MEVC XXXXXX XXXXXX JURVETSON FUND I, INC.
16,500,000 SHARES*
COMMON STOCK
UNDERWRITING AGREEMENT
March 27, 2000
PRUDENTIAL XXXXX TECHNOLOGY
a unit of Prudential Securities
XXXXXXX XXXXX & ASSOCIATES, INC.
GRUNTAL & CO.
DLJDIRECT, INC.
FIDELITY CAPITAL MARKETS,
a division of National Financial Services Corporation
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
meVC Xxxxxx Xxxxxx Jurvetson Fund I, Inc., a Delaware corporation (the
"Company"), meVC Advisers, Inc., a Delaware corporation and the Company's
investment adviser ("meVC Advisers"), and Xxxxxx Xxxxxx Jurvetson MeVC
Management Co., LLC, a California limited liability company and the Company's
investment sub-adviser ("Xxxxxx Advisers"), hereby confirm their agreement with
the several underwriters named in Schedule 1 hereto (the "Underwriters"), for
whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.
1 SECURITIES. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the Underwriters an aggregate of
16,500,000 shares (the "Firm Securities") of the Company's common stock, par
value $.01 per share ("Common Stock"). The Company also proposes to issue and
sell to the Underwriters not more than 2,475,000 additional shares of Common
Stock if requested by the Representatives as provided in Section 3 of this
Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such option are referred to herein as the "Option
Securities", and the Firm Securities and any Option Securities are collectively
referred to herein as the "Securities".
------------------------
* Plus an option to purchase from meVC Xxxxxx Xxxxxx Jurvetson Fund I,
Inc. up to 2,475,000 additional shares to cover over-allotments.
2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY, MEVC ADVISERS AND
XXXXXX ADVISERS. The Company, meVC Advisers and Xxxxxx Advisers severally
represent and warrