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EXHIBIT 1.1
FORM OF UNDERWRITING AGREEMENT
January ___, 2000
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Financial, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Onyx Acceptance Corporation, a Delaware corporation (the "Company"), hereby
confirms its agreement, subject to the terms and conditions stated herein, to
issue and sell to you (the "Underwriter"), twenty million dollars ($20,000,000)
principal amount of its ___% Subordinated Notes due __________, 2006 ("Notes").
Such $20,000,000 principal amount of the Notes are collectively referred to in
this Agreement as the "Firm Notes". The Company also hereby confirms its
agreement to issue and sell to the Underwriter an aggregate of up to three
million dollars ($3,000,000) additional principal amount of Notes solely for the
purpose of covering overallotments. Such additional Notes are referred to in
this Agreement as the "Option Notes", and the Firm Notes and the Option Notes
are collectively referred to as the "Notes." The Notes are to be issued under an
Indenture, dated as of January ___, 2000 (the "Indenture") between the Company
and Bankers Trust Company, as trustee (the "Trustee"). The Notes are more fully
described in the Registration Statement and Prospectus as hereafter defined.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to, and agrees with, the Underwriter that:
(a) A registration statement on Form S-1 (Registration No. 333-________)
with respect to the Notes has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "1933 Act"), and
the rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "SEC") thereunder and has been filed with the SEC under
the 1933 Act. If the Company has elected to rely on Rule 462(b) under the 1933
Act to increase the size of the offering registered under the 1933 Act, the
Company will prepare and file with the SEC a registration statement with respect
to such increase pursuant to Rule 462(b). The Company has filed such amendments
to the registration statement and such amended preliminary prospectuses as may
have been required to be filed to the date hereof. If the Company has elected
not to rely upon Rule 430A, the Company has prepared and will promptly file an
amendment to the registration statement and an amended prospectus (provided the
Underwriter has consented to such filing). If the Company has elected to rely
upon Rule 430A, it will prepare and timely file a prospectus pursuant to Rule
424(b) that discloses the information previously omitted from the prospectus in
reliance upon Rule 430A. Copies of such registration statement, including a
registration statement filed pursuant to Rule 462(b), each pre-effective
amendment thereto, all exhibits thereto and each related preliminary prospectus
have been delivered by the Company to the Underwriter. Such registration
statement, as amended or supplemented, at the time it became effective,
including all prospectuses included as a part thereof, financial schedules,
exhibits, the information (if any) deemed to be part thereof pursuant to Rules
430A and 434 under the 1933 Act and any registration statement filed pursuant to
Rule 462 under the 1933 Act, is herein referred to as the "Registration
Statement." The term "Prospectus" as used herein shall mean the final
prospectus, as amended or supplemented, included as a part of the Registration
Statement on file with the SEC when it becomes effective; provided, however,
that if a
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prospectus is filed by the Company pursuant to Rules 424(b) and 430A or a term
sheet is filed by the Company pursuant to Rule 434 under the 1933 Act, the term
"Prospectus" as used herein shall mean the prospectus so filed pursuant to Rules
424(b) and 430A and the term sheet so filed pursuant to Rule 434. The term
"Preliminary Prospectus" as used herein means any prospectus, as amended or
supplemented, used prior to the Effective Date (as defined in Section 5(a)
hereof) and included as a part of the Registration Statement, including any
prospectus filed with the SEC pursuant to Rule 424(a).
(b) (i) Neither the SEC nor any state securities division has issued any
order preventing or suspending the use of any Preliminary Prospectus or issued a
stop order with respect to the offering of the Notes, or requiring the
recirculation of a Preliminary Prospectus and no proceedings for that purpose
have been instituted or, to the Company's knowledge, threatened. The
Registration Statement, including any post-effective amendment to the
Registration Statement, when it became or becomes effective and on any Closing
Date (as defined in Section 2 hereof), complied or will comply in all material
respects with the requirements of the 1933 Act and the Rules and Regulations.
When the Registration Statement became or becomes effective and when any post-
effective amendments thereto shall become effective, the Registration Statement
did not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Neither any Preliminary Prospectus, on the date of filing
thereof with the SEC, nor the Prospectus or any amendment or supplement thereto,
on the date of filing thereof with the SEC and on any Closing Date, contained or
will contain any untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that none of the representations and warranties in this Subsection 1(b)
shall apply to statements in, or omissions from, the Registration Statement,
Preliminary Prospectus or the Prospectus, or any amendment thereof or supplement
thereto, which are based upon and conform to written information furnished to
the Company by the Underwriter, as identified in Section 12 herein, specifically
for use in the preparation of the Registration Statement, Preliminary Prospectus
or the Prospectus, or any amendment or supplement thereto. There is no contract
or other document of the Company of a character required by the 1933 Act or the
Rules and Regulations to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit to the Registration Statement, that has
not been described or filed as required. The descriptions of all such contracts
and documents or references thereto are correct and include the information
required under the 1933 Act and the Rules and Regulations. The conditions for
use of a Registration Statement on Form S-1 for the distribution of the Notes
have been satisfied with respect to the Company. All descriptions in the
Registration Statement or Prospectus of statutes, regulations, legal or
governmental proceedings, the Indenture, the Notes, or other contracts or other
documents are accurate in all material respects and fairly present the
information shown.
(c) PricewaterhouseCoopers LLP, who have examined the consolidated
financial statements reported on by them and filed with the SEC as part of the
Registration Statement and the Prospectus, are independent public accountants as
required by the 1933 Act. The consolidated financial statements of the Company
and its consolidated Subsidiaries, including the related notes, included in the
Registration Statement and in the Prospectus (the "Financial Statements") fairly
present, on the basis stated therein, the financial position, results of
operations, cash flows and changes in shareholders' equity of the Company and
its consolidated subsidiaries on a consolidated basis at the dates and for the
periods to which they relate. The Financial Statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied, except as otherwise stated therein, throughout the periods involved and
comply in all material respects with the requirements of the 1933 Act. The
selected financial data and summary financial data set forth in the Prospectus
fairly present the information purported to be shown thereby as of the dates and
for the periods indicated on a basis consistent with the audited consolidated
financial statements of the Company and the selected financial data are in
compliance in all material respects with the requirements of the 1933 Act and
the Rules and Regulations. There are no other financial
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statements or schedules required to be included in the Registration Statement or
Prospectus that are not included in the Registration Statement or Prospectus.
