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DVI, INC.
$100,000,000
9 7/8% Senior Notes due 2004
UNDERWRITING AGREEMENT
January 27, 1997
PRUDENTIAL SECURITIES INCORPORATED
CIBC WOOD GUNDY SECURITIES CORP.
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
DVI, Inc., a Delaware corporation (the "Company"), hereby
confirms its agreement with the several underwriters named in Schedule 1 hereto
(the "Underwriters") for whom you have been authorized to act as representatives
(in such capacities, the "Representatives") as set forth below. If you are the
only Underwriters, all references herein to the Representatives shall be deemed
to be to the Underwriters.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the several Underwriters
$100,000,000 aggregate principal amount at maturity of its 97/8% Senior Notes
due 2004 (the "Securities"), to be issued pursuant to an indenture dated as of
January 27, 1997, as supplemented by a supplemental indenture to be dated as of
January 30, 1997 (collectively, the "Indenture") between the Company and First
Trust National Association, as trustee (the "Trustee").
2. Registration Statement. The Company has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (Registration No. 333-17097), including a prospectus, relating to
certain of its debt securities (including the Securities) and the offering
thereof from time to time in accordance with Rule 415 under the Securities Act
of 1933, as amended (the "Act"). Such registration statement has been declared
effective by the Commission. As provided in Section 6(a) hereof, a prospectus
supplement reflecting the terms of the Securities, the terms of the offering
thereof
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and the other matters set forth therein has been prepared and will be filed
pursuant to Rule 424 under the Act. Such prospectus supplement, in the form
first filed after the date hereof pursuant to Rule 424, is herein referred to as
the "Prospectus Supplement." Such registration statement, as amended at the date
hereof, including the exhibits thereto and the documents incorporated by
reference therein, is herein called the "Registration Statement," and the basic
prospectus included therein relating to all offerings of securities under the
Registration Statement, as supplemented by the Prospectus Supplement, is herein
called the "Prospectus," except that, if such basic Prospectus is amended or
supplemented on or prior to the date on which the Prospectus Supplement is first
filed pursuant to Rule 424, the term "Prospectus" shall refer to the basic
Prospectus as so amended or supplemented and as supplemented by the Prospectus
Supplement, in either case including the documents filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are incorporated by reference therein. The term
"Preliminary Prospectus" shall refer to each basic prospectus or prospectus
supplement which is subject to completion.
3. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) The Company meets the requirements for use of Form S-3
under the Act and on the original effective date of the Registration
Statement, on the effective date of the most recent post-effective
amendment thereto, if any, and on the date of the filing by the Company
of any annual report on Form 10-K after the original filing of the
Registration Statement, the Registration Statement complied in all
material respects with the requirements of the Act and the rules and
regulations of the Commission thereunder (the "Regulations"), the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission under the Trust Indenture Act
(the "Trust Indenture Act Regulations") and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; on the date hereof and at the Closing Date (as defined
below), (A) the Registration Statement and any amendments and
supplements thereto, comply and will comply in all material respects
with the requirements of the Act, the Regulations, the Trust Indenture
Act and the Trust Indenture Act Regulations, (B) neither the
Registration Statement nor any amendment or supplement thereto includes
or will include an untrue statement of a material fact or omits or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (C) neither
any Preliminary Prospectus nor the Prospectus nor any amendment or
supplement thereto includes or will include an untrue statement of a
material fact or omits or will omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or
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warranties as to statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Underwriter, directly or through you, expressly for
use in the Registration Statement or the Prospectus, or as to
statements in the Statement of Eligibility (Form T-1) under the Trust
Indenture Act of the Trustee filed as an exhibit to the Registration
Statement. At the Closing Date, the Indenture will comply in all
material respects with the requirements of the Trust Indenture Act and
the Trust Indenture Act Regulations.
(b) The documents incorporated by reference in the Prospectus,
at the time they were filed with the Commission, complied in all
material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder, and when read
together with the other information in the Prospectus, do not and will
not, on the date hereof and at the Closing Date, include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(c) The Company and each of its subsidiaries have been duly
organized and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation. The
Company and each of DVI Financial Services Inc. and DVI Business Credit
Corporation (the"Principal Operating Subsidiaries") are duly qualified
to transact business as foreign corporations and are in good standing
under the laws of all other jurisdictions where the ownership or
leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the
failure to be so qualified does not amount to a material liability or
disability to the Company and the Principal Operating Subsidiaries,
taken as a whole. The subsidiaries listed on Schedule 2 hereto
constitute all of the active subsidiaries of the Company. All of the
other subsidiaries of the Company do not actively conduct business,
have not entered into any material existing agreements and do not have
any material liabilities of any kind, and the Company does not
currently intend for any of such subsidiaries to conduct business,
enter into agreements or incur material liabilities in the future.
(d) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement and the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus; and the Company has full power
(corporate and other) to enter into this Agreement and to carry out all
the terms and provisions hereof to be carried out by it.
(e) The issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and are, directly or indirectly, owned
of record and beneficially by the
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Company free and clear of any security interests, liens, encumbrances,
equities or claims.
