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EQUIPMENT LEASING CORPORATION OF AMERICA
$50,000,000
DEMAND AND FIXED RATE CERTIFICATES
April xx, 1996
Welco Securities, Inc.
Suite 105
One Belmont Avenue
Bala Cynwyd, PA 19004
Dear Sirs:
Equipment Leasing Corporation of America., a Delaware Corporation (the
"Company") hereby confirms its agreement with you (hereinafter called the
"Underwriter") as follows:
1. DESCRIPTION OF SECURITIES. The Company proposes to issue and sell to
the public up to $50,000,000 in principal amount of Demand and Fixed Rate
Certificates (the "Certificates"), which are referred to herein as the
"Securities." The offering which will be on a continuous basis until
termination will be on a "best efforts" basis for the Securities through the
Underwriter as agent for the Company pursuant to the Securities Act of 1933, as
amended (the "1933 Act") and in accordance with the terms and subject to the
conditions as hereinafter set forth.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to, and agrees with, the Underwriter that:
(a) A registration statement (File No. 333-xxxxx) on Form S-2,
including a preliminary form of prospectus, relating to the offering of the
Securities has been carefully and accurately prepared by the Company in
conformity with the requirements of the 1933 Act and the rules and regulations
("Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") promulgated pursuant to the 1933 Act and said registration
statement has been filed with the Commission under the 1933 Act and one or more
amendments to said registration statement, as the case may be, may be similarly
prepared and filed with the Commission. As used in this Agreement and unless
the context indicates otherwise, the term "Registration Statement" refers to
and means said registration statement, including any exhibit, financial
statement, schedule and prospectus included therein, as finally amended and
revised on or prior to the effective date (the "Effective Date") of said
registration statement. The term "Preliminary Prospectus" refers to and means
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and prospectus filed with the Commission and included in said registration
statement before it becomes effective, and the term "Prospectus" refers to and
means the prospectus included in the Registration Statement at the time it
becomes effective, except that if the prospectus first filed by the Company
pursuant to Rule 424(b) of the Rules and Regulations shall differ from the
Prospectus, the term "Prospectus" shall refer to the prospectus filed pursuant
to Rule 424(b). If the Registration Statement or the Prospectus is amended or
supplemented after the Effective Date and prior to or on the Effective Date (as
defined below), then the terms "Registration Statement" and "Prospectus" shall
refer to such documents as so amended or supplemented.
(b) The Commission has not issued any order preventing or suspending
the use of any preliminary Prospectus and, to the knowledge of the Company, has
not instituted and does not presently plan to institute any proceedings with
respect to such an order: and on the Effective Date and at all times subsequent
thereto, (i) the Registration Statement and the Prospectus will contain all
statements and information which are required to be stated therein by the 1933
Act, the Rules and Regulations or any orders of the Commission under the 1933
Act and will conform in all material respects to the requirements of the 1933
Act, the Rules and Regulations and said orders and (ii) neither the
Registration Statement nor the Prospectus will include any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make statements therein not misleading; provided,
however, that the foregoing representations and warranties in this Subsection
(b) will not apply to statements or omissions made in, or omitted form, the
Registration Statement or the Prospectus or any amendment or supplement thereto
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Underwriter specifically for use therein.
(c) The Company has been duly incorporated and is now, and at the
Effective Date will be validly existing and in good standing as a corporation
under the laws of the jurisdiction in which it is incorporated, and has full
power and authority to own its properties and conduct its business as presently
conducted and as described in, or contemplated by, the Registration Statement.
The Company and its subsidiaries are duly qualified and in good standing in all
jurisdictions in which the nature of the business transacted by it or the
character or location of its properties make such qualification necessary. To
the best knowledge of the Company and except as set forth in the Registration
Statement, it holds all licenses, certificates and permits from the state,
federal or other regulatory authorities necessary for the conduct of its
business and is in compliance with all laws and regulation and all orders and
decrees applicable to it or its business or assets. The Company does not own
any interest in any other corporation, partnership, joint venture or other
entity, other than is fully disclosed in the Registration Statement.
The Company has an authorized capitalization of 1,000 shares of common
stock ($1.00 par value) and 50,000 shares of preferred stock. At the time the
Registration Statement becomes effective, 1,000 shares of common stock, will be
issued and outstanding. On the effective Date of the Registration Statement
and during the offering, there will be no other outstanding options, warrants
or other rights to purchase securities of the company except as disclosed in
the Registration Statement or contemplated thereby.
