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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): MAY 21, 1998
DVI, INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 0-16271 22-2722773
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
500 HYDE PARK, DOYLESTOWN, PENNSYLVANIA 18901
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(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code: (215) 345-6600
NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On April 24, 1998, DVI, Inc. (the "Company") filed a registration statement
on Form S-3 (File No. 333-50895) (the "Registration Statement"), relating to
$500,000,000 in aggregate principal amount of Common Stock, Preferred Stock,
Depositary Shares, Debt Securities and Warrants with the Securities and Exchange
Commission (the "SEC"). On May 4, 1998, the Registration Statement was declared
effective by the SEC. The Company has offered for sale 2,200,000 shares of its
Common Stock (the "Common Stock"), plus an over-allotment option for up to an
additional 330,000 shares, in an underwritten public offering through the
several underwriters listed on Schedule I to the Underwriting Agreement which is
filed as Exhibit 1.1 hereto and has offered for sale 340,000 shares to certain
stockholders in a direct offering pursuant to the Stock Purchase Agreement which
is filed as Exhibit 99.1 hereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
1.1 Underwriting Agreement dated May 21, 1998 by and between the Company
and the Underwriters named therein.
99.1 Stock Purchase Agreement dated May 21, 1998 by and between the Company
and the Stockholders named therein.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DVI, INC.
By: /s/ Steven R. Garfinkel
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Steven R. Garfinkel
Chief Financial Officer
Date: May 26, 1998
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EXHIBIT INDEX
Exhibit
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1.1 Underwriting Agreement dated May 21, 1998 by and between the Company and
the Underwriters named therein.
99.1 Stock Purchase Agreement dated May 21, 1998 by and between the Company and
the Stockholders named therein.
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EXHIBIT 1.1
DVI, INC.
2,200,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
May 21, 1998
PRUDENTIAL SECURITIES INCORPORATED
PIPER JAFFRAY INC.
FOX-PITT, KELTON INC.
c/o Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Ladies and Gentlemen:
DVI INC., a Delaware corporation (the "Company"), hereby confirms its
agreement with the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you have been duly 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 an aggregate
of 2,200,000 shares (the "Firm Securities") of the Company's Common Stock, par
value $0.005 per share ("Common Stock"). The Company also proposes to issue and
sell to the several Underwriters not more than 330,000 additional shares of
Common Stock if requested by the Representatives as provided in Section 3 of
this Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such option are referred to herein as the "Option
Securities", and the Firm Securities and any Option Securities are collectively
referred to herein as the "Securities".
2. 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
Securities Act of 1933, as amended (the "Act"). A registration statement on such
form (File No. 333-50895) with respect to the Securities, including a
prospectus, and pre-effective amendment number 1 thereto, have been filed by the
Company with the Securities and Exchange
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(1) Plus an option to purchase from DVI, Inc. up to 330,000 additional shares to
cover over-allotments, if any.
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Commission (the "Commission") under the Act, and one or more amendments to such
registration statement may have been so filed. Such registration statement has
been declared effective by the Commission. As provided in Section 5(a), a
prospectus supplement reflecting the terms of the Securities, the terms of the
offering thereof 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" refers to each basic
prospectus or prospectus supplement which is subject to completion. 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"), 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 and the 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 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. The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus.
(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
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of incorporation. The Company and each of DVI Financial Services Inc. and DVI
Business Credit Corporation (the "Principal Operating Subsidiaries") and MSF
Holding Ltd. 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, except as set forth on Schedule 2 hereto, are, directly or
indirectly, owned of record and beneficially by the 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. The Firm Securities and the Option Securities have been
duly authorized by the Company for issuance and sale pursuant to this Agreement
and at the Firm Closing Date or the related Option Closing Date (as such terms
are hereinafter defined), as the case may be, after payment therefor in
accordance herewith, will be validly issued, fully paid and nonassessable and
will not have been issued in violation of any preemptive or other similar rights
of any securityholder of the Company.
(g) The capital stock of the Company conforms in all material respects
to the description thereof contained in the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus.
(h) Except as disclosed in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), there are no outstanding
(A) securities or obligations of the Company or any of its subsidiaries
convertible into or exchangeable for any capital stock of the Company or any
such subsidiary, (B) warrants, rights or options to subscribe for or
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purchase from the Company or any such subsidiary any such capital stock or any
such convertible or exchangeable securities or obligations or (C) obligations of
the Company or any such subsidiary to issue any shares of capital stock, any
such convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
(i) 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 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.
(j) 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 Regulations.
(k) 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.
(l) 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.
(m) 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 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 or 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
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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 applicable to the Company or any of its
subsidiaries.
(n) 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).
(o) 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.
(p) 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.
(q) The Securities have been approved for listing on the New York Stock
Exchange (the "NYSE"), subject to official notice of issuance.
(r) 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 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).
(s) 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
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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.
(t) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, 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).
(u) 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).
(v) 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 has 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).
(w) Except as set forth in the Prospectus, no subsidiary of the Company
is currently prohibited, directly or indirectly, from paying any dividends to
the Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, 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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(x) 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).
(y) 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.
(z) 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 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).
(aa) 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 are in compliance with all terms and conditions of any such permit,
license or approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals which would not,
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).
(bb) Except for the shares of capital stock of the subsidiaries and
Aegis Therapies LLC owned by either the Company or another subsidiary and the
equity interests set forth on Schedule 2, 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).