(f) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus. All of the
issued shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. No holder of
outstanding securities of the Company or any of its Subsidiaries is
entitled as such to any preemptive or other rights to subscribe for any
of the Securities, and no holder of securities of the Company has any
right which has not been fully exercised or waived to require the
Company to register the offer or sale of any securities owned by such
holder under the Act in connection with the public offering
contemplated by this Agreement. No holder of securities has the right
to require the Company to register such holder's securities under the
Act in connection with this Registration Statement.
(g) The Indenture has been qualified under the Trust Indenture
Act. The execution and delivery of the Indenture have been duly
authorized by the Company, and, on and as of the Closing Date, the
Indenture will have been duly executed and delivered by the Company and
duly qualified under the Trust Indenture Act and, assuming due
authorization, execution and delivery by the Trustee, will be a legal,
valid, binding and enforceable instrument of the Company.
(h) The issuance, execution and delivery of the Securities
have been duly authorized by the Company and, on and as of the Closing
Date, the Securities will have been duly executed by the Company and,
assuming due authentication by the Trustee, will be the legal, valid,
binding and enforceable obligations of the Company, entitled to the
benefits of the Indenture.
(i) The statements set forth under the headings "Description
of the Notes" and "Description of Debt Securities" in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) are complete and accurate in all material respects.
(j) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included or incorporated by
reference in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present the financial position of the Company and its
consolidated subsidiaries and the results of operations and cash flows
as of the dates and periods therein specified. Such financial
statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise noted
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therein). The selected financial data set forth under the caption
"Selected Financial Information and Other Data" in the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) fairly present, on the basis stated in the Prospectus (or
such Preliminary Prospectus), the information included therein and have
been compiled on a basis consistent with the audited consolidated
financial statements included or incorporated by reference in the
Registration Statement.
(k) Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included or incorporated by
reference in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), are independent public accountants as required by the Act,
the Exchange Act and the related published rules and regulations
thereunder.
(l) The execution and delivery of this Agreement have been
duly authorized by the Company and this Agreement has been duly
executed and delivered by the Company, and is the valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms.
(m) No legal or governmental proceedings are pending to which
the Company or any of its subsidiaries is a party or to which the
property of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the
Prospectus and are not described therein (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), and, to the
knowledge of the Company, no such proceedings have been threatened
against the Company or any of its subsidiaries or with respect to any
of their respective properties; and no contract or other document is
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) or filed as
required.
(n) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement, the
Securities and the Indenture and the consummation of the other
transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may
be required under state securities or blue sky laws or (ii) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company
or any of
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its subsidiaries or any of their respective properties are bound, or
the charter documents or by-laws of the Company or any of its
subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator applicable to the Company or any of its subsidiaries.
(o) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus,
(i) neither the Company nor any of its subsidiaries has sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding and (ii) there has not been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth or results of operations of
the Company or any of its subsidiaries, except in each case as
described in or contemplated by the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus.
(p) The Company has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(q) None of the Company, its subsidiaries or any employee of
the Company or its subsidiaries has made any payment of funds of the
Company or its subsidiaries prohibited by law and no funds of the
Company or its subsidiaries have been set aside to be used for any
payment prohibited by law.
(r) The Securities have been approved for listing on the New
York Stock Exchange (the "NYSE"), subject to official notice of
issuance.
(s) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), (i) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or contingent,
nor entered into any material transaction not in the ordinary course of
business; (ii) the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its
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capital stock; (iii) there has not been any material change in the
capital stock of the Company and its consolidated subsidiaries; and
(iv) there has not been any change in the short-term debt or long-term
debt of the Company or any of its consolidated subsidiaries other than
in the ordinary course of business consistent with past practice as
described in the Prospectus, except in each case described in clauses
(i) through (iv) as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(t) Except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), (i) the Company and each of its subsidiaries have good and
marketable title in fee simple to all material real property and
marketable title to all material personal property owned by each of
them, in each case free and clear of any security interests, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not
interfere with the use made or proposed to be made of such property by
the Company or such subsidiary, and (ii) any real property and
buildings held under lease by the Company or any such subsidiary are
held under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company or
such subsidiary.
(u) No labor dispute with the employees of the Company or any
of its subsidiaries exists or is threatened or imminent that could
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of
the Company and its subsidiaries, taken as a whole, except as described
in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(v) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all patents, patent applications,
trademarks, service marks, trade names, licenses, copyrights and
proprietary or other confidential information currently employed by
them in connection with their respective businesses, or necessary in
order to conduct their respective businesses, as presently conducted,
and neither the Company nor any such subsidiary has received, or has
reason to believe that it may receive, any notice of infringement of or
conflict with asserted rights of any third party or otherwise with
respect to any of the foregoing which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would result
in a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company
and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
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(w) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged. Neither the Company nor any of
the subsidiaries have been refused any insurance coverage sought or
applied for, which refusal has had, or could have in the future, a
material adverse effect on the Company's business. Neither the Company
nor any subsidiary has reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not materially and
adversely affect the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company or its
subsidiaries, taken as a whole, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(x) DVI Financial Services Inc. is not currently prohibited,
directly or indirectly, from repaying to the Company any loans or
advances to such subsidiary from the Company pursuant to the
Intercompany Note (as defined in the Prospectus), except as described
in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(y) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state,
local or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a material adverse change in the
condition (financial or otherwise), business, prospects, net worth or
results of operations of the Company or its subsidiaries, taken as a
whole, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(z) The Company and each of its subsidiaries conduct their
respective operations in a manner that does not subject it or them to
registration as an investment company under the Investment Company Act
of 1940, as amended, and the transactions contemplated hereby will not
cause the Company or any of its subsidiaries to become an investment
company subject to registration thereunder.
(aa) The Company and each of its subsidiaries have filed all
foreign, federal, state and local tax returns that are required to be
filed or have requested extensions thereof (except in any case in which
the failure so to file would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole) and have paid all taxes
required to be paid by it and any other assessment, fine or penalty
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levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(bb) Neither the Company nor any of its subsidiaries is in
violation of any federal, state or foreign law or regulation relating
to occupational safety and health or to the storage, handling or
transportation of hazardous or toxic materials and the Company and its
subsidiaries have received all permits, licenses or other approvals
required of them under applicable federal, state and foreign
occupational safety and health and environmental laws and regulations
to conduct their respective businesses, and the Company and each of its
subsidiaries is in compliance with all terms and conditions of any such
permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the
aggregate, result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole,
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(cc) Except for the shares of capital stock of the
subsidiaries and Aegis Therapies LLC owned by either the Company or
another subsidiary, neither the Company nor any such subsidiary owns
any shares of stock or other equity securities of any corporation or
any equity interest in any firm, partnership, association or other
entity, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(dd) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(ee) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default, in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its
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subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties is bound or may be
affected in any respect that is materially adverse with regard to the
property, business or operations of the Company and its subsidiaries.
(ff) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
or if the Prospectus is not in existence, the most recent Preliminary
Prospectus, there has not been any downgrading in the ratings of any of
the Company's debt securities or preferred stock or any of the debt
securities of any of its subsidiaries or affiliates, including, without
limitation any of the Company's securitized debt securities or any
action threatening such a downgrading or placing the Company or any of
its subsidiaries or affiliates under special surveillance by any
"nationally recognized rating agency" (as defined in Rule 436 (g) under
the Act); nor does the Company have any knowledge of any facts or
circumstances that are likely to cause such downgrading, threatened
downgrading or the placing of the Company or any of its subsidiaries or
affiliates under such surveillance.
(gg) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
4. Purchase, Sale and Delivery of the Securities. (a) On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company,
the principal amount of Securities set forth opposite the name of such
Underwriter in Schedule 1 hereto at an aggregate purchase price of $96,380,000.
One or more certificates in definitive form for the Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Underwriters request
upon notice to the Company at least 48 hours prior to the Closing Date, shall be
delivered by or on behalf of the Company to the Underwriters, against payment by
or on behalf of the Underwriters of the purchase price therefor by wire
transfer. Such delivery of and payment for the Securities shall be made at the
offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
at 9:30 a.m., New York time, on January 30, 1997, or at such other place, time
or date as the Underwriters and the Company may agree upon or as the
Underwriters may determine pursuant to Section 9 hereof, such time and date of
delivery against payment being herein referred to as the "Closing Date." The
Company will make such certificate or certificates for the Securities available
for checking and packaging by the Underwriters at the offices in
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New York, New York of the Trustee or of Prudential Securities Incorporated at
least 24 hours prior to the Closing Date.
(b) It is understood that you, individually and not as one of
the Underwriters, may (but shall not be obligated to) make payment on behalf of
any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such Underwriter
or Underwriters from any of its or their obligations hereunder.
5. Offering by the Underwriters. Upon your authorization of
the release of the Securities, the several Underwriters shall offer the
Securities for sale to the public upon the terms set forth in the Prospectus.
6. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:
(a) Immediately following the execution of this Agreement, the
Company will prepare a Prospectus Supplement that complies with the Act
and the Regulations and that sets forth the principal amount of the
Securities and their material terms, the name of each Underwriter
participating in the offering and the principal amount of the
Securities that each severally has agreed to purchase, the price at
which the Securities are to be purchased by the Underwriters from the
Company, any initial public offering price, any selling concession and
reallowance and any delayed delivery arrangements, and such other
information as you and the Company deem appropriate in connection with
the offering of the Securities. The Company will promptly transmit
copies of the Prospectus Supplement to the Commission for filing
pursuant to Rule 424 under the Act and will furnish to the Underwriters
as many copies of any preliminary Prospectus Supplement and the
Prospectus as you shall reasonably request.
(b) During the period when the Prospectus is required by the
Act to be delivered in connection with the sale of the Securities, the
Company will, subject to Section 6(c) hereof, file promptly all
documents required to be filed with the Commission pursuant to Section
13 or 14 of the Exchange Act.
(c) During the period when the Prospectus is required by the
Act to be delivered in connection with the sale of the Securities, the
Company will inform you of its intention to file any amendment to the
Registration Statement, any supplement to the Prospectus or any
document that would as a result thereof be incorporated by reference in
the Prospectus; will furnish you with copies of any such amendment,
supplement or other document a reasonable time in advance of filing and
will not file
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any such amendment, supplement or other document in a form to which you
shall reasonably object.
(d) The Company will use its best efforts to arrange for the
qualification of the Securities for offering and sale under the
securities or blue sky laws of such jurisdictions as the Underwriters
may designate and to continue such qualifications in effect for as long
as may be necessary to complete the distribution of the Securities,
provided, however, that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.
(e) If, at any time prior to the later of (i) the final date
when a Prospectus relating to the Securities is required to be
delivered under the Act or (ii) the Closing Date, any event occurs as a
result of which the Prospectus, as then amended or supplemented, would
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or if for any other reason it is necessary at any time to amend or
supplement the Prospectus to comply with the Act, the Exchange Act or
the Trust Indenture Act or the respective rules or regulations of the
Commission thereunder, the Company will promptly notify the
Underwriters thereof and, subject to Section 6(a) hereof, will prepare
and file with the Commission, at the Company's expense, an amendment to
the Registration Statement or an amendment or supplement to the
Prospectus that corrects such statement or omission or effects such
compliance.
(f) The Company will, without charge, provide (i) to the
Underwriters and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities
and each amendment thereto (in each case including exhibits thereto),
(ii) to each other Underwriter a conformed copy of such registration
statement and each amendment thereto (in each case without exhibits
thereto) and (iii) so long as a Prospectus relating to the Securities
is required to be delivered under the Act, as many copies of each
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto as the Underwriters may reasonably request; without limiting
the application of clause (iii) of this sentence, the Company, not
later than 6:00 PM, New York City time, on the business day following
the date of determination of the public offering price, will deliver to
the Underwriters, without charge, as many copies of the Prospectus and
any amendment or supplement thereto as the Underwriters may reasonably
request for purposes of confirming orders that are expected to settle
on the Closing Date.
(g) The Company, as soon as practicable, will make generally
available to its security holders and to the Underwriters a
consolidated earnings statement of the
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Company and its subsidiaries that satisfies the provisions of Section
11(a) of the Act and Rule 158 thereunder.
(h) The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf
of the Underwriters, offer, sell, offer to sell, contract to sell,
grant any option to purchase or otherwise transfer or dispose (or
announce any offer, transfer, offer of sale, contract of sale, grant of
any option to purchase or other sale or disposition) of any debt
securities of the Company that are substantially similar to the
Securities during the period commencing on the date hereof and
terminating on the earlier of (a) the Closing Date and (b) the date of
notice to the Company by the Underwriters of the termination of trading
restrictions with respect to the Securities, except pursuant to this
Agreement.
(j) The Company will not, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities or (ii) (A) sell (except pursuant
to this Agreement), bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay
to any person any compensation for soliciting another to purchase any
other securities of the Company.
7. Expenses.
(a) The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not
the transactions contemplated herein are consummated or this Agreement
is terminated pursuant to Section 12 hereof, including all costs and
expenses incident to (a) the printing or other production of documents
with respect to the transactions, including any costs of printing the
registration statement originally filed with respect to the Securities
and any amendment thereto, any Preliminary Prospectus and the
Prospectus and any amendment or supplement thereto, the Indenture, this
Agreement and any blue sky memoranda, (b) all arrangements relating to
the delivery to the Underwriters of copies of the foregoing documents,
(c) the fees and disbursements of the counsel, the accountants and any
other experts or advisors retained by the Company, (d) preparation,
issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's
fees, (e) the qualification of the Securities under state securities
and blue sky laws, including filing fees and reasonable fees and
disbursements of counsel for the Underwriters relating thereto, (f) the
fees and disbursements of the Trustee, (g) the filing fees of the
Commission and
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the National Association of Securities Dealers, Inc. relating to the
Securities, (h) any meetings with prospective investors in the
Securities (other than as shall have been specifically approved by the
Underwriters to be paid for by the Underwriters), (i) any fees charged
by investment rating agencies for the rating of Securities and (j) the
fees associated with any listing of the Securities on any securities
exchange. If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the
Underwriters set forth in Section 8 hereof is not satisfied, because
this Agreement is terminated pursuant to Section 12(a)(i) hereof or
because of any failure, refusal or inability on the part of the Company
to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by reason of a default by
any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities. The
Company shall not in any event be liable to any of the Underwriters for
the loss of anticipated profits from the transactions covered by this
Agreement.
(b) In addition to its obligations under Section 9(a) hereof,
the Company agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising
out of or based upon any loss, claim, damage or liability described in
Section 9(a) hereof, it will reimburse the Underwriters, and each of
them, on a monthly basis against submission of invoices and such
additional information as the Company reasonably may request for all
reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations
of the Company to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been
improper by a court of jurisdiction. To the extent that any portion, or
all, of any such interim reimbursement payments are so held to have
been improper, the Underwriters receiving the same shall promptly
return such amounts to the party or parties who have paid such amounts
together with interest, compounded daily, determined on the basis of
the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by Bank of America
(the "Prime Rate"). Any such interim reimbursement payments that are
not made to the Underwriters within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of
such request until the date paid.
(c) In addition to their obligations under Section 9(a)
hereof, the Underwriters agree that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any loss, claim, damage or
liability described in Section 9(b)(i) or 9(b)(ii) hereof, (in each
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case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives specifically
for use therein), they will reimburse the Company on a monthly basis,
against submission of invoices and such additional information as the
Underwriters reasonably may request, for all reasonable legal or other
expenses incurred by the Company in connection with investigating or
defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Underwriters' obligation to
reimburse the Company for such expenses and the possibility that such
payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any portion, or all, of any
such interim reimbursement payments are so held to have been improper,
the Company shall promptly return such amounts to the Underwriters
together with interest, compounded daily, determined on the basis of
the Prime Rate. Any such interim reimbursement payments that are not
made to the Company within 30 days of a request for reimbursement shall
bear interest at the Prime Rate from the date of such request until the
date paid.
(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in
Sections 7(b) and 7(c) above, including the amounts of any requested
reimbursement payments, the method of determining such amounts and the
basis on which such amounts shall be apportioned among the indemnifying
parties, shall be settled by arbitration conducted under the provisions
of the Constitution and Rules of the Board of Governors of the NYSE or
pursuant to the Code of Arbitration Procedure of the NASD. Any such
arbitration must be commenced by service of a written demand for
arbitration or a written notice of intention to arbitrate, therein
electing the arbitration tribunal. If the party demanding arbitration
does not make designation of an arbitration tribunal in such demand or
notice, then the party responding to said demand or notice is
authorized to do so. Any such arbitration will be limited to the
interpretation and obligations of the parties under the interim
reimbursement provisions contained in Sections 7(b) and 7(c) hereof and
will not resolve the ultimate propriety or enforceability of the
obligation to indemnify for expenses that is created by the provisions
of Section 9 hereof.
8. Conditions of the Underwriters' Obligations. The
obligations of the several Underwriters to purchase and pay for the Securities
shall be subject, in the Underwriters' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Closing Date, as if made on and as of the Closing Date, to
the accuracy of the statements of the Company's officers made pursuant to the
provisions hereof, to the performance by the Company of its covenants and
agreements hereunder and to the following additional conditions:
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(a) No stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no order
directed at any document incorporated by reference in the Registration Statement
shall have been issued, and no proceedings for that purpose shall have been
instituted or threatened or, to the knowledge of the Company or the
Underwriters, shall be contemplated by the Commission; and the Company shall
have complied with any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise).
(b) The Underwriters shall have received an opinion, dated the
Closing Date, of Xxxxxx & Xxxxx, counsel for the Company, to the effect that:
(i) the Company and each of its subsidiaries (other than
non-U.S. subsidiaries) listed in Schedule 2 hereto have been duly
organized and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation;
(ii) the Company and each of the Principal Operating
Subsidiaries are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and each of
such subsidiaries, taken as a whole;
(iii) the Company and each of the Principal Operating
Subsidiaries have corporate power to own or lease their respective
properties and conduct their respective businesses as described in the
Registration Statement and the Prospectus, and the Company has
corporate power to enter into this Agreement and the Indenture and to
carry out all the terms and provisions hereof and thereof to be carried
out by it;
(iv) the issued shares of capital stock of each of the
Company's Principal Operating Subsidiaries have been duly authorized
and validly issued, are fully paid and nonassessable and, to the best
knowledge of such counsel, are owned beneficially by the Company free
and clear of any perfected security interests or any other security
interests, liens, encumbrances, equities or claims;
(v) the execution and delivery of the Indenture have been duly
authorized by all necessary corporate action of the Company, and the
Indenture has been duly executed and delivered by the Company, has been
duly qualified under the Trust Indenture Act and, assuming due
authorization, execution and delivery by the Trustee, is a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency
and similar
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laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(vi) the issuance, offering and sale of the Securities by the
Company to the Underwriters pursuant to this Agreement have been duly
authorized by all necessary corporate action of the Company and the
Securities have been duly issued, executed and delivered by the Company
and, assuming due authentication by the Trustee, when executed,
authenticated and issued in a manner provided in the Indenture and paid
for as provided in this Agreement, will be the valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(vii) as of the dates shown the Company has an authorized
capitalization as set forth under the heading "Capitalization" in the
Prospectus;
(viii) the statements set forth under the headings
"Description of the Notes" and "Description of Debt Securities" in the
Prospectus, insofar as such statements constitute a summary of certain
provisions of the Indenture, provide in all material respects a fair
summary of such provisions;
(ix) the execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company and
this Agreement has been duly executed and delivered by the Company;
(x) to such counsel's best knowledge (A) no legal or
governmental proceedings are pending to which the Company or any of its
subsidiaries is a party or to which the property of the Company or any
of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not described therein,
and no such proceedings have been threatened against the Company or any
of its subsidiaries or with respect to any of their respective
properties and (B) no contract or other document is required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement that is not described
therein or filed as required;
(xi) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement, the
Securities and the Indenture and the consummation of the other
transactions herein contemplated do not (A) require the
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consent, approval, authorization, registration or qualification of or
with any governmental authority, except such as have been obtained and
such as may be required under state securities or blue sky laws, or (B)
conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument
specifically described in the Registration Statement or any material
contract or agreement listed on Schedule 3 hereto and to which the
Company or any of its subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the
Company or any of its subsidiaries, or to such counsel's best knowledge
any statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator and
specifically naming the Company or any of its subsidiaries or any rule
or regulation of any governmental authority and applicable to the
Company or any of its subsidiaries;
(xii) the Registration Statement is effective under the Act;
any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, pursuant to Rules 434 and 424(b) has been
made in the manner and within the time period required by Rules 434 and
424(b); and, to such counsel's best knowledge, no stop order suspending
the effectiveness of the Registration Statement or any amendment
thereto has been issued, and no proceedings for that purpose have been
instituted or threatened or, to such counsel's best knowledge, are
contemplated by the Commission;
(xiii) the Registration Statement originally filed with
respect to the Securities and each amendment thereto and the Prospectus
and each document incorporated by reference therein (in each case,
other than the financial statements and other financial information
contained or incorporated by reference therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act, the Exchange Act
and the Trust Indenture Act and the respective rules and regulations of
the Commission thereunder;
(xiv) pursuant to Section 3 (c) (5) of the Investment Company
Act of 1940, as amended (the "1940 Act"), and based on no-action
letters issued by the staff of the Commission with respect to Sections
3 (c) (5) (A) or (B) of the 1940 Act, the Company is not, and the
transactions contemplated by this Agreement will not cause the Company
to become an investment company subject to registrations thereunder;
and
(xv) to such counsel's best knowledge, DVI Financial Services
Inc. is not currently prohibited, directly or indirectly, from repaying
the Company any loans or advances to such subsidiary from the Company
pursuant to the Intercompany Note (as
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defined in the Prospectus), except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
Such counsel shall also state that they have no reason to
believe that the Registration Statement, as of its effective date, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date or the date of such opinion,
included or includes any untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Counsel may state that this belief is based upon its participation in the
preparation of the Registration Statement and the Prospectus and its review and
discussion of the contents thereof but is without independent investigation or
verification.
Such counsel need not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus, except to the limited extent stated in
paragraph (vi) above. In addition, such counsel need not express any opinion or
belief as to the financial statements or schedules or any other financial,
economic or statistical data contained in the Registration Statement or the
Prospectus.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials. Such counsel may state
that as to matters on which its opinion is expressed to its "best knowledge"
such counsel is responsible for knowledge of only those facts (i) set forth in
certificates of responsible officers of the Company, (ii) described in the
Registration Statement or (iii) within the actual knowledge of those attorneys
in such counsel's firm that have performed services for the Company in
connection with the transactions contemplated by this Agreement.
Such counsel may state that its opinions are limited to
matters of United States federal law, the laws of the state of New York and
Delaware corporate law and that its references in its opinions to governmental
authorities are to federal and New York authorities. References to the
Registration Statement and the Prospectus in this paragraph (b) shall include
any amendment or supplement thereto at the date of such opinion.
(c) The Underwriters shall have received an opinion, dated the
Closing Date, of Xxxxxx X. Xxxxxx, General Counsel of the Company and of DVI
Financial Services Inc., to the effect that:
(i) to such counsel's best knowledge (A) no legal or
governmental proceedings are pending to which the Company or any of its
subsidiaries is a party or
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to which the property of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement
or the Prospectus and are not described therein, and no such
proceedings have been threatened against the Company or any of its
subsidiaries or with respect to any of their respective properties and
(B) no contract or other document is required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement that is not described therein or filed as
required;
(ii) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement, the
Securities and the Indenture and the consummation of the other
transactions herein contemplated do not conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
lease or other agreement or instrument, known to such counsel, to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the
Company or any of its subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator and specifically naming the Company or any
of its subsidiaries or any rule or regulation of any governmental
authority and applicable to the Company or any of its subsidiaries; and
(iii) (A) no default exists, and (B) no event has occurred
which, with notice or lapse of time or both, would constitute a
default, in the due performance and observance of any term, covenant or
condition of any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective properties is bound or may
be affected which would have a material adverse effect upon the
property, business, or operations of the Company and any of its
subsidiaries.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials. Such counsel may also
state that, wherever such counsel's opinion with respect to the existence or
absence of facts is stated to be "to the best of such counsel's knowledge" or
"known to such counsel", such statements are intended to signify that, during
the course of such counsel's representation of the Company, no information has
come to the attention of such counsel which gives such counsel actual knowledge
of facts contrary to the existence or absence of the facts indicated.
Such counsel may state that his opinions are limited to
matters of United States federal law, the laws of the state of Pennsylvania and
Delaware corporate law and that its
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references in its opinions to governmental authorities are to federal and
Pennsylvania authorities. References to the Registration Statement and the
Prospectus in this paragraph (c) shall include any amendment or supplement
thereto at the date of such opinion.
(d) The Underwriters shall have received an opinion, dated the
Closing Date, of Shearman & Sterling, counsel for the Underwriters, with respect
to the issuance and sale of the Securities, the Registration Statement and the
Prospectus, and such other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters. In rendering such opinion, such counsel may rely as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Company and public officials to the extent satisfactory in form and scope
to such counsel.
References to the Registration Statement and the Prospectus in
this paragraph (d) shall include any amendment or supplement thereto at the date
of such opinion.
(e) The Underwriters shall have received from Deloitte &
Touche LLP a letter or letters dated, respectively, the date hereof and the
Closing Date, in form and substance satisfactory to the Underwriters, to the
effect that:
(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries within the meaning of the
Act, the Exchange Act and the applicable rules and regulations
thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules audited by them and included in the
Registration Statement and the Prospectus comply in form in all
material respects with the applicable accounting requirements of the
Act, the Exchange Act and the related published rules and regulations
thereunder;
(iii) on the basis of their limited review in accordance with
standards established by the American Institute of Certified Public
Accountants of any interim unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries as
indicated in their report included in the Registration Statement and
the Prospectus, carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally accepted
auditing standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph
(iii), a reading of the minute books of the shareholders, the board of
directors and any committees thereof of the Company and each of its
consolidated subsidiaries, and inquiries of certain officials of the
Company
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and its consolidated subsidiaries who have responsibility for financial
and accounting matters, nothing came to their attention that caused
them to believe that:
(A) the unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement and the Prospectus do
not comply in form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited consolidated financial statements included in the
Registration Statement and the Prospectus; and
(B) at a specific date not more than five business
days prior to the date of such letter, there were any changes
in the capital stock or long-term debt of the Company and its
consolidated subsidiaries or any decreases in net current
assets or stockholders' equity of the Company and its
consolidated subsidiaries, in each case compared with amounts
shown on the September 30, 1996 unaudited consolidated balance
sheet included in the Registration Statement and the
Prospectus, or for the period from October 1, 1996 to January
27, 1996 to such specified date there were any decreases, as
compared with the corresponding period in the preceding year
in finance and other income, earnings from continuing
operations, or total or per share amounts of net earnings of
the Company and its consolidated subsidiaries, except in all
instances for changes, decreases or increases set forth in
such letter; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries and are
included in the Registration Statement and the Prospectus under the
captions set forth in such letter and in Exhibit 11 to the Registration
Statement, and have compared such amounts, percentages and financial
information with such records of the Company and its consolidated
subsidiaries and with information derived from such records and have
found them to be in agreement, excluding any questions of legal
interpretation.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
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References to the Registration Statement and the Prospectus in
this paragraph (e) with respect to either letter referred to above shall include
any amendment or supplement thereto at the date of such letter.
(f) The Underwriters shall have received a certificate, dated
the Closing Date, of the principal executive officer and the principal financial
and accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Closing
Date, the Registration Statement, as amended as of the Closing Date,
does not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented as of the
Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and the Company has performed all covenants
and agreements and satisfied all conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to
the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries have sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business prospects, net worth or results of operations of the Company
or any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or
supplement thereto).
(g) On or before the Closing Date, the Underwriters and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(h) Prior to the commencement of the offering of the
Securities, the Securities shall have been approved for listing on the NYSE.
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All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory in all material respects to the Underwriters and
counsel for the Underwriters. The Company shall furnish to the Underwriters such
conformed copies of such opinions, certificates, letters and documents in such
quantities as the Underwriters and counsel for the Underwriters shall reasonably
request.
9. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter or such controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) any untrue statement or alleged untrue statement made by
the Company in Section 3 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including without
limitation, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or
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omission or alleged omission made in the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives specifically for use therein. This indemnity agreement will be
in addition to any liability which the Company may otherwise have. The Company
will not, without the prior written consent of the Underwriter or Underwriters
purchasing, in the aggregate, more than fifty percent (50%) of the Securities,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not any such Underwriter or any person who
controls any such Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to which
the Company, any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or alleged omission to state therein a material
fact required to be stated in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party of the commencement thereof;
but the omission so to notify the
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indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 9. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof and approval by such indemnified party of
counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Underwriters in the case of paragraph (a) of this Section 9,
representing the indemnified parties under such paragraph (a) who are parties to
such action or actions) or (ii) the indemnifying party does not promptly retain
counsel satisfactory to the indemnified party or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. After such notice from the indemnifying party
to such indemnified party, the indemnifying party will not be liable for the
costs and expenses of any settlement of such action effected by such indemnified
party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 9 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
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the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters, the parties'
relative intents, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company and the Underwriters agree that it
would not be equitable if the amount of such contribution were determined by pro
rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to above in this paragraph
(d). Notwithstanding any other provision of this paragraph (d), no Underwriter
shall be obligated to make contributions hereunder that in the aggregate exceed
the total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company.
(e) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of Sections 7(b), 7(c) and 7(d) hereof and this
Section 9, and are fully informed regarding said provisions. They further
acknowledge that the provisions of Sections 7(b), 7(c) and 7(d) hereof and this
Section 9 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and Prospectus as required by
the Act. The parties are advised
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28
that federal or state policy, as interpreted by the courts in certain
jurisdictions, may be contrary to certain provisions of Sections 7(b), 7(c) and
7(d) hereof and this Section 9, and the parties hereto hereby expressly waive
and relinquish any right or ability to assert such public policy as a defense to
a claim under Sections 7(b), 7(c) and 7(d) hereof or this Section 9 and further
agree not to attempt to assert any such defense.
10. Default of Underwriters. If one or more Underwriters
default in their obligations to purchase Securities hereunder and the aggregate
principal amount of such Securities that such defaulting Underwriter or
Underwriters agree but failed to purchase is ten percent or less of the
aggregate principal amount of Securities to be purchased by all of the
Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Underwriters for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Underwriters), but if no such arrangements are made
by the Closing Date, the other Underwriters shall be obligated severally in
proportion to their respective commitments hereunder to purchase the Securities
that such defaulting Underwriter or Underwriters agreed but failed to purchase.
If one or more Underwriters so default with respect to an aggregate principal
amount of Securities that is more than ten percent of the aggregate principal
amount of Securities to be purchased by all of the Underwriters at such time
hereunder, and if arrangements satisfactory to the Underwriters are not made
within 36 hours after such default for the purchase by other persons (who may
include one or more of the non-defaulting Underwriters, including the
Underwriters), of the Securities with respect to which such default occurs, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or the Company other than as provided in Section 11 hereof. In the
event of any default by one or more Underwriters as described in this Section
10, the Underwriters shall have the right to postpone the Closing Date
established as provided in Section 4 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Securities. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10. Nothing herein shall relieve any defaulting
Underwriter from liability for its default.
11. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, and the several Underwriters set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, any Underwriter or any
controlling person referred to in Section 9 hereof and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 6 and 9 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
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29
12. Termination. (a) This agreement may be terminated with
respect to the securities in the sole discretion of the Representatives by
notice to the Company given prior to the Closing Date, in the event that the
Company shall have failed, refused or been unable to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder at or
prior thereto or, if at or prior to the Closing Date,
(i) the Company or any of its subsidiaries shall have, in the
sole judgment of the Underwriters, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company),
in the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its subsidiaries,
except in each case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto);
(ii) trading in the Company's Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or trading
in securities generally on the New York Stock Exchange or Nasdaq
National Market shall have been suspended or minimum or maximum prices
shall have been established on either such exchange or market system;
(iii) a banking moratorium shall have been declared by New
York or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the financial markets or the market for
the Securities that, in the sole judgment of the Underwriters, makes it
impractical or inadvisable to proceed with the public offering or the
delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 12
shall be without liability of any party to any other party except as provided in
Section 11 hereof.
13. Information Supplied by Underwriters. The statements set
forth in the last paragraph on the front cover page of the Prospectus and under
the heading "Underwriting" in the Preliminary Prospectus or the Prospectus (to
the extent such statements relate to the Underwriters) constitute the only
information furnished by any
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30
Underwriter to the Company for the purposes of Sections 3(a) and 9 hereof. The
Underwriters confirm that such statements (to such extent) are correct.
14. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be delivered to sent by mail,
telex or facsimile transmission and confirmed in writing to Prudential
Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: High Yield Securities Department; and if sent to the Company, shall
be delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to the Company at DVI, Inc., 000 Xxxx Xxxx, Xxxxxxxxxx, XX 00000,
Attention: Chief Financial Officer (facsimile number (000) 000-0000), with a
copy to Xxxxxx & Xxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Xxxx X. Xxxxx (facsimile number (000) 000-0000).
15. Successors. This Agreement shall inure to the benefit of
and shall be binding upon the several Underwriters, the Company and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 9 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Underwriters contained in Section 9 of this
Agreement shall also be for the benefit of the directors of the Company, the
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. No purchaser of Securities from any
Underwriter shall be deemed a successor because of such purchase.
16. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
17. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute an agreement binding the Company
and each of the several Underwriters.
Very truly yours,
DVI, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
The foregoing Agreement is hereby confirmed
and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
CIBC WOOD GUNDY SECURITIES CORP.
By: PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
For itself and on behalf of the
Underwriters
32
SCHEDULE 1
UNDERWRITERS
Principal Amount at
Underwriter Maturity
----------- -------------------
Prudential Securities Incorporated............... $ 60,000,000
CIBC Wood Gundy Securities Corp.................. 40,000,000
-------------------
Total............................................ $ 100,000.000
===================
00
XXXXXXXX 0
XXXXXXXXXXXX
XXX FINANCIAL SERVICES INC.
DVI LEASE FINANCE CORPORATION XX
XXX XXXXXXXXXXX XXXX. 0000-X
XXX RECEIVABLES CORP. II
DVI RECEIVABLES CORP. III
DVI RECEIVABLES CORP.
DVI SUBORDINATED SECURITIES CORPORATION
DVI LEASE FINANCE CORP. III
DVI RECEIVABLES CORP. IV
DVI INTERNATIONAL INC.
DVI FINANCIAL SERVICES (AUSTRALIA), LIMITED
DVI HEALTHCARE OPERATIONS, INC.
DVI BUSINESS CREDIT CORPORATION
DVI BUSINESS CREDIT RECEIVABLES CORP.
DVI BUSINESS CREDIT RECEIVABLES CORP. II
