EXHIBIT 1.01
3,530,000 Shares
MBIA INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
__________, 1996
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
XXXXXX BROTHERS INC.
XXXXX XXXXXX INC.
As representatives of the
several U.S. underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX SACHS INTERNATIONAL
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
XXXXX XXXXXX INC.
As representatives of the
several international
managers named in Schedule II
hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Jupiter House
Trinton Court
00 Xxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX, Xxxxxxx
Dear Sirs:
MBIA Inc., a Connecticut corporation (the "Company"), proposes to issue and
sell to the several Underwriters (as defined below) an aggregate of 670,000
shares of its common stock (par value $1.00 per share) ("Common Stock"), and The
Aetna Casualty and Surety Company, a Connecticut corporation (the "Selling
Stockholder"), proposes to sell to the several Underwriters an aggregate of
2,860,000 shares of Common Stock of the Company. The 670,000 shares of Common
Stock to be issued and
2
sold by the Company are hereinafter called the Company Shares. The shares of
Common Stock to be sold by the Selling Stockholder are hereinafter called the
Stockholder Shares. The Company Shares and the Stockholder Shares are
hereinafter called the Firm Shares.
It is understood that, subject to the conditions hereinafter stated,
2,290,000 Stockholder Shares (the "U.S. Stockholder Shares") and 540,000 Company
Shares (the "U.S. Company Shares" and together with the U.S. Stockholder Shares,
the "U.S. Firm Shares") will be sold to the several U.S. Underwriters named in
Schedule I hereto (the "U.S. Underwriters") in connection with the offering and
sale of such U.S. Firm Shares in the United States and Canada to United States
and Canadian Persons (as such terms are defined in the Agreement Between U.S.
Underwriters and International Managers of even date herewith), and 570,000
Stockholder Shares (the "International Stockholder Shares") and 130,000 Company
Shares (the "International Company Shares" and together with the International
Stockholder Shares, the "International Shares") will be sold to the several
International Managers named in Schedule II hereto (the "International
Managers") in connection with the offering and sale of such International Shares
outside the United States and Canada to persons other than United States and
Canadian Persons. Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, Xxxxxxx,
Sachs & Co., Xxxxxx Brothers Inc. and Xxxxx Xxxxxx Inc. shall act as
representatives (the "U.S. Representatives") of the several U.S. Underwriters,
and Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities Corporation, Xxxxxxx Sachs
International, Xxxxxx Brothers International (Europe) and Xxxxx Xxxxxx Inc.
shall act as representatives (the "International Representatives") of the
several International Managers. The U.S. Underwriters and the International
Managers are hereinafter collectively referred to as the Underwriters.
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional 100,000 shares of its Common Stock (the
"Additional Company Shares"), and the Selling Stockholder also proposes to sell
to the several U.S. Underwriters not more than an additional 260,000 shares of
Common Stock of the Company (the "Additional Stockholder Shares" and together
with the Additional Company Shares, the "Additional Shares"), if requested by
the U.S. Underwriters as provided in Section 2 hereof. The Firm Shares and the
Additional Shares are herein collectively called the Shares. The Company and
the Selling Stockholder are hereinafter collectively referred to as the Sellers.
1. Registration Statement and Prospectus. The Company has prepared and
-------------------------------------
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-3 including a
3
prospectus relating to the Shares, which may be amended. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons, and the international prospectus, to be used in connection
with the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the outside front and
back cover pages. The registration statement as amended at the time when it
becomes effective, including information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the Registration Statement; and the U.S.
prospectus and the international prospectus in the respective forms first used
to confirm sales of Shares are hereinafter referred to as the Prospectus.
2. Agreements to Sell and Purchase. The Company hereby agrees to issue
-------------------------------
and sell the U.S. Company Shares to the several U.S. Underwriters, and the
Selling Stockholder hereby agrees to sell to the several U.S. Underwriters the
U.S. Stockholder Shares, and each of the U.S. Underwriters, upon the basis of
the representations and warranties contained in this Agreement, and subject to
its terms and conditions, agrees, severally and not jointly, to purchase from
the Company and the Selling Stockholder at a price per share of $___ (the
"Purchase Price"), the respective number of U.S. Company Shares and U.S.
Stockholder Shares (subject to such adjustments to eliminate fractional shares
as the U.S. Representatives may determine) that bears the same proportion to the
number of U.S. Company Shares and U.S. Stockholder Shares to be sold by the
Company or by the Selling Stockholder, as the case may be, as the number of Firm
Shares set forth in Schedule I hereto opposite the name of such U.S. Underwriter
bears to the total number of Firm Shares set forth opposite the names of all
U.S. Underwriters in Schedule I hereto.
The Company hereby agrees to issue and sell the International Company
Shares to the International Managers named in Schedule II hereto, and the
Selling Stockholder hereby agrees to sell the International Stockholder Shares
to the International Managers named in Schedule II hereto, and each of the
International Managers, upon the basis of the representations and warranties
contained in this Agreement, and subject to its terms and conditions, agrees,
severally and not jointly, to purchase from the Company and the Selling
Stockholder at the Purchase Price the respective number of Firm Shares set forth
opposite the name of such International Manager in Schedule II hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell to the U.S.
4
Underwriters the Additional Company Shares, and the Selling Stockholder agrees
to sell to the U.S. Underwriters the Additional Stockholder Shares, and the U.S.
Underwriters shall have the right to purchase, severally and not jointly, up to
100,000 Additional Company Shares from the Company and up to 260,000 Additional
Stockholder Shares from the Selling Stockholder at the Purchase Price.
Additional Shares may be purchased solely for the purpose of covering over-
allotments made in connection with the offering of the Firm Shares. The U.S.
Underwriters may exercise their right to purchase Additional Shares in whole or
in part from time to time by giving written notice thereof to the Company and
the Selling Stockholder within 30 days after the date of this Agreement. The
U.S. Representatives shall give any such notice on behalf of the U.S.
Underwriters and such notice shall specify the aggregate number of Additional
Shares to be purchased pursuant to such exercise and the date for payment and
delivery thereof. The date specified in any such notice shall be a business day
(i) no earlier than the Closing Date (as hereinafter defined), (ii) no later
than ten business days after such notice has been given and (iii) no earlier
than two business days after such notice has been given. If any Additional
Shares are to be purchased, each U.S. Underwriter, severally and not jointly,
agrees to purchase from the Company and the Selling Stockholder the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
the U.S. Representatives may determine) which bears the same proportion to the
total number of Additional Shares to be purchased from the Company and the
Selling Stockholder as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I bears to the total number of U.S. Firm Shares.
The Sellers hereby agree, severally and not jointly, and the Company shall,
concurrently with the execution of this Agreement, deliver an agreement executed
by (i) each of the directors and officers of the Company and (ii) [each
stockholder listed on Annex I hereto], pursuant to which each such person
agrees, not to offer, sell, contract to sell, grant any option to purchase, or
otherwise dispose of any Common Stock of the Company or any securities
convertible into or exercisable or exchangeable for such Common Stock or in any
other manner transfer all or a portion of the economic consequences associated
with the ownership of any such Common Stock, except to the Underwriters pursuant
to this Agreement, for a period of 90 days after the date of the Prospectus
without the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation. Notwithstanding the foregoing, during such period (i) the Company
may grant stock options pursuant to the Company's existing stock option plan and
(ii) the Company may issue shares of its Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date
hereof.
3. Terms of Public Offering. The Sellers are advised by you that the
------------------------
Underwriters propose (i) to make a public
5
offering of their respective portions of the Shares as soon after the effective
date of the Registration Statement as in your judgment is advisable and (ii)
initially to offer the Shares upon the terms set forth in the Prospectus.
Each U.S. Underwriter hereby makes to and with the Company the
representations and agreements of such U.S. Underwriter contained in the fifth
paragraph of Section 3 of the Agreement Between U.S. Underwriters and
International Managers of even date herewith. Each International Manager hereby
makes to and with the Company the representations and agreements of such
International Underwriter contained in the seventh, eighth, ninth and tenth
paragraphs of Section 3 of such Agreement.
4. Delivery and Payment. Delivery to the Underwriters of and payment for
--------------------
the Firm Shares shall be made at 10:00 A.M., New York City time, on the third
business day (the "Closing Date") following the date of the initial public
offering, at such place outside the State of New York as you shall designate.
The Closing Date and the location of delivery of and the form of payment for the
Firm Shares may be varied by agreement between you and the Sellers.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at such place as the U.S.
Representatives shall designate at 10:00 A.M., New York City time, on the date
specified in the applicable exercise notice given by you pursuant to Section 2
(an "Option Closing Date"). Any such Option Closing Date and the location of
delivery of and the form of payment for such Additional Shares may be varied by
agreement between the U.S. Representatives, the Company and the Selling
Stockholder.