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(d) The financial statements and schedules included in the
Registration Statement fairly present the financial position and operations
covered thereby at the respective dates and for the respective periods to which
they apply. Such financial statements and schedules have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved.
(e) The accountants who certified the financial statements and
schedules filed with the Commission as part of the Registration Statement, are
independent public accountants as required by the 1933 Act and the Rules and
Regulations.
(f) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus and prior to the Effective
Date, except as disclosed in or contemplated by the Registration Statement and
Prospectus (i) the Company has not incurred or shall not have incurred any
material liabilities or obligations, direct or contingent, or entered into any
material transactions other than in the ordinary course of business; (ii) there
has not been and shall not have been any change in the Common Stock, funded
debt (other than regular borrowings and repayments of principal on
indebtedness) or other securities of the Company, any materially adverse
changes in the condition (financial or other), business, operations, income,
properties or business prospects of the Company, including any loss or damage
to the properties of the company (whether or not such material loss is insured
against), or any default in the performance of any obligation as the Company in
any contract: and (iii) the Company has not and shall not have paid or declared
any dividend or other distribution on its Common Stock and has not increased
the stated rate of dividends on its outstanding Preferred Shares.
(g) This Agreement has been duly and validly authorized executed and
delivered by the Company and, when duly executed and delivered by the Company,
will constitute a valid and binding agreement, enforceable in accordance with
its terms, except as enforceability of any indemnification provision may be
limited under federal securities laws except as enforceability of such
agreements may be limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws relating to or affecting generally the enforcement of
creditors' rights. The Company is not presently in violation of or in default
under, and the execution, delivery and performance of this Agreement and the
consummation of the transactions herein and therein contemplated will not
result in the creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of the company pursuant to, or in conflict with,
result in a breach of or constitute a default under, any of the terms,
conditions or provisions of (i) the articles of incorporation, as amended, or
the by-laws of the Company, (ii) any note, loan agreement, indenture, mortgage,
deed of trust, or other agreement or instrument of which the Company is a party
or by which the Company or any of its properties are bound or subject, or (iii)
to the best knowledge of the Company any existing law, order, rule, regulation,
writ, injunction or decree of any government, government instrumentality,
agency, body or court having jurisdiction over the Company or any of its
properties, The consent, approval, authorization, order of any government or
governmental instrumentality, agency, body or court is not required for the
consummation of the transactions herein contemplated, except such as may be
required under the 1933 Act or under the Blue Sky or securities laws of any
state.
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(h) Except as set forth in the Prospectus, there is neither pending
nor, to the knowledge of the Company, threatened, any action, suit, or
proceeding at law or in equity or any arbitration to which the Company or any
officer, director or principal stockholder thereof is party before or by any
court, arbitration tribunal or governmental instrumentality, agency, or body
which might result in any materially adverse change in the condition (financial
or other), business, operations, income, properties or business prospects of
the Company, or which might materially affect its properties or assets, or
prevent consummation of the transactions contemplated hereby.
(i) There is no contract or other document which is required to be
filed as an exhibit to the Registration Statement by the 1933 Act or by the
Rules and Regulations which has not been so filed, and subsequent to the
respective dates as of which information is given in the Registration
Statement, each contract to which the Company is party and which is filed as an
exhibit to, or incorporated by reference in the Registration Statement is and
shall be in full force and effect at the Effective Date or shall have been
terminated in accordance with its terms or as set forth in the Registration
Statement and Prospectus, and no party to any such contract shall have given
notice of the cancellation of or, to the knowledge of the Company, shall have
threatened to cancel, any such contract and the Company shall not be in
material default thereunder.
(j) Except as set forth in the Registration Statement, the Company
has good and marketable title in fee simple to all its property and assets,
including any licenses, described in the Registration Statement as owned by it
free and clear of all liens, charges, encumbrances and restrictions other than
such as are not materially significant in relation to the business of the
Company; all of the leases and subleases material to the business of the
Company under which the Company holds or uses any real or personal property,
including those described or referred to in the Prospectus, are in full force
and effect, and the Company is not in default in respect of any of the terms or
provisions of any such leases or subleases, and no claim of any sort has been
asserted by anyone adverse to the Company's rights under any such leases or
subleases or affecting or questioning the Company's rights to the continued
possession of the leased or subleased property covered by such lease or
sublease.
