Exhibit 1.1
LITCHFIELD CAPITAL TRUST I
10% Series A Trust Issued Preferred Securities
(liquidation amount $10 per preferred security)
guaranteed by
LITCHFIELD FINANCIAL CORPORATION
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UNDERWRITING AGREEMENT
May 13, 1999
XXXXXX XXXXXXX XXXXXX XXXX XXXXXX, XXXXX XXXXX INCORPORATED c/x Xxxxxx Xxxxxxx
Xxxxxx Gull Xxx Xxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
Litchfield Capital Trust I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), and Litchfield Financial
Corporation, a Massachusetts corporation (the "Company"), on its own behalf and
as depositor and sponsor of the Trust and as guarantor, propose, subject to the
terms and conditions stated herein, that the Trust issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") for whom you are
acting as the representatives (the "Representatives") an aggregate of 2,500,000
(the "Firm Securities") and, at the election of the Underwriters, up to an
additional 375,000 (the "Optional Securities"), of 10% Series A Trust Issued
Preferred Securities (liquidation amount $10 per preferred security),
representing preferred undivided beneficial interests in the assets of the
Trust, guaranteed on a subordinated basis by the Company as to the payment of
distributions, and as to payments on liquidation or redemption, to the extent
set forth in a guarantee agreement (the "Guarantee") between the Company and The
Bank of New York, as trustee (the "Guarantee Trustee"). The Firm Securities and
the Optional Securities that the Underwriters elect to purchase pursuant to
Section 2 hereof are referred to collectively as the "Preferred Securities." The
Trust is to purchase, with the proceeds of the sale of the Preferred Securities
and up to 77,320 of its 10% Series A Trust Common Securities (liquidation amount
$10 per Common Security) (not including 11,598 if the underwriters exercise
their over-allotment option) (the "Common Securities," and, collectively with
the Preferred Securities, the "Trust Securities"), $25,773,200 aggregate
principal amount (or $29,639,180 aggregate principal amount assuming full
exercise by the Underwriters of the over-allotment option described herein) of
10% Series A Junior Subordinated Debentures due 2029 (the "Subordinated
Debentures") of the
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Company, to be issued pursuant to an Indenture (the "Indenture") between the
Company and The Bank of New York, as trustee (the "Indenture Trustee").
The Company will be the holder of 100% of the Common Securities. The
Trust will be subject to the terms of an Amended and Restated Declaration of
Trust (the "Trust Agreement"), among the Company, as Depositor, The Bank of New
York, as Property Trustee ("Property Trustee"), The Bank of New York (Delaware),
as Delaware Trustee (the "Delaware Trustee") and three individual trustees who
are employees or officers of or affiliated with the Company (the "Regular
Trustees"), and the holders from time to time, of undivided beneficial interests
in the assets of the Trust. The Property Trustee, the Delaware Trustee and the
Regular Trustees are collectively referred to herein as the "Trustees."
1. Representations and Warranties of the Trust and the Company. Each of
the Trust and the Company represents and warrants to, and agrees with, the
Underwriters that:
a. The Trust and the Company have 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 Nos.
333-76285, 000-00000-00 and 333-76285-02), including the related preliminary
prospectus relating to the offering of the Preferred Securities, the
Subordinated Debentures and the Guarantee, have filed such amendments thereto as
may have been required as of the date hereof, 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, prospectus supplement, 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 Trust pursuant
to Rule 462(b) of the Securities Act, is herein referred to as the "Registration
Statement," and the prospectus and prospectus supplement 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 and prospectus supplement 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 and prospectus supplement 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
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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 or the Trust by the Underwriters
specifically for use therein (it being understood that the only information so
provided is certain information included in the second, eighth and eleventh
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) 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 or the Trust by the Underwriters
specifically for use therein (it being understood that the only information so
provided is certain information included in the second, eighth and eleventh
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 a 50% or greater 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
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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 Trust has been duly created and is validly existing as a statutory
business trust in good standing under the Business Trust Act of the State of
Delaware (the "Delaware Business Trust Act") with the trust power and authority
to own property and conduct its business as described in the Registration
Statement, Effective Prospectus and Final Prospectus and has conducted and will
conduct no business other than the transactions contemplated by this Agreement
and described in the Registration Statement, Effective Prospectus and Final
Prospectus; the Trust is not a party to or bound by any agreement or instrument
other than this Agreement, the Trust Agreement and the agreements and
instruments contemplated by the Trust Agreement and described in the
Registration Statement; based on expected operations and current law, the Trust
is not and will not be classified as an association taxable as a corporation for
United States federal income tax purposes; and the Trust is not a party to or
subject to any action, suit or proceeding of any nature;
f. The Preferred Securities have been duly and validly authorized by the
Trust, and, when issued and delivered to the Underwriters against payment
therefor as provided herein, will be duly and validly issued and, subject to the
terms of the Trust Agreement, fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will conform to the description thereof
contained in the Registration Statement, Effective Prospectus and Final
Prospectus and will be in substantially the form previously delivered to you;
the issuance of the Preferred Securities is not subject to preemptive or other
similar rights; the Preferred Securities will have the rights set forth in the
Trust Agreement, and the terms of the Preferred Securities are valid and binding
on the Trust; the holders of the Preferred Securities (the "Securityholders")
will be entitled to the same limitation of personal liability
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extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware;
g. The Common Securities have been duly and validly authorized by the Trust
and upon delivery by the Trust to the Company against payment therefor as
described in the Registration Statement, Effective Prospectus and Final
Prospectus, will be duly and validly issued undivided beneficial interests in
the assets of the Trust and will conform to the description thereof contained in
the Registration Statement, Effective Prospectus and Final Prospectus; the
issuance of the Common Securities is not subject to preemptive or other similar
rights; and at the First Closing Date (as defined in Section 2c hereof), all of
the issued and outstanding Common Securities of the Trust will be directly owned
by the Company free and clear of any Lien (as defined below); and the Trust
Securities are the only interests authorized to be issued by the Trust;
h. This Agreement has been duly authorized, executed and delivered by the
Company and the Trust and constitutes a valid and binding agreement of each of
the Company and the Trust, enforceable against the Company and the Trust in
accordance with their terms. 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 by the Company or the Trust or the consummation by
the Company or the Trust of the transactions contemplated hereby or under the
Guarantor Agreements (as defined herein), 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 Preferred Securities, the
Guarantee and the Subordinated Debentures. The Company's performance of this
Agreement and the Guarantor Agreements, and by the Trust to the extent the Trust
is a party to such agreements, and the consummation of the transactions
contemplated hereby and thereby, and the issuance and sale of the Trust
Securities by the Trust, will not result in a breach or violation of, or
conflict with, any of the terms and provisions of, or constitute a material
default under, the Trust Agreement, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company or any of
its subsidiaries or the Trust is a party or to which the Company or any of its
subsidiaries or the Trust 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
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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.
i. The Guarantee, the Subordinated Debentures, the Trust Agreement and the
Indenture (collectively, the "Guarantor Agreements") have each been duly
authorized and, when executed and delivered by the Company, will constitute
valid and legally binding obligations of the Company, enforceable in accordance
with their respective terms, except to the extent (A) that enforcement thereof
may be limited by (1) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect relating
to the rights of creditors generally, and (2) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity); and (B) with respect to the Indenture, the waiver contained in Section
6.06 of the Indenture may be deemed unenforceable. Each of the Preferred
Guarantee, the Trust Agreement and the Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended.
j. The Subordinated Debentures are entitled to the benefits provided by the
Indenture; each of the Guarantor Agreements will conform to the descriptions
thereof in the Registration Statement and will be in substantially the form
previously delivered to you.
k. The documents that are incorporated by reference in the Registration
Statement, Effective Prospectus and Final Prospectus or from which information
is so incorporated by reference, when they become effective or were filed with
the Commission, as the case may be, complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as applicable, and the
Rules and Regulations of the Commission thereunder.
l. The Company has full legal right, power and authority to authorize the
offering of the Subordinated Debentures and the Guarantee, to execute, deliver
and perform this Agreement and to issue, sell and deliver the Subordinated
Debentures and the Guarantee.
m. The Trust has full legal right, power and authority to authorize the
offering of the Preferred Securities, to execute, deliver and perform this
Agreement and to sell and deliver the Preferred Securities to the Underwriters
as provided herein.
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n. The capitalization of the Company as of December 31, 1998 is as set
forth under the caption "Capitalization" in the Effective Prospectus and the
Final Prospectus, and the Guarantee, the Subordinated Debentures and the
Preferred Securities conform to the descriptions thereof in the Effective
Prospectus and the Final Prospectus. All the issued shares of capital stock of
the Company have been duly authorized and validly issued, are fully paid and
nonassessable. None of the issued shares of capital stock of the Company have
been issued in violation of any preemptive or similar rights. No holder of any
security of the Company has or will have any right to require the registration
of such security by virtue of any transaction contemplated by this agreement.
The Preferred Securities have been duly authorized by the Trust Agreement and
are duly and validly issued and, subject to the qualifications set forth herein,
fully paid and non-assessable undivided beneficial interests in the assets of
the Trust and will entitle the Securityholders to the benefits provided by the
Trust Agreement (subject to the terms of the Trust Agreement). The
Securityholders, as beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. The Underwriters will receive good and marketable title to the
Preferred Securities to be issued and delivered hereunder, free and clear of all
liens, encumbrances, claims, security interests, restrictions, stockholders'
agreements and voting trusts whatsoever.
o. 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.
p. 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 "Use of Proceeds,"
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and "Summary Financial Information of Litchfield" fairly presents the
information set forth therein on the basis stated in the Effective Prospectus
and the Final Prospectus. Xxxxx & 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.
q. Subsequent to March 31, 1999, neither the Company nor any subsidiary nor
the Trust 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 nor the Trust 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, or the Trust except in each case as described in or contemplated by the
Effective Prospectus and the Final Prospectus.
r. 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.
s. 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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t. 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.
u. 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.
v. 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.
w. 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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x. 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.
y. 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 affect the
condition (financial or otherwise), results of operations, properties, affairs,
management, business affairs or business prospects of the Company or any of its
subsidiaries.
z. 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.
aa. 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 any security of the
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Company in connection with the offering, the sale or resale of the Preferred
Securities.
bb. 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.
cc. The Company is not, and will not become as a result of the offering and
sale of the Trust Securities and Subordinated Debentures, 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.
dd. 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.
ee. The Preferred Securities have been approved for listing on the Nasdaq
National Market subject to notice of issuance.
2. Purchase, Sale and Delivery of the Preferred Securities.
a. On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set
forth, the Trust and the Company agree that the Trust shall issue and sell to
the Underwriters, and the Underwriters, severally and not jointly, agree to
purchase at a purchase price of $10 per Preferred Security, the number of Firm
Securities set forth opposite the Underwriters' names in Schedule I hereto.
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b. The Trust and the Company also grant to the Underwriters an option to
purchase, solely for the purpose of covering over-allotments in the sale of Firm
Securities, all or any portion of the Optional Securities at the purchase price
per Preferred Security set forth above. The option granted hereby may be
exercised as to all or any part of the Optional Securities 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 Optional
Securities 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 Optional Securities to be purchased and the date and time
for delivery of and payment for such Optional Securities and stating that the
Optional Securities referred to therein are to be used for the purpose of
covering over-allotments in connection with the distribution and sale of the
Firm Securities. 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
Optional Securities specified in such notice. Optional Securities shall be
purchased for the account of the Underwriters in proportion to the number of
Firm Securities set forth opposite the Underwriter's name in Schedule I hereto,
except that the purchase obligations of the Underwriters shall be adjusted so
that the Underwriters shall not be obligated to purchase fractional Optional
Securities.
c. A global certificate or certificates in definitive form for the Firm
Securities which the Underwriters have agreed to purchase hereunder shall be
delivered by or on behalf of the Trust to the Underwriters, through the
facilities of DTC, for the accounts of the Underwriters against payment by the
Underwriters or on their behalf of the purchase price therefor by same day funds
to an account designated by the Trust, 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." A global certificate
or certificates in definitive form for the Optional Securities which the
Underwriters shall have agreed to purchase hereunder shall be similarly
delivered by or on behalf of the Trust on the Option Closing Date against
payment by the Underwriters or on its
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behalf of the purchase price in the manner set forth above. The global
certificate or certificates in definitive form for the Preferred Securities will
be in good delivery form and in such denominations and registered in such names
as Xxxxxx Xxxxxxx Xxxxxx Gull may request not less than 48 hours prior to the
First Closing Date or the Option Closing Date, as the case may be. Such
certificate or certificates will be made available for checking at the office of
DTC or its designated custodian, at least 24 hours prior to the First Closing
Date or the Option Closing Date, as the case may be. The Preferred Securities to
be purchased by the Underwriters hereunder will be represented by one or more
global Preferred Securities in book-entry form which will be deposited by or on
behalf of the Trust with DTC or its designated custodian.
d. As compensation to the Underwriters for their commitments hereunder, and
in view of the fact that the proceeds of the sale of the Preferred Securities
will be used by the Trust to purchase the Subordinated Debentures of the Company
at each Closing Date, the Company will pay to the Underwriters an amount equal
to $.40 per Preferred Security for the Preferred Securities to be delivered by
the Company at such Closing Date.
3. Offering by the Underwriters. After the Registration Statement
becomes effective, the Underwriters propose to offer for sale to the public the
Firm Securities and any Optional Securities which may be sold at the price and
upon the terms set forth in the Final Prospectus.
4. Covenants of the Company. Each of the Company and the Trust, jointly
and severally, covenants and agrees with the Underwriters:
a. To 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; to 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; to
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's
reasonable opinion, may be necessary or advisable in connection with the
distribution of the Preferred Securities; and the Company and Trust shall not
file any amendment of or supplement to the Registration Statement, the Effective
Prospectus or the Final Prospectus which is not approved by the Underwriters
after reasonable notice thereof; to 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
13
suspending the qualification of the Preferred Securities for offering or sale in
any jurisdiction, or of the institution of any proceedings for any such purpose;
and to 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. To 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 Preferred Securities, the Subordinated Debentures and the
Guarantee 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 and the Trust shall not be required to qualify as
a foreign corporation or trust 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 or trust.
c. Within the time during which a Final Prospectus relating to the
Preferred Securities, the Subordinated Debentures and the Guarantee is required
to be delivered under the Securities Act, to 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 Preferred Securities, the
Subordinated Debentures and the Guarantee 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 and Trust 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. To 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 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
14
may reasonably request. The Company and Trust will deliver to the Underwriters a
copy of each document incorporated by reference in the Effective Prospectus and
the Final Prospectus which has not previously been furnished.
e. To (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. To 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. At any time when the Company or the Trust is not subject to Section
13 or 15(d) of the Exchange Act, for the benefit of holders from time to time of
Preferred Securities or Subordinated Debentures, to furnish at the Company's or
the Trust's expense, as appropriate, upon request, to holders of Preferred
Securities or Subordinated Debentures and prospective purchasers of such
securities information (the "Additional Issuer Information") satisfying the
requirements of subsection (d)(4)(i) of Rule 144A under the Securities Act.
h. To furnish to the holders of the Preferred Securities as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the date of the Registration Statement (unless such quarter is the fourth
fiscal quarter, in which case beginning with the second fiscal quarter ending
after the date of the Registration Statement)), consolidated summary financial
information of the Company and its subsidiaries for such quarter in reasonable
detail.
i. During a period of five years from the date of the Registration
Statement, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements 15
furnished to or filed with the Commission or any securities exchange on which
the Preferred Securities or any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission).
j. In the case of the Company, to issue the Guarantee concurrently
with the issue and sale of the Preferred Securities as contemplated herein.
k. To apply the net proceeds from the sale of the Preferred
Securities, in the case of the Trust, and the Subordinated Debentures, in the
case of the Company, as set forth under the caption "Use of Proceeds" in the
Final Prospectus.
l. From time to time, after the effective date of the Registration
Statement to 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 Preferred Securities
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.
m. During the period beginning from the date hereof and continuing for
a period of 180 days after the date of the Effective Prospectus, not to offer,
issue, sell, contract to sell, grant any option (other than the grant of options
by the Company pursuant to plans in effect on the date hereof) for the sale of,
or otherwise dispose of ("Transfer"), directly or indirectly, (a) any trust
certificates or other securities of the Trust (other than the Preferred
Securities and the Common Securities), (b) any preferred stock or any other
security of the Company or its affiliates that is substantially similar to the
Preferred Securities, or (c) any other securities which are convertible into, or
exercisable or exchangeable for, any of (a) and (b) above, without the prior
consent of Xxxxxx Xxxxxxx for a period of 180 days after the date of the
Effective Prospectus.
n. To 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 any security of the Company in
connection with the offering, the sale or resale of the Preferred Securities,
the Guarantee or the Subordinated Debentures.
5. Expenses. The Company agrees with the Underwriters that 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
16
of the obligations of the Company and the Trust hereunder, including, but not
limited to, (i) the fees, disbursements and expenses of the Trust's and the
Company's counsel and accountants in connection with the issue of the Preferred
Securities and all other expenses in connection with the preparation, printing
and filing of the Registration Statement and any amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters;
(ii) the cost of printing or producing this Agreement, the Indenture, the Trust
Agreement, the Guarantee, any Blue Sky and legal investment memorandum, any
closing documents (including any compilations thereto) and any other documents
in connection with the offering, purchase, sale and delivery of the Preferred
Securities; (iii) the fees, disbursements and expenses of Xxxxxxxx, Xxxxxxx &
Xxxxxxx, special tax counsel to the Trust; (iv) the cost of preparing the
Preferred Securities and the Subordinated Debentures; (v) the fees and expenses
of the Trustees and any other agent thereof and the fees and disbursements of
their counsel, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky surveys; and (vi) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Preferred Securities by them, and any
advertising expenses connected with any offers they may make. The Company shall
not in any event be liable to the Underwriters for the loss of anticipated
profits from the transactions covered by this Agreement.
6. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Securities and Optional Securities
shall be subject, in their discretion, to the accuracy of the representations
and warranties of the Company and the Trust 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 Trust of all of their covenants and
agreements hereunder and to the following additional conditions:
a. 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, the Trust 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 Preferred
Securities, shall not have objected to such offering, such terms or
the Underwriters' participation in the same.
b. No Underwriter shall have advised the Company and the Trust
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
Representatives' reasonable judgment, is material, or omits to state a
fact which, in the Representatives'
17
judgment, is material and is required to be stated therein or
necessary to make the statements therein not misleading, and the
Company and the Trust shall not have cured such 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 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. To the
best knowledge of such counsel, 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. To the best knowledge of such
counsel, 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. To the
best knowledge of such counsel, 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. To the best
knowledge of such counsel, 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.
18
(3) The Company has full legal right, power and
authority to enter into this Agreement and
the Guarantor Agreements, and this Agreement
and the Guarantor Agreements, upon due
execution, authentication and delivery, have
been duly authorized, executed, and
delivered by the Company. This Agreement and
the Guarantor Agreements constitute valid
and legally binding obligations of the
Company enforceable against the Company in
accordance with their terms, except to the
extent that (A) enforcement thereof may be
limited by (1) bankruptcy, insolvency,
fraudulent transfer, rehabilitation,
conservation, reorganization, moratorium or
other similar laws now or hereafter in
effect relating to the rights of creditors
generally, and (2) general principles of
equity (regardless of whether enforceability
is considered in a proceeding at law or in
equity); (B) with respect to the Indenture,
the waiver contained in Section 6.06 of the
Indenture may be deemed unenforceable, and
(C) with respect to this Agreement, the
enforceability of indemnification and
contribution provisions may be limited by
federal and state securities laws and the
policies underlying such laws. The
Subordinated Debentures are entitled to the
benefits provided by the Indenture.
(4) 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
Guarantor Agreements and 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 Preferred Securities,
the Guarantee and the Subordinated
Debentures. The performance of this
Agreement and the Guarantor Agreements and
the consummation of the transactions
contemplated hereby and thereby will not
conflict with or result in a breach or
violation 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.
(5) 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
19
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.
(6) 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.
(7) 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.
(8) 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
20
Registration Statement or the Final
Prospectus or to be filed as exhibits to the
Registration Statement which are not
described and filed as required.
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 misleading (except that such counsel need
express no view as to financial statements, schedules
and other financial information included therein).
