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EXHIBIT 1.1
LITCHFIELD FINANCIAL CORPORATION
1,150,000 SHARES OF COMMON STOCK
PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
____________, 1998
XXXXXX XXXXXXX INCORPORATED
XxXXXXXX & COMPANY SECURITIES, INC.
X.X. XXXXXXXX & CO.
c/o Xxxxxx Xxxxxxx Incorporated
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
Litchfield Financial Corporation, a Massachusetts corporation (the
"Company") proposes to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), and certain shareholders of the Company (the
"Selling Stockholders") named in Schedule II hereto severally propose to sell to
the several Underwriters, an aggregate of 1,150,000 shares of the Company's
Common Stock, par value $.01 per share (the "Firm Shares"), of which 1,000,000
shares are to be issued and sold by the Company and 150,000 shares are to be
sold by the Selling Stockholders, each Selling Stockholder selling the amount
set forth opposite such Selling Stockholder's name in Schedule II hereto. The
respective amounts of the Firm Shares to be so purchased by the Underwriters are
set forth opposite their names in Schedule I hereto. In addition, the Company
proposes to grant to the Underwriters an option to purchase up to an aggregate
of 172,500 additional shares of the Company's Common Stock solely for the
purpose of covering over-allotments, if any (the "Option Shares"). The Firm
Shares and the Option Shares purchased pursuant to this Agreement are
hereinafter collectively referred to as the "Shares."
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
a. The Company has filed with the Securities and
Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities
Act"), a registration statement on Form S-3
(Registration No. 333-_______ including the related
preliminary prospectus relating to the Shares, has
filed such amendments thereto as may have been
required as of the date hereof,
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and will file such additional amendments as may
hereafter be required. Copies of such registration
statement and any amendments, including any
post-effective amendments, and all forms of the
related prospectuses contained therein and any
supplements thereto, have been delivered to the
Underwriters. Such registration statement, including
the prospectus, Part II, all financial schedules and
exhibits thereto, and all information deemed to be a
part of such Registration Statement pursuant to Rule
430A under the Securities Act, at the time when it
shall become effective, together with any
registration statement filed by the Company pursuant
to Rule 462(b) of the Securities Act, is herein
referred to as the "Registration Statement," and the
prospectus included as part of the Registration
Statement on file with the Commission that discloses
all the information that was omitted from the
prospectus on the effective date pursuant to Rule
430A of the Rules and Regulations (as defined below)
and in the form filed pursuant to Rule 424(b) under
the Securities Act is herein referred to as the
"Final Prospectus." The prospectus included as part
of the Registration Statement on the date when the
Registration Statement became effective is referred
to herein as the "Effective Prospectus." Any
prospectus included in the Registration Statement and
in any amendment thereto prior to the effective date
of the Registration Statement is referred to herein
as a "Preliminary Prospectus." For purposes of this
Agreement, "Rules and Regulations" mean the rules and
regulations promulgated by the Commission under
either the Securities Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as
applicable.
b. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and
each Preliminary Prospectus, at the time of filing
thereof, complied with the requirements of the
Securities Act and the Rules and Regulations, and did
not include 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, in the light of the circumstances under
which they were made, not misleading; except that the
foregoing does not apply to statements or omissions
made in reliance upon and in conformity with written
information furnished to the Company by any
Underwriter specifically for use therein (it being
understood that the only information so provided is
the information included in the last two paragraphs
on the cover page and in the first, third and fourth
paragraphs under the caption "Underwriting" in the
Final Prospectus). When the Registration Statement
becomes effective and at all times subsequent thereto
up to and including the First Closing Date (as
hereinafter defined), (i) the Registration Statement,
the Effective Prospectus and Final Prospectus and any
amendments or supplements thereto will contain all
statements which are required to be stated therein in
accordance with the Securities Act, the Exchange Act
and the Rules and Regulations and will comply with
the requirements of the Securities Act, the Exchange
Act and the Rules and Regulations, and (ii)
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neither the Registration Statement, the Effective
Prospectus nor the Final Prospectus nor any amendment
or supplement thereto 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 the statements therein, in light of
the circumstances in which they are made, not
misleading; except that the foregoing does not apply
to statements or omissions made in reliance upon and
in conformity with written information furnished to
the Company by any Underwriter specifically for use
therein (it being understood that the only
information so provided is the information included
in the last paragraph on the cover page and in the
first, third and fourth paragraphs under the caption
"Underwriting" in the Final Prospectus).
c. The Company and each subsidiary of the Company (as
used herein, the term "subsidiary" includes any
corporation, joint venture or partnership in which
the Company or any subsidiary of the Company has an
ownership interest) is duly organized and validly
existing and in good standing under the laws of the
respective jurisdictions of their organization or
incorporation, as the case may be, with full power
and authority (corporate, partnership and other, as
the case may be) to own their properties and conduct
their businesses as now conducted and are duly
qualified or authorized to do business and are in
good standing in all jurisdictions wherein the nature
of their business or the character of property owned
or leased may require them to be qualified or
authorized to do business, except for jurisdictions
in which the failure to so qualify would not have a
material adverse effect on the Company and its
subsidiaries taken as a whole. The Company and its
subsidiaries hold all licenses, consents and
approvals, and have satisfied all eligibility and
other similar requirements imposed by federal and
state regulatory bodies, administrative agencies or
other governmental bodies, agencies or officials, in
each case as material to the conduct of the
respective businesses in which they are engaged in
the Effective Prospectus and the Final Prospectus.
d. The outstanding stock of each of the Company's
corporate subsidiaries is duly authorized, validly
issued, fully paid and nonassessable. All of the
outstanding stock of each of the Company's corporate
subsidiaries owned beneficially and of record by the
Company is owned clear of any lien, encumbrance,
pledge, equity or claim of any kind. Neither the
Company nor any of its subsidiaries is a partner or
joint venturer in any partnership or joint venture.
e. The capitalization of the Company as of March 31,
1998 is as set forth under the caption
"Capitalization" in the Effective Prospectus and the
Final Prospectus, and the Company's capital stock
conforms to the description thereof contained under
the caption "Description of Capital Stock" in the
Effective Prospectus and the Final Prospectus. All
the issued shares of capital stock of the Company
(including the Shares to be sold by the Selling
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Shareholders) have been duly authorized and validly
issued, are fully paid and nonassessable. None of the
issued shares of capital stock of the Company
(including the Shares to be sold by the Selling
Shareholders) have been issued in violation of any
preemptive or similar rights. The Shares to be sold
by the Company have been duly and validly authorized
and, upon issuance and delivery and payment therefor
in the manner herein described, will be validly
issued, fully paid and nonassessable. Upon the
effective date of the offering of the Shares, there
will be no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon
the transfer of, any shares of Common Stock pursuant
to the Company's Articles of Organization, bylaws or
other governing documents or any agreement or other
instrument to which the Company is a party or by
which it may be bound except as described in the
Effective Prospectus and the Final Prospectus and
except for restrictions on transfer imposed under
applicable securities laws. Neither the filing of the
Registration Statement nor the offer or sale of the
Shares as contemplated by this Agreement gives rise
to any rights, other than those which have been
waived or satisfied, for or relating to the
registration of any shares of Common Stock or any
other securities of the Company. The Underwriters
will receive good and marketable title to the Shares
to be sold by the Company to be issued and delivered
hereunder, free and clear of all liens, encumbrances,
claims, security interests, restrictions,
stockholders' agreements and voting trusts
whatsoever.
f. All offers and sales of the Company's securities
prior to the date hereof were at all relevant times
duly registered or exempt from the registration
requirements of the Securities Act and were duly
registered or the subject of an available exemption
from the registration requirements of the applicable
state securities or Blue Sky laws, or if not
registered in compliance with the applicable federal
and state securities laws, any actions arising from
such failure to register any such securities are
barred by applicable statute of limitations.
g. The Company has full legal right, power and authority
to enter into this Agreement and the Custody
Agreement and Power of Attorney (the "Custody
Agreement and Power of Attorney") signed by each
Selling Stockholder and the Company, as Custodian,
relating to the deposit of the Shares to be sold by
such Selling Stockholder and to appointing a certain
individual as such Selling Stockholder's
attorney-in-fact to the extent set forth therein,
relating to the transactions contemplated thereby and
by the Registration Statement, and to sell and
deliver the Shares to be sold by the Company to the
Underwriters as provided herein, and this Agreement
and the Custody Agreement and Power of Attorney have
been duly authorized, executed and delivered by the
Company and constitute valid and binding agreements
of the Company enforceable against the Company in
accordance with their terms. No consent, approval,
authorization or order of any court or governmental
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agency or body or third party is required for the
performance of this Agreement and the Custody
Agreement and Power of Attorney by the Company or the
consummation by the Company of the transactions
contemplated hereby or thereby, except such as have
been obtained and such as may be required by the
National Association of Securities Dealers, Inc.
("NASD") or under the Securities Act, or state
securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the
Underwriters. The issue and sale of the Shares to be
sold by the Company, the Company's performance of
this Agreement and the consummation of the
transactions contemplated hereby will not result in a
breach or violation of, or conflict with, any of the
terms and provisions of, or constitute a material
default by the Company or any of its subsidiaries
under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a
party or to which the Company or any of its
subsidiaries or any of their respective properties is
subject, the Articles of Organization or bylaws of
the Company or any of its subsidiaries or any statute
or any judgment, decree, order, rule or regulation of
any court or governmental agency or body applicable
to the Company, or any subsidiary or any of their
respective properties. Neither the Company nor any
subsidiary is (i) in violation of its Articles of
Organization, (ii) in violation of any partnership
agreement or joint venture agreement, as the case may
be, (iii) in violation of its bylaws or any law,
administrative rule or regulation or arbitrators' or
administrative or court decree, judgment or order or
(iv) in violation of or default (there being no
existing state of facts which with notice or lapse of
time or both would constitute a default) in the
performance or observance of any obligation,
agreement, covenant or condition contained in any
contract, indenture, deed of trust, mortgage, loan
agreement, note, lease, agreement or other instrument
or permit to which it is a party or by which it or
any of its properties is or may be bound.
h. The consolidated financial statements and the related
notes of the Company, incorporated by reference in
the Registration Statement, the Effective Prospectus
and the Final Prospectus present fairly the financial
position, results of operations and changes in
financial position and cash flow of the Company and
its subsidiaries, at the dates and for the periods to
which they relate and have been prepared in
accordance with generally accepted accounting
principles applied on a consistent basis throughout
the periods indicated. The other financial statements
and schedules incorporated by reference in or as
schedules to the Registration Statement conform to
the requirements of the Securities Act, the Exchange
Act and the Rules and Regulations and present fairly
the information presented therein for the periods
shown. The financial and statistical data set forth
in the Effective Prospectus and the Final Prospectus
under the captions "Prospectus Summary," "Use of
Proceeds," "Capitalization," "Selected Consolidated
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Financial Information," "Management's Discussion and
Analysis of Financial Condition and Results of
Operations," "Business" and "Principal and Selling
Stockholders" fairly presents the information set
forth therein on the basis stated in the Effective
Prospectus and the Final Prospectus. Ernst & Young
LLP, whose reports appear in the Effective Prospectus
and the Final Prospectus, are independent accountants
as required by the Securities Act and the Rules and
Regulations.
i. Subsequent to March 31, 1998, neither the Company nor
any subsidiary has sustained any material loss or
interference with its business or properties from
fire, flood, hurricane, earthquake, accident or other
calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental
action, order or decree, which is not disclosed in
the Effective Prospectus and the Final Prospectus;
and subsequent to the respective dates as of which
information is given in the Registration Statement,
the Effective Prospectus and the Final Prospectus,
(i) neither the Company nor any of its subsidiaries
has incurred any material liabilities or obligations,
direct or contingent, or entered into any material
transactions not in the ordinary course of business,
and (ii) there has not been any change in the capital
stock, partnership interests, joint venture
interests, long-term debt or obligations under
capital leases of the Company and its subsidiaries,
or any issuance of options, warrants or rights to
purchase the capital stock of the Company, or any
adverse change, or any development involving a
prospective adverse change in the management,
business, prospects, financial position, net worth or
results of operations of the Company or its
subsidiaries, taken as a whole, except in each case
as described in or contemplated by the Effective
Prospectus and the Final Prospectus.
j. Except as described in the Effective Prospectus and
the Final Prospectus, there is not pending, or to the
knowledge of the Company threatened, any action,
suit, proceeding, inquiry or investigation, to which
the Company, any of its subsidiaries or any of their
officers or directors is a party, or to which the
property of the Company or any subsidiary is subject,
before or brought by any court or governmental agency
or body, wherein an unfavorable decision, ruling or
finding could prevent or materially hinder the
consummation of this Agreement or result in a
material adverse change in the business condition
(financial or other), prospects, financial position,
net worth or results of operations of the Company or
its subsidiaries.
k. There are no contracts or other documents required by
the Securities Act or by the Rules and Regulations to
be described in the Registration Statement, the
Effective Prospectus or the Final Prospectus or to be
filed as exhibits to the Registration Statement which
have not been described or filed as required.
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l. Except as described in the Effective Prospectus and
the Final Prospectus, the Company and each of its
subsidiaries have good and marketable title to all
real and material personal property owned by them,
free and clear of all liens, charges, encumbrances or
defects except those reflected in the financial
statements hereinabove described. The real and
personal property and buildings referred to in the
Effective Prospectus and the Final Prospectus which
are leased from others by the Company are held under
valid, subsisting and enforceable leases. The Company
or its subsidiaries owns or leases all such
properties as are necessary to its operations as now
conducted.
m. The Company's system of internal accounting controls
taken as a whole is sufficient to meet the broad
objectives of internal accounting control insofar as
those objectives pertain to the prevention or
detection of errors or irregularities in amounts that
would be material in relation to the Company's
financial statements; and, except as disclosed in the
Effective Prospectus and the Final Prospectus,
neither the Company nor any of its subsidiaries nor
any employee or agent of the Company or any
subsidiary has made any payment of funds of the
Company or any subsidiary or received or retained any
funds in violation of any law, rule or regulation.
n. The Company and its subsidiaries have filed all
federal, state and local income, excise and franchise
tax returns required to be filed through the date
hereof and have paid all taxes shown as due
therefrom; and there is no tax deficiency that has
been, nor does the Company or any subsidiary have
knowledge of any tax deficiency which is likely to
be, asserted against the Company or its subsidiaries,
which if determined adversely could materially and
adversely affect the earnings, assets, affairs,
business prospects or condition (financial or other)
of the Company or its subsidiaries.
o. The Company and its subsidiaries operate their
respective businesses in conformity in all material
respects with all applicable statutes, common laws,
ordinances, decrees, orders, rules and regulations of
governmental bodies. The Company and its subsidiaries
have all licenses, approvals or consents to operate
their respective businesses in all locations in which
such businesses are currently being operated, and the
Company and its subsidiaries are not aware of any
existing or imminent matter which may adversely
impact their operations or business prospects other
than as specifically disclosed in the Effective
Prospectus and the Final Prospectus. The Company has
not engaged in any activity, whether alone or in
concert with one of its customers, creating the
potential for exposure to material civil or criminal
monetary liability or other material sanctions under
federal or state laws regulating consumer credit
transactions, debt collection practices or land sales
practices.
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p. Neither the Company nor any of its subsidiaries have
failed to file with the applicable regulatory
authorities any statement, report, information or
form required by any applicable law, regulation or
order where the failure to file the same would have a
material adverse effect on the Company and its
subsidiaries, taken as a whole; all such filings or
submissions were in material compliance with
applicable laws when filed and no deficiencies have
been asserted by any regulatory commission, agency or
authority with respect to such filings or
submissions. Neither the Company nor any of its
subsidiaries have failed to maintain in full force
and effect any license or permit necessary or proper
for the conduct of its business, or received any
notification that any revocation or limitation
thereof is threatened or pending, and, except as
disclosed in the Effective Prospectus and the Final
Prospectus, there is not pending any change under any
law, regulation, license or permit which could
materially adversely affect its business, operations,
property or business prospects. Neither the Company
nor any of its subsidiaries have received any notice
of violation of or been threatened with a charge of
violating and are not under investigation with
respect to a possible violation of any provision of
any law, regulation or order.
q. No labor dispute exists with the Company's employees
or with employees of its subsidiaries or is imminent
which could materially adversely affect the Company
or any of its subsidiaries. The Company is not aware
of any existing or imminent labor disturbance by its
employees or by any employees of its subsidiaries
which could be expected to materially adversely
effect the condition (financial or otherwise),
results of operations, properties, affairs,
management, business affairs or business prospects of
the Company or any of its subsidiaries.