(cc) 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
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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.
(dd) 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 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
reasonably could be expected to 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.
(ee) 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.
(ff) 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 as of the date of such certificate by the
Company to each Underwriter as to the matters covered thereby.
3. 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, at a purchase
price of $20.2575 per share, the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule 1 hereto. One or more certificates in
definitive form for the Firm 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 Representatives request upon notice to
the Company at least 48 hours prior to the Firm Closing Date, shall be delivered
by or on behalf of the Company to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by wire transfer in same-day funds
(the "Wired Funds") to the account of the Company. Such delivery of and payment
for the Firm Securities shall be made at the offices of Gibson, Dunn & Crutcher
LLP, 200 Park Avenue, New York, New York 10016 at 9:30 A.M., New York time, on
May 28, 1998, or at such other place, time or date as the Representatives and
the Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date". The Company will make such certificate
or certificates
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for the Firm Securities available for checking and packaging by the
Representatives at the offices in New York, New York of the Company's transfer
agent or registrar or of Prudential Securities Incorporated at least 24 hours
prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Securities. The purchase price
to be paid for any Option Securities shall be the same price per share as the
price per share for the Firm Securities set forth above in paragraph (a) of this
Section 3, plus if the purchase and sale of any Option Securities takes place
after the Firm Closing Date and after the Firm Securities are trading
"ex-dividend", an amount equal to the dividend payable on such Option
Securities. The option granted hereby may be exercised as to all or any part of
the Option Securities from time to time within 30 days after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading). The Underwriters shall not be under any obligation to purchase any of
the Option Securities prior to the exercise of such option. The Representatives
may from time to time exercise the option granted hereby by giving notice in
writing or by telephone (confirmed in writing) to the Company setting forth the
aggregate principal amount of Option Securities as to which the several
Underwriters are then exercising the option and the date, place and time for
delivery of and payment for such Option Securities. Any such date of delivery
shall be determined by the Representatives but shall not be earlier than two
business days or later than five business days after such exercise of the option
and, in any event, shall not be earlier than the Firm Closing Date. The time and
date set forth in such notice, or such other time on such other date as the
Representatives and the Company may agree upon or as the Representatives may
determine pursuant to Section 9 hereof, is herein called the "Option Closing
Date" with respect to such Option Securities. Upon exercise of the option as
provided herein, the Company shall become obligated to sell to each of the
several Underwriters, and, subject to the terms and conditions herein set forth,
each of the Underwriters (severally and not jointly) shall become obligated to
purchase from the Company, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the option
as such Underwriter is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional Shares. If the option is exercised as to all or
any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3, except that reference therein to
the Firm Securities and the Firm Closing Date shall be deemed, for purposes of
this paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(c) The Company hereby acknowledges that the wire transfer by or on
behalf of the Underwriters of the purchase price for any Securities does not
constitute closing of a purchase and sale of the Securities. Only execution and
delivery of a receipt for Securities by the Underwriters indicates completion of
the closing of a purchase of the Securities from the Company. Furthermore, in
the event that the Underwriters wire funds to the Company prior to the
completion of the closing of a purchase of Securities, the Company hereby
acknowledges that until the Underwriters execute and deliver a receipt for the
Securities, by facsimile or otherwise, the Company will not be entitled to the
Wired Funds and shall return the Wired Funds to the Underwriters as soon as
practicable (by wire transfer of same-day funds) upon demand. In the event that
the closing of a purchase of Securities is not completed and the
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<PAGE> 10
Wired Funds are not returned by the Company to the Underwriters on the same day
the Wired Funds were received by the Company, the Company agrees to pay to the
Underwriters in respect of each day the Wired Funds are not returned by it, in
same-day funds, interest on the amount of such Wired Funds in an amount
representing the Underwriters' cost of financing as agreed upon by Prudential
Securities Incorporated and the Company.
(d) It is understood that any of you, individually and not as one of
the Representatives, 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.
4. Offering by the Underwriters. Upon your authorization of the release
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. 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 number of shares of Common Stock
constituting the Securities, the name of each Underwriter participating in the
offering and the number of shares of Common Stock 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 and any selling
concession, 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 5(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 any such amendment, supplement or other document in a
form to which you shall reasonably object.
(d) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or any order directed at any
document incorporated by reference in the Registration Statement or the
Prospectus or any amendment or supplement thereto or any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or any
amendment or
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<PAGE> 11
supplement thereto, (ii) the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, (iii) the institution, threatening or
contemplation of any proceeding for any such purpose or (iv) any request made by
the Commission for amending the Registration Statement, for amending or
supplementing any Preliminary Prospectus or the Prospectus or for additional
information. The Company will use its best efforts to prevent the issuance of
any such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
(e) 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 Representatives 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.
(f) 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 Option 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 Regulations, the Company will promptly notify the Representatives thereof
and, subject to Section 5(c) 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.
(g) The Company will, without charge, provide (i) to the Representatives
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), certified by the Company to be complete
copies thereof as filed with the Commission by electronic transmission, (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 Representatives may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company, not
later than (A) 6:00 PM, New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to 10:00 AM,
New York City time on such date or (B) 2:00 PM, New York City time, on the
business day following the date of determination of the public offering price,
if such determination occurred after 10:00 AM, New York City time, on such date,
will deliver to the Underwriters, without charge, as many copies of the
Prospectus and any amendment or supplement thereto as the Representatives may
reasonably request for purposes of confirming orders that are expected to settle
on the Firm Closing Date.