Certificates for the Shares shall be registered in such names and issued in
such denominations as you shall request in writing not later than two full
business days prior to the Closing Date or an Option Closing Date, as the case
may be. Such certificates shall be made available to you for inspection not
later than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the respective Sellers, for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by
certified or official bank checks payable in New York Clearing House funds to
the order of the applicable Sellers.
5. Agreements of the Company. The Company agrees with you:
-------------------------
(a) To use its best efforts to cause the Registration Statement to
become effective at the earliest possible time.
6
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment to it becomes effective, (ii) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, and (iv) of the
happening of any event during the period referred to in paragraph (e) below
which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(c) To furnish to you, without charge, five signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus of which you shall
not previously have been advised or to which you shall reasonably object;
and to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause the
same to become promptly effective.
(e) Prior to 10:00 A.M. New York City time on the first business day
next succeeding the date of this Agreement, and from time to time
thereafter for such period as in the opinion of counsel for the
Underwriters a prospectus is required by law to be delivered in connection
with sales by an Underwriter or a dealer, to furnish in New York City to
each Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer
may reasonably request.
7
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters
it becomes necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus,
as so amended or supplemented, will not in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter or
dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such qualification in effect
so long as required for distribution of the Shares and to file such
consents to service of process or other documents as may be necessary in
order to effect such registration or qualification.
(h) To mail and make generally available to its stockholders as soon
as reasonably practicable an earnings statement covering a period of at
least twelve months after the effective date of the Registration Statement
(but in no event commencing later than 90 days after such date) which shall
satisfy the provisions of Section 11(a) of the Act, and to advise you in
writing when such statement has been so made available.
(i) During the period of five years after the date of this Agreement,
to furnish to you as soon as available a copy of each report or other
publicly available information of the Company mailed to the holders of
Common Stock or filed with the Commission and such other publicly available
information concerning the Company and its subsidiaries as you may
reasonably request.
(j) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), each
preliminary prospectus and all amendments and supplements to any of them
prior to or during the period specified in paragraph (e), (ii) the printing
and delivery of the Prospectus and all amendments or supplements to it
during the period specified in paragraph (e), (iii) the printing
8
and delivery of this Agreement, the Preliminary Blue Sky Memoranda and all
other agreements, memoranda, correspondence and other documents printed and
delivered in connection with the offering of the Shares (including in each
case any disbursements of counsel for the Underwriters relating to such
printing and delivery), (iv) the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of the
several states (including in each case the fees and disbursements of
counsel for the Underwriters relating to such registration or qualification
and memoranda relating thereto), (v) filings and clearance with the
National Association of Securities Dealers, Inc. in connection with the
offering, (vi) the listing of the Shares on the New York Stock Exchange,
(vii) furnishing such copies of the Registration Statement, the Prospectus
and all amendments and supplements thereto as may be requested for use in
connection with the offering or sale of the Shares by the Underwriters or
by dealers to whom Shares may be sold and (viii) the performance by the
Sellers of their other obligations under this Agreement.
(k) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company
prior to the Closing Date or any Option Closing Date, as the case may be,
and to satisfy all conditions precedent to the delivery of the Shares.
6. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii)
the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Act and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any 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 under which they were
made, not misleading, except that the representations and warranties set
forth in this paragraph (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon
9
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act; and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and authority to carry on its business as it is currently being conducted
and to own, lease and operate its properties, and each is duly qualified
and is in good standing as a foreign corporation authorized to do business
in each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(e) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and
are owned by the Company, free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature.
(f) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholder) have been duly
authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights; and the Shares to be issued
and sold by the Company hereunder have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid and non-
assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.
(g) The authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained in
the Prospectus.
(h) Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws or in default in the performance of
any obligation, agreement or
10
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument material to
the conduct of the business of the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a party or by
which it or any of its subsidiaries or their respective property is bound.
(i) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except as such may
be required under the securities or Blue Sky laws of the various states)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or
any of its subsidiaries or any agreement, indenture or other instrument to
which it or any of its subsidiaries is a party or by which it or any of its
subsidiaries or their respective property is bound, or violate or conflict
with any laws, administrative regulations or rulings or court decrees
applicable to the Company, any of its subsidiaries or their respective
property.