r. Except as disclosed in the Effective Prospectus and
the Final Prospectus, the Company and its
subsidiaries own or possess, or can acquire on
reasonable terms, the licenses, copyrights,
trademarks, service marks and trade names presently
employed by them in connection with the businesses
now operated by them, and neither the Company nor any
of its subsidiaries have received any notice of
infringement of or conflict with asserted rights of
others with respect to any of the foregoing which,
alone or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result
in any material adverse change in the condition,
financial or otherwise, or in the earnings, business
affairs or business prospects of the Company or its
subsidiaries.
s. Neither the Company nor any of its subsidiaries, nor
any of the directors, officers, employees or agents
of the Company and its subsidiaries have taken and
will not take, directly or indirectly, any action
designed to cause or result in, or which has
constituted or which might be expected to constitute,
stabilization or manipulation of the price of the
Common Stock. The
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Company acknowledges that the Underwriters may engage
in passive market making transactions in the Shares
on The Nasdaq Stock Market's National Market (the
"Nasdaq National Market").
t. The Company and each of its subsidiaries are insured
by insurers of reorganized financial responsibility
against such losses and risks and in such amounts as
are prudent and customary in the businesses in which
they are engaged; and the Company has no reason to
believe that it or any of its subsidiaries will not
be able to renew their existing insurance coverage as
and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to
continue their respective businesses at a comparable
cost.
u. The Company is not an "investment company" within the
meaning of such term under the Investment Company Act
of 1940 and the rules and regulations of the
Commission thereunder.
v. The Company is in compliance in all material respects
with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable
event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in ERISA)
for which the Company would have any liability; the
Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension
plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder
(the "Code"), and each "pension plan" for which the
Company would have any liability that is intended to
be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has
occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
w. The Shares have been approved for listing on the
Nasdaq National Market subject to notice of issuance.
2. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder represents and warrants to each Underwriter and agrees as
follows:
a. The Selling Stockholder has valid and marketable
title to the Shares to be sold by the Selling
Stockholder, free and clear of any liens,
encumbrances, equities and claims (other than as
imposed by the Securities Act or this Agreement), and
full right, power and authority to effect the sale
and delivery of such Shares; and upon the delivery of
and payment for the Shares to be sold by the Selling
Stockholder pursuant to this Agreement and the
Custody Agreement and Power of Attorney, valid and
marketable title
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thereto, free and clear of any stockholders'
agreements, voting trusts, liens, encumbrances,
equities and claims, will be transferred to the
Underwriters.
b. The Selling Stockholder agrees that the shares of
Common Stock represented by the certificates are
subject to the interest of the Underwriters
hereunder, and that the obligations of the Selling
Stockholder hereunder shall not be terminated except
as provided in this Agreement.
c. The Selling Stockholder has duly executed and
delivered this Agreement and the Custody Agreement
and Power of Attorney; this Agreement and the Custody
Agreement and Power of Attorney constitute legal
valid and binding obligations of the Selling
Stockholder, all authorizations and consents
necessary for the execution and delivery of this
Agreement and the Custody Agreement and Power of
Attorney and for the sale and delivery of the Shares
to be sold by the Selling Stockholder hereunder have
been given, except as may be required by the NASD or
under the Securities Act or state securities laws or
Blue Sky laws; and the Selling Stockholder has the
legal capacity and full right, power and authority to
execute this Agreement and the Custody Agreement and
Power of Attorney.
d. The performance of this Agreement and the Custody
Agreement and Power of Attorney and the consummation
of the transactions contemplated hereby and thereby
by the Selling Stockholder will not result in a
material breach or violation of, or material conflict
with, any of the terms or provisions of, or
constitute a material default by the Selling
Stockholder under, any indenture, mortgage, deed of
trust (constructive or other), loan agreement, lease,
franchise, license or other agreement or instrument
to which the Selling Stockholder or any of his or her
properties is bound, any statute, or any judgment,
decree, order, rule or regulation or any court or
governmental agency or body applicable to the Selling
Stockholder or the property of the Selling
Stockholder.
e. The Selling Stockholder has not distributed nor will
distribute any prospectus or other offering material
in connection with the offer and sale of the Shares
other than any Preliminary Prospectus filed with the
Commission or the Final Prospectus or other material
permitted by the Securities Act.
f. For a period of 120 days from the effective date of
the Registration Statement, the Selling Stockholder
will not, directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise
dispose of any shares of Common Stock, other than to
the Underwriters pursuant to this Agreement, without
the prior written consent of the Underwriters.
g. To the best knowledge of the Selling Stockholder, the
representations and warranties of the Company
contained in Section 1 of this Agreement are true
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and correct; the Selling Stockholder has reviewed and
is familiar with the Registration Statement as
originally filed with the Commission and the
Preliminary Prospectus contained therein. The
Preliminary Prospectus does not include an 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; the
Selling Stockholder is not prompted to sell the
Shares to be sold by the Selling Stockholder by any
information concerning the Company that is not set
forth in the Preliminary Prospectus, the Effective
Prospectus, or the Final Prospectus.
h. At the time the Registration Statement becomes
effective (i) such parts of the Registration
Statement and any amendments and supplements thereto
that specifically refer to the Selling Stockholder,
if any, will not contain an untrue statement of a
material fact or omit to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading and (ii) such
parts of the Effective Prospectus and Final
Prospectus that specifically refer to the Selling
Stockholder, if any, will not include an untrue
statement of a material fact or omit to state a
material fact necessary in order to make the
statements therein, in light of the circumstances
under which they were made, not misleading.
i. No approval, consent, order, authorization,
designation, declaration or filing by or with any
regulatory body, administrative or other governmental
body is necessary in connection with the execution
and delivery of this Agreement by or on behalf of the
Selling Stockholder, and the consummation by it of
the transactions herein contemplated (other than as
by the Securities Act, state securities laws and the
NASD).
j. Any certificates signed by or on behalf of the
Selling Stockholder as such and delivered to the
Underwriters or to counsel for the Underwriters shall
be deemed a representation and warranty by the
Selling Stockholder to each Underwriter as to the
matters covered thereby.
k. In order to document the Underwriters' compliance
with the reporting and withholding provisions of the
Tax Equity and Fiscal Responsibility Act of 1982 with
respect to the transactions herein contemplated, the
Selling Stockholder agrees to deliver to the
Underwriters prior to or at the First Closing Date
(as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9
(or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
l. The Selling Stockholder will not take, directly or
indirectly, any action designed to cause or result
in, or which might constitute or be expected to
constitute, stabilization or manipulation of the
price of the Common Stock.
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3. Purchase, Sale and Delivery of the Shares.
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 and the Selling Stockholders agree to sell to
each of the Underwriters, and each of the
Underwriters, severally and not jointly, agrees to
purchase at a purchase price of $________ per share,
the number of Firm Shares set forth opposite such
Underwriter's name in Schedule I hereto.
b. The Company grants to the Underwriters an option to
purchase, solely for the purpose of covering
over-allotments in the sale of Firm Shares, all or
any portion of the Option Shares at the purchase
price per share set forth above. The option granted
hereby may be exercised as to all or any part of the
Option Shares at any time within 30 days after the
date the Registration Statement becomes effective.
The Underwriters shall not be under any obligation to
purchase any Option Shares prior to the exercise of
such option. The option granted hereby may be
exercised by the Underwriters giving written notice
to the Company setting forth the number of Option
Shares to be purchased and the date and time for
delivery of and payment for such Option Shares and
stating that the Option Shares referred to therein
are to be used for the purpose of covering
over-allotments in connection with the distribution
and sale of the Firm Shares. If such notice is given
prior to the First Closing Date (as defined herein),
the date set forth therein for such delivery and
payment shall not be earlier than two full business
days thereafter or the First Closing Date, whichever
occurs later. If such notice is given on or after the
First Closing Date, the date set forth therein for
such delivery and payment shall not be earlier than
three full business days thereafter. In either event,
the date so set forth shall not be more than 15 full
business days after the date of such notice. The date
and time set forth in such notice is herein called
the "Option Closing Date." Upon exercise of the
option, the Company shall become obligated to sell to
the Underwriters, and, subject to the terms and
conditions herein set forth, the Underwriters shall
become obligated to purchase, for the account of each
Underwriter, from the Company, severally and not
jointly, the number of Option Shares specified in
such notice. Option Shares shall be purchased for the
accounts of the Underwriters in proportion to the
number of Firm Shares set forth opposite such
Underwriter's name in Schedule I hereto, except that
the respective purchase obligations of each
Underwriter shall be adjusted so that no Underwriter
shall be obligated to purchase fractional Option
Shares.
c. Certificates in definitive form for the Firm Shares
which each Underwriter has agreed to purchase
hereunder shall be delivered by or on behalf of the
Company and the Selling Stockholders to the
Underwriters for the account of such Underwriters
against payment by such Underwriters or on their
behalf of the purchase price therefor by same day
funds to the order of the
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Company, at the offices of Xxxxxx Xxxxxxx
Incorporated ("Xxxxxx Xxxxxxx"), Xxx Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other place
as may be agreed upon by Xxxxxx Xxxxxxx and the
Company, at 10:00 A.M., Boston time, on the third
full business day after this Agreement becomes
effective, such time of delivery against payment
being herein referred to as the "First Closing Date."