(h) The Company, as soon as practicable, will make generally available
to its security holders and to the Representatives a consolidated earnings
statement of the Company and its subsidiaries that satisfies the provisions of
Section 11(a) of the Act and Rule 158 thereunder.
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<PAGE> 12
(i) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(j) 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, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, offer of
sale, contract of sale, pledge, grant of any option to purchase or other sale or
disposition) of any shares of Common Stock or other capital stock of the
Company, or any securities convertible into, or exchangeable or exercisable for,
shares of Common Stock or other capital stock of the Company for a period of 90
days from the date of the Prospectus Supplement, except pursuant to this
Agreement and except for issuances of options and warrants to purchase shares of
Common Stock, and the exercise of existing options and warrants, under the
Company's 1986 Stock Option Plan, 1995 Stock Bonus Plan, 1996 Stock Option Plan
and Non-Employee Director Warrant Plan.
(k) 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.
(l) The Company will obtain the agreements described in Section 7(g)
hereof prior to the Firm Closing Date.
(m) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your reasonable opinion the market price of the Common
Stock has been or is likely to be materially affected, the Company will, after
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and issue a press release
or other public statement, written or oral, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
6. Expenses. 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 11 hereof, including all costs and expenses incident to: (i)
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,
the Prospectus and any amendment or supplement thereto, this Agreement and any
blue sky memoranda; (ii) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents; (iii) the fees and
disbursements of the counsel, accountants and any other experts or advisors
retained by the Company; (iv) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees; (v) the qualification of the Securities under
state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto; (vi) the filing
fees of the Commission (and the National Association of Securities Dealers,
Inc.) relating to the Securities; (vii) the listing of the
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<PAGE> 13
Securities on the New York Stock Exchange; (viii) meetings with prospective
investors in the Securities (other than shall have been specifically approved by
the Representatives to be paid for by the Underwriters); and (ix) advertising
relating to the offering of the Securities (other than shall have been
specifically approved by the Representatives to be paid for by the
Underwriters). 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 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 11 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 reasonable 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.
7. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm 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:
(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 or the
Prospectus or any amendment or supplement thereto 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 Representatives, 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 Rogers & Wells LLP, 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,
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<PAGE> 14
and the Company has corporate power to enter into this Agreement and to
carry out all the terms and provisions hereof 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) as of the dates shown the Company has an authorized
capitalization as set forth under the heading "Capitalization" in the
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; the issuance, offering and sale of the Firm Securities
pursuant to this Agreement have been duly authorized by all necessary
corporate action of the Company and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will be
validly issued, fully paid and nonassessable; such counsel has been
advised by the staff of the New York Stock Exchange that the Securities
have been approved for listing, subject to official notice of issuance,
on the New York Stock Exchange; to such counsel's knowledge, no holders
of outstanding shares of capital stock of the Company are entitled as
such to any preemptive or other rights to subscribe for any of the
Securities arising under the General Corporation Law of the State of
Delaware, the certificate of incorporation or by-laws of the Company or
any material agreement to which the Company is a party; and to such
counsel's knowledge no holders of securities of the Company are
entitled to have such securities registered under the Registration
Statement;
(vi) the statements set forth under the heading "Description
of Capital Stock" in the Prospectus, insofar as such statements purport
to summarize certain provisions of the capital stock of the Company,
provide in all material respects a fair summary of such provisions,
(vii) 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;
(viii) 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;
(ix) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained
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<PAGE> 15
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 is a party or by which the Company
or any of the 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;
(x) 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, to such counsel's best knowledge, are threatened or
contemplated by the Commission;
(xi) the Registration Statement originally filed with respect
to the Securities and Pre-Effective Amendment No. 1 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 Regulations; and
(xii) 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.
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.
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<PAGE> 16
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 Melvin C. Breaux, 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 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 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;
(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 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
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<PAGE> 17
would have a material adverse effect upon the property, business, or
operations of the Company and any of its subsidiaries; and
(iv) the statements set forth under the headings
"Business--Government Regulation" in the Prospectus, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, provide a fair summary of such legal
matters, documents and proceedings.
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 Commonwealth of Pennsylvania and
Delaware corporate law and that its 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 Representatives shall have received an opinion, dated the Firm
Closing Date, of Gibson, Dunn & Crutcher LLP, New York, New York, counsel for
the Underwriters, with respect to the issuance and sale of the Firm Securities,
the Registration Statement and the Prospectus, and such other related matters as
the Representatives 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.
(e) The Representatives shall have received from Deloitte & Touche LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, 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 examined 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 financial statements of the Company
and its consolidated subsidiaries as indicated in their reports
incorporated in the Registration Statement and the Prospectus and of the
unaudited financial statements of the Company and its consolidated
subsidiaries for the periods from which such amounts are derived,
carrying out certain
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<PAGE> 18
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 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 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,
the Exchange 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
March 31, 1998 unaudited consolidated balance sheet included in
the Registration Statement and the Prospectus, or for the period
from April 1, 1998 to such specified date there were any
decreases, as compared with the corresponding period in the
preceding fiscal year, in finance and other income, earnings
from continuing operations or total or per share amounts of net
income 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 or incorporated by reference in the Registration Statement and
the Prospectus, in Exhibit II to the Registration Statement or under
Item 2 of the Company's Quarterly Report on Form 10-Q and Items 1, 6 and
7 of the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1997 incorporated by reference in the Registration Statement
and the Prospectus, 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
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<PAGE> 19
the purchase and delivery of the Securities as contemplated by the
Registration Statement, as amended as of the date hereof.