(k) The Company has filed all necessary federal, state, local and
foreign income and franchise tax returns and has paid or accrued all taxes and
fees shown therein as due; the Company has no knowledge of any tax deficiency
which might be asserted against the Company which could materially and
adversely affect its business or properties:
(l) The Company or its agent maintains insurance, which is in full
force and effect, of the types and in the amounts adequate for its business and
in line with insurance maintained by similar companies and businesses,
including but not limited to, insurance covering personal injury and property
damage liability, workmen's compensation, employer liability and insurance
covering all personal property owned, leased by or in the care of the Company
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against.
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(m) The Company knows of no outstanding claims for services either in
the nature of a finder's fee, brokerage fee or otherwise with respect to this
underwriting for which the Company or the Underwriter may be responsible.
(n) The Company has not taken, and will not take, directly or
indirectly, any action designed to constitute or which has constituted or which
might reasonably be expected to cause or result in the stabilization of the
price of the Securities or a violation of Rule 10b-6 of the rules and
regulations promulgated pursuant to the Securities and Exchange Act of 1934, as
amended (the "1934 Act") or in a manipulation of the price of any security
issued by the Company.
(o) The Company will use its best efforts to appoint and continue to
retain as transfer agent Financial Data, Inc., Bala Cynwyd, Pennsylvania (the
"Transfer Agent"), as long as the services by the Transfer Agent are performed
satisfactorily and any Securities are outstanding, and will make arrangements
to have available, at the office of such Transfer Agent, certificates
representing the Securities in such quantities as may form time to time be
necessary.
(p) As of the date the Registration Statement becomes effective (i)
the Indenture and all supplements thereto will have been validly authorized,
executed and delivered by the Company and will constitute the legally binding
obligation of the Company, (ii) the Certificates will have been validly
authorized and, upon payment therefore as provided in this Agreement, will be
validly issued and outstanding, and will constitute legally binding obligations
of the Company, except in the event of bankruptcy, etc., entitled to the
benefits of the Indenture, and (iii) the Certificate and the Indenture will
conform to the descriptions thereof contained in the prospectus.
3. ISSUE, SALE AND DELIVERY OF THE SECURITIES.
(a) The Company hereby appoints the Underwriter as its agent in the
public offering of up to $50,000,000 in principal amount of Demand and Fixed
Rate Certificates to be offered on a "best-efforts" basis, subsequent to the
effective date of the Prospectus on a continuous basis until terminated in
accordance with this agreement. The Underwriter on the basis of the
representations and warranties herein contained and subject to the terms and
conditions therein set forth, accepts such appointment and agrees to use its
best efforts to find purchasers for the Securities referred to above. The
minimum denomination in which the underwriter shall sell the Certificate, or
such other minimum denomination as determined by the Company from time to time.
It is understood between the parties hereto that there is no firm commitment by
the Underwriter to purchase any or all of the Securities and the Underwriter
agrees that it will exert its best efforts to sell the Securities as covered by
the Registration Statement on Form S-2 under the Act. In addition, the
foregoing obligation of the Underwriter is subject to receipt of written advice
from the Commission that subject to qualification under applicable state laws
and the absence of any prohibitory action by any governmental body, agency or
official, and subject to the terms and conditions contained in this Agreement
and in the Prospectus covering the offering to which this Agreement relates.
(b) Delivery of and payment for the Securities.
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(1) All funds received by the Underwriter from the public for the
purchase of Certificates sold shall be made in a form payable to the Company
and shall be promptly forwarded in kind to the Company, along with an
Application for Purchase signed by the purchaser signifying that the purchaser
has received a copy of the Prospectus. The Company, promptly upon receipt of
the funds, will cause the Certificates to be issued, authenticated and mailed
to each purchaser and will maintain sufficient records of such mailing.
(2) In consideration of the services to be rendered by the
Underwriter, the Company hereby agrees to reimburse the Underwriter for all
out-of-pocket expenses incurred by the Underwriter in connection with the
offering of Securities as provided for hereunder, provided that the Underwriter
submits written evidence of any expense for which reimbursement is sought.
(3) The Underwriter shall be entitled to a commission on all
sales of Certificates sold equal to 1/15 of 1% per month for each month of all
Fixed Term Certificates issued. Therefore commissions shall range from .4% for
a 6-month certificate sold (being 1/15 of 1% multiplied by 6) to 8.0% for a
120-month certificate (being 1/15 of 1% multiplied by 120).
(4) Only sales made by properly licensed registered securities
agents employed by the Underwriter or by Selected Dealers of the Underwriter
shall be entitled to the commission and concession. It is also agreed, that
commission on certificates shall be paid for certificates issued for cash, and
for any renewal, rollover, or conversion of any outstanding Certificate. No
commissions shall be paid on account of any certificate payable on demand (i.e.