(d) Each of the Company, Onyx Acceptance Financial Corporation ("OAFC"),
Onyx Acceptance Funding Corporation ("OFC") and Onyx Acceptance Receivables
Corporation ("OARC"; each of OAFC, OFC and OARC are referred to herein as a
"Subsidiary" and collectively as the "Subsidiaries") are and at the First
Closing Date and the Second Closing Date will be, duly organized and validly
existing and in good standing under the laws of their respective states of
incorporation with full power and authority (corporate and other) to own, lease
and operate their respective properties and conduct their respective businesses
as currently carried on and contemplated and described in the Registration
Statement and Prospectus and no proceeding has been instituted in any such
jurisdiction revoking, limiting, curtailing or seeking to revoke, limit or
curtail such qualification. Each of the Company and the Subsidiaries are duly
qualified to do business as a foreign corporation in good standing in each
jurisdiction in which the character and location of their respective assets or
their respective business (existing or as contemplated by the Prospectus)
requires such qualification and which the failure to so qualify would have a
material adverse effect upon the condition (financial or otherwise), or the
earnings or business of the Company and the Subsidiaries, taken as a whole,
whether or not occurring in the ordinary course of business (a "Material Adverse
Effect").
(e) The Company and the Subsidiaries are not in violation of their
respective Certificate of Incorporation, Bylaws or other governing instruments.
None of the Company, any of the Subsidiaries is in default (nor with the giving
of notice or the passage of time or both would be in default) in the performance
of any obligation, agreement or condition contained in any material contract or
in any bond, debenture, note, indentured loan agreement or other evidence of
indebtedness or any loan agreement, transfer and servicing agreement, sale and
servicing agreement, pooling and servicing agreement, underwriting agreement,
repurchase agreement, trust agreement, guaranty agreement entered into with MBIA
Insurance Corporation, Capital Markets Assurance Corporation or other insurer or
other credit enhancement, certificate issued in connection with a
securitization, contract or joint venture agreement of the Company or the
Subsidiaries or other instrument to which each is subject or by which any of
their respective property or assets are subject where such default could have a
Material Adverse Effect. The Company and the Subsidiaries are not in violation
of any law, order, rule, regulation, writ, injunction, or decree of any
government, governmental instrumentality or court, domestic or foreign, which
violation is material to the business of the Company and the Subsidiaries, taken
as a whole. With respect to the securitizations (i) there have been no servicer
defaults or insurer defaults in connection therewith (or any event with the
giving of notice or passage of time would constitute a default) and (ii) no
wind-down event, trigger event, early amortization event or event of default
with respect to a certificate or note issued in connection with the
securitizations has occurred or will occur as a result of the transactions
contemplated by this agreement (or any event with the giving of notice or
passage of time would constitute an early amortization event). The Company or
the Subsidiaries are not currently liable to repurchase any material amount of
securitized contracts and no representation or warranty with respect to the
collectability of any securitized contract has been made.
(f) The Company and the Subsidiaries possess all franchises, licenses,
certificates, permits, authorizations, approvals and orders (collectively,
"Licenses") of all state, federal and other governmental regulatory officials
and bodies necessary to own their respective properties, conduct their
respective business as described in the Registration Statement and Prospectus,
except where the failure to possess such Licenses, would not, individually or in
the aggregate, have a Material Adverse Effect or have obtained waivers from any
such applicable requirements from the appropriate state, federal or other
regulatory authorities. The Company and each of the Subsidiaries are conducting
their business in compliance with all material, Licenses, except where the
failure to comply would not individually or in the aggregate have a Material
Adverse Effect. All such Licenses are in full force and effect, and the Company
and the Subsidiaries have not received notice of any proceeding or action
relating to the revocation or modification of any such License
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which individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, might have a Material Adverse Effect.
(g) Subsequent to the respective dates as of which information is given
in the Registration Statement and Prospectus, except as is described in the
Registration Statement and Prospectus: (i) the Company and the Subsidiaries have
not incurred, and will not have incurred, any material liabilities or
obligations, direct or contingent, or entered into any transactions, in each
case, other than in the ordinary course of business; (ii) the Company and the
Subsidiaries have not and will not have paid or declared any dividends or other
distributions on their capital stock; (iii) except in the ordinary course of
business consistent with past practice, there has not been and will not have
been any material change in the capital stock or outstanding debt, including any
capitalized lease obligation, of the Company or the Subsidiaries, or any
issuance of options, warrants, convertible securities (other than as may be
issued pursuant to the Company's 1996 Stock Option Plan, as amended, and the
Employee 401(k) Deferred Savings Plan), or other rights to purchase the capital
stock of the Company or the Subsidiaries or any material adverse change or a
development involving a prospective material adverse change in the condition
(financial or otherwise), or the earnings or business of the Company and the
Subsidiaries taken as a whole (a "Material Adverse Change"); and (iv) the
Company or the Subsidiaries has not sustained any material loss or damage to
their respective properties or interference with their respective business,
whether or not insured.
(h) There are no actions, suits, investigations or proceedings pending
or, to the knowledge of the Company, threatened before any court or governmental
agency, authority or body, to which the Company or the Subsidiaries is a party
or of which the business or property of the Company or the Subsidiaries is the
subject which are required to be described in the Registration Statement or
which might reasonably be expected to: (i) result in any Material Adverse
Change; or (ii) prevent consummation of the transactions contemplated by this
Agreement and the Indenture. All pending legal or governmental proceedings to
which the Company or the Subsidiaries is a party or to which any of their
respective property is subject, which are not described in the Registration
Statement and the Prospectus, including ordinary routine litigation incidental
to the business, are, considered in the aggregate, not material to the Company
and the Subsidiaries taken as a whole.