(j) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any of their respective
property is the subject, and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated. No contract or document
of a character required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement
is not so described or filed as required.
(k) Coopers & Xxxxxxx L.L.P. are independent public accountants with
respect to the Company as required by the Act.
(l) The financial statements, together with related schedules and
notes forming part of the Registration Statement and the Prospectus (and
any amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and changes in financial position
of the Company and its subsidiaries on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set
forth in
11
the Registration Statement and the Prospectus (and any amendment or
supplement thereto) is, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books
and records of the Company.
(m) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(n) Other than pursuant to the Amended and Restated Shareholders'
Agreement dated as of May 21, 1987, as amended, among the Company and the
shareholders named therein (the "Shareholders' Agreement"), no holder of
any security of the Company has any right to require registration of shares
of Common Stock or any other security of the Company.
(o) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
7. Representations and Warranties of the Selling Stockholder. The
---------------------------------------------------------
Selling Stockholder represents and warrants to each Underwriter that:
(a) The Selling Stockholder is the lawful owner of the Shares to be
sold by it pursuant to this Agreement and has, and on the Closing Date (and
Option Closing Date, if applicable) will have, good and clear title to such
Shares, free of all restrictions on transfer, liens, encumbrances, security
interests and claims whatsoever.
(b) Upon delivery of and payment for such Shares pursuant to this
Agreement, good and clear title to such Shares will pass to the
Underwriters, free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever.
(c) The Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority to enter into this Agreement and the
Custody Agreement between the Selling Stockholder and
______________________________, as Custodian (the "Custody Agreement") and
to sell, assign, transfer and deliver such Shares in the manner provided
herein and therein, and this Agreement and the Custody Agreement have been
duly authorized, executed and delivered by the Selling Stockholder and each
of this Agreement and the Custody Agreement is a valid and binding
agreement of the Selling Stockholder enforceable in accordance with its
terms, except as rights to indemnity and contribution hereunder may be
limited by applicable law.
12
(d) The power of attorney signed by the Selling Stockholder
appointing _________________ and ________________, or either one of them,
as its attorney-in-fact to the extent set forth therein with regard to the
transactions contemplated hereby and by the Registration Statement and the
Custody Agreement has been duly authorized, executed and delivered by or on
behalf of the Selling Stockholder and is a valid and binding instrument of
the Selling Stockholder enforceable in accordance with its terms, and,
pursuant to such power of attorney, the Selling Stockholder has authorized
_________________ and ________________, or either one of them, to execute
and deliver on its behalf this Agreement and any other document necessary
or desirable in connection with transactions contemplated hereby and to
deliver the Shares to be sold by the Selling Stockholder pursuant to this
Agreement.
(e) The Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably
be expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares pursuant to the distribution contemplated by this Agreement, and
other than as permitted by the Act, the Selling Stockholder has not
distributed and will not distribute any prospectus or other offering
material in connection with the offering and sale of the Shares.
(f) The execution, delivery and performance of this Agreement by the
Selling Stockholder, compliance by the Selling Stockholder with all the
provisions hereof and the consummation of the transactions contemplated
hereby will not require any consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental
body (except as such may be required under the Act, state securities laws
or Blue Sky laws) and will not conflict with or constitute a breach of any
of the terms or provisions of, or a default under, organizational documents
of the Selling Stockholder, or any agreement, indenture or other instrument
to which the Selling Stockholder is a party or by which the Selling
Stockholder or property of the Selling Stockholder is bound, or violate or
conflict with any laws, administrative regulation or ruling or court decree
applicable to the Selling Stockholder or property of the Selling
Stockholder.
(g) Such parts of the Registration Statement under the caption
"Selling Shareholder" which specifically relate to the Selling Stockholder
do not, and will not on the Closing Date (and any Option Closing Date, if
applicable), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
13
make the statements therein, in light of circumstances under which they
were made, not misleading.
(h) At any time during the period described in paragraph 5(e) hereof,
if there is any change in the information referred to in paragraph 7(g)
above, the Selling Stockholder will immediately notify you of such change.
8. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless each Underwriter and the Selling Stockholder and each person, if any,
who controls any Underwriter or the Selling Stockholder within the meaning of
Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all losses, claims,
damages, liabilities and judgments caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriters furnished in
writing to the Company by or on behalf of any Underwriter through you, or based
upon information relating to the Selling Stockholder furnished to the Company in
writing by or on behalf of the Selling Stockholder, expressly for use therein.
(b) The Selling Stockholder agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either such
Section, from and against any and all losses, claims, damages and liabilities
and judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only with
reference to information relating to the Selling Stockholder furnished in
writing by or on behalf of the Selling Stockholder expressly for use in the
Registration Statement or the Prospectus or in any preliminary prospectus.
(c) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with
14
respect to which indemnity may be sought against the Company and the Selling
Stockholder, such Underwriter shall promptly notify the Company and the Selling
Stockholder in writing and the Company and the Selling Stockholder shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses. Any Underwriter
or any such controlling person shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Company, (ii) the Company and the
Selling Stockholder shall have failed to assume the defense and employ counsel
or (iii) the named parties to any such action (including any impleaded parties)
include both such Underwriter or such controlling person and the Company or the
Selling Stockholder, as the case may be, and such Underwriter or such
controlling person shall have been advised by such counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the Company or the Selling Stockholder, as the case may be,
(in which case the Company and the Selling Stockholder shall not have the right
to assume the defense of such action on behalf of such Underwriter or such
controlling person, it being understood, however, that the Company and the
Selling Stockholder shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all such Underwriters and controlling persons, which firm
shall be designated in writing by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation and that all such fees and expenses shall be reimbursed as they are
incurred). A Seller shall not be liable for any settlement of any such action
effected without the written consent of such Seller but if settled with the
written consent of such Seller, such Seller agrees to indemnify and hold
harmless any Underwriter and any such controlling person from and against any
loss or liability by reason of such settlement. Notwithstanding the immediately
preceding sentence, if in any case where the fees and expenses of counsel are at
the expense of the indemnifying party and an indemnified party shall have
requested the indemnifying party to reimburse the indemnified party for such
fees and expenses of counsel as incurred, such indemnifying party agrees that it
shall be liable for any settlement of any action effected without its written
consent if (i) such settlement is entered into more than ten business days after
the receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the indemnified party in
accordance with such request for reimbursement prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party
15
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement, any person controlling the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, the Selling Stockholder and each
person, if any, controlling the Selling Stockholder within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company and the Selling Stockholder to each
Underwriter but only with reference to information relating to such Underwriter
furnished in writing by or on behalf of such Underwriter through you expressly
for use in the Registration Statement, the Prospectus or any preliminary
prospectus. In case any action shall be brought against the Company, any of its
directors, any such officer or any person controlling the Company or the Selling
Stockholder or any person controlling the Selling Stockholder based on the
Registration Statement, the Prospectus or any preliminary prospectus and in
respect of which indemnity may be sought against any Underwriter, the
Underwriter shall have the rights and duties given to the Sellers (except that
if any Seller shall have assumed the defense thereof) such Underwriter shall not
be required to do so, but may employ separate counsel therein and participate in
the defense thereof but the fees and expenses of such counsel shall be at the
expense of such Underwriter), and the Company, its directors, any such officers
and any person controlling the Company and the Selling Stockholder and any
person controlling the Selling Stockholder shall have the rights and duties
given to the Underwriter, by Section 8(c) hereof.
(e) If the indemnification provided for in this Section 8 is unavailable
to an indemnified party or insufficient in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, the Selling Stockholder and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the Selling Stockholder and the Underwriters shall be
16
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling Stockholder,
and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Shares, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company, the Selling Stockholder and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company, the Selling Stockholder or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 8(e)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8(e) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
[(f) Each Seller hereby designates [______________], [ADDRESS], (a [ ]
corporation) as its authorized agent, upon which process may be served in any
action, suit or proceeding which may be instituted in any state or federal court
in the State of New York by any Underwriter or person controlling an Underwriter
asserting a claim for indemnification or contribution under or pursuant to this
Section 8, and each Seller will accept the jurisdiction of such court in such
action, and waives, to the fullest extent permitted by applicable law, any
defense based upon lack of personal jurisdiction or venue. A copy of any such
17
process shall be sent or given to such Seller, at the address for notices
specified in Section 13 hereof.]
9. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters to purchase the Firm Shares under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the
same force and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective not later
than 5:00 P.M., New York City time, on the date of this Agreement or at
such later date and time as you may approve in writing, and at the Closing
Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been commenced or shall be pending before or contemplated by the
Commission.
(c) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of the Company, (ii) since the date of the
latest balance sheet included in the Registration Statement and the
Prospectus there shall not have been any change, or any development
involving a prospective material adverse change, in the capital stock or in
the long-term debt of the Company from that set forth in the Registration
Statement and Prospectus, (iii) the Company and its subsidiaries shall have
no liability or obligation, direct or contingent, which is material to the
Company and its subsidiaries, taken as a whole, other than those reflected
in the Registration Statement and the Prospectus and (iv) on the Closing
Date you shall have received a certificate dated the Closing Date, signed
by _______________ and _______________, in their capacities as the
_______________ and _________________ of the Company, confirming the
matters set forth in paragraphs (a), (b), and (c) of this Section 9.
(d) All the representations and warranties of the Selling Stockholder
contained in this Agreement shall be true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date and
you shall have received a certificate to such effect, dated the Closing
Date, from the Selling Stockholder.
18
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Xxxxx X. Xxxxx, Esq., General Counsel of the Company, to the
effect that:
(i) the Company and each of its subsidiaries (other than
MBIA Insurance Corporation ("MBIA Corp.") which is discussed below)
has been duly incorporated, is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority required to carry on its
business as it is currently being conducted and to own, lease and
operate its properties;
(ii) the Company and each of its subsidiaries (other than
MBIA Corp. which is discussed below) is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole;
(iii) (A) MBIA Corp. has been duly incorporated, is
validly existing as an insurance company in good standing under the
laws of the State of New York and (B) is duly licensed and in good
standing to conduct its municipal bond insurance business in each
state in the United States and the District of Columbia;
(iv) all of the outstanding shares of capital stock of, or
other ownership interests in, each of the Company's subsidiaries have
been duly and validly authorized and issued and are fully paid and
non-assessable, and are owned by the Company, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature;
(v) all the outstanding shares of Common Stock (including
the Shares to be sold by the Selling Stockholder) have been duly
authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights;
(vi) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when issued and delivered to
the Underwriters against payment therefor as provided by this
Agreement, will have been validly issued and will be fully paid and
non-assessable, and the issuance of such Shares is not subject to any
preemptive or similar rights;
19
(vii) this Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of
the Company enforceable in accordance with its terms (except as rights
to indemnity and contribution hereunder may be limited by applicable
law);
(viii) the authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters to the
description thereof contained in the Prospectus;
(ix) the Registration Statement has become effective under
the Act, no stop order suspending its effectiveness has been issued
and no proceedings for that purpose are, to the knowledge of such
counsel, pending before or contemplated by the Commission;
(x) the statements under the captions "Selling Shareholder",
"Description of Capital Stock" and "Underwriting" in the Prospectus
and Item 15 of Part II of the Registration Statement insofar as such
statements constitute a summary of legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings;
(xi) neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws and, to the best of
such counsel's knowledge after due inquiry, neither the Company nor
any of its subsidiaries is in default in the performance of any
obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other agreement,
indenture or instrument material to the conduct of the business of the
Company and its subsidiaries, taken as a whole, to which the Company
or any of its subsidiaries is a party or by which it or any of its
subsidiaries or their respective property is bound;
(xii) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all the
provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may
be required under the Act or other securities or Blue Sky laws) and
will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the
Company or any of its subsidiaries or any agreement, indenture or
other instrument to which
20
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its respective properties are
bound, or violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the Company or
any of its subsidiaries or its respective properties;
(xiii) after due inquiry, such counsel does not know of
any legal or governmental proceeding pending or threatened to which
the Company or any of its subsidiaries is a party or to which any of
their respective property is subject which is required to be described
in the Registration Statement or the Prospectus and is not so
described, or of any contract or other document which is required to
be described in the Registration Statement or the Prospectus or is
required to be filed as an exhibit to the Registration Statement which
is not described or filed as required;
(xiv) the Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(xv) to the best of such counsel's knowledge, after due
inquiry, other than pursuant to the Shareholders' Agreement, no holder
of any security of the Company has any right to require registration
of shares of Common Stock or any other security of the Company; and
(xvi) (1) the Registration Statement and the Prospectus
and any supplement or amendment thereto (except for financial
statements as to which no opinion need be expressed) comply as to form
in all material respects with the Act, and (2) such counsel believes
that (except for financial statements, as aforesaid) the Registration
Statement at the time it became effective did not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and that the Prospectus as of its date and as of the
Closing Date, as amended or supplemented, if applicable (except for
financial statements, as aforesaid) does not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In giving such opinion with respect to the matters covered by
clause (xvi) such counsel may state that his opinion and belief are based
upon his participation in the preparation of the Registration Statement and
Prospectus and
21
any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification except
as specified. Each of the opinions delivered pursuant to this paragraph
(e) may rely as to matters of Connecticut law on the opinion of Day, Xxxxx
& Xxxxxx or of such other local counsel as shall be reasonably satisfactory
to you.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Debevoise & Xxxxxxxx, counsel for the Company, as to the matters
referred to in clauses (i), (iii)(A), (v), (vi), (vii), (viii), (ix), (x)
(but only as to the statements in the Prospectus under "Description of
Capital Stock" and "Underwriting") and (xvi) of paragraph (e) above.
In giving such opinion with respect to the matters covered by
clause (xvi) such counsel may state that their opinion and belief are based
upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified. Each of the opinions delivered pursuant
to this paragraph (f) may rely as to matters of Connecticut law on the
opinion of Day, Xxxxx & Xxxxxx or of such other local counsel as shall be
reasonably satisfactory to you.
The opinion of Debevoise & Xxxxxxxx described in paragraph (f)
above shall be rendered to you at the request of the Company and shall so
state therein.
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of [counsel in the Law Department of the Selling Stockholder], to the
effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Selling Stockholder and is a valid and binding
agreement of the Selling Stockholder enforceable in accordance with
its terms (except as rights to indemnity and contribution hereunder
may be limited by applicable law);
(ii) the execution, delivery and performance of this
Agreement by the Selling Stockholder, compliance by the Selling
Stockholder with all the provisions hereof and the consummation of the
transactions contemplated hereby will not require any consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may
be required under
22
the Act or other securities or Blue Sky laws) and will not conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Selling Stockholder or
any agreement, indenture or other instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder or its
respective properties are bound, or violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to
the Selling Stockholder or its respective properties;
(iii) the Custody Agreement has been duly authorized,
executed and delivered by the Selling Stockholder and is a valid and
binding agreement of the Selling Stockholder enforceable in accordance
with its terms;
(iv) the Selling Stockholder has full legal right, power and
authority, and any approval required by law (other than any approval
imposed by the applicable state securities and Blue Sky laws) to sell,
assign, transfer and deliver the Shares to be sold by it in the manner
provided in this Agreement and the Custody Agreement;
(v) the Selling Stockholder has good and clear title to the
certificates for the Shares to be sold by it and upon delivery
thereof, pursuant hereto and payment therefor, good and clear title
will pass to the Underwriters, severally, free of all restrictions on
transfer, liens, encumbrances, security interests and claims
whatsoever; and
(vi) the power of attorney signed by the Selling Stockholder
appointing _________________ and ___________, or either of them, as
its attorney-in-fact to the extent set forth therein with regard to
the transactions contemplated hereby and by the Registration Statement
has been duly authorized, executed and delivered by or on behalf of
the Selling Stockholder and are valid and binding instruments of the
Selling Stockholder enforceable in accordance with its terms, and
pursuant to such power of attorney, the Selling Stockholder has
authorized _________________ and ________________, or either of them,
to execute and deliver on its behalf this Agreement and any other
document necessary or desirable in connection with transactions
contemplated hereby and to deliver the Shares to be sold by it
pursuant to this Agreement.
(h) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters,
as to the matters referred to in clauses (vi), (vii), (ix), (x) (but only
with
23
respect to the statements under the captions "Description of Capital Stock"
and "Underwriting") and (xvi) of paragraph (e). In giving such opinion
with respect to the matters covered by clause (xvi) such counsel may state
that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments
or supplements thereto and review and discussion of the contents thereof,
but are without independent check or verification except as specified.
Each of the opinions delivered pursuant to this paragraph (h) may rely as
to matters of Connecticut law on the opinion of Day, Xxxxx & Xxxxxx or of
such other local counsel as shall be reasonably satisfactory to you.
(i) You shall have received a letter on and as of the Closing Date,
in form and substance satisfactory to you, from Coopers & Xxxxxxx L.L.P.,
independent public accountants, with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus and substantially in the form and substance of the
letter delivered to you by Coopers & Xxxxxxx L.L.P., on the date of this
Agreement.
(j) The Company shall have delivered to you the agreements specified
in Section 2 hereof.
(k) The Company and the Selling Stockholder shall not have failed at
or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with
by the Company at or prior to the Closing Date.
[(l) You shall have received on the Closing Date, a certificate of
the Selling Stockholder who is not a U.S. Person to the effect that the
Selling Stockholder is not a U.S. Person (as defined under applicable U.S.
federal tax legislation), which certificate may be in the form of a
properly completed and executed United States Treasury Department Form W-8
(or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).]
The several obligations of the U.S. Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to the U.S. Representatives on the
applicable Option Closing Date of such documents as you may reasonably request
with respect to the good standing of the Company, the due authorization and
issuance of such Additional Shares and other matters related to the issuance of
such Additional Shares.
10. Effective Date of Agreement and Termination. This Agreement
-------------------------------------------
shall become effective upon the later of (i) execution of this Agreement and
(ii) when notification of the effectiveness
24
of the Registration Statement has been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Sellers if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any adverse change or development
involving a prospective adverse change in the condition, financial or otherwise,
of the Company or any of its subsidiaries or the earnings, affairs, or business
prospects of the Company or any of its subsidiaries, whether or not arising in
the ordinary course of business, which would, in your judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (ii) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in your
judgment, is material and adverse and would, in your judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (iii) the suspension or material limitation of trading in
securities on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ National Market System or limitation on prices for securities on any such
exchange or National Market System, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Company or any Subsidiary, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number
--------
25
of Firm Shares or Additional Shares, as the case may be, which any Underwriter
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such number of Firm
Shares or Additional Shares, as the case may be, without the written consent of
such Underwriter. If on the Closing Date or on an Option Closing Date, as the
case may be, any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares, or Additional Shares, as the case may be, and the aggregate number
of Firm Shares or Additional Shares, as the case may be, with respect to which
such default occurs is more than one-tenth of the aggregate number of Shares to
be purchased on such date by all Underwriters and arrangements satisfactory to
you and the applicable Sellers for purchase of such Shares are not made within
48 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter and the applicable Sellers. In any
such case which does not result in termination of this Agreement, either you or
the Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
11. Agreements of the Selling Stockholder. The Selling Stockholder
-------------------------------------
severally agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes with respect to
the Shares to be sold by the Selling Stockholder; and
(b) To take all reasonable actions in cooperation with the Company
and the Underwriters to cause the Registration Statement to become
effective at the earliest possible time, to do and perform all things to be
done and performed under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares pursuant to
this Agreement.
12. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Company, to MBIA Inc.,
000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, (b) if to the Selling Stockholder, to
Aetna Life Insurance and Annuity Company, 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000-0000, Attention: Vice President Corporate Finance YF37 and
(c) if to any Underwriter or to you, to you c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation, 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department, or in any case to such other address as the person to be
notified may have requested in writing.
26
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Stockholder, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or by or on behalf of the Sellers, the officers or directors of
the Company or any controlling person of the Sellers, (ii) acceptance of the
Shares and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Sellers agree to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Sellers, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
27
Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Selling Stockholder and the several Underwriters.
Very truly yours,
MBIA INC.
By____________________________
Title:
THE AETNA CASUALTY
AND SURETY COMPANY
By____________________________
Attorney-in-fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
XXXXXX BROTHERS INC.
XXXXX XXXXXX INC.
Acting severally on behalf of
themselves and the several
U.S. Underwriters named in
Schedule I hereto
By XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By__________________________
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX SACHS INTERNATIONAL
XXXXXX BROTHERS
INTERNATIONAL (EUROPE)
XXXXX XXXXXX INC.
Acting severally on behalf of
themselves and the several
International Managers
named in Schedule II hereto
By XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By__________________________
SCHEDULE I
----------
Number of Firm Shares
U.S. Underwriters to be Purchased
------------------------------ ---------------------
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Xxxxxxx, Sachs & Co.
Xxxxxx Brothers Inc.
Xxxxx Xxxxxx Inc.
__________________
Total 2,830,000
SCHEDULE II
-----------
Number of Firm Shares
International Underwriters to be Purchased
------------------------------- ---------------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Xxxxxxx Sachs International
Xxxxxx Brothers International
(Europe)
Xxxxx Xxxxxx Inc.
__________________
Total 700,000
ANNEX I
-------
Required Stockholder Lock-ups
-----------------------------