Demand Money Market Thrift Certificate) sold by the Underwriter. The
Underwriter has assumed full responsibility for thorough and prior training of
its representatives concerning the selling methods to be used in connection
with the offer and sale of the Company's Securities, giving special emphasis to
the principles of full and fair disclosure to prospective investors, the
prohibitions against "Free-Riding" and "Withholding", and suitability standards
prescribed by applicable securities law.
4. OFFERING OF THE SECURITIES ON BEHALF OF THE COMPANY.
(a) In offering the Securities for sale, the Underwriter shall offer
them solely as agent for the Company, and such offer shall be made upon the
terms and subject to the conditions set forth in the Registration Statement and
Prospectus. The Underwriter shall commence making offers and sales as agent
for the Company as soon after the Effective Date as they may deem advisable.
(b) The Underwriter shall have the right to associate with other
underwriters or dealers who are members of the National Association of
Securities Dealers, Inc. ("NASD") as it may determine. The Underwriter shall
have the right to grant to such persons a concession, to be reimbursed by the
Company, as the Underwriter with the consent of the Company may determine, but
not to exceed the amount stated on the front cover of the Prospectus, under and
pursuant to a Selected Dealer Agreement in the form filed as and exhibit to the
registration statement. No commission shall be paid on account of the sale of
any Demand and Fixed Rate Certificate.
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5. AGREEMENTS OF THE COMPANY. The Company covenants and agrees with the
Underwriter that:
(a) The Company will use its best efforts to (i) cause the
Registration Statement to become effective as promptly as possible (ii) notify
the Underwriter of the effectiveness of the Registration Statement, the receipt
of any comments of the Commission, and the time when the Registration Statement
or any post-effective amendment thereto has become effective or any supplement
to the Prospectus has been filed, (iii) notify the Underwriter promptly of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or any order preventing or suspending the use of any
proceedings for any of such purposes of which it has knowledge and (iv) use its
best efforts to prevent the issuance of any stop order and if issued, to obtain
as promptly as possible the lifting thereof. The Company will advise the
Underwriter promptly of any request of the Commission for an amendment or
supplement to the Registration Statement or the Prospectus or for any
additional information, and will not at any time, whether before or after the
Effective Date, file any amendment or supplement to the Registration Statement,
(i) which shall not have been previously submitted to the Underwriter a
reasonable time prior to the filing thereof, (ii) to which the Underwriter
shall have objected in writing, or (iii) which is not in compliance with the
1933 Act or the Rules and Regulations.
(b) Within the time during which the Prospectus is required to be
delivered under the 1933 Act, or pursuant to the undertakings of the Company in
the Registration Statement, the Company will comply, at its own expense, with
all requirements imposed upon it by the 1933 Act, the Rules and Regulations,
the 1934 Act, the rules and regulation of the Commission promulgated under the
1934 Act, each as now in effect or hereafter amended or supplemented, and by
any order of the Commission so far as necessary to permit the continuance of
sales of, or dealings in, the Securities, if then issuable. During such period
the Company, at its own expense, shall amend or supplement the Prospectus in
order to make such Prospectus not misleading in light of the circumstances
existing at the time it is delivered to a purchaser or seller.
(c) The Company will deliver to the Underwriter, without charge, (i)
prior to the Effective Date, copies of those Preliminary Prospectus which will
be distributed in accordance with Rule 460 and any which were filed with the
Commission bearing in red ink the statement required by Item 501 (c) (8) of
Regulation S-K of the Rules and Regulations, (ii) on and form time to time
after the Effective Date, copies of the Prospectus and (iii) as soon as they
are available, and from time to time thereafter, copies of each amended or
supplemented prospectus prepared for the purpose of permitting compliance with
Subsections (b) and (c) of this Section 5, and the number of copies to be
delivered in each such case will be such as the Underwriter may reasonably
request. The Company has consented and hereby consents to the use of each
Preliminary Prospectus for the purposes permitted by the 1933 Act and the Rules
and Regulation. The company authorizes the Underwriter and participating
dealers to use the Prospectus in connection with the sale of the Securities for
such period as the Prospectus is required to comply with the applicable
provisions of the 1933 Act and the Rules and Regulations.