(i) The Company has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement has been duly
and validly authorized, executed and delivered by the Company. The performance
of this Agreement and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and provisions of,
or constitute a default (or with the giving of notice or the passage of time or
both would so constitute a breach or default) or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to (i) any indenture, mortgage, deed of
trust, loan agreement, bond, debenture, note agreement or other evidence of
indebtedness; lease, contract or other agreement or instrument to which the
Company or any Subsidiary is a party or by which the property or assets of the
Company or any Subsidiary is bound, (ii) the Company's or the Subsidiaries'
Certificate of Incorporation or Bylaws or other organizational documents or
(iii) any statute or any order, rule or regulation of any court, governmental
agency or body having jurisdiction over the Company or any Subsidiary. No
consent, approval, authorization, order, registration, filing, qualification,
license, or permit of or with any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any of the
Subsidiaries or their properties or assets, is required for the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, including the issuance, sale and delivery of
the Notes, except as may be required under the 1933 Act, the Rules and
Regulations, the securities laws ("Blue Sky Laws") of the states (the "States")
where the Notes are to be sold, the rules and regulations of The Nasdaq National
Market and the rules and regulations of the National Association of Securities
Dealers, Inc. ("NASD") in connection with the offer and sale of the Notes by the
Underwriter.
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(j) The Company has full power and authority to execute and deliver the
Indenture and to perform its obligations thereunder. The Indenture has been duly
and validly authorized and when executed and delivered by the Company on the
First Closing Date, will constitute a valid, legal and binding agreement of the
Company enforceable in accordance with their terms, except as enforcement may be
limited under bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and by general principles
of equity. The Company's performance of the Indenture and the consummation of
the transactions therein contemplated by such agreements will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default (or with the giving of notice or the passage of time or both would so
constitute a breach or default) or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or the
Subsidiaries pursuant to (i) any indenture, mortgage, deed of trust, loan
agreement, bond, debenture, note agreement or other evidence of indebtedness;
lease, contract or other agreement or instrument to which the Company or any
Subsidiary is a party or by which the property or assets of the Company or any
Subsidiary is bound, (ii) the Company's or any Subsidiary's Articles of
Incorporation or Bylaws or other organizational documents or (iii) any statute
or any order, rule or regulation of any court, governmental agency or body
having jurisdiction over the Company or any Subsidiary, except, in each case,
for such breaches, violations, defaults and liens that would not result in a
Material Adverse Effect. No consent, approval, authorization, order,
registration, filing, qualification, license, or permit of or with any court or
any public, governmental or regulatory agency or body having jurisdiction over
the Company or any Subsidiary or their properties or assets, is required for the
execution, delivery and performance of the Indenture or the consummation of the
transactions contemplated thereby except for qualification of the Indenture
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
The Indenture complies with and is qualified under the Trust Indenture Act. The
Indenture is in substantially the form filed as an exhibit to the Registration
Statement.
(k) The Company has full power and authority to execute and deliver the
Notes and to perform its obligations thereunder. The Notes have been duly and
validly authorized and, when authenticated by the Trustee and issued, delivered
and sold in accordance with this Agreement and the Indenture, will have been
duly and validly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture and enforceable against the Company in
accordance with their terms, except as enforcement may be limited under
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general principles of equity.
(l) The Company has, as of the dates set forth in the Prospectus, the
duly authorized, issued and outstanding capitalization set forth in the
Prospectus under the caption "Capitalization." The outstanding Common Stock of
the Company is duly authorized and validly issued, fully paid, and
nonassessable. No preemptive rights or similar rights of any security holders of
the Company exist with respect to the issuance and sale of the Notes by the
Company. The Company has no agreement with any security holder which gives such
security holder the right to require the Company to register under the 1933 Act
any securities of any nature owned or held by such person either in connection
with the transactions contemplated by this Agreement or after a demand for
registration by such holder. The certificates evidencing the Notes comply as to
form with all applicable provisions of federal law and the laws of the State of
Delaware. Except as set forth in any part of the Registration Statement, the
Company and the Subsidiaries do not have any outstanding options to purchase or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contract or commitments to issue or sell, any Common
Stock or other securities of the Company.
(m) The Company and the Subsidiaries have good and marketable title to
all real properties described in the Prospectus as being owned by them and good
title to all other properties described in the Prospectus as being owned by
them, in each case free and clear of all security interests, liens, charges,
encumbrances, restrictions or defects except such as are described in the
Prospectus or as such do not materially affect the value of such
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property and do not materially interfere with the use made of such property by
the Company or the Subsidiaries. The Company and the Subsidiaries hold valid and
enforceable leases for the properties (real and personal) described in the
Prospectus as leased by them with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such properties; the
Company and the Subsidiaries are not in default (or with the giving of notice or
the passage of time or both would be in default) in respect to any of such
leases, and to the best knowledge of the Company, no material claim of any sort
has been asserted by anyone adverse to the rights of the Company and the
Subsidiaries as lessee under any such lease or questioning its right to
continued use and possession of any of the leased properties under any such
lease.
(n) Except as disclosed in the Prospectus, the Company and the
Subsidiaries own or possess, or can acquire on reasonable terms, all patents,
patent applications, trademarks, service marks, tradenames, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses, inventions,
know-how, trade secrets and other similar rights necessary for the conduct of
their respective businesses as currently carried on or intended to be carried on
and as described in the Prospectus. Neither the Company nor the Subsidiaries
have received any notice or claim involving or giving rise to any infringement
of or conflict with licenses or similar registrations, service ▇▇▇▇
registrations, copyrights, licenses, inventions, trade secrets or other similar
rights of others with respect to any of the foregoing and which infringement or
conflict (if the subject of an unfavorable decision or ruling), singly or in the
aggregate, would result in a Material Adverse Effect.
(o) The Company and the Subsidiaries have filed all necessary federal,
state, local and foreign income, franchise and other tax returns required to be
filed through the date of this Agreement or have obtained an extension therefor
and have paid all taxes shown as due thereon other than any which the Company or
the Subsidiaries is contesting in good faith.
(p) The Company and the Subsidiaries own no capital stock or other
equity or ownership or proprietary interest in any corporation, partnership,
limited liability company, association, trust or other entity (other than with
respect to the Company, the Subsidiaries' capital stock) and are not affiliated
(as that term is defined under the ▇▇▇▇ ▇▇▇) with any other company or business
entity except as described in the Prospectus.