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 Representatives shall have received a certificate, dated the
Firm Closing Date, of the principal executive officer and the principal
financial or 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 Firm Closing
Date; the Registration Statement, as amended as of the Firm 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
Firm 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 Firm Closing Date;
(ii) 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 or the Prospectus or any amendment or supplement
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 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 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.
(g) The Representatives shall have received from each person who is a
director or executive officer of the Company or who is purchasing shares of
Common Stock in the contemporaneous direct offering referred to in the
Prospectus an agreement to the effect that such person 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, pledge, grant any option to purchase or otherwise sell or
dispose (or announce any offer, sale, offer of sale, contract of sale, pledge,
grant of an option to purchase or other sale or disposition) of any shares of
Common Stock or any
19
<PAGE> 20
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date of this Agreement.
(h) On or before the Firm Closing Date, the Representatives and counsel
for the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
(i) Prior to the commencement of the offering of the Securities, the
Securities shall have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.
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 Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. 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 2 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
20
<PAGE> 21
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, 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 omission or alleged omission made in such 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; and provided, further,
that the Company will not be liable to any Underwriter or any person controlling
such Underwriter with respect to any such untrue statement or omission made in
any Preliminary Prospectus that is corrected in the Prospectus (or any amendment
or supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Securities from such Underwriter but was not sent or given a
copy of the Prospectus (as amended or supplemented), other than the documents
incorporated by reference therein, at or prior to the written confirmation of
the sale of such Securities to such person in any case where such delivery of
the Prospectus (as amended or supplemented) is required by the Act, unless such
failure to deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 5(a), (b) and (f) of this Agreement.
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 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 indemnity and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, it 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 or any such
director, officer or 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 of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or the 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
21
<PAGE> 22
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 8
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 8, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. 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 so 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 8 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 Representatives in the case of
paragraph (a) of this Section 8, representing the indemnified parties under such
paragraph (a) who are parties to such action or actions), (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 8 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
22
<PAGE> 23
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
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.
9. Default of Underwriters. If one or more Underwriters default in their
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is 10% or less of the aggregate
number of Firm Securities or Option Securities to be purchased by all of the
Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but
23
<PAGE> 24
failed to purchase. If one or more Underwriters so default with respect to an
aggregate number of Securities that is more than 10% of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives 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 Representatives) 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 10 hereof. In the event of any default by one or more Underwriters as
described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 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 Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. 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 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with respect to
the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, 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 Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of its subsidiaries shall have, in the
sole judgment of the Representatives, 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), which makes it impracticable or
inadvisable to proceed with the completion of the public offering of the
Securities;
(ii) trading in the Common Stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities
generally on
24
<PAGE> 25
the New York Stock Exchange shall have been suspended or minimum or
maximum prices shall have been established on such exchange.
(iii) a banking moratorium shall have been declared by New York
or United States federal 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 U. S. financial markets that, in the
sole judgment of the Representatives, 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 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. Information Supplied by Underwriters. The statements set forth in
the last paragraph on the front cover page and under the heading "Underwriting"
in any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b) and 8 hereof. The Underwriters represent that such statements (to
such extent) are correct.
13. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, One New York Plaza, New York, New York 10292, Attention: Equity
Transactions Group; 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
500 Hyde Park, Doylestown, Pennsylvania 18901, Attention: General Counsel, with
a copy to Rogers & Wells LLP, 200 Park Avenue, New York, New York 10166-0153,
Attention: John A. Healey (facsimile number 9212) 878-8375).
14. 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 8 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 8 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.
25
<PAGE> 26
15. 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.
16. 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.
[Remainder of page intentionally left blank.]
26
<PAGE> 27
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/ Steven R. Garfinkel
____________________________
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
PIPER JAFFRAY INC.
FOX-PITT, KELTON, INC.
By PRUDENTIAL SECURITIES INCORPORATED
By /s/ Jean-Claude Canfin
______________________________________
Jean-Claude Canfin
Managing Director
For itself and on behalf of the Representatives.