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(d) The Company will take such action as may be necessary to qualify
the offer and sale of the Securities under the Blue Sky or securities law of
such states or other jurisdictions as is required and as the Underwriter may
reasonably designate and to continue such qualifications in effect so long as
may be required for the purposes of the distribution of the Securities;
provided, however, that the Company will not be obligated to file any general
consent to service of process or qualify as a foreign corporation under the
laws of any such state or jurisdiction in connection with its obligations under
this Subsection (d). In each state or jurisdiction where the Company shall
qualify the Securities, as above provided, the company will prepare and file
such statements or reports as may be required by the laws of such state or
jurisdiction.
(e) The Company will apply the net proceeds it realizes from the sale
of the Securities in substantially the manner set forth under the caption "Use
of Proceeds" in the Prospectus and subject to qualifications and exceptions
stated herein.
6. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITER. The Underwriter
represents and warrants as follows:
(a) It is registered as a broker/dealer with the Commission, in good
standing with the appropriate governmental agency in each state in which it
offers or sells the Securities and is a member of the National Association of
Securities Dealers, Inc. ("NASD") and will use its best efforts to maintain
such registrations, qualifications and memberships throughout the term of the
offering.
(b) To the knowledge of the Underwriter, no action or proceeding is
pending against the Underwriter or any of its officers or directors concerning
the Underwriter's activities as a broker or dealer that would affect the
Company's offering of the Securities.
(c) The Underwriter will offer the Securities only in those states and
in the quantities that are identified in the Blue Sky Memorandums to be
delivered from the Company to the Underwriter that the offering of the
Securities has been qualified for sale under the applicable state statutes and
regulations. The Underwriter, however, may offer the Securities in other
states if (i) the transaction is exempt from the registration requirements in
that state, (ii) the Company has received notice ten days prior to the proposed
sale, and (iii) the Company does not object within said ten day period.
(d) The Underwriter, in connection with the offer and sale of the
Securities and in the performance of its duties and obligations under this
Agreement, agrees to use its best efforts to comply with all applicable federal
laws; the laws of the states or other jurisdictions in which the Securities are
offered and sold, and the Rule and Regulations of the NASD.
(e) The Underwriter is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada with all requisite
power and authority to enter into this Agreement and to carry out its
obligations hereunder.
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(f) This Agreement has been duly authorized, executed and delivered by
the Underwriter and is a valid agreement on the part of the Underwriter.
(g) Neither the execution of this Agreement nor the consummation of
the transaction contemplated hereby will result in any breach of any of the
terms or conditions of, or constitute a default under, the articles of
incorporation or by-laws of the Underwriter of any indenture, agreement or
other instrument to which the Underwriter is party or violate any order
directed to the underwriter of any court or any federal or state regulatory
body or administrative agency having jurisdiction over the Underwriter or its
affiliates.
(h) The Underwriter knows of no person who rendered any services in
connection with the introduction of the Company to the Underwriter. No person
acting by, through or under the Underwriter will be entitled to receive from
the Underwriter or from the Company any finder's fees or similar payments.
(i) The written information provided by the Underwriter for inclusion
in ten Registration Statement and Prospectus consists of certain information on
the front and back Prospectus cover pages, and under "Plan of Distribution" in
the Prospectus.
7. EXPENSES OF THE UNDERWRITER.
Subject to the sale of Securities, the Company shall reimburse the
Underwriter, for its out-of-pocket expenses on an accountable basis in an
amount which is not expected to exceed $25,000.00. In the event the offering
is terminated, the Underwriter will be reimbursed only for its actual
accountable out-of-pocket expenses.
8. EXPENSES OF THE COMPANY. The Company agrees that it will pay the
following fees and expenses:
(a) All fees and expenses of its legal counsel who will be engaged to
prepare certain information, documents and papers for filing with the
Commission.