(q) The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide that: (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(r) The Company and the Subsidiaries maintain insurance, which is in
full force and effect, of the types and in amounts which are adequate for their
business and as is customary with insurance maintained by similar companies and
businesses.
(s) No labor disturbance by the employees of the Company and the
Subsidiaries exists or, to the best of the Company's knowledge, is imminent
which could reasonably be expected to have a material adverse effect on the
conduct of the business, operations, financial condition, or income of the
Company and the Subsidiaries taken as a whole.
(t) Neither the Company nor any Subsidiary is an "investment company" as
defined in the Investment Company Act of 1940, as amended and will not become an
"investment company" upon the sale of the Notes.
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(u) None of the Company, the Subsidiaries or any of their employees or
agents has made any payment of funds of the Company or the Subsidiaries or
received or retained funds in violation of any law, rule or regulation.
(v) Other than as contemplated by this Agreement, the Company has not
engaged any "finder" with respect to the transactions contemplated by this
Agreement and there is no outstanding claim for services in the nature of a
"finder's fee" with respect to such financing.
(w) The Company, after giving effect to the execution, delivery and
performance of this Agreement, the Indenture, and the Notes and the consummation
of the transactions contemplated hereby and thereby will not be: (i) insolvent;
(ii) left with unreasonably small capital with which to engage in its business;
or (iii) incurring debts beyond its ability to pay such debts as they mature.
(x) The Company has not taken and will not take, directly or indirectly,
any action designed to cause or result in or which has constituted or which
constitute the stabilization or manipulation, as defined in the 1934 Act or
otherwise, of the price of any outstanding securities of the Company to
facilitate the sale or resale of the Notes.
(y) On the First Closing Date and the Second Closing Date, as the case
may be, all transfer or other taxes, if any (other than income taxes), which are
required to be paid in connection with the sale or transfer of the Notes will
have been fully paid or provided for by the Company and all laws imposing such
taxes will have been fully complied with.
(z) Neither the Company, nor any affiliate thereof, does business with
the government of Cuba or with any person or affiliate located in Cuba.
2. PURCHASE, SALE, DELIVERY AND PAYMENT
(a) On the basis of the representations, warranties, and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, the Firm Notes at a purchase price equal to _____%
of the per Note price offered to the public (as set forth in the Prospectus at
$1,000 per Note). The Underwriter will purchase all of the Firm Notes if any are
purchased.
(b) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company hereby
grants an option to the Underwriter to purchase an aggregate of up to
$3,000,000.00 principal amount of Option Notes at the same purchase price as the
Firm Notes for use solely in covering any overallotments made by the Underwriter
in the sale and distribution of the Firm Notes. The option granted hereunder may
be exercised at any time and from time to time within 45 days after the
Effective Date upon notice (confirmed in writing) by the Underwriter to the
Company setting forth the aggregate principal amount of Option Notes as to which
the Underwriter is exercising the option and the date on which certificates for
such Option Notes are to be delivered. The option granted hereby may be
cancelled by the Underwriter as to the Option Notes for which the option is
unexercised at any time prior to the expiration of the 45-day period upon notice
to the Company.
(c) The Company will deliver the Firm Notes to the Underwriter at the
offices of ▇▇▇▇▇▇▇, Street and Deinard Professional Association, unless some
other place is agreed upon, at 10:00 A.M., Minneapolis time, against payment of
the purchase price on the third full business day after the Effective Date, or
such later time as may be agreed upon between the Underwriter and the Company,
such time and being herein referred to as the "First Closing Date."
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(d) The Company will deliver the Option Notes being purchased by the
Underwriter to the Underwriter at the offices of ▇▇▇▇▇▇▇, Street and Deinard
Professional Association as set forth in Section 2(c) above, unless some other
place is agreed upon, at 10:00 A.M., Minneapolis time, against payment of the
purchase price on the date determined by the Underwriter and of which the
Company has received notice as provided in Section 2(b), which shall not be
earlier than two nor later than three full business days after the exercise of
the option as set forth in Section 2(b), or at such other time not later than
ten full business days thereafter as may be agreed upon by the Underwriter and
the Company, such time and date being herein referred to as the "Second Closing
Date." The First Closing Date and Second Closing Date are referred to herein as
the "Closing Date."
(e) Certificates for the Notes to be delivered will be registered in
such names and issued in such denominations as the Underwriter shall request of
the Company at least three full business days prior to each Closing Date. The
certificates will be made available to the Underwriter in definitive form for
the purpose of inspection and packaging at least 24 hours prior to the Closing
Date.
(f) Payment for the Notes shall be made by wire transfer of immediately
available funds to a designated account of the Company.
(g) The Underwriter will make a public offering of the Notes directly to
the public (which may include selected dealers who are members in good standing
with the NASD or foreign dealers not eligible for membership in the NASD but who
have agreed to abide by the interpretation of the NASD's Board of Governors with
respect to free-riding and withholding) as soon as the Underwriter deems
practicable after the Registration Statement becomes effective at the initial
public offering price set forth on the cover page of the Prospectus, subject to
the terms and conditions of this Agreement and in accordance with the
Prospectus. Such concessions from the public offering price may be allowed
selected dealers of the NASD as the Underwriter determines, and the Underwriter
will furnish the Company with such information about the distribution
arrangements as may be necessary for inclusion in the Registration Statement. It
is understood that the public offering price and concessions may vary after the
initial public offering of the Notes. The Underwriter shall offer and sell the
Notes only in jurisdictions in which the offering of Notes has been duly
registered or qualified, or is exempt from registration or qualification, and
shall take reasonable measures to effect compliance with applicable state and
local securities laws.
3. [Reserved.]