The First Closing Date and the Option Closing Date
are herein individually referred to as the "Closing
Date" and collectively referred to as the "Closing
Dates." Certificates in definitive form for the
Option Shares which each Underwriter shall have
agreed to purchase hereunder shall be similarly
delivered by or on behalf of the Company on the
Option Closing Date against payment by such
Underwriter or on its behalf of the purchase price in
the manner set forth above. The certificates in
definitive form for the Shares to be delivered will
be in good delivery form and in such denominations
and registered in such names as Xxxxxx Xxxxxxx may
request not less than 48 hours prior to the First
Closing Date or the Option Closing Date, as the case
may be. Such certificates will be made available for
checking and packaging at a location in New York, New
York as may be designated by the Underwriters, at
least 24 hours prior to the First Closing Date or the
Option Closing Date, as the case may be. It is
understood that an Underwriter may (but shall not be
obligated to) make payment on behalf of any
Underwriter or Underwriters for the Shares 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. After the Registration Statement
becomes effective, the several Underwriters propose to offer for sale to the
public the Firm Shares and any Option Shares which may be sold at the price and
upon the terms set forth in the Final Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each
of the Underwriters that:
a. The Company shall comply with the provisions of and
make all requisite filings with the Commission
pursuant to Rules 424(b), 430A and 462(b) of the
Rules and Regulations and to notify the Underwriters
promptly (in writing, if requested) of all such
filings. The Company shall notify the Underwriters
promptly of any request by the Commission for any
amendment of or supplement to the Registration
Statement, the Effective Prospectus or the Final
Prospectus or for additional information; the Company
shall prepare and file with the Commission, promptly
upon the request of the Underwriters, any amendments
of or supplements to the Registration Statement, the
Effective Prospectus or the Final Prospectus which,
in the Underwriters' reasonable opinion, may be
necessary or advisable in connection with the
distribution of the Shares; and the Company shall not
file any amendment of or supplement to the
Registration Statement, the Effective
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Prospectus or the Final Prospectus which is not
approved by the Underwriters after reasonable notice
thereof. The Company shall advise the Underwriters
promptly of the issuance by the Commission or any
jurisdiction or other regulatory body of any stop
order or other order suspending the effectiveness of
the Registration Statement, suspending or preventing
the use of any Preliminary Prospectus, the Effective
Prospectus or the Final Prospectus or suspending the
qualification of the Shares for offering or sale in
any jurisdiction, or of the institution of any
proceedings for any such purpose; and the Company
shall use its best efforts to prevent the issuance of
any stop order or other such order and, should a stop
order or other such order be issued, to obtain as
soon as possible the lifting thereof.
b. The Company will take or cause to be taken all
necessary action and furnish to whomever the
Underwriters direct such information as may be
reasonably required in qualifying the Shares for
offer and sale under the securities or Blue Sky laws
of such jurisdictions as the Underwriters may
designate and will continue such qualifications in
effect for as long as may be reasonably necessary to
complete the distribution. The Company shall not be
required to qualify as a foreign corporation or
(except for the sole purpose of complying with Blue
Sky filing requirements) to file a general consent to
service of process in any jurisdiction where it is
not presently qualified or where it would be subject
to taxation as a foreign corporation.
c. Within the time during which a Final Prospectus
relating to the Shares is required to be delivered
under the Securities Act, the Company shall comply
with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by
the Rules and Regulations, as from time to time in
force, so far as is necessary to permit the
continuance of sales of or dealings in the Shares as
contemplated by the provisions hereof and the Final
Prospectus. If during such period any event occurs as
a result of which the Final Prospectus as then
amended or supplemented would include an untrue
statement of a material fact or omit to state a
material fact necessary to make the statements
therein, in the light of the circumstances then
existing, not misleading, or if during such period it
is necessary to amend the Registration Statement or
supplement the Final Prospectus to comply with the
Securities Act, the Company shall promptly notify the
Underwriters and shall amend the Registration
Statement or supplement the Final Prospectus (at the
expense of the Company) so as to correct such
statement or omission or effect such compliance.
d. The Company will furnish without charge to the
Underwriters and make available to the Underwriters
copies of the Registration Statement (four of which
shall be signed and shall be accompanied by all
exhibits, including any which are incorporated by
reference, which have not previously been furnished),
each Preliminary Prospectus, the Effective Prospectus
and the
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Final Prospectus, and all amendments and supplements
thereto, including any prospectus or supplement
prepared after the effective date of the Registration
Statement, in each case as soon as available and in
such quantities as the Underwriters may reasonably
request. The Company will deliver to each Underwriter
a copy of each document incorporated by reference in
the Effective Prospectus and the Final Prospectus
which has not previously been furnished.
e. The Company will (i) deliver to the Underwriters at
such office or offices as the Underwriters may
designate as many copies of the Preliminary
Prospectus and Final Prospectus as the Underwriters
may reasonably request, and (ii) for a period of not
more than nine months after the Registration
Statement becomes effective, send to the Underwriters
as many additional copies of the Final Prospectus and
any supplement thereto as the Underwriters may
reasonably request.
f. The Company shall make generally available to its
security holders, in the manner contemplated by Rule
158(b) under the Securities Act as promptly as
practicable and in any event no later than 90 days
after the end of its fiscal quarter in which the
first anniversary of the effective date of the
Registration Statement occurs, an earnings statement
satisfying the provisions of Section 11(a) of the
Securities Act covering a period of at least 12
consecutive months beginning after the effective date
of the Registration Statement.
g. The Company will apply the net proceeds from the sale
of the Shares as set forth under the caption "Use of
Proceeds" in the Final Prospectus.
h. During a period of five years from the effective date
of the Registration Statement, the Company will
furnish to the Underwriters copies of all reports and
other communications (financial or other) furnished
by the Company to its stockholders and, as soon as
available, copies of any reports or financial
statements furnished or filed by the Company to or
with the Commission or any national securities
exchange on which any class of securities of the
Company may be listed.
i. The Company will, from time to time, after the
effective date of the Registration Statement file
with the Commission such reports as are required by
the Securities Act, the Exchange Act and the Rules
and Regulations, and shall also file with state
securities commissions in states where the Shares
have been sold by the Underwriters (as the
Underwriters shall have advised the Company in
writing) such reports as are required to be filed by
the securities acts and the regulations of those
states.
j. Except pursuant to this Agreement or with the
Underwriters' written consent, for a period of 120
days from the effective date of the Xxxxxxxxxxxx
Xxxxxxxxx,
00
00
the Company will not, and the Company has provided
agreements executed by each of its executive
officers, directors, and the Selling Stockholders of
the Company, providing that for a period of 120 days
from the First Closing Date, such person or entity
will not, offer for sale, sell, grant any options
(other than pursuant to existing employee benefit
plans and agreements, other existing compensation
agreements and existing stock options), rights or
warrants with respect to any shares of Common Stock,
securities convertible into Common Stock or any other
capital stock of the Company, or otherwise dispose
of, directly or indirectly, any shares of Common
Stock or such other securities or capital stock.
k. If at any time during the 25 day period after the
Registration Statement is declared effective, any
rumor, publication or event relating to or affecting
the Company shall occur as a result of which, in the
Underwriters' opinion, the market price for the
Shares has been or is likely to be materially
affected (regardless of whether such rumor,
publication or event necessitates a supplement to or
amendment of the Final Prospectus), the Company will,
after written notice from the Underwriters advising
them as to the effect set forth above, prepare,
consult with the Underwriters concerning the
substance of and disseminate a press release or other
public statement, reasonably satisfactory to the
Underwriters, responding to or commenting on such
rumor, publication or event.
l. The Company will not take, directly or indirectly,
any action designed to cause or result in, or which
might constitute or be expected to constitute,
stabilization or manipulation of the price of the
Common Stock.
m. The Company will not take, directly or indirectly,
any action which would cause or result in the
delisting or the Company's Common Stock on the Nasdaq
National Market prior to the First Closing Date or,
if the Underwriters exercise the option granted by
the Company to cover overallotment, prior to the
Option Closing Date.