(b) All fees and expenses of its accountants incurred in connection
with the offering of the Securities and the preparation of all documents and
filings made as part of the offering;
(c) All costs in issuing and delivering the Securities;
(d) All costs of printing and delivering to the Underwriter and
dealers as many copies of the Registration Statement and amendments,
preliminary Prospectuses and definitive Prospectuses as reasonably requested by
the Underwriter;
(e) All of the Company's mailing, telephone, travel, clerical and
other office costs incurred or to be incurred in connection with the offering
of the Securities;
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(f) All fees and costs which may be imposed by the Commission, the
various state or local securities authorities and the NASD for review of the
offering of the Securities;
(g) All other expenses incurred by the Company in performance of its
obligations under this Agreement, including, but not limited to, underwriting
re-allowances and concessions to Selected Dealers.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
Section 13 of the 1933 Act against any and all losses, claims, damages or
liabilities, joint or several (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
attorneys' fees), to which the Underwriter or such controlling person may
become subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, and Preliminary Prospectus, the
Prospectus, or in any application or other papers, hereinafter collectively
called Blue Sky applications, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the Company will not be liable
in any such case to the extent that any such loss, claim, damages or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus or the Prospectus or in a Blue Sky application, or any
amendment or supplement thereto, in reliance upon, and in conformity with,
written information furnished to the Company by the Underwriter specifically
for use in the preparation thereof, and provided further that the indemnity
agreement contained in this Section 9 (a) shall not inure to benefit of the
Underwriter (or to the benefit of any person controlling the Underwriter) with
respect to any person asserting any such loss, claim, damage or liability and
who purchased the Securities form the Underwriter if the Underwriter failed to
send or give in violation of the 1933 Act or the Rules and Regulations a copy
of the Prospectus to such person at or prior to the written confirmation to
such person of the sale of such Securities, provided such prospectus has been
provided to the Underwriter. This indemnity will be in addition to any
liability which the Company may otherwise have.
(b) The Underwriter agrees, that it will indemnify and hold harmless
the Company, each of its directors, each nominee (if any) or director named in
the Prospectus, each of its officers who has signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act, against any and all losses, claims, damages or liabilities
(which shall, for all purposes of this Agreement, include, but not be limited
to, all costs of defense and investigation and all attorneys' fees) to which
the Company or any such directors, nominee officer or controlling person may
become subject under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
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fact contained in the Registration Statement, any Preliminary Prospectus, or in
any Blue Sky application or the Prospectus or any amendment or supplement
thereof, or arise out of or based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but in each case only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary Prospectus or
the Prospectus or such amendment or Supplement thereto in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Underwriter may otherwise have.
(c) Within a reasonable time after receipt by an indemnified party
under this Section 9 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party of the
commencement thereof; but the omission to notify the indemnifying party will
not relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than solely pursuant to this Section 9. In case
any such action is brought against any indemnified party, which notifies that
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may choose, jointly with
any other indemnifying party similarly notified, reasonably assume the defense
thereof, subject to the provisions herein stated, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof the indemnifying party will not be liable to such indemnified
party under this Section 9 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation unless the indemnifying party shall not
pursue the action to this final conclusion. The indemnified party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall not be at
the expense of the indemnifying party if the indemnifying party has assumed the
defense of the action. The indemnifying party shall not be liable to indemnify
the indemnified party for any settlement of any action effected without the
indemnifying party's prior written consent to any such settlement, which
consent shall not be unreasonably withheld.
10. SURVIVAL OF AGREEMENTS, ETC. Notwithstanding any investigations made
by or on behalf of the parties to this Agreement, all representations,
warranties, indemnities, and agreements made by the parties to this Agreement
or pursuant hereto shall remain in full force and effect and will survive
delivery of an payment for the Securities, except that, if a party hereto has
actual knowledge as of the Effective Date of facts which would constitute a
breach of the representations and warranties contained herein, such breaches
shall be waived by such party if such party consummates the transactions
contemplated by this Agreement.
(a) Under this Agreement that the Registration Statement or the
Prospectus, or any amendment or supplement thereto, contains and untrue
statement of fact which is material or omits to state a fact which is material
and is required to be stated therein or is necessary to make the statements
therein not misleading.
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(b) The underwriter shall have received a certificate dated and
delivered as of the Effective Date, to the President and Chief Financial
Officer of the Company stating that, to the best of their respective knowledge
and belief after diligent investigation, that:
(i) The company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied hereunder at prior to
such date.
(ii) No stop order suspending the effectiveness of the Registration
Statement had been issued, and no proceedings for that purpose have been
instituted or are pending, contemplated or threatened under the 1933 Act.
(iii) The respective signers of the certificates have carefully
examined the Registration Statement and the Prospectus and any supplement or
amendment thereto, each of which contains all statements required to be stated
therein in accordance with the 1933 Act and the Rules and Regulations and
conforms in all material respects to the requirements thereof, and neither the
Registration Statement nor the Prospectus nor any amendment or supplement
thereto omits to state any material fact necessary to make the statements
therein not misleading and does not contain any untrue statement of material
fact, and, since the Effective Date there has occurred no event required to be
set forth in an amended or supplemented prospectus which has not been set
forth.