4. COVENANTS OF THE COMPANY. The Company hereby covenants and agrees
with the Underwriter as follows:
(a) If the Registration Statement has not become effective prior to the
date hereof, the Company will use its best efforts to cause the Registration
Statement and any subsequent amendments thereto to become effective as promptly
as possible. The Company will notify the Underwriter promptly, after the Company
shall receive notice thereof, of the time when the Registration Statement, or
any subsequent amendment thereto, has become effective or any supplement to the
Prospectus has been filed. Following the execution and delivery of this
Agreement, the Company will prepare, and timely file or transmit for filing with
the SEC in accordance with Rules 430A, 424(b) and 434, as applicable, copies of
the Prospectus, or, if necessary, a post-effective amendment to the Registration
Statement (including the Prospectus), in which event, the Company will take all
necessary action to have such post-effective amendment declared effective as
soon as possible. The Company will notify the Underwriter promptly upon the
Company's obtaining knowledge of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or of the initiation
or threat of any proceedings for that purpose and will use its best efforts to
prevent the issuance of any stop order and, if a stop order is issued, to obtain
as soon as possible the withdrawal or lifting thereof. The Company will promptly
prepare and file at its own expense with the SEC any amendments of, or
supplements to, the Registration Statement or the Prospectus which may be
necessary
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in connection with the distribution of the Notes by the Underwriter. During the
period when a Prospectus relating to the Notes is required to be delivered under
the 1933 Act, the Company will promptly file any amendments of, or supplements
to, the Registration Statement or the Prospectus which may be necessary to
correct any untrue statement of a material fact or any omission to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company will
notify the Underwriter promptly of the receipt of any comments from the SEC
regarding the Registration Statement or Prospectus or request by the SEC for any
amendment thereof or supplement thereto or for any additional information. The
Company will not (i) file any amendment of, or supplement to, the Registration
Statement or Prospectus, whether prior to or after the Effective Date, which
shall not previously have been submitted to the Underwriter and its counsel a
reasonable time prior to the proposed filing or to which the Underwriter shall
have reasonably objected or (ii) so long as in the opinion of counsel to the
Underwriter, a Prospectus is required to be delivered in connection with sales
by any Underwriter or dealer, file any information, documents, or reports
pursuant to the 1934 Act, without delivering a copy of such information,
documents or reports to the Underwriter prior to or concurrently with said
filing.
(b) The Company has used and will continue to use its best efforts, in
cooperation with the Underwriter, to register or qualify the Notes for sale
under the securities laws of such jurisdictions as the Underwriter may designate
and the Company will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification
and will continue such registrations or qualifications in effect for a period of
not less than one year from the Effective Date, provided, however, that in no
event shall the Company be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not now so qualified or subject itself to
taxation in respect of doing business in any jurisdiction where it is not now so
subject. In each jurisdiction where any of the Notes shall have been so
qualified, the Company will file such statements and reports as are or may be
reasonably required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
Effective Date. The Company will notify the Underwriter immediately of, and
confirm in writing, the suspension of qualification of the Notes or the threat
of such action in any jurisdiction.
(c) The Company will furnish to the Underwriter, as soon as available,
copies of the Registration Statement (one of which will be signed and which
shall include all exhibits), the Preliminary Prospectus, the Prospectus and any
amendments or supplements to such documents, including any prospectus prepared
to permit compliance with Section 10(a)(3) of the 1933 Act, all in such
quantities as the Underwriter may from time to time reasonably request. The
Company specifically authorizes the Underwriter and all dealers to whom any of
the Notes may be sold by the Underwriter to use and distribute copies of such
Preliminary Prospectuses and Prospectuses in connection with the offer and sale
of the Notes as and to the extent permitted by the federal and applicable state
and local securities laws.
(d) As soon as practicable (but in no event later than 90 days after the
close of the period covered thereby) the Company will make generally available
to its security holders, including Note holders, and furnish to you, an earnings
statement of the Company covering the period of 12 months beginning not later
than the first day of the next fiscal quarter following the Effective Date of
the Registration Statement which will satisfy the requirements of Section 11(a)
or Rule 158 of the 1933 Act and which need not be certified or audited by
independent public accountants.
(e) For as long as there are any Notes outstanding, the Company will
furnish to the Underwriter, without need of request, concurrently with
furnishing such reports to its stockholders, the following reports: (i) as soon
as they are available, copies of all other reports (financial or otherwise)
mailed to security holders; and (ii) as soon as they are available, copies of
all reports and financial statements furnished to, or filed with, the SEC, the
NASD, any securities exchange or any state securities commission by the Company.
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(f) The Company will apply the net proceeds from the sale of the Notes
in the manner set forth under the caption "Use of Proceeds" in the Prospectus.
(g) The Company will provide the Underwriter with copies of reports,
certificates and supporting documentation furnished to the Trustee pursuant to
the Indenture or otherwise concurrently with furnishing such reports to the
Trustee.
(h) Subject to the last sentence of this subparagraph (h) The Company
shall pay all reasonable fees and expenses of the Underwriter's counsel incurred
in connection with the offering. The Company agrees that the necessary legal
work for drafting and preparing the Indenture and for registration,
qualification or perfection of exemptions of the Notes for sale under the Blue
Sky Laws of such States as the Underwriter may designate (the "Blue Sky States")
shall be performed by counsel for the Underwriter and paid for by the Company.
All Blue Sky filing fees and fees and expenses of Underwriter's counsel incurred
in connection with registering, qualifying or perfecting exemptions of the Notes
for sale in the Blue Sky States shall be paid by the Company, and all of the
fees and expenses of Underwriter's counsel incurred in connection with the
offering shall be paid by the Company. Subject to clause (xv) of paragraph (i),
such Blue Sky and counsel fees shall be paid regardless of whether any closing
shall occur and shall be in addition to the Underwriter's fees, expenses and
commission described in this Agreement. In no event shall the Company be
required to pay more than $75,000 for all fees of Underwriter's counsel, plus
out-of-pocket expenses of Underwriter's counsel, incurred pursuant to this
subparagraph (h) and subparagraph (i).