6. Expenses. The Company and the Selling Stockholders agree with the
Underwriters that (a) whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
the Company will pay all fees and expenses incident to the performance of the
obligations of the Company and the Selling Stockholders hereunder, including,
but not limited to, (i) the Commission's registration fee, (ii) the expenses of
printing (or reproduction) and distributing the Registration Statement
(including the financial statements therein and all amendments and exhibits
thereto), each Preliminary Prospectus, the Effective Prospectus, the Final
Prospectus, any amendments or supplements thereto, and this Agreement and other
underwriting documents, including the Underwriters' Questionnaires and Blue Sky
Memoranda, (iii) fees and expenses of accountants and counsel for the Company
and the Selling Stockholders, (iv) expenses of registration or qualification of
the Shares under state Blue Sky and securities laws, including the fees and
disbursements of counsel to the Underwriters in connection therewith, (v)
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filing fees paid or incurred by the Underwriters and related fees and expenses
of counsel to the Underwriters in connection with filings with the NASD, (vi)
fees, costs and expenses associated with the registration and listing of the
Shares on the Nasdaq National Market, (vii) the costs and charges of the
Company's transfer agent and registrar and the cost of preparing the
certificates for the Shares, (viii) all other costs and expenses incident to the
performance of their obligations hereunder not otherwise provided for in this
Section 6; and (b) the out-of-pocket expenses, including counsel fees,
disbursements and expenses, incurred by the Underwriters in connection with
investigating, preparing to market and marketing the Shares and proposing to
purchase and purchasing the Shares under this Agreement will be borne and paid
by the Company if the sale of the Shares provided for herein is not consummated
by reason of the termination of this Agreement by the Company pursuant to
Section 14(a)(i), or because of any failure or refusal on the part of the
Company to comply or fulfill any of the conditions of this Agreement. Except as
provided in this Section, the Underwriters shall pay all of their own expenses.
7. Conditions of the Underwriters' Obligations. The respective
obligations of the Underwriters to purchase and pay for the Firm Shares shall be
subject, in their discretion, to the accuracy of the representations and
warranties of the Company and the Selling Stockholders 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 and the Selling
Stockholders of all of their covenants and agreements hereunder and to the
following additional conditions:
a. The Registration Statement and all post-effective
amendments thereto shall have become effective not
later than 5:30 P.M., Washington, D.C. time, on the
day following the date of this Agreement, or such
later time and date as shall have been consented to
by the Underwriters and all filings required by Rules
424, 430A and 462 of the Rules and Regulations shall
have been made; no stop order suspending the
effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose
shall have been instituted or threatened or, to the
knowledge of the Company or the Underwriters, shall
be contemplated by the Commission; any request of the
Commission for additional information (to be included
in the Registration Statement or the Final Prospectus
or otherwise) shall have been complied with to the
Underwriters' satisfaction; and the NASD, upon review
of the terms of the public offering of the Shares,
shall not have objected to such offering, such terms
or the Underwriters' participation in the same.
b. No Underwriter shall have advised the Company that
the Registration Statement, Preliminary Prospectus,
the Effective Prospectus or Final Prospectus, or any
amendment or any supplement thereto, contains an
untrue statement of fact which, in the Underwriters'
reasonable judgment, is material, or omits to state a
fact which, in the Underwriters' judgment, is
material and is required to be stated therein or
necessary to make the statements therein not
misleading and the Company shall not have cured such
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untrue statement of fact or stated a statement of
fact required to be stated therein.
c. The Underwriters shall have received an opinion,
dated the Closing Date, from Xxxxxxxx, Xxxxxxx &
Xxxxxxx, a professional corporation ("Xxxxxxxx,
Xxxxxxx & Xxxxxxx"), counsel for the Company,
substantially to the effect that:
(1) The Company has been duly organized and is
validly existing in good standing as a
corporation under the laws of the
Commonwealth of Massachusetts, with
corporate power and authority to own its
properties and conduct its business as now
conducted, and is duly qualified to do
business as a foreign corporation in good
standing in all other jurisdictions where
the failure to so qualify would have a
material adverse effect upon the Company and
its subsidiaries taken as a whole. The
Company holds all licenses, certificates,
permits, franchises and authorizations from
governmental authorities which are material
to the conduct of its business in all
locations in which such business is
currently being conducted.
(2) Each of the Company's subsidiaries is
validly existing and in good standing as a
corporation under the laws of the state of
its incorporation or organization, as the
case may be, with power and authority to own
its properties and conduct its business as
now conducted, and is duly qualified or
authorized to do business and is in good
standing in all other jurisdictions where
the failure to so qualify would have a
material adverse effect upon the business of
the Company and its subsidiaries taken as a
whole. The outstanding stock of each of the
Company's subsidiaries is duly authorized,
validly issued, fully paid and
nonassessable. All of the outstanding stock
of each of the corporate subsidiaries owned
beneficially and of record by the Company is
owned free and clear of all liens,
encumbrances, equities and claims. No
options or warrants or other rights to
purchase, agreements or other obligations to
issue or other rights to convert any
obligations into any shares of capital stock
or of ownership interests in any of the
Company's subsidiaries are outstanding. Each
of the Company's subsidiaries holds all
licenses, certificates, permits, franchises
and authorizations from governmental
authorities which are material to the
conduct of its business in all locations in
which such business is currently being
conducted.
(3) As of the dates specified therein, the
Company had authorized and issued capital
stock as set forth under the caption
"Capitalization" in the Final Prospectus.
All of the outstanding shares of the capital
stock of the Company (including the Shares
to be sold by the Selling Stockholders) have
been duly authorized and are validly issued,
fully
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paid and nonassessable, and the Shares to be
sold by the Company have been duly
authorized, and upon issuance thereof and
payment therefor as provided herein, will be
validly issued, fully paid and
nonassessable; none of the issued shares
(including the Shares to be sold by the
Selling Stockholders) have been issued in
violation of or subject to any preemptive
rights provided for by law or by the
Company's Articles of Organization. There
are no preemptive rights or, to the
knowledge of such counsel, other rights to
subscribe for or to purchase, or any
restriction upon the transfer of, the Shares
pursuant to the Company's Articles of
Organization, bylaws or other governing
documents or, to the knowledge of such
counsel, any agreement or other instrument
to which the Company is a party or by which
it may be bound except as described in the
Effective Prospectus and Final Prospectus
and except for restrictions on transfer
imposed under applicable securities laws.
Neither the filing of the Registration
Statement nor the offer or sale of the
Shares as contemplated by this Agreement
gives rise to any rights, other than those
which have been waived or satisfied, for or
relating to the registration of any shares
of Common Stock or any other securities of
the Company. The Underwriters will receive
good and marketable title to the Shares to
be sold by the Company to be issued and
delivered pursuant to this Agreement, free
and clear of all liens, encumbrances,
claims, security interests, restrictions,
stockholders' agreements and voting trusts
whatsoever. The capital stock of the Company
and the Shares conform to the description
thereof contained in the Final Prospectus.
All offers and sales of the Company's
securities (including the Shares to be sold
by the Selling Stockholders) prior to the
date hereof were at all relevant times duly
registered or exempt from the registration
requirements of the Securities Act and were
duly registered or the subject of an
exemption from the registration requirements
of applicable state securities or Blue Sky
laws, or if not registered in compliance
with the applicable federal and state
securities laws, any actions arising from
such failure to register any such securities
are barred by applicable statute of
limitations.
(4) The Company has full legal right, power and
authority to enter into this Agreement and
the Custody Agreement and Power of Attorney
and to issue, sell and deliver the Shares to
be sold by it to the Underwriters as
provided herein, and this Agreement and the
Custody Agreement and Power of Attorney have
been duly authorized, executed and delivered
by the Company and constitute the valid and
legally binding obligation of the Company
enforceable against the Company in
accordance with its terms, except as
enforceability may be limited by general
equitable principles, bankruptcy,
insolvency,
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reorganization, moratorium, fraudulent
transfer, fraudulent conveyance or other
laws affecting creditors' rights generally.
(5) No consent, approval, authorization or order
of any court or governmental agency or body
or third party is required for the
performance of this Agreement or the Custody
Agreement and Power of Attorney by the
Company or the consummation by the Company
of the transactions contemplated hereby and
thereby, except such as have been obtained
under the Securities Act and such as may be
required by the NASD and under state
securities or Blue Sky laws in connection
with the purchase and distribution of the
Shares by the several Underwriters. The
performance of this Agreement and the
Custody Agreement and Power of Attorney by
the Company and the consummation by the
Company of the transactions contemplated
hereby and thereby will not conflict with or
result in a breach or violation by the
Company of any of the terms or provisions
of, or constitute a default by the Company
under, any indenture, mortgage, deed of
trust, loan agreement, lease or other
agreement or instrument known to such
counsel to which the Company is a party or
to which the Company or its properties is
subject, the Articles of Organization or
bylaws of the Company, any statute, or any
judgment, decree, order, rule or regulation
known to such counsel of any court or
governmental agency or body applicable to
the Company or any of its subsidiaries or
their properties.
