi) Prior to the Closing Time and each Date of Delivery (i) no
stop order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of the
Prospectus or any document in the Disclosure Package shall have
been issued, and no proceedings for such purpose shall have been
initiated or threatened, by the Commission or any other
applicable regulatory authority, and no suspension of the
qualification of the Shares for offering or sale in any
jurisdiction, or the initiation or threatening of any proceedings
for any of such purposes, has occurred; (ii) all requests for
additional information on the part of the Commission or any other
applicable regulatory authority shall have been complied with to
the reasonable satisfaction of the Representative; (iii) the
Registration Statement shall not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and (iv) the Prospectus and the Disclosure Package
shall not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(xii) All filings with the Commission required by Rule 424 under
the Securities Act to have been filed by the Closing Time shall
have been made within the applicable time period prescribed for
such filing by such Rule.
(xiii) Between the time of execution of this Agreement and the
Closing Time or the relevant Date of Delivery there shall not
have been any Material Adverse Change and no transaction which is
material and unfavorable to the Company shall have been entered
into by the Company or any of the Subsidiaries, in each case,
which in the Representative's sole
-23-
judgment, makes it impracticable or inadvisable to proceed with
the public offering of the Shares as contemplated by the
Registration Statement.
(xiv) Application has been made for the listing of the Shares on
NASDAQ.
(xv) The NASD shall not have raised any objection with respect to
the fairness and reasonableness of the underwriting terms and
arrangements.
(xvi) The Company shall have furnished to the Representative, at
the Closing Time and on each Date of Delivery, a certificate of
its Interim Chief Executive Officer and Chief Financial Officer
to the effect that:
(A) the representations and warranties of the Company in
this Agreement are true and correct, as if made on and
as of the date hereof and such Date of Delivery, and
the Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied at or prior to the date hereof
and such Date of Delivery;
(B) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment
thereto and no order directed at any document
incorporated by reference therein ("Incorporated
Document") has been issued and no proceedings for that
purpose have been instituted or are pending or
threatened under the Securities Act or applicable blue
sky laws of any jurisdiction;
(C) the Registration Statement, the Prospectus and the
Disclosure Package, and any amendments or supplements
thereto, did not and do 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, in the light
of the circumstances under which they were made, not
misleading; and, since the effective date of the
Registration Statement, there has occurred no event
required to be set forth in an amendment or supplement
to the Prospectus or the Disclosure Package which has
not been so set forth; and
(D) subsequent to the respective dates as of which
information is given in the Registration Statement, the
Prospectus and the Disclosure Package, there has not
been (a) any Material Adverse Change, (b) any
transaction that is material to the Company and the
Subsidiaries considered as one enterprise,
-24-
except transactions entered into in the ordinary course
of business, (c) any obligation, direct or contingent,
that is material to the Company and the Subsidiaries
considered as one enterprise, incurred by the Company
or the Subsidiaries, except obligations incurred in the
ordinary course of business, (d) any change in the
capital stock or outstanding indebtedness of the
Company or any Subsidiary that is material to the
Company and the Subsidiaries considered as one
enterprise, (e) any dividend or distribution of any
kind declared, paid or made on the capital stock of the
Company or any Subsidiary, or (f) any loss or damage
(whether or not insured) to the property of the Company
or any subsidiary which has been sustained or will have
been sustained which has a Material Adverse Effect.
(b) On or prior to the Closing Time related to the Initial Shares the
Company shall have issued and sold at least 11,423,340 additional shares of
its common stock pursuant to that certain underwriting agreement between
the Company and the Underwriters.
(c) The Company shall have furnished to the Underwriters such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement, the Prospectus and the Disclosure
Package, the representations, warranties and statements of the Company
contained herein, and the performance by the Company of its covenants
contained herein, and the fulfillment of any conditions contained herein,
as of the Closing Time or any Date of Delivery, as the Representative may
reasonably request.
7. Underwriter Representations and Covenants. Each Underwriter represents and
agrees that:
(a) In relation to each member state of the European Economic Area
which has implemented the Prospectus Directive (each, a "Relevant Member
State"), with effect from and including the date on which the Prospectus
Directive is implemented in each Relevant Member State ("Relevant
Implementation Date"), it has not made and will not make an offer of the
Shares to the public in that Relevant Member State, except that it may,
with effect from and including the Relevant Implementation Date, make an
offer of the Shares to the public in that Relevant Member State:
(i) at any time to legal entities which are authorized or
regulated to operate in the financial markets or, if not so
authorized or regulated, whose corporate purpose is solely to
invest in securities;
(ii) at any time to any legal entity which has two or more of (1)
an average of at least 250 employees during the last financial
year; (2) a total
-25-
balance sheet of more than (euro) 43,000,000 and (3) an annual
net turnover of more than (euro) 50,000,000, as shown in its last
annual or consolidated accounts; or
(iii) at any time in any other circumstances which do not require
the publication by the Company or a prospectus pursuant to
Article 3 of the Prospectus Directive.
For the purposes of this Section 7(a), the expression "offer of the
Shares to the public" in relation to any Shares in any Relevant Member
State means the communication in any form and by any means of
sufficient information on the terms of the offer and the Shares to be
offered so as to enable an investor to decide to purchase the Shares,
as the same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member State
and the expression "Prospectus Directive" means Directive 2003/71/EC
of the European Economic Area and includes any relevant implementing
measure in each Relevant Member State.
(b) It is aware of the fact that no German sales prospectus
(Verkaufsprospekt) within the meaning of the Securities Sales Prospectus
Act (Wertpapier-Verkaufsprospektgesetz, the "Act") of the Federal Republic
of Germany has been or will been published with respect to the Shares, it
will comply with the Act and it has not engaged and will not engage in a
public offering (offentliches Angebot) within the meaning of the Act with
respect to any Shares otherwise than in accordance with the Act and all
other applicable legal and regulatory requirements.
(c) (i) It has not offered or sold and, prior to the expiry of a
period of six months from the Closing Time, will not offer or
sell any Shares to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (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 1995;
(ii) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation
or inducement to engage in investment activity (within the
meaning of section 21 of the Financial Services and Markets Act
2000 (the "FSMA")) received by it in connection with the issue or
sale of any Shares in circumstances in which section 21(1) of the
FSMA does not apply to the Company; and
(iii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to the Shares in, from or otherwise involving the United
Kingdom.
-26-
8. Termination:
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of the Representative, at any
time prior to the Closing Time or any Date of Delivery, (i) if any of the
conditions specified in Section 6 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, or (ii) if there has been since
the respective dates as of which information is given in the Registration
Statement, the Prospectus or the Disclosure Package, any Material Adverse
Change, or any development involving a prospective Material Adverse Change,
or material change in management of the Company or any Subsidiary, whether
or not arising in the ordinary course of business, or (iii) if there has
occurred any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic, political or other
conditions the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representative,
impracticable to market the Shares or enforce contracts for the sale of the
Shares, or (iv) if trading in any securities of the Company has been
suspended by the Commission or by NASDAQ, or if trading generally on the
New York Stock Exchange or in the NASDAQ National Market System has been
suspended (including an automatic halt in trading pursuant to
market-decline triggers, other than those in which solely program trading
is temporarily halted), or limitations on prices for trading (other than
limitations on hours or numbers of days of trading) have been fixed, or
maximum ranges for prices for securities have been required, by such
exchange or the NASD or the over-the-counter market or by order of the
Commission or any other governmental authority, or (v) if there has been
any downgrade in the rating of any of the Company's debt securities or
common shares by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities
Act) or by A.M. Best Company, Inc., or (vi) any federal or state statute,
regulation, rule or order of any court or other governmental authority,
domestic or foreign, has been enacted, published, decreed or otherwise
promulgated which, in the reasonable opinion of the Representative,
materially adversely affects or will materially adversely affect the
business or operations of the Company, or (vii) any action has been taken
by any federal, state or local government or agency, domestic or foreign,
in respect of its monetary or fiscal affairs which, in the reasonable
opinion of the Representative, has a material adverse effect on the
securities markets in the United States.
If the Representative elects to terminate this Agreement as provided
in this Section 7, the Company and the Underwriters shall be notified
promptly by telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company
shall be unable to comply in all material respects with any of the terms of
this Agreement, the Company shall not be under any obligation or liability
under this Agreement (except to the extent provided in Sections 5 and 10
hereof) and the Underwriters shall be under no obligation or liability to
the
-27-
Company under this Agreement (except to the extent provided in Section 10
hereof) or to one another hereunder.
9. Increase in Underwriters' Commitments:
If any Underwriter shall default at the Closing Time or on a Date of
Delivery in its obligation to take up and pay for the Shares to be
purchased by it under this Agreement on such date, the Representative shall
have the right, within 36 hours after such default, to make arrangements
for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Shares which
such Underwriter shall have agreed but failed to take up and pay for (the
"Defaulted Shares"). Absent the completion of such arrangements within such
36-hour period, (i) if the total number of Defaulted Shares does not exceed
10% of the total number of Shares to be purchased on such date, each
non-defaulting Underwriter shall take up and pay for (in addition to the
number of Shares which it is otherwise obligated to purchase on such date
pursuant to this Agreement) the portion of the total number of Shares
agreed to be purchased by the defaulting Underwriter on such date in the
proportion that its underwriting obligations hereunder bears to the
underwriting obligations of all non-defaulting Underwriters; and (ii) if
the total number of Defaulted Shares exceeds 10% of such total, the
Representative may terminate this Agreement by notice to the Company,
without liability of any party to any other party except that the
provisions of Sections 5 and 9 hereof shall at all times be effective and
shall survive such termination.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it
will not sell any Shares hereunder on such date unless all of the Shares to
be purchased on such date are purchased on such date by the Underwriters
(or by substituted Underwriters selected by the Representative with the
approval of the Company or selected by the Company with the approval of the
Representative).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing
Time or the relevant Date of Delivery for a period not exceeding five
business days in order that any necessary changes in the Registration
Statement and Prospectus and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 9 with the same
effect as if such substituted Underwriter had originally been named in this
Agreement.
10. Indemnity and Contribution by the Company and the Underwriters:
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, from
and against any loss,
-28-
expense, liability, damage or claim (including the reasonable cost of
investigation), jointly or severally, which any such Underwriter or
controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim arises
out of or is based upon (A) any breach of any representation, warranty or
covenant of the Company contained herein, (B) untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment or part thereof) any Issuer Free Writing Prospectus that
the Company has filed or was required to file with the Commission, or the
Prospectus (the term Prospectus for the purpose of this Section 10 being
deemed to include the Base Prospectus, any Preliminary Prospectus, the
Prospectus and the Prospectus as amended or supplemented by the Company),
(C) any omission or alleged omission to state a material fact required to
be stated in any such Registration Statement, or necessary to make the
statements made therein not misleading, or (D) any omission or alleged
omission from the Disclosure Package of a material fact necessary to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading; except only insofar as any such loss,
expense, liability, damage or claim arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in and in conformity with information
furnished in writing by the Underwriters through the Representative to the
Company expressly for use in such Registration Statement, Prospectus or
Application. The indemnity agreement set forth in this Section 10(a) shall
be in addition to any liability which the Company may otherwise have.
If any action is brought against an Underwriter or controlling person
in respect of which indemnity may be sought against the Company pursuant to
subsection (a) above, such Underwriter shall promptly notify the Company in
writing of the institution of such action, and the Company shall assume the
defense of such action, including the employment of counsel and payment of
expenses; provided, however, that any failure or delay to so notify the
Company will not relieve the Company of any obligation hereunder, except to
the extent that its ability to defend is actually impaired by such failure
or delay. Such Underwriter or controlling person shall have the right to
employ its or their own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of such Underwriter or such
controlling person unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action, or the Company shall not have employed counsel to have charge of
the defense of such action within a reasonable time or such indemnified
party or parties shall have reasonably concluded (based on the advice of
counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Company (in which
case the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Company and paid as
incurred (it being understood, however, that the Company shall not be
liable for the fees and expenses of more than one separate firm of
attorneys for the Underwriters or controlling persons in any one action or
series of related actions in the same jurisdiction (other than one local
counsel in any such jurisdiction) representing the indemnified parties who
are parties to such action).
-29-
Anything in this paragraph to the contrary notwithstanding, (i) the Company
shall not be liable for any settlement of any such claim or action effected
without its consent and (ii) the foregoing indemnity with respect to the
any Issuer Free Writing Prospectus and the Prospectus shall not inure to
the benefit of the Underwriters to the extent that such loss, claim,
damage, liability or judgment arises out of or is based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Issuer Free Writing Prospectus and the Prospectus, or caused by the
omission or alleged omission to state in any Issuer Free Writing Prospectus
and the Prospectus a material fact required to be stated therein or
necessary to make the statements therein not misleading if: (x) the Company
furnished to the Underwriters sufficient copies of any Issuer Free Writing
Prospectus or the Prospectus, as amended or supplemented, on a timely basis
to permit delivery of the Issuer Free Writing Prospectus and the Prospectus
by the Underwriters to all persons at or prior to the delivery of the
written confirmation of the sale of the Shares to such persons; (y) the
disclosure contained in the Issuer Free Writing Prospectus and the
Prospectus, as amended or supplemented, cured the defect in the Issuer Free
Writing Prospectus and the Prospectus giving rise to such loss, claim,
damage liability or judgment; and (z) a copy of the Issuer Free Writing
Prospectus and the Prospectus, as amended or supplemented, was not sent or
given by or on behalf of Underwriters to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, the Company's directors, the
Company's officers that signed the Registration Statement, and any person
who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any loss, expense,
liability, damage or claim (including the reasonable cost of investigation)
which, jointly or severally, the Company or any such person may incur under
the Securities Act, the Exchange Act or otherwise, but only insofar as such
loss, expense, liability, damage or claim arises out of or is based upon
(A) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment or part thereof),
any Issuer Free Writing Prospectus that the Company has filed or was
required to file with the Commission, or the Prospectus, (B) any omission
or alleged omission to state a material fact required to be stated in any
such Registration Statement, or necessary to make the statements made
therein not misleading, or (C) any omission or alleged omission from the
Disclosure Package or the Prospectus of a material fact necessary to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading, but in each case only insofar as such
untrue statement or alleged untrue statement or omission or alleged
omission was made in such Registration Statement, Issuer Free Writing
Prospectus, Disclosure Package or Prospectus in reliance upon and in
conformity with information furnished in writing by the Underwriters
through the Representative to the Company expressly for use therein. The
statements set forth in the paragraph identified by "Electronic Prospectus
Delivery," the first paragraph under "Commissions and Expenses," and the
paragraphs identified by "Stabilization" under the caption "Underwriting"
in the Preliminary Prospectus, the Disclosure Package and the Prospectus
(to the extent such statements relate to the
-30-
Underwriters) constitute the only information furnished by or on behalf of
any Underwriter through the Representative to the Company for purposes of
Sections 3(l), (m) and (n) and this Section 10.
If any action is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant
to the foregoing paragraph, the Company, or such person shall promptly
notify the Representative in writing of the institution of such action and
the Representative, on behalf of the Underwriters, shall assume the defense
of such action, including the employment of counsel and payment of
expenses. The Company or such person shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of the Company or such person unless the employment of
such counsel shall have been authorized in writing by the Representative in
connection with the defense of such action or the Representative shall not
have employed counsel to have charge of the defense of such action within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses
available to it or them which are different from or additional to those
available to the Underwriters (in which case the Representative shall not
have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and
expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the fees
and expenses of more than one separate firm of attorneys in any one action
or series of related actions in the same jurisdiction (other than one local
counsel in any such jurisdiction) representing the indemnified parties who
are parties to such action). Anything in this paragraph to the contrary
notwithstanding, no Underwriter shall be liable for any settlement of any
such claim or action effected without the written consent of the
Representative.
(c) If the indemnification provided for in this Section 10 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a), (b) and (c) of this Section 10 in respect of any losses,
expenses, liabilities, damages or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, expenses, liabilities, damages or claims
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Underwriters from the offering of the
Shares or (ii) if (but only if) the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, and of the Underwriters in
connection with the statements or omissions which resulted in such losses,
expenses, liabilities, damages or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Underwriters shall be deemed to be in the same proportion as the total
proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company bear to the
underwriting discounts and commissions received by
-31-
the Underwriters. The relative fault of the Company and of the Underwriters
shall be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any claim or action.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 10 were 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
account of the equitable considerations referred to in subsection (d)(i)
and, if applicable (ii), above. Notwithstanding the provisions of this
Section 10, no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the
Shares purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 10 are several in proportion to their
respective underwriting commitments and not joint.
11. Qualified Independent Underwriter:
The Company hereby confirms that at its request BB&T Capital Markets,
a division of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc. has without compensation acted as
"qualified independent underwriter" (in such capacity, the "QIU") within
the meaning of Rule 2720 of the Conduct Rules of the NASD in connection
with the offering of the Shares. The Company will indemnify and hold
harmless the QIU against any losses, expenses, liabilities, damages or
claims to which the QIU may become subject, under the Securities Act or
otherwise, insofar as such losses, expenses, liabilities, damages or claims
(or actions in respect thereof) arise out of or are based upon the QIU's
acting (or alleged failing to act) as such "qualified independent
underwriter" and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or
defending any such loss, expense, liability, damage or claim or action as
such expenses are incurred.
12. Survival:
The indemnity and contribution agreements contained in Section 10 and
the representations, warranties, covenants and agreements of the Company
contained in Sections 3, 4 and 5 of this Agreement shall remain in full
force and effect regardless of any investigation made by or on behalf of
any Underwriter, or any person who controls any
-32-
Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors and officers or any person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and shall survive any termination of this Agreement or the sale and
delivery of the Shares. The Company and each Underwriter agree promptly to
notify the others of the commencement of any litigation or proceeding
against it and, in the case of the Company, against any of the Company's
officers and directors, in connection with the sale and delivery of the
Shares, or in connection with the Registration Statement or Prospectus.
13. Notices:
Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered to Friedman,
Billings, ▇▇▇▇▇▇ & Co., Inc., as Representative of the several
Underwriters, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered to the Company at the offices of the Company at ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇; Attention: Interim Chief
Executive Officer.
14. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THAT WOULD APPLY ANY OTHER LAW. The section headings in
this Agreement have been inserted as a matter of convenience of reference
and are not a part of this Agreement.
15. Parties at Interest:
The Agreement herein set forth has been and is made solely for the
benefit of the Underwriters, the Company and the controlling persons,
directors and officers referred to in Sections 9 hereof, and their
respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as
such purchaser, from any of the Underwriters) shall acquire or have any
right under or by virtue of this Agreement.
16. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts which
together shall constitute one and the same agreement among the parties. A
facsimile signature shall constitute an original signature for all
purposes.
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If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this Agreement shall constitute a binding agreement among the
Company and the Underwriters.
Very truly yours,
QUANTA CAPITAL HOLDINGS LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ III
------------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ III
Title: Interim Chief Executive
Officer and President
Accepted and agreed to as of the date
first above written:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Managing Director
For itself and as Representative of the
other Underwriters named on Schedule I
hereto.
SCHEDULE I
Number of Initial
Underwriter Shares to be Purchased
-------------------------------------------- ----------------------
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. ..... 2,250,000
BB&T Capital Markets, a division of ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇▇▇▇, Inc. .................... 750,000
Total ................................... 3,000,000
SCHEDULE II
ISSUER FREE WRITING PROSPECTUSES
The road show which is attached hereto.
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