(i) The Company will pay, in addition to the Blue Sky and counsel fees
described in paragraph (h) of this Section, all costs and expenses related to
the performance of its obligations under this Agreement including, but not
limited to: (i) all expenses incident to the issuance and delivery of the Notes;
(ii) all expenses incident to the preparation, filing and delivery of the
Registration Statement, each Preliminary Prospectus, the Prospectus, and any
amendments, supplements or submissions related thereto (including exhibits);
(iii) all expenses incident to the filing, delivery and qualification of the
Indenture and any amendments, supplements or submissions related thereto; (iv)
all NASD fees incurred by the Underwriter in connection with the review of the
Underwriter's compensation by the NASD; (v) the cost of preparing and printing
as many amendments to the Registration Statement as may be necessary; (vi) the
cost of all certificates representing the Notes; (vii) the fees and expenses of
the Trustee and paying agent under the Indenture; (viii) the cost of printing
and distributing all documents related to the offering of the Notes; (ix) the
fees and expenses of the Company's independent accountants, including the cost
of "cold comfort" review; (x) the fees and expenses of legal counsel for the
Company; (xi) the cost of furnishing and delivering to the Underwriter and
dealers participating in the distribution of the Notes copies of the
Registration Statement (including Exhibits), Preliminary Prospectuses, the
Prospectuses and any amendments of, or supplements to, any of the foregoing;
(xii) travel and lodging expenses of the Underwriter; (xiii) reasonable expenses
associated with the production of materials prepared in connection with the
information meetings to be held in selected cities; (xiv) the travel expenses to
be incurred by the management of the Company in connection with such meetings
and (xv) if the Offering for any reason is not closed, the Company shall
reimburse the Underwriter for its accountable expenses (after deducting the
$25,000 deposit) as aforesaid, provided that such accountable expenses,
including the fees and expense of the Underwriter's counsel pursuant to
Subparagraphs (h) and (i) do not exceed $100,000. If upon such abandonment, the
Underwriter's actual accountable out-of-pocket expenses do not exceed the
$25,000 deposit, the portion of the deposit not used will be reimbursed by the
Underwriter to the Company.
(j) The Company will not take, and will use its best efforts to cause
each of its officers and directors not to take, directly or indirectly, any
action designed to or which might reasonably be expected to cause or result in
the manipulation of the price of any security of the Company to facilitate the
sale or resale of the Notes.
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(k) The Company will use its best efforts to maintain the listing of its
Common Stock on The Nasdaq National Market.
5. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter to purchase and pay for the Notes as provided herein shall be
subject to the accuracy of the representations and warranties of the Company, as
of the date hereof and the First Closing Date (as if made on the First Closing
Date) and in the case of the Option Notes, as of the date hereof and the Second
Closing Date (as if made on the Second Closing Date), to the performance by the
Company of its obligations hereunder, and to the satisfaction of the following
additional conditions on or before the First Closing Date in the case of the
Firm Notes and on or before the Second Closing Date in the case of the Option
Notes:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M. Minneapolis time, on the first full business day following the
date of this Agreement, or such later date as shall be consented to in writing
by the Underwriter (the "Effective Date"). If the Company has elected to rely
upon Rule 430A, the information concerning the price of the Notes and
price-related information previously omitted from the effective Registration
Statement pursuant to Rule 430A shall have been transmitted to the SEC for
filing pursuant to Rule 424(b) within the prescribed time period, and prior to
the Closing Date the Company shall have provided evidence satisfactory to the
Underwriter of such timely filing (or a post-effective amendment providing such
information shall have been promptly filed and declared effective in accordance
with the 1933 Act and the Rules and Regulations). No stop order suspending the
effectiveness thereof shall have been issued and no proceeding for that purpose
shall have been initiated or, to the knowledge of the Company or the
Underwriter, threatened by the SEC or any state securities commission or similar
regulatory body. Any request of the SEC for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the satisfaction of the Underwriter and its legal
counsel. The NASD, upon review of the terms of the Offering, shall not have
objected to the terms of the Underwriter's participation in the Offering.
(b) The Underwriter shall not have been advised that the Registration
Statement or Prospectus, or any amendment thereof or supplement thereto,
contains any untrue statement of a material fact or omits to state a material
fact and which is required to be stated therein or is necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
(c) The Underwriter and Underwriter's counsel shall have been furnished
with such documents and information as the Underwriter or its counsel may have
requested.
(d) The Underwriter shall have received the opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇,
L.L.P., dated as of the Closing Date and satisfactory in form and substance to
the Underwriter and its counsel and substantially in the form set forth in
Exhibit A hereto.
(e) At the time of execution of this Agreement and also at each Closing
Date, the Underwriter shall have received from PricewaterhouseCoopers LLP a
letter or letters, dated the date of delivery thereof, in the form and substance
satisfactory to the Underwriter, stating that they are independent public
accountants with respect to the Company on a consolidated basis within the
meaning of the 1933 Act and that: (i) In their opinion, the Financial Statements
included in the Registration Statement and Prospectus and reported on therein by
them comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and related published rules and regulations; (ii)
On the basis of a limited review (but not an examination in accordance with
generally accepted auditing standards) consisting of a reading of the unaudited
financial statements included in the Registration Statement and Prospectus (if
any) and the latest available interim financial statements of the Company
subsequent thereto; a reading of the minutes of the board of directors and
shareholders of the Company subsequent thereto; and inquiries of officials of
the Company and the Subsidiaries responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in such
letter and agreed upon by you, nothing has come to their
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attention that causes them to believe that: a) The unaudited financial
statements included in the Registration Statement and Prospectus, if any, do not
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and with the published Rules and Regulations or
that such financial statements are not fairly presented in conformity with
generally accepted accounting principles applied on a basis consistent with that
of the audited financial statements included in the Registration Statement and
Prospectus; b) As of a specified date not more than five days prior to the date
of this Agreement in the case of the first letter and not more than two business
days prior to the date of the First Closing Date and if applicable, the Second
Closing Date, in the case of the second and subsequent letters, there have been
any changes in the capital stock, increases in debt, decreases in contracts held
for sale (net of allowance), credit enhancement assets (net of amortization) or
any increase in liabilities or decreases in assets or stockholders' equity of
the Company, in each case, as compared with amounts shown in the most recent
balance sheet included in the Prospectus; and c) for the period from the date of
the most recent balance sheet included therein to such specified date, there was
any decrease, as compared with the corresponding period of the previous year,
total revenues or any decrease in net income before income taxes or net income
or in basic or diluted per share amounts of net income except, in each case, for
such changes which the Registration Statement discloses have occurred or may
occur; (iii) In addition to the examination referred to in their report included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in clause (ii) above, they have
carried out certain specified procedures requested by you, not constituting an
audit in accordance with generally accepted auditing standards with respect to
certain amounts, percentages and other financial information which are derived
from the accounting records and other financial and statistical data of the
Company and the Subsidiaries which appear in or incorporated by reference in the
Prospectus including the information set forth on the inside cover pages of the
Prospectus and under the captions "Prospectus Summary," "Summary Financial
Data," "Capitalization," "Selected Consolidated Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
"Business" and which are specified by you and have compared certain of such
amounts, percentages and financial information with the accounting records and
other appropriate data of the Company and the Subsidiaries and have found them
to be in agreement.