(6) Except as described in the Final Prospectus,
there is not pending, or to the best
knowledge of such counsel threatened, any
action, suit, proceeding, inquiry or
investigation, 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, before or brought
by any court or governmental agency or body,
which, if determined adversely to the
Company or any of its subsidiaries, could
result in any material adverse change in the
business, financial position, net worth or
results of operations, or could materially
adversely affect the properties or assets,
of the Company or any of its subsidiaries.
(7) To the best knowledge of such counsel, no
default exists, and no event has occurred
which with notice or after the lapse of time
to cure 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, loan
agreement, lease or other agreement or
instrument to which the Company or any of
its subsidiaries is a party or to which they
or their properties are subject, or of the
Articles of Organization or bylaws of the
Company or any of its subsidiaries.
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(8) To the best knowledge of such counsel after
reasonable inquiry, neither the Company nor
any of its subsidiaries is in violation of
any law, ordinance, administrative or
governmental rule or regulation applicable
to the Company or any of its subsidiaries
and material to the Company and its
subsidiaries taken as a whole or any decree
of any court or governmental agency or body
having jurisdiction over the Company or any
of its subsidiaries.
(9) The Registration Statement and all post
effective amendments thereto have become
effective under the Securities Act, and, to
the best knowledge of such counsel, no stop
order suspending the effectiveness of the
Registration Statement has been issued and
no proceedings for that purpose have been
instituted or are threatened, pending or
contemplated by the Commission. All filings
required by Rule 424 and Rule 430A of the
Rules and Regulations have been made; the
Registration Statement, the Effective
Prospectus and Final Prospectus, and any
amendments or supplements thereto (except
for the financial statements and schedules
included therein as to which such counsel
need express no opinion), as of their
respective effective or issue dates,
complied as to form in all material respects
with the requirements of the Securities Act
and the Rules and Regulations; the
descriptions in the Registration Statement,
the Effective Prospectus and the Final
Prospectus of statutes, regulations, legal
and governmental proceedings, and contracts
and other documents are accurate in all
material respects and present fairly the
information required to be stated; and such
counsel does not know of any pending or
threatened legal or governmental
proceedings, statutes or regulations
required to be described in the Final
Prospectus which are not described as
required nor of any contracts or documents
of a character required to be described in
the Registration Statement or the Final
Prospectus or to be filed as exhibits to the
Registration Statement which are not
described and filed as required.
(10) The information in the Effective Prospectus
and the Final Prospectus under the caption
"Description of Capital Stock," insofar as
it purports to summarize the capital stock
of the Company, is correct in all material
respects.
In addition to the matters set forth above, such
opinion shall also include a statement to the effect
that nothing has come to the attention of such
counsel which leads them to believe that the
Registration Statement, the Effective Prospectus and
the Final Prospectus or any amendment or supplement
thereto contains an untrue statement of a material
fact or omits to state a material fact required to be
stated therein or necessary to make the statements
therein not
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misleading (except that such counsel need express no
view as to financial statements, schedules and other
financial information included therein).
d. The Underwriters shall have received an opinion,
dated the Closing Date, of Xxxxxxxx, Xxxxxxx and
Xxxxxxx as counsel for the Selling Stockholders,
substantially to the effect that:
(1) This Agreement and the Custody Agreement and
Power of Attorney have been duly executed
and delivered by or on behalf of each of the
Selling Stockholders and constitute valid
and binding agreements of the Selling
Stockholders in accordance with their terms,
except as enforceability may be limited by
applicable equitable principles or by
bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to
time in effect affecting the enforcement of
creditors' rights and except that the
enforceability of the rights to indemnity
and contribution contained herein may be
limited by federal or state laws and public
policy underlying such laws.
(2) To the best knowledge of such counsel, the
sale of the Shares to be sold by the Selling
Stockholders hereunder and the compliance by
the Selling Stockholders with all of the
provisions of this Agreement and the Custody
Agreement and Power of Attorney, and the
consummation of the transactions herein and
therein contemplated will not conflict with
or result in a breach or violation of any
terms or provisions of, or constitute a
default under any material indenture,
mortgage, deed of trust, loan agreement or
other agreement or instrument known to such
counsel to which any of the Selling
Stockholders is a party or by which any of
the Selling Stockholders is bound or to
which any of the property or assets of any
of the Selling Stockholders is subject, or
any statute, order, rule or regulation of
any court or governmental agency or body
known to such counsel to be applicable to
the Selling Stockholders or the property of
the Selling Stockholders.
(3) To the knowledge of such counsel, no
consent, approval, authorization or order of
any court or governmental agency or body is
required for the consummation of the
transactions contemplated by this Agreement
and the Custody Agreement and Power of
Attorney in connection with the Shares to be
sold by the Selling Stockholders hereunder,
except which have been duly obtained and in
full force and effect, such as have been
obtained under the Securities Act and such
as may be required under state securities or
Blue Sky laws in connection with the
purchase and distribution of such Shares by
the Underwriters, as to which such counsel
need express no opinion.
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(4) The Selling Stockholders have full right,
power and authority to sell, transfer and
deliver such Shares pursuant to this
Agreement and the Custody Agreement and
Power of Attorney. Assuming that the
Underwriters will take delivery of the
Shares for value in good faith and without
notice of any adverse claim within the
meaning of the Uniform Commercial Code and
that the Underwriters are not parties
themselves to any fraud or illegality
affecting the Shares, and by delivery of a
certificate or certificates therefor, the
Selling Stockholders will transfer to the
Underwriters good and marketable title to
such shares, free and clear of (i) all
liens, encumbrances, claims, security
interests and (ii) to the knowledge of such
counsel, all restrictions, stockholders'
agreements and voting trusts.
e. The Underwriters shall have received an opinion or
opinions, dated the Closing Date, of Bass, Xxxxx &
Xxxx PLC, counsel for the Underwriters, with respect
to the Registration Statement and the Final
Prospectus, and such other related matters as the
Underwriters may 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. Such counsel may rely on
Hutchins, Wheeler, Xxxxxxx as to matters of
Massachusetts law.
f. The Underwriters shall have received from Ernst &
Young LLP, a letter dated the date hereof and, at the
Closing Date, a second letter dated the Closing Date,
in form and substance satisfactory to the
Underwriters, stating that they are independent
public accountants with respect to the Company and
its subsidiaries within the meaning of the Securities
Act and the applicable Rules and Regulations, and to
the effect that:
(1) In their opinion, the financial statements
and schedules examined by them and included
in the Registration Statement comply as to
form in all material respects with the
applicable accounting requirements of the
Securities Act and the published Rules and
Regulations and are presented in accordance
with generally accepted accounting
principles; and they have made a review in
accordance with standards established by the
American Institute of Certified Public
Accountants of the consolidated interim
financial statements, selected financial
data, and/or condensed financial statements
derived from audited financial statements of
the Company;
(2) The unaudited selected financial information
included in the Preliminary Prospectus and
the Final Prospectus under the captions
"Prospectus Summary" and "Selected
Consolidated Financial Information" for the
years ended December 31, 1997, 1996, 1995,
1994 and 1993 agrees with the corresponding
amounts in the audited
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financial statements incorporated by
reference in the Final Prospectus or
previously reported on by them;
(3) On the basis of a reading of the latest
available unaudited interim consolidated
financial statements of the Company and its
subsidiaries, a reading of the minute books
of the Company and its subsidiaries,
inquiries of management of the Company
responsible for financial and accounting
matters and other specified procedures, all
of which have been agreed to by the
Underwriters, nothing came to their
attention that caused them to believe that:
(a) the unaudited financial statements
included in the Registration
Statement do not comply as to form
in all material respects with the
accounting requirements of the
federal securities laws 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
the basis for the audited financial
statements contained in the
Registration Statement;
(b) any other unaudited financial
statement data included in the Final
Prospectus do not agree with the
corresponding items in the unaudited
consolidated financial statements
from which data was derived and any
such unaudited data were not
determined on a basis substantially
consistent with the basis for the
corresponding amounts in the audited
financial statements included in the
Prospectus;
(c) at a specified date not more than
five days prior to the date of
delivery of such respective letter,
there was any change in the
consolidated capital stock, decline
in stockholders' equity or increase
in long-term debt of the Company and
its subsidiaries, or other items
specified by the Underwriters, in
each case as compared with amounts
shown in the latest balance sheets
included in the Final Prospectus,
except in each case for changes,
decreases or increases which the
Final Prospectus discloses have
occurred or may occur or which are
described in such letters; and
(d) for the period from the closing date
of the latest consolidated
statements of income included in the
Effective Prospectus and the Final
Prospectus to a specified date not
more than five days prior to the
date of delivery of such respective
letter, there were any decreases in
total revenues or net income of the
Company, or other items specified by
the Underwriters,
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or any increases in any items
specified by the Underwriters, in
each case as compared with the
corresponding period of the
preceding year, except in each case
for decreases which the Final
Prospectus discloses have occurred
or may occur or which are described
in such letter.
They have carried out certain specified
procedures, not constituting an audit, with
respect to certain amounts, percentages and
financial information specified by the
Underwriters which are derived from the
general accounting records of the Company
and its subsidiaries, which appear in the
Effective Prospectus and the Final
Prospectus and have compared and agreed such
amounts, percentages and financial
information with the accounting records of
the Company and its subsidiaries or to
analyses and schedules prepared by the
Company and its subsidiaries from its
detailed accounting records.
In the event that the letters to be
delivered referred to above set forth any
such changes, decreases or increases, it
shall be a further condition to the
obligations of the Underwriters that the
Underwriters shall have determined, after
discussions with officers of the Company
responsible for financial and accounting
matters and with Ernst & Young LLP, that
such changes, decreases or increases as are
set forth in such letters do not reflect a
material adverse change in the stockholders'
equity or long-term debt of the Company as
compared with the amounts shown in the
latest consolidated balance sheets of the
Company included in the Final Prospectus, or
a material adverse change in total revenues
or net income, of the Company, in each case
as compared with the corresponding period of
the prior year.
g. There shall have been furnished to the Underwriters a
certificate, dated the Closing Date and addressed to
the Underwriters, signed by the Chief Executive
Officer and by the Chief Financial Officer of the
Company to the effect that:
(1) the representations and warranties of the
Company in Section 1 of this Agreement are
true and correct, as if made at and as of
the Closing Date, and the Company has
complied with all the agreements and
satisfied all the conditions on its part to
be performed or satisfied at or prior to the
Closing Date;
(2) no stop order suspending the effectiveness
of the Registration Statement has been
issued, and no proceedings for that purpose
have been initiated or are pending, or to
their knowledge, threatened under the
Securities Act;
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(3) all filings required by Rules 424, 430A and
462 of the Rules and Regulations have been
made;
(4) they have carefully examined the
Registration Statement, the Effective
Prospectus and the Final Prospectus, and any
amendments or supplements thereto, and such
documents do not include 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; and
(5) since the effective date of the Registration
Statement, there has occurred no event
required to be set forth in an amendment or
supplement to the Registration Statement,
the Effective Prospectus or the Final
Prospectus which has not been so set forth.
h. Subsequent to the respective dates as of which
information is given in the Registration Statement
and the Final Prospectus, and except as stated
therein, the Company and its subsidiaries shall have
not sustained any material loss or interference with
their respective businesses or properties from fire,
flood, hurricane, earthquake, accident or other
calamity, whether or not covered by insurance, or
from any labor dispute or any court or governmental
action, order or decree, or become a party to or the
subject of any litigation which is material to the
Company and its subsidiaries taken as a whole, nor
shall there have been any material adverse change, or
any development involving a prospective material
adverse change, in the business, properties, key
personnel, capitalization, net worth results of
operations or condition (financial or other) of the
Company and its subsidiaries taken as a whole, which
loss, interference, litigation or change, in the
Underwriters' judgment shall render it unadvisable to
commence or continue the offering of the Shares at
the offering price to the public set forth on the
cover page of the Prospectus or to proceed with the
delivery of the Shares.
i. The representations and warranties of the Selling
Stockholders shall be true and correct as of the
Closing Date, and the Selling Stockholders shall
deliver to the Underwriters a certificate to that
effect dated the Closing Date and executed by or on
behalf of the Selling Stockholders.
All such opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory to the Underwriters and their counsel. The Company shall
furnish to the Underwriters such conformed copies of such opinions,
certificates, letters and documents in such quantities as the Underwriters shall
reasonably request.
The respective obligations of the Underwriters to purchase and pay for the
Option Shares shall be subject, in their discretion, to each of the foregoing
conditions to purchase the Firm Shares, except
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that all references to the "Closing Date" shall be deemed to refer to the Option
Closing Date, if it shall be a date other than the Closing Date.
8. Condition of the Company's and the Selling Stockholders'
Obligations. The obligations hereunder of the Company and the Selling
Stockholders are subject to the condition set forth in Section 7(a) hereof.
9. Indemnification and Contribution.
a. The Company agrees to indemnify and hold harmless
each Underwriter, and each person, if any, who
controls any Underwriter within the meaning of the
Securities Act, against any losses, claims, damages
or liabilities, joint or several, to which such
Underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based
in whole or in part upon (i) any inaccuracy in the
representations and warranties of the Company or the
Selling Stockholders contained herein, (ii) any
failure of the Company or the Selling Stockholders to
perform its or their obligations hereunder or under
law or (iii) any untrue statement or alleged untrue
statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus,
the Effective Prospectus or Final Prospectus, or any
amendment or supplement thereto, or in any Blue Sky
application or other written information furnished by
the Company or the Selling Stockholders filed in any
state or other jurisdiction in order to qualify any
or all of the Shares under the securities laws
thereof (a "Blue Sky Application"), or arise out of
or are based upon the omission or alleged omission to
state in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final
Prospectus or any amendment or supplement thereto or
any Blue Sky Application a material fact required to
be stated therein or necessary to make the statements
therein not misleading, and will reimburse 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 or defending any such loss, claim,
damage, liability or action as such expenses are
incurred; provided, however, that neither the Company
nor the Selling Stockholders will 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 the Registration
Statement, the Preliminary Prospectus, the Effective
Prospectus or Final Prospectus or such amendment or
such supplement or any Blue Sky Application in
reliance upon and in conformity with written
information furnished to the Company by any
Underwriter specifically for use therein (it being
understood that the only information so provided is
the information included in the last paragraph on the
cover page and in the first, third and fourth
paragraphs under the caption "Underwriting" in any
Preliminary
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Prospectus and the Final Prospectus and the Effective
Prospectus). The Company shall be liable for the full
amount of all claims pursuant to this Section and
this Agreement.
b. Each Underwriter will indemnify and hold harmless the
Selling Stockholders and 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 the
Securities 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 Securities 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, any Preliminary
Prospectus, the Effective Prospectus or Final
Prospectus, or any amendment or supplement thereto,
or any Blue Sky Application, or arise out of or are
based upon the omission or the alleged omission to
state in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final
Prospectus or any amendment or supplement thereto or
any Blue Sky Application a material fact required to
be stated therein 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
any Underwriter specifically for use therein (it
being understood that the only information so
provided is the information included in the last
paragraph on the cover page and in the first, third
and fourth paragraphs under the caption
"Underwriting" in any Preliminary Prospectus and in
the Effective Prospectus and the Final Prospectus);
c. Promptly after receipt by an indemnified party under
this Section 9 of notice of the commencement of any
action, including governmental proceedings, such
indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party under
this Section 9 notify the indemnifying party of the
commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any
liability which it may have to any indemnified party
otherwise than under this Section 9. In case any such
action is brought against any indemnified party, and
it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent
that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense
thereof, with counsel satisfactory to such
indemnified party; and after notice from the
indemnifying party to such indemnified party of its
election to so 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
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defense thereof other than reasonable costs of
investigation except that the indemnified party shall
have the right to employ separate counsel if, in its
reasonable judgment, it is advisable for the
indemnified party and any other Underwriter to be
represented by separate counsel, and in that event
the fees and expenses of separate counsel shall be
paid by the indemnifying party. Neither the Company
nor any of the Selling Stockholders will, without
prior written consent of each Underwriter, settle or
compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or
proceeding (or related cause of action or portion
thereof) in respect of which indemnification may be
sought hereunder (whether or not such Underwriter is
a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent
includes an unconditional release of such Underwriter
from all liability arising out of such claim, action,
suit or proceeding (or related cause of action or
portion thereof).
d. In order to provide for just and equitable
contribution in circumstances in which the indemnity
agreement provided for in the preceding part of this
Section 9 is for any reason held to be unavailable to
the Underwriters, or the Company is insufficient to
hold harmless an indemnified party, then the Company
shall contribute to the damages paid by the
Underwriters, and the Underwriters shall contribute
to the damages paid by the Company provided, however,
that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. In determining the amount of
contribution to which the respective parties are
entitled, there shall be considered the relative
benefits received by each party from the offering of
the Shares (taking into account the portion of the
proceeds of the offering realized by each), the
parties' relative knowledge and access to information
concerning the matter with respect to which the claim
was asserted, the opportunity to correct and prevent
any statement or omission, and any other equitable
considerations appropriate under 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). No Underwriter or person
controlling such Underwriter shall be obligated to
make contribution hereunder which in the aggregate
exceeds the underwriting discount applicable to the
Shares purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages
which such Underwriter and its controlling persons
have otherwise been required to pay in respect of the
same or any similar claim. The Underwriters'
obligations to contribute hereunder are several in
proportion to their respective underwriting
obligations and not joint. For purposes of this
Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the
Securities Act shall have the same rights to
contribution as such
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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
Securities Act, shall have the same rights to
contribution as the Company.
e. The obligations of the Company under this Section 9
shall be in addition to any liability which the
Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any,
who controls any Underwriter within the meaning of
the Securities Act; and the obligations of the
Underwriters under this Section 9 shall be in
addition to any liability which the respective
Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer
and director of the Company and to each person, if
any, who controls the Company within the meaning of
the Securities Act.
10. Default of Underwriters. If any Underwriter defaults in its
obligation to purchase Shares hereunder and if the total number of Shares which
such defaulting Underwriter agreed but failed to purchase is ten percent or less
of the total number of Shares to be sold hereunder, the non-defaulting
Underwriters shall be obligated severally to purchase (in the respective
proportions which the number of Shares set forth opposite the name of each
non-defaulting Underwriter in Schedule I hereto bears to the total number of
Shares set forth opposite the names of all the non-defaulting Underwriters), the
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase. If any Underwriter so defaults and the total number of Shares with
respect to which such default or defaults occur is more than ten percent of the
total number of Shares to be sold hereunder, and arrangements satisfactory to
the other Underwriters and the Company for the purchase of such Shares by other
persons (who may include the non-defaulting Underwriters) are not made within 36
hours after such default, this Agreement, insofar as it relates to the sale of
the Shares, will terminate without liability on the part of the non-defaulting
Underwriters or the Company except for (i) the provisions of Section 9 hereof,
and (ii) the expenses to be paid or reimbursed by the Company pursuant to
Section 6. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10. Nothing herein shall
relieve a defaulting Underwriter from liability for its default.
11. Default by the Selling Stockholders. If any of the Selling
Stockholders fails to sell and deliver the number of Shares that such Selling
Stockholder is obligated to sell, the Underwriters may, at their option, by
notice to the Company, either (a) require the Company to sell and deliver such
number of shares of Common Stock as to which such Selling Stockholder has
defaulted, or (b) terminate this Agreement if the Company shall have refused to
sell and deliver to the Underwriters the shares of Common Stock referred to in
Section 11(a). In the event of a default under this Section 11 that does not
result in the termination of this Agreement, the Underwriters shall have the
right to postpone the First Closing Date for a period not exceeding seven days
in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. No action taken pursuant
to this Section 11 shall relieve the Company or the Selling Stockholder so
defaulting from liability, if any, in respect of such default.
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12. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Selling
Stockholders, the Company, its officers and the 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 Selling Stockholders, the Company, any
of its officers or directors, any Underwriter or any controlling person, (ii)
any termination of this Agreement and (iii) delivery of and payment for the
Shares.
13. Effective Date. This Agreement, after due execution, shall become
effective at whichever of the following times shall first occur: (i) at 11:30
A.M., Washington, D.C. time, on the next full business day following the date on
which the Registration Statement becomes effective or (ii) at such time after
the Registration Statement has become effective as the Underwriters shall
release the Firm Shares for sale to the public; provided, however, that the
provisions of Sections 6, 9, 12 and 13 hereof shall at all times be effective.
For purposes of this Section 13, the Firm Shares shall be deemed to have been so
released upon the release by the Underwriters for publication, at any time after
the Registration Statement has become effective, of any newspaper advertisement
relating to the Firm Shares or upon the release by the Underwriters of telegrams
offering the Firm Shares for sale to securities dealers, whichever may occur
first.
14. Termination.
a. The Company's obligations under this Agreement may be
terminated by the Company by notice to the
Underwriters (i) at any time before it becomes
effective in accordance with Section 13 hereof, or
(ii) in the event that the condition set forth in
Section 8 shall not have been satisfied at or prior
to the First Closing Date.
b. This Agreement may be terminated by the Underwriters
by notice to the Company and the Selling Stockholders
(i) at any time before it becomes effective in
accordance with Section 13 hereof; (ii) in the event
that at or prior to the First Closing Date the
Company or the Selling Stockholders shall have
failed, refused or been unable to perform any
agreement on the part of the Company or the Selling
Stockholders to be performed hereunder or any other
condition to the obligations of the Underwriters
hereunder is not fulfilled; (iii) if at or prior to
the Closing Date trading in securities on the New
York Stock Exchange, the American Stock Exchange or
the over-the- counter market shall have been
suspended or materially limited or minimum or maximum
prices shall have been established on either of such
Exchanges or such market, or a banking moratorium
shall have been declared by Federal or state
authorities; (iv) if at or prior to the Closing Date
trading in securities of the Company shall have been
suspended; or (v) if there shall have been such a
material change in general economic, political or
financial conditions or if the effect of
international conditions on the financial markets in
the United States shall be such as, in the
Underwriters' reasonable judgment, makes it
inadvisable to commence or continue the offering of
the Shares at
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the offering price to the public set forth on the
cover page of the Prospectus or to proceed with the
delivery of the Shares.
c. Termination of this Agreement pursuant to this
Section 14 shall be without liability of any party to
any other party other than as provided in Sections 6
and 9 hereof.
15. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed or delivered or telegraphed and
confirmed in writing to Xxxxxx Xxxxxxx Incorporated, Xxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attn: Xxxxxxx X. Xxxxxxx, or if sent to the Company or the
Selling Stockholders shall be mailed, delivered or telegraphed and confirmed in
writing to the Company at 000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxxx 00000,
Attn: Xxxxxxx X. Xxxxxxxx.
16. Miscellaneous. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company and the Selling Stockholders
and their respective successors and legal representatives. 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. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Company, the Selling
Stockholders and the several Underwriters and for the benefit of no other person
except that (i) the representations and warranties of the Company and the
Selling Stockholders and contained in 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 Securities Act, and (ii) the indemnities by the
Underwriters shall also be for the benefit of the directors of the Company,
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 Securities Act. No purchaser of Shares from any Underwriter will be deemed a
successor because of such purchase. The validity and interpretation of this
Agreement shall be governed by the laws of the State of Massachusetts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
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If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between the Company, the Selling Stockholders and each of the several
Underwriters.
Very truly yours,
LITCHFIELD FINANCIAL CORPORATION
By:
-----------------------------------------------
Name:
Title:
SELLING STOCKHOLDERS, named in Schedule II hereto:
By:
-----------------------------------------------
Xxxxxxx X. Xxxxxxxx, Attorney-in-Fact
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Confirmed and accepted as of the date first above written.
XXXXXX XXXXXXX INCORPORATED
By:_______________________________
Name:____________________________
Title:_____________________________
XxXXXXXX & COMPANY SECURITIES, INC.
By:_______________________________
Name:____________________________
Title:_____________________________
X.X. XXXXXXXX & CO.
By:_______________________________
Name:____________________________
Title:_____________________________
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SCHEDULE I
UNDERWRITERS
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
---------------------------------------------------------------------------- ---------------
Xxxxxx Xxxxxxx Incorporated.................................................
XxXxxxxx & Company Securities, Inc..........................................
X.X. Xxxxxxxx & Co..........................................................
---------
Total Firm Shares to be Purchased...................... 1,150,000
=========
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SCHEDULE II
SELLING STOCKHOLDERS
NUMBER OF
FIRM SHARES
NAME TO BE PURCHASED
FROM SELLING
SHAREHOLDERS
--------------------------------------------------------------------- ----------------
Xxxxxxx X. Xxxxxxxx..................................................
Xxxxxxx X. Xxxx......................................................
-------
Total Firm Shares to be Purchased
from the Selling Shareholders................... 150,000
=======
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