To the extent that matters discussed above are addressed in the
legal opinions of the same date of Xxxxxx Xxxxxxxxxx & Xxxxxxxxx,
Xxxxxx X. XxXxxx, Esq. and Xxxx X. Xxxxxx, Esq. (copies of which are
concurrently delivered to the Underwriters), the opinion of Xxxxxxxx,
Xxxxxxx & Xxxxxxx may be given in reliance on, and subject to any
limitations in, such opinions.
x. Xxxxxxxx, Xxxxxx & Xxxxxx, P.A., special Delaware counsel
for the Trust, shall have furnished to you their written opinion, dated
the Closing Date, in form and substance satisfactory to you, to the
effect that:
i. The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Business Trust Act, and all filings required under
the laws of the State of Delaware with respect to the creation
and valid existence of the Trust as a business trust have been
made;
ii. Under the Delaware Business Trust Act and the
Trust Agreement, the Trust has the trust power and authority
to own property and conduct its business, all as described in
the Effective Prospectus.
iii. Each of this Agreement and the Trust Agreement
constitutes a valid and legally binding obligation of the
Company and the Trustees, and is enforceable against the
Company and the Trustees, in accordance with its terms,
subject, as to enforcement, to the effect upon the declaration
of (i) bankruptcy, insolvency, reorganization, moratorium,
receivership, liquidation, fraudulent transfer and conveyance,
and other similar laws relating to or affecting the rights and
remedies of creditors generally, (ii) principles of equity,
including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution.
21
iv. Under the Delaware Business Trust Act and the
Trust Agreement, the Trust has the trust power and authority
to (a) execute and deliver, and to perform its obligations
under, the Underwriting Agreement and (b) issue and perform
its obligations under the Trust Securities.
v. Under the Delaware Business Trust Act and the
Trust Agreement, the execution and delivery by the Trust of
the Underwriting Agreement, and the performance by the Trust
of its obligations thereunder, have been duly authorized by
all necessary trust action on the part of the Trust.
vi. Under the Trust Agreement and the Delaware
Business Trust Act, the Underwriting Agreement may be duly
executed on behalf of the Trust by the Sponsor.
vii. The Preferred Securities have been duly
authorized by the Trust Agreement and are duly and validly
issued and, subject to the qualifications set forth herein,
fully paid and non-assessable undivided beneficial interests
in the assets of the Trust and will entitle the
Securityholders to the benefits provided by the Trust
Agreement (subject to the terms of the Trust Agreement). The
Securityholders, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
viii. The Common Securities have been duly authorized
by the Trust Agreement and are validly issued and fully paid
undivided beneficial interests in the assets of the Trust.
ix. Under the Delaware Business Trust Act and the
Trust Agreement, the issuance of the Trust Securities is not
subject to preemptive rights.
x. The issuance and sale by the Trust of the Trust
Securities, the execution, delivery and performance by the
Trust of the Underwriting Agreement, and the consummation by
the Trust of the transactions contemplated by the Underwriting
Agreement and the Trust Agreement and the compliance by the
Trust with its obligations thereunder do not violate (a) any
provisions of the Certificate of Trust of the Trust, dated as
of April 12, 1999, or the Trust Agreement, or (b) any
applicable Delaware law or administrative regulation.
xi. With respect to statements made in the Final
Prospectus under the caption "The Trusts" and in the
prospectus supplement under "Litchfield Capital Trust I,"
insofar as such statements are statements of Delaware law,
such statements are fairly presented.
xii. No authorization, approval, consent or order of
any Delaware court or Delaware governmental authority or
Delaware agency is required to be obtained by the Trust solely
in connection with the sale of the Trust Securities.
22
xiii. The Securityholders (other than those
Securityholders who reside or are domiciled in the State of
Delaware) will have no liability for income taxes imposed by
the State of Delaware solely as a result of their
participation in the Trust, and the Trust will not be liable
for any income tax imposed by the State of Delaware.
x. Xxxxxxxx, Xxxxxxx & Xxxxxxx, counsel to the Trust and the
Company in relation to the classification of the Trust for United
States federal income tax purposes, shall have furnished their written
opinion to the effect that the statements made in the Effective
Prospectus or Final Prospectus under the caption "Certain Federal
Income Tax Consequences" are a fair and accurate summary of certain of
the United States federal income tax issues relating to the purchase,
ownership and the disposition of the Preferred Securities.
f. 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 this Agreement, the Subordinated
Debentures, the Indenture, the Trust Agreement and the Registration
Statement, Effective Prospectus and the Final Prospectus, and such
other related matters as the Underwriters may require, and the Company
and Trust 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 Xxxxxxxx, Xxxxxxx & Xxxxxxx,
Xxxxxx X. XxXxxx, Esq., and Xxxx X. Xxxxxx, Esq. as to matters of
Massachusetts law and on Xxxxxxxx, Xxxxxx & Xxxxxx, P.A. as to matters
of Delaware law.
g. 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 or incorporated by reference 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) 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
23
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 or incorporated
by reference 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 or
incorporated by reference 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 or incorporated by reference 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 subsi diaries, or
other items specified by the Underwriters, in each case as compared
with amounts shown in the latest balance sheets included or
incorporated by reference 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 or incorporated by
reference 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, 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
24
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
Xxxxx & 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.
h. The Trust Agreement, the Guarantee and the Indenture shall
have been executed and delivered, in each case in a form reasonably
satisfactory to you.
i. Subsequent to the respective dates as of which information is
given in the Registration Statement, and except as stated therein,
neither the Company nor the Trust have sustained any material loss or
interference with their business 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 or the
Trust, 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
or the Trust, which loss, interference, litigation or change, in the
judgment of the Underwriters shall render it unadvisable to commence
or continue the offering or the delivery of the Preferred Securities
on the terms and in the manner contemplated in this Agreement and in
the Registration Statement.
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j. 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 Xxxxxx Xxxxxxx 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.
k. 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 and the trustees of the Trust to the effect
that:
(1) the representations and warranties of the
Company and Trust in Section 1 of this
Agreement are true and correct, as if made
at and as of the Closing Date, and each of
the Company and Trust have 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;
(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.
The obligation of the Underwriters to purchase and pay for the Optional
Securities shall be subject, in their discretion, to each of the foregoing
conditions to purchase the Firm Securities, except 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 First Closing Date.
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7. Condition of the Company's and the Trust's Obligations. The
obligations hereunder of the Company and the Trust are subject to the condition
set forth in Section 6(a) hereof.
8. Indemnification and Contribution.
a. The Company and the Trust, jointly and severally, agree to
indemnify and hold harmless the Underwriters, and each person, if any,
who controls the Underwriters within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or
several, to which the Underwriters 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 Trust contained
herein, (ii) any failure of the Company or the Trust 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 filed in any state or other jurisdiction in
order to qualify any or all of the Preferred Securities 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 the Underwriters and each such controlling person
for any legal or other expenses reasonably incurred by the
Underwriters 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 Trust 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 or the Trust by the Underwriters specifically for use
therein (it being understood that the only information so provided is
the information included in the second, eighth and eleventh paragraphs
under the caption "Underwriting" in any Preliminary Prospectus and the
Final Prospectus and the Effective Prospectus).
b. The Underwriters will indemnify and hold harmless the Trust
and the Company, each of its directors, each of its officers who
signed the Registration
27
Statement and each person, if any, who controls the Company within
the meaning of the Securities Act, and each Regular Trustee or any other
person who controls the Trust within the meaning of the Securities Act,
against any losses, claims, damages or liabilities to which the Company or
Trust 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 and the
Trust by the Underwriters specifically for use therein (it being understood
that the only information so provided is the information included in the
second, eighth and eleventh 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 8 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 8 notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 8. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party; 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 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
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 to be represented by separate counsel, and in that
event the fees and expenses of separate counsel shall be paid by the
28
indemnifying party. Neither the Company nor the Trust will, without prior
written consent of the Underwriters, 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 the
Underwriters are a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of
the Underwriters 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 8 is for any reason held to be
unavailable to the Underwriters, the Company, or the Trust as
insufficient to hold harmless an indemnified party, then the Company
and the Trust shall contribute to the damages paid by the
Underwriters, and the Underwriters shall contribute to the damages
paid by the Company and the Trust 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 Preferred Securities (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, the Trust 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. The Underwriters or
any person controlling the Underwriters shall not be obligated to make
contribution hereunder which in the aggregate exceeds the amounts paid
to the Underwriters as compensation for their commitments to purchase
Preferred Securities under this Agreement, less the aggregate amount
of any damages which the Underwriters and their controlling persons
have otherwise been required to pay in respect of the same or any
similar claim. For purposes of this Section, each person, if any, who
controls the Underwriters within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as the
Underwriters, 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, and each Regular Trustee and each person who controls the
Trust within the meaning of Section 15 of the Securities Act, shall
have the same right to contribution as the Trust.
29
e. The obligations of the Company and the Trust under this
Section 8 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 the Underwriters within the
meaning of the Securities Act; and the obligations of the Underwriters
under this Section 8 shall be in addition to any liability which the
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, and to each person who controls the Trust within
the meaning of the Securities Act.
9. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Trust, 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 Company, any of its officers or directors, the Underwriters or any
controlling person, the Trust or any Regular Trustee or controlling person of
the Trust (ii) any termination of this Agreement and (iii) delivery of and
payment for the Preferred Securities.
10. Effective Date. This Agreement, after due execution, shall become
effective at whichever of the following times shall first occur: (i) execution
and delivery of this Agreement by the parties hereto or (ii) at such time after
the Registration Statement has become effective as the Underwriters shall
release the Firm Securities for sale to the public; provided, however, that the
provisions of Sections 5, 8, 9 and 10 hereof shall at all times be effective.
For purposes of this Section 10, the Firm Securities 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 Securities or upon the release by the
Underwriters of telegrams offering the Firm Securities for sale to securities
dealers, whichever may occur first.
11. 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 10 hereof,
or (ii) in the event that the condition set forth in Section 7 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 Trust (i) at any time before it becomes
effective in accordance with Section 10 hereof; (ii) in the event that
at or prior to the First Closing Date the Company or the Trust shall
have failed, refused or been unable to perform any agreement on the
part of the Company or the Trust 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
30
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 Preferred
Securities at the offering price to the public set forth on the cover page
of the Prospectus or to proceed with the delivery of the Securities.
c. Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party other than
as provided in Sections 5 and 8 hereof.
12. Notices. All communications hereunder shall be in writing and, if
sent to the Underwriters, shall be mailed or delivered or telegraphed and
confirmed in writing to Xxxxxx Xxxxxxx Xxxxxx Gull, Xxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attn: Xxxxxxx X. Xxxxxxx, or if sent to the Company or the
Trust shall be mailed, delivered or telegraphed and confirmed in writing to the
Company or the Trust at 000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxxx 00000,
Attn: Xxxxxxx X. Xxxxxxxx.
13. Miscellaneous. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Company and the Trust 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 Trust and the Underwriters and
for the benefit of no other person except that (i) the representations and
warranties of the Company and the Trust contained in this Agreement shall also
be for the benefit of any person or persons who control the Underwriters 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 and the Regular Trustees and any person or persons who
control the Trust within the meaning of Section 15 of the Securities Act. No
purchaser of Preferred Securities from the Underwriters 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.
14. No Liability of Property Trustee, Delaware Trustee or Guarantee
Trustee.
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It is understood and agreed by the parties hereto that (a)
each of the representations, undertakings and agreements herein made on the part
of the Trust is made and intended not as representations, warranties, covenants,
undertakings and agreements of any Trustee of the Trust, including, without
limitation, The Bank of New York, as Guarantee Trustee or Property Trustee, or
The Bank of New York (Delaware), as Delaware Trustee, in their individual
capacity, but is made and intended for the purpose of binding only the Trust,
and (b) under no circumstances shall any Trustee, including The Bank of New York
as Guarantee Trustee or Property Trustee or The Bank of New York (Delaware) as
Delaware Trustee be personally liable for any breach or failure of any
obligation, representation, warranty, or covenant made or undertaken by the
Trust under this Agreement except, if such breach or failure is due to any gross
negligence or wilful misconduct of the Trustee.
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 Trust and the Underwriters.
Very truly yours,
LITCHFIELD FINANCIAL CORPORATION
By:
Name:
Title:
LITCHFIELD CAPITAL TRUST I
By: Litchfield Financial Corporation, as sponsor
By:
Name:
Title:
32
Confirmed and accepted as of the date first above written.
XXXXXX XXXXXXX XXXXXX GULL
XXXXXX, XXXXX XXXXX INCORPORATED
For themselves and as Representatives of the several Underwriters
By: Xxxxxx Xxxxxxx Xxxxxx Gull
By:_______________________________
Name:
Title:
By: Xxxxxx, Xxxxx Xxxxx Incorporated
By:_______________________________
Name:
Title:
33
SCHEDULE I
UNDERWRITERS
Number of
Firm Securities
Underwriters to Be Purchased
---------------------------------------------------------------------------- ---------------------------
Xxxxxx Xxxxxxx Xxxxxx Gull.................................................. 1,666,667
Xxxxxx, Xxxxx Xxxxx Incorporated............................................ 833,333
Total Firm Securities to be Purchased.................. 2,500,000
===========================
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