(f) On each Closing Date since the date hereof or since the dates as of
which information is given in the Registration Statement and Prospectus, the
Company and its Subsidiaries shall have not 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 shall
not have been any Material Adverse Change, or any development involving a
prospective Material Adverse Change, and you shall have received a certificate,
dated such date, of the president and the chief financial officer of the Company
to the effect that: (i) there has been no such Material Adverse Change; (ii) the
representations and warranties of the Company in Section 1 of this Agreement are
true and correct as if made on and as of such date and the Company has performed
all obligations and satisfied all conditions on its part to be performed or
satisfied at or prior to such date; and (iii) the SEC has not issued any order
preventing or suspending the use of any prospectus or issued a stop order
suspending the effectiveness of the Registration Statement and no proceedings
for that purpose have been instituted or are pending or to their knowledge
threatened under the ▇▇▇▇ ▇▇▇.
(g) The Underwriter shall have received all necessary written consents
from the Company's and the Subsidiaries' lenders and any other person whose
consent is required in connection with this Agreement and the transactions
contemplated thereby.
(h) The Notes shall have been qualified for sale under the Blue Sky Laws
of the States as shall have been specified by the Underwriter. The Indenture
shall have been qualified under the Trust Indenture Act.
(i) The Underwriter shall have received, dated as of each Closing Date,
from the Secretary of the Company a certificate of incumbency certifying the
names, titles and signatures of the officers authorized
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to execute this Agreement according to the resolutions of the Board of Directors
of the Company authorizing and approving the execution, delivery and performance
of this Agreement, a copy of such resolutions to be attached to such
certificate, certifying such resolutions and certifying that the Company's
Certificate of Incorporation, as amended, and the Company's Bylaws have been
validly adopted and have not been amended or modified.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Underwriter and to its counsel. If any of the conditions
specified in this section shall not have been fulfilled when and as required by
this Agreement, this Agreement and all obligations of the Underwriter hereunder
may be canceled at, or at any time prior to the Closing Date by the Underwriter.
Any such cancellation shall be without liability of the Underwriter to the
Company and shall be in writing or by telegraph or telephone and confirmed in
writing. The Underwriter may waive in writing the nonperformance by the Company
of any one or more of the foregoing conditions or extend the time for
performance of such conditions. Each such waiver shall be applicable only to the
item to which it relates and the closing to which it relates and no waiver or
series of waivers shall be deemed to have waived any condition at any time other
than the condition at the time explicitly waived.
6. INDEMNIFICATION
(a) The Company hereby agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against
any losses, claims, damages or liabilities arising out of (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, or the omission or alleged
omission to state in the Registration Statement or any amendment thereof a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus if used prior to the
Effective Date of the Registration Statement or in the Prospectus (as amended or
as supplemented, if the Company shall have filed with the SEC any amendment
thereof or supplement thereto), or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading and the
Company will reimburse the Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by the Underwriter or controlling
person (subject to the limitation set forth in Section 6(c) hereof) in
connection with investigating or defending against 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, an untrue statement, or alleged untrue
statement, omission or alleged omission, made in reliance upon and in conformity
with written information furnished to the Company by, or on behalf of, the
Underwriter specifically for use in the preparation of the Registration
Statement or any such post effective amendment thereof, any such Preliminary
Prospectus or the Prospectus or any such amendment thereof or supplement
thereto, or in any application or other statement executed by the Company or the
Underwriter filed in any jurisdiction in order to qualify the Notes under, or
exempt the Notes or the sale thereof from qualification under, the Blue Sky Laws
of such jurisdiction; and provided further that the Company will not be liable
to the Underwriter with respect to any Preliminary Prospectus to the extent that
any such loss, claim, damage or liability results from the fact that the
Underwriter sold Notes to a person who was not sent or given, at or prior to
written confirmation of such sale, a copy of the Prospectus in any case where
such delivery is required by the 1933 Act and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained in
such Preliminary Prospectus was corrected in the Prospectus, provided that the
Company has delivered the Prospectuses to the Company in requisite quantity to
permit such delivery or sending. This indemnity agreement is in addition to any
liability which the Company may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
each of the Company's directors, each of the Company's officers who has signed
the Registration Statement and each
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person who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20A of the 1934 Act against any losses, claims, damages or
liabilities arising out of (i) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, or the omission or alleged omission to state in the Registration
Statement or any amendment thereof, a material fact required to be stated
therein or necessary to make the statements therein not misleading; or (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus if used prior to the Effective Date of the Registration
Statement or in the Prospectus (as amended or as supplemented, if the Company
shall have filed with the SEC any amendment thereof or supplement thereto), or
the omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading in each case to the extent, but only the extent,
that such untrue statement, alleged untrue statement, omission or alleged
omission, was made in reliance upon and in conformity with written information
furnished to the Company by, or on behalf of, the Underwriter specifically for
use in the preparation of the Registration Statement or any such post effective
amendment thereof, any such Preliminary Prospectus or the Prospectus or any such
amendment thereof or supplement thereto, or in any application or other
statement executed by the Company or by the Underwriter and filed in any
jurisdiction; and the Underwriter will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person (subject to the limitation set forth in Section 6(c) hereof in connection
with investigating or defending against any such loss, claim, damage, liability
or action. This indemnity agreement is in addition to any liability which the
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 6, notify in writing the indemnifying party of the commencement thereof.