(iv) As of such date, the representations and warranties of the
Company contained in this Agreement are true and correct with the same effect
as if made on and as of the date hereof, and the Company has complied with all
of its obligations and agreements herein contained and to be completed as of
the date hereof, and certifying as to the matters referred to in Subsections
11(c) and (d).
(v) Subsequent to the respective dates as of which information is
given in the Registration Statements and the Prospectus and except as
contemplated in the Prospectus, the Company has not incurred, except in the
ordinary course of business, any material liabilities or obligations, direct or
contingent, or entered into any material transaction, contract, or agreement,
except in the ordinary course of business, and there has not been any
materially adverse change in the condition (financial or other), business,
operations, income, properties or business prospects, results of operations,
securities, long-term or short-term debt or general affairs of the Company.
(vi) Subsequent to the respective dates of which information is given
in the Registration Statement and the Prospectus, the Company has not sustained
any material loss or damage to its properties, whether or not insured, and
since such respective dates, no dividends or distributions whatever have been
declared or paid, or both, on or with respect to the common stock of the
Company.
(vii) Such officer has not taken and will not take, directly or
indirectly, any action designed to, or which might reasonably be expected to,
cause or result in the stabilization or manipulation of the price of the
Company's Securities to facilitate the sale or resale of the Securities.
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(viii) Except as set forth in the Prospectus, no action, suit or
proceeding, at law or in equity is pending or threatened against the Company
which might be required to be set forth in the Registration Statement, and no
commission, board or administrative agency in the United States or elsewhere,
wherein an unfavorable decision, ruling or finding might materially and
adversely affect the condition (financial or other), business, operations,
income, properties, business prospects, results of operations or general
affairs of the Company.
(c) The Company shall not be a party to, or be involved in, any
arbitration, litigation, or governmental proceeding, which is then pending or,
to the knowledge of the Company, threatened, of a character which might
materially and adversely affect the Company or be required to be disclosed in
the Registration Statement, other than that which is disclosed in the
Prospectus.
(d)The Company shall not have sustained any loss on account of fire,
flood, accident or other calamity, whether or not covered by insurance, which
in the reasonable judgment of the Underwriter, materially and adversely affects
the business of the Company.
(e)All of the Securities shall be tendered for delivery in accordance
with the terms and provisions of this Agreement.
(f)As of the Effective Date, (i) the representations and warranties of
the Company contained in this Agreement shall be true and correct with the same
effect as if made on the Effective Date and the Company shall have performed
all its obligations due to be performed prior thereto; (ii) the Registration
Statement and the Prospectus and any amendment or supplement thereto shall
contain all statements which are required to be stated herein in accordance
with the 1933 Act and the Rules and Regulations and conform in all material
respects to the requirements thereof, and neither the Registration Statement
nor the Prospectus nor any amendment or supplement thereto shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading; (iii) there shall have been, since the respective dates as of which
information is given, no materially adverse change in the condition (financial
or other), business, operations, income, properties, business prospects,
results of operations, securities, long-term or short-term debt or general
affairs of the Company from that set forth in the Registration Statement or the
Prospectus, except changes which the Registrations Statement and the Prospectus
contemplate will occur after the Effective Date, and the Company shall not have
incurred any material liabilities or material obligations, direct or
contingent, or entered into any material transaction, contract or agreement not
in the ordinary course of business other than as referred to in the
Registration Statement and the Prospectus; (iv) except as set forth in the
Prospectus, no action, suit or proceeding, at law or in equity shall be pending
or threatened against the Company before or by any commission, board or
administrative agency in the United States or elsewhere, wherein an unfavorable
decision, ruling or finding might materially and adversely affect the condition
(financial or other), business, operations, income, properties, business
prospects, results of operations or general affairs of the Company.
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(g) The Company shall have furnished to the Underwriter such other
certificates, documents, and opinions as the Underwriter may have reasonably
requested (including certificates of officers of the Company) as to the
accuracy, as of the Effective Date, of the representations and warranties of
the Company herein, the performance of the Company of its obligations hereunder
and other conditions concurrent and precedent to the obligations of other
Underwriter hereunder. Any certificate signed by an officer of the Company and
delivered to the Underwriter shall be a certification as to the statements made
therein.
12. EFFECTIVE DATE. This Agreement will become effective after the
execution of this agreement at such time as the registration statement is
ordered effective by the Commission.
13. TERMINATION.
(a) This Agreement may be terminated by the Company at any time by
notice to the Underwriter.