27
<PAGE> 28
SCHEDULE 1
UNDERWRITERS
<TABLE>
<CAPTION>
Number of
Underwriter Firm Securities
- ----------- ---------------
<S> <C>
Prudential Securities Incorporated ........................ 1,320,000
Piper Jaffray Inc. ........................................ 660,000
Fox-Pitt, Kelton Inc. ..................................... 220,000
---------
Total ................................................ 2,200,000
=========
</TABLE>
<PAGE> 29
SCHEDULE 2
SUBSIDIARIES
<TABLE>
<CAPTION>
<S> <C> <C>
JURISDICTION OF
NAME PARENT ORGANIZATION
DVI FINANCIAL SERVICES INC. DVI, INC. Delaware
DVI INTERNATIONAL, INC. DVI FINANCIAL SERVICES INC. Delaware
DVI LEASE FINANCE CORPORATION II DVI FINANCIAL SERVICES INC. Delaware
DVI LEASE FINANCE CORPORATION III DVI FINANCIAL SERVICES INC. Delaware
DVI LEASE RECEIVABLES CORP. 1993-A DVI FINANCIAL SERVICES INC. Delaware
DVI LEASE RECEIVABLES CORP. II DVI FINANCIAL SERVICES INC. Delaware
DVI LEASE RECEIVABLES CORP. III DVI FINANCIAL SERVICES INC. Delaware
DVI RECEIVABLES CORP. DVI FINANCIAL SERVICES INC. Delaware
DVI RECEIVABLES CORP. II DVI FINANCIAL SERVICES INC. Delaware
DVI RECEIVABLES CORP. III DVI FINANCIAL SERVICES INC. Delaware
DVI RECEIVABLES CORP. IV DVI FINANCIAL SERVICES INC. Delaware
DVI RECEIVABLES CORP. V DVI FINANCIAL SERVICES INC. Delaware
DVI RECEIVABLES CORP. V LLC DVI FINANCIAL SERVICES INC. Delaware
DVI SUBORDINATED SECURITIES CORP. DVI FINANCIAL SERVICES INC. Delaware
DVI MORTGAGING FUNDING, INC. DVI FINANCIAL SERVICES INC. Delaware
DVI HEALTHCARE FINANCIAL ADVISORS, INC. DVI FINANCIAL SERVICES INC. Delaware
DVI RECEIVABLES CORP. VI DVI FINANCIAL SERVICES INC. Delaware
DVI RECEIVABLES CORP. VI LLC DVI FINANCIAL SERVICES INC. Delaware
DVI SECURITIES, INC. DVI FINANCIAL SERVICES INC. Delaware
DVI BUSINESS CREDIT, INC. DVI, INC. Delaware
DVI BUSINESS CREDIT RECEIVABLES CORP. DVI BUSINESS CREDIT, INC. Delaware
DVI BUSINESS CREDIT RECEIVABLES CORP. II DVI BUSINESS CREDIT, INC. Delaware
DVI BUSINESS CREDIT RECEIVABLES CORP. III DVI BUSINESS CREIDT, INC. Delaware
MEDICAL EQUIPMENT CREDIT PTE. LTD. DVI INTERNATIONAL, INC. Singapore
MSF HOLDING LTD. DVI INTERNATIONAL, INC. Bahamas
DVI MALAYSIA, INC. DVI INTERNATIONAL, INC. Malaysia
DVI (THIALAND) LTD. DVI INTERNATIONAL, INC. Thailand
DVI FINANCIAL SERVICES - AUSTRALIA, LTD. DVI INTERNATIONAL, INC. Australia
OFERIL SOCIEDAS ANONIMA DVI INTERNATIONAL, INC. Uruguay
</TABLE>
2
<PAGE> 1
EXHIBIT 99.1
DVI, INC.
340,000 Shares
Common Stock
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 21st day of May, 1998, by
and between DVI, Inc., a Delaware corporation (the "Company"), and the
investors listed on SCHEDULE 1 hereto the ("Investors"), each of which is
herein referred to as an "Investor."
1. SECURITIES. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the Investors an aggregate of 340,000
shares (the "Securities") of the Company's Common Stock, par value $0.005 per
share ("Common Stock").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each of the several Investors
that:
(a) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (the "Act"). A registration statement
on such form (File No. 333-50895) with respect to the Securities, including a
prospectus, and pre-effective Amendment No. 1 to the registration statement
have been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Act, and one or more amendments to such registration
statement may have been so filed. Such registration statement has been
declared effective by the Commission. As provided in Section 5(a), a
prospectus supplement reflecting the terms of the Securities, the terms of the
offering thereof 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" refers to each basic
prospectus or prospectus supplement which is subject to completion. 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"), 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 and
<PAGE> 2
the 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 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 Investor, directly or through you, expressly for use in the
Registration Statement or the Prospectus. The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus.
(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., DVI Business Credit Corporation (collectively,
the "Principal Operating Subsidiaries") and MSF Holding Ltd. 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, except as set forth on SCHEDULE 2, are, directly or
indirectly, owned of record and beneficially by the 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
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<PAGE> 3
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. The Securities have been duly
authorized by the Company for issuance and sale pursuant to this Agreement and
at the Closing Date (as such term is hereinafter defined), after payment
therefor in accordance herewith, will be validly issued, fully paid and
nonassessable and will not be issued in violation of any preemptive or other
similar rights of any security holder of the Company.
(g) The capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus.
(h) Except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) or incorporated
therein by reference, there are no outstanding (A) securities or obligations of
the Company or any of its subsidiaries convertible into or exchangeable for any
capital stock of the Company or any such subsidiary, (B) warrants, rights or
options to subscribe for or purchase from the Company or any such subsidiary
any such capital stock or any such convertible or exchangeable securities or
obligations or (C) obligations of the Company or any such subsidiary to issue
any shares of capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(i) 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. No other financial statements or schedules of the Company and its
subsidiaries are required to be filed by the Company and its subsidiaries
pursuant to the Act or the Exchange Act. 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 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.
(j) 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 Regulations.
(k) 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.
(l) 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, and, to the knowledge of the
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<PAGE> 4
Company, no such proceedings have been threatened against the Company or any of
its subsidiaries or with respect to any of their respective properties 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 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.