The omission so to notify the indemnifying party will not relieve it from any
liability under this Section 6 as to the particular item for which
indemnification is then being sought, unless such omission so to notify
prejudices the indemnifying party's ability to defend such action. In case any
such action is brought against any indemnified party and the indemnified party
notifies an 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 who shall be reasonably satisfactory to such
indemnified party; and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that if, in the reasonable judgment
of the indemnified party, it is advisable for such parties and controlling
persons to be represented by separate counsel, any indemnified party shall have
the right to employ separate counsel to represent it and all other parties and
their controlling persons who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Underwriter against the
Company or by the Company against the Underwriter hereunder, in which event the
fees and expenses of such separate counsel shall be borne by the indemnifying
party and paid as incurred. In no event shall the indemnifying parties be liable
for fees and expense of more than one counsel separate from their own counsel
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. Any such indemnifying party shall not be
liable to any such indemnified party on account of any settlement of any claim
or action effected without the prior written consent of such indemnifying party.
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7. CONTRIBUTION
If the indemnification provided for in Section 6 is unavailable under
applicable law to, or insufficient to hold harmless, any indemnified party in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriter from the offering of the Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Underwriter in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The Company and the Underwriter agree that contribution
determined by pro rata allocation would not be equitable. The respective
relative benefits received by the Company on the one hand, and the Underwriter,
on the other hand, shall be deemed to be in the same proportion (A) in the case
of the Company, as the total price paid to the Company for the Notes by the
Underwriter (net of underwriting discount received but before deducting
expenses) bears to the aggregate public offering price of the Notes and (B) in
the case of the Underwriter, as the aggregate underwriting discount and
commissions received by them bears to the aggregate public offering price of the
Notes, in each case as reflected in the Prospectus. The relative fault of the
Company and the Underwriter 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 by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. Notwithstanding
the provisions of this Section 7, the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Notes underwritten by it and offered to the public exceeds the amount of any
damages which the Underwriter has otherwise been required to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person who controls the
Underwriter within the meaning of the 1933 Act or the 1934 Act shall have the
same rights to contribution as the Underwriter, each person who controls the
Company within the meaning of the 1933 Act or the 1934 Act shall have the same
rights to contribution as the Company and each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company.
8. SURVIVAL OF INDEMNITIES, CONTRIBUTION AGREEMENTS, WARRANTIES AND
REPRESENTATIONS.
The respective indemnity and contribution agreements of the Company and
the Underwriter contained in Sections 6 and 7, respectively, the representations
and warranties of the Company set forth in Section 1 hereof and the covenants of
the Company set forth in Section 4(h) and 4(i) hereof shall remain operative and
in full force and effect, regardless of any investigation made by, or on behalf
of, the Underwriter, the Company, any of its officers and directors, or any
controlling person referred to in Sections 6 and 7, and shall survive the
delivery of and payment for the Notes. The aforesaid indemnity and contribution
agreements shall also survive any termination or cancellation of this Agreement.
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9. TERMINATION.
(a) Until the First Closing Date, this Agreement may be terminated by
the Underwriter, at its option, by giving notice to the Company, if (i) there
shall have been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Registration Statement
or the Prospectus, any Material Adverse Change, the effect of which is such as
to make it, in your judgment, so material and adverse as to make it
impracticable or inadvisable to market the Notes or to enforce contracts for the
sale of the Notes; (ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange, Nasdaq National Market, Nasdaq SmallCap
Market or the over-the-counter market shall have been suspended or minimum
prices shall have been established on such exchanges by the SEC or by such
exchanges or markets; (iii) a general banking moratorium shall have been
declared by federal, New York, Minnesota or California authorities; (iv) there
shall have been such a material adverse change in general economic, monetary,
political or financial conditions, or the effect of international conditions on
the financial markets in the United States shall be such that, in the reasonable
judgment of the Underwriter, makes it impracticable or inadvisable to market the
Notes or to enforce contracts for the sale of the Notes; (v) there shall be a
material outbreak of hostilities or material escalation and deterioration in the
political and military situation between the United States and any foreign
power, or a formal declaration of war by the United States of America shall have
occurred, the effect of which is such as to make it, in the reasonable judgment
of the Underwriter, impracticable or inadvisable to market the Notes or to
enforce contracts for the sale of the Notes. Any such termination shall be
without liability of any party to any other party, except as provided in
Sections 6, 7, and 8 hereof; provided, however, that the Company shall remain
obligated to pay costs and expenses to the extent provided in Sections 4(h) and
(i) of this Agreement.
(b) If the Underwriter elects to terminate this Agreement as provided in
this Section 9, it shall notify the Company promptly by telegram or telephone,
confirmed by letter sent to the address specified in Section 10 hereof.
10. NOTICES.
All communications hereunder shall be in writing and, if sent to the
Underwriter, shall be mailed by certified or registered mail or hand delivered
or sent by facsimile transmission and confirmed in writing to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
Financial, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ with a copy to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇, Street and Deinard
Professional Association, Suite 2300, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ and if sent to the Company, shall be mailed by certified or registered
mail or hand delivered or sent by facsimile transmission, and confirmed in
writing to the Company at Onyx Acceptance Corporation, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer, with a
copy to J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., Suite 3700, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
11. SUCCESSORS.
This Agreement shall inure to the benefit of and be binding upon the
Underwriter, the Company, and their successors, assigns and legal
representatives and the controlling persons and officers and directors referred
to in Section 6 and 7 and their heirs and legal representatives, and nothing 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 provision 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. No purchaser of
Notes will be deemed a successor because of such purchase.
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12. INFORMATION FURNISHED BY UNDERWRITER.
The statements under the caption "Underwriting" in any Preliminary
Prospectus and in the Prospectus constitute the only written information
furnished by, or on behalf of, the Underwriter specifically for use in the
Prospectus and Preliminary Prospectus with reference to the Underwriter referred
to in Section 1(b) and Section 6 hereof.
13. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with
the substantive laws of the State of New York without regard to its choice of
laws provisions.
14. COUNTERPARTS. This Agreement may be signed in any number of
counterparts and all such counterparts taken together shall constitute the
single Agreement of the parties.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate of this
Agreement, whereupon it will become a binding agreement between the Company and
the Underwriter in accordance with its terms.
Very truly yours,
ONYX ACCEPTANCE CORPORATION
By__________________________________
Its______________________________
ACCEPTANCE
The foregoing Underwriting Agreement is
hereby confirmed and accepted by us as
of the date first written above.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ FINANCIAL, INC.
By________________________________
Its_______________________________
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