(b) This Agreement may be terminated by the Underwriter by notice to
the Company at any time before this Agreement becomes effective in accordance
with Section 12 hereof, (i) if, prior to the Effective Date, the Company should
have failed or refused to comply fully with any of the provisions of this
Agreement on its part to be performed prior thereto, or if any of the
agreements, conditions, covenants, representations or warranties of the Company
herein contained should not have been performed or fulfilled within the times
specified, (ii) if, prior to the Effective Date, the Congress of the United
States or any state legislative body passes any act or measure,or any order,
rule or regulation is adopted by any governmental body or any authoritative
accounting institute or board, or any governmental executive, which is believed
in good faith by the Underwriter to have material impact on the markets for
securities in general, or if a banking moratorium should have been declared by
the United States, New York or Delaware authorities, (iii) if, prior to the
Effective Date, there should have occurred the outbreak of any war or any other
event or calamity which, in the reasonable judgment of the Underwriter
materially disrupts the financial markets of the United States, or (iv) if,
prior to the Effective Date, any materially adverse change occurs, since, the
respective dates as of which information is given in the Registration Statement
and the Prospectus, in the condition (financial or other), business,
operations, income, properties, earnings, affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether not arising
in the ordinary course of business.
14. NOTICES. Any notice hereunder shall be in writing, unless otherwise
expressly provided herein, and if to the respective persons indicated, will be
sufficient if mailed or delivered and confirmed in writing or by telegraph,
addressed as respectively indicated or to such other address as will be
indicated by a written notice similarly given, to the following persons:
(a) If to the Underwriter - addressed to Welco Securities, Inc.,
Suite 105, One Belmont Avenue, Bala Cynwyd, Pennsylvania 19004, Attention:
Kenneth S. Shapiro, President.
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(b) If to the Company - addressed to Equipment Leasing Corporation of
America, Suite 76, 501 Silverside Rd., Wilmington, Delaware 19809, Attention:
William Shapiro, President.
15. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the Underwriter, the Company and their respective successors,
legal representatives and assigns. Nothing expressed or mentioned in this
Agreement is intended, or will be construed, to give any person, corporation
and other entity not mentioned in the preceding sentence 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 the representations, warranties
and indemnities of the Company contained in this Agreement will also be for the
benefit of the directors and officers of the Underwriter and any person or
persons who control the Underwriters within the meaning of Section 15 of the
1933 Act, and except that the indemnities of the Underwriter will also be for
the benefit of the directors and officers of the Company and any person or
persons who control the Company within the meaning of Section 15 of the 1933
Act. No purchaser of any of the Securities from the Underwriter or the Company
will be deemed a successor or assign solely because of such purchase.
16. FINDERS FEES AND HOLDERS OF FIRST REFUSAL RIGHTS. The Company hereby
represents and warrants to the Underwriter that no other person is entitled
directly or indirectly, to compensation of or services as a finder in the
connection with the proposed transactions or holds a right of first refusal or
similar right in connection with the proposed offering, and the Company hereby
agrees to indemnify and hold harmless the Underwriter and each person, if any,
who controls the Underwriter within the meaning of Section 15 of the 1933 Act,
from and against any loss, liability, claim, damage or expense whatsoever
arising out of a claim by an alleged finder or alleged holder of a right of
first refusal or similar right in connection with the proposed offering.
17. COMPLIANCE WITH NASD BY-LAWS AND REGULATIONS. The Underwriter as well
as any participating dealer associated with the Underwriter, shall conduct
itself in a manner consistent with the provisions of Section 12 of Schedule E
to the NASD By-Laws, and no transaction in the Securities to be offered will be
executed by any member in a discretionary account without the prior specific
written approval of the customer.
Investors' checks will be transmitted directly to the Company by noon
of the next business day following receipt.
18. APPLICABLE LAW. This Agreement will be construed in accordance with
the laws of the Commonwealth of Pennsylvania.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof, as of the day and year first above written, in the
space provided below for the purpose, whereupon this letter with our acceptance
shall constitute a binding agreement between us.
Very truly yours,
EQUIPMENT LEASING CORPORATION OF AMERICA
By:
---------------------------------------
William Shapiro, President
(Corporate Seal)
ATTEST:
- ---------------------------- Confirmed and accepted as of the day
Lester L. Shapiro, Secretary and year first above written.
WELCO SECURITIES, INC.
(Corporate Seal) By:
---------------------------------------
Kenneth S. Shapiro, President
ATTEST:
- ----------------------------
Irene J. Leahy
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