(m) The issuance, offering and sale of the Securities to the
Investors by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (i) require the consent,
approval, authorization, filing of or with or notice to, registration or
qualification of or with any governmental authority, except such as have been
obtained or 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 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.
(n) 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),
business prospects, net worth or results of operations of the Company or any of
its subsidiaries, except in each case as contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(o) 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.
(p) 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.
(q) The Securities have been approved for listing on the New York
Stock Exchange, Inc. (the "NYSE"), subject to official notice of issuance.
(r) 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
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<PAGE> 5
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 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).
(s) 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.
(t) No labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the knowledge of the Company, 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 the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(u) 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 the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(v) 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 has 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 the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
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<PAGE> 6
(w) No subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(x) 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 the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(y) 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.
(z) 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 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 the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(aa) 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 are in compliance with all terms and conditions of any such
permit, license or approval, except any such violation of law or regulation,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
which would not, 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 the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(bb) Except for the shares of capital stock of the subsidiaries and
Aegis Therapies LLC owned by either the Company or another subsidiary and the
equity interests held by the Company or a subsidiary in the entities set forth
on SCHEDULE 3 hereto, 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 the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
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(cc) 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.
(dd) 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 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 could reasonably be expected to be materially adverse with
regard to the property, business or operations of the Company and its
subsidiaries.
(ee) 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.
(ff) The Company has not engaged any broker, sales agent or
underwriter and will not pay any brokers, sales or underwriting fees or
commissions to any person with respect to the offer and sale of the Securities.
3. 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 Investors, and each of the Investors,
severally and not jointly, agrees to purchase from the Company, at a purchase
price of $20.2575 per share, the number of Securities set forth opposite the
name of such Investor in Schedule 1 hereto. One or more certificates in
definitive form for the Securities that the Investors have agreed to purchase
hereunder, and in such denomination or denominations and registered in such
name or names as the Investors 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 Investors, against payment by or on behalf of the Investors of
the purchase price therefor by wire transfer in same-day funds (the "Wired
Funds") to the account of the Company. Such delivery of and payment for the
Securities shall be made at the offices of Gibson, Dunn & Crutcher LLP, 200
Park Avenue, New York, New York 10016 at 9:30 A.M., New York time, on May 28,
1998, or at such other place, time or date as the Investors and the Company may
agree upon or as the Investors may determine pursuant to Section 9 hereof, such
time and date of delivery against payment being herein referred to as the
"Closing Date."
(b) The Company hereby acknowledges that the wire transfer by or on
behalf of the Investors of the purchase price for any Securities does not
constitute closing of a purchase and sale of the Securities. Only execution
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<PAGE> 8
and delivery of a receipt for Securities by the Investors in the form attached
hereto indicates completion of the closing of a purchase of the Securities from
the Company. Furthermore, in the event that the Investors wire funds to the
Company prior to the completion of the closing of a purchase of Securities, the
Company hereby acknowledges that until the Investors execute and deliver a
receipt for the Securities, by facsimile or otherwise, the Company will not be
entitled to the Wired Funds.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each Investor
hereby severally represents and warrants to the Company that:
(a) This Agreement, when executed and delivered by each Investor,
will constitute the Investor's valid and legally binding obligation,
enforceable in accordance with its terms.
(b) This Agreement is made with each Investor in reliance upon the
Investor's representation to the Company, which by the Investor's execution of
this Agreement the Investor hereby confirms, that the Securities to be received
by the Investor will be acquired for investment for the Investor's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that the Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. By
executing this Agreement, the Investor further represents that the Investor
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the Securities. The Investor represents that it
has the full power and authority to enter into this Agreement.
(c) The Investor represents that it is familiar with Rule 144 as
promulgated under the Act, as presently in effect, and understands the resale
limitations that may be imposed thereby as a result of the Investors'
"affiliate" status (as defined in Rule 144).
(d) No consent, approval or authorization of or designation,
declaration or filing with any state, federal or foreign governmental authority
on the part of the Investor is required in connection with the valid execution
and delivery of this Agreement by the Investor and the consummation by the
Investor of the transactions contemplated hereby and thereby other than
securities law filings required to be made by the Company.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees
with each of the Investors 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 number of shares of Common Stock
constituting the Securities, the name of each Investor participating in the
offering and the number of shares of Common Stock that each has agreed to
purchase, the price at which the Securities are to be purchased by the
Investors from the Company and such other information as the Investors 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 Investors as many copies of any preliminary Prospectus Supplement and the
Prospectus as the Investors shall reasonably request.
(b) The Company will advise the Investors, promptly after receiving
notice or obtaining knowledge thereof, of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or any order directed at any document
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<PAGE> 9
incorporated by reference in the Registration Statement or the Prospectus or
any amendment or supplement thereto or any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, (ii) the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, (iii) the institution, threatening or
contemplation of any proceeding for any such purpose or (iv) any request made
by the Commission for amending the Registration Statement, for amending or
supplementing any Preliminary Prospectus or the Prospectus or for additional
information. The Company will use its best efforts to prevent the issuance of
any such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
(c) If, at any time prior to the final date when a prospectus
relating to the Securities is required to be delivered under the Act any event
occurs as a result of which the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or 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 Regulations, the Company will
promptly notify the Investors thereof and will prepare and file with the
Commission, at the Company's expense, an amendment to the Registration
Statement or an amendment or supplement to the Prospectus that corrects such
statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Investors and
to their counsel a signed copy of the registration statement originally filed
with respect to the Securities and each amendment thereto and complete copies
thereof as filed with the Commission by electronic transmission.
(e) The Company, as soon as practicable, will make generally
available to its security holders and to the Investors a consolidated earnings
statement of the Company and its subsidiaries that satisfies the provisions of
Section 11(a) of the Act and Rule 158 thereunder.
(f) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
6. EXPENSES. 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 10 hereof, including all costs and expenses
incident to: (i) 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, the Prospectus and any amendment or supplement thereto,
this Agreement and any blue sky memoranda; (ii) all arrangements relating to
the delivery to the Investors of copies of the foregoing documents; (iii) the
reasonable fees and disbursements of the counsel, accountants and any other
experts or advisors retained by the Company; (iv) preparation, issuance and
delivery to the Investors of any certificates evidencing the Securities,
including transfer agent's and registrar's fees; (v) the qualification of the
Securities under state securities and blue sky laws, including filing fees and
fees and disbursements of counsel for the Investors relating thereto; (vi) the
filing fees of the Commission relating to the Securities; and (vii) the listing
of the Securities on the NYSE. If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Investors set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 10 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 Investors, the
Company will reimburse the Investors severally upon demand for all out-of-
pocket expenses (including reasonable fees and disbursements of counsel) that
shall have been incurred by them in connection with the proposed purchase and
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<PAGE> 10
sale of the Securities. The Company shall not in any event be liable to any of
the Investors for the loss of anticipated profits from the transactions covered
by this Agreement.
7. CONDITIONS OF THE INVESTORS' OBLIGATIONS. The obligations of
the several Investors to purchase and pay for the Securities shall be subject,
in the Investors' 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:
(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 or the
Prospectus or any amendment or supplement thereto 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 Investors, 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 Investors shall have received an opinion, dated the Closing
Date, of Rogers & Wells LLP, 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 to carry out all the terms and
provisions hereof 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) as of the dates shown the Company has an authorized
capitalization as set forth under the heading "Capitalization" in the
Prospectus; all of the issued shares of capital stock of the Company have
been duly authorized and validly issued and outstanding and are fully paid
and nonassessable; the issuance, offering and sale of the Securities
pursuant to this Agreement have been duly authorized by all necessary
corporate action of the Company and, when issued and delivered to and paid
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for by the Investors pursuant to this Agreement, will be validly issued,
fully paid and nonassessable; such counsel has been advised by the staff
of the NYSE that the Securities are approved for listing, subject to
official notice of issuance, on the NYSE; to such counsel's knowledge, no
holders of outstanding shares of capital stock of the Company are entitled
as such to any preemptive or other rights to subscribe for any of the
Securities; and to such counsel's knowledge no holders of securities of
the Company are entitled to have such securities registered under the
Registration Statement;
(vi) the statements set forth under the heading
"Description of Capital Stock" in the Prospectus, insofar as such
statements purport to summarize certain provisions of the capital stock of
the Company, provide in all material respects, a fair summary of such
provisions;
(vii) 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 and is
enforceable against the Company in accordance with its terms; provided
that such counsel will render no opinion regarding the enforceability of
the indemnification provisions contained in this Agreement;
(viii) 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;
(ix) the issuance, offering and sale of the Securities to
the Investors by the Company pursuant to this Agreement, the compliance by
the Company with other provisions of this Agreement and the consummation
of the other transactions herein contemplated do not (A) require the
consent, approval, authorization, filing, registration or qualification of
or with or notice to 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 EXHIBIT A hereto and to which the Company
or any of its subsidiaries is a party or by which the Company or any of
the 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;
(x) 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
are to such counsel's best knowledge threatened or contemplated by the
Commission;
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<PAGE> 12
(xi) 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 Regulations; and
(xii) 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.
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 the Delaware
General Corporation Law and that its references in its opinions to governmental
authorities are to federal and New York authorities only. 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 Investors shall have received an opinion, dated the Closing
Date, of Melvin C. Breaux, General Counsel of the Company and of DVI Financial
Services Inc., to the effect that:
(i) (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 to such counsel's best knowledge no
11
<PAGE> 13
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 Investors by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement 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;
(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; and
(iv) the statements set forth under the heading
"Business--Government Regulation" in the Prospectus, insofar as such
statements constitute a summary of legal matters, documents or proceedings
referred to therein, provide a fair summary of such legal matters,
documents and proceedings.
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 following consultation with the executive
officers of the Company 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 Commonwealth of Pennsylvania and
Delaware General Corporation Law and that its 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 Investors shall have received a certificate, dated the
Closing Date, of the principal executive officer and the principal financial or
accounting officer of the Company to the effect that:
13
<PAGE> 14
(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 post-effective amendment thereto 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 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 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.
(e) On or before the Closing Date, the Investors and their counsel
shall have received such further certificates, documents or other information
as they may have reasonably requested from the Company.
(f) Prior to the commencement of the offering of the Securities,
the Securities shall have been approved for listing on the NYSE, subject to
official notice of issuance.
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 Investors and their
counsel. The Company shall furnish to the Investors such conformed copies of
such opinions, certificates, letters and documents in such quantities as the
Investors and their counsel shall reasonably request.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Investor
and each person, if any, who controls any Investor 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 Investor 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 2 of this Agreement;
14
<PAGE> 15
(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"); or
(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.
and will reimburse, as incurred, each Investor and each such controlling person
for any legal or other expenses reasonably incurred by such Investor 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 omission or alleged omission made in such 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 Investor
specifically for use therein. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each Investor, 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 or any such director, officer or 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 of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application or (ii) the omission or the 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 Investor
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 Investor
may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 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 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
15
<PAGE> 16
under this Section 8. 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 so 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 8 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 Investors in the case of paragraph (a) of this Section 8,
representing the indemnified parties under such paragraph (a) who are parties
to such action or actions), (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 8 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
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 Investors 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 purchase price paid by the Investors. 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 Investors, 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 Investors 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 Investors 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 Investor shall be
16
<PAGE> 17
obligated to make contributions hereunder that in the aggregate exceed the
total purchase price of the Securities purchased by such Investor under this
Agreement, less the aggregate amount of any damages that such Investor 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. For purposes
of this paragraph (d), each person, if any, who controls an Investor 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 Investor, 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.
9. SURVIVAL. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the several Investors 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 or any Investor and (ii) delivery
of and payment for the Securities. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
10. TERMINATION.
(a) This Agreement may be terminated with respect to the
Securities:
(i) in the sole discretion of the Investors by notice to the
Company given prior to the Closing Date in the event that the Company
shall be in material breach of the representations or warranties made by
the Company herein or 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
(ii) in the sole discretion of the Investors or the Company in
the event that the closing contemplated under the Underwriting Agreement
dated as of the date hereof among the Company and Prudential Securities
Incorporated, Piper Jaffray Inc. and Fox-Pitt Kelton, Inc. shall not
occur.
(b) Termination of this Agreement pursuant to this Section 10 shall
be without liability of any party to any other party except as provided in
Section 9 hereof.
11. NOTICES. All communications hereunder shall be in writing
and, if sent to any of the Investors, shall be delivered or sent by mail, telex
or facsimile transmission and confirmed in writing to CIBC Trust Company
(Bahamas) Limited, 2nd Floor, CIBC Building, Shirley Street, Nassau, Bahamas,
Attention: Mrs. Carlis E. Chisolm, Trust Manager with a copy to Michael A.
Pucker, Esq., Neal, Gerber & Eisenberg, Two North LaSalle Street, Chicago,
Illinois 60602; 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 500
Hyde Park, Doylestown, Pennsylvania 18901, Attention: General Counsel with a
copy to John A. Healy, Esq., Rogers & Wells LLP, 200 Park Avenue, New York, New
York 10166.
12. SUCCESSORS. This Agreement shall inure to the benefit of and
shall be binding upon the several Investors, 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
17
<PAGE> 18
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 8 of this
Agreement shall also be for the benefit of any person or persons who control
any Investor within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Investors contained in Section 8
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 Investor shall be deemed a successor because of such purchase.
13. 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.
14. 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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<PAGE> 19
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this shall constitute an agreement binding the Company and each of
the several Investors.
DVI, INC.
By: /s/ Steven R. Garfinkel
___________________________________________
Name: Steven R. Garfinkel
Title: Executive Vice President
and Chief Financial Officer
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
/s/ Linda Williams and /s/ Carlis Chisholm
_____________________________________________
CIBC Trust Company (Bahamas) Limited,
as Trustee of Settlement Trusts T-551 ##1,
2, 3, 4, 5, 6, 7, 10, 11 and 12
<PAGE> 20
SCHEDULE 1
INVESTORS
<TABLE>
<CAPTION>
INVESTOR NUMBER OF SECURITIES
<S> <C>
Settlement Trust T-551 # 1 34,000
Settlement Trust T-551 # 2 34,000
Settlement Trust T-551 # 3 34,000
Settlement Trust T-551 # 4 34,000
Settlement Trust T-551 # 5 34,000
Settlement Trust T-551 # 6 34,000
Settlement Trust T-551 # 7 34,000
Settlement Trust T-551 # 10 34,000
Settlement Trust T-551 # 11 34,000
Settlement Trust T-551 # 12 34,000
------
TOTAL 340,000
</TABLE>
<PAGE> 21
SCHEDULE 2
SUBSIDIARIES
NAME JURISDICTION OF INCORPORATION
<PAGE> 22
SCHEDULE 3
EQUITY INTERESTS
COMPANY NAME OWNERSHIP INTEREST
Physicians Health Corp. Options to purchase 50,000
shares of common stock
Central Imaging Services ("CIS") 4% of CIS's common stock
Computer Products and Services 273,778 shares of common stock
Consolidated Technologies, Inc. Warrants to purchase 1,000,000
shares of common stock
Healthsmart Pacific, Inc. ("HPI") 100% of the issued and
outstanding Series A Preferred
Stock, convertible into a 10%
ownership interest in HPI
MAC Health Group Inc. 100 shares of Common Stock
MedShares Warrants to purchase 10% of
common stock
Medical Resources Warrants to purchase 100,000
shares of common stock
Nuclear Imaging, Inc. ("NII") Right to 20% of the equity of
NII upon sale of NII
OpenSied Ventures, LLC Warrants to purchase up to 9%
of the member interests
Presgar Imaging of Singapore, LLC 18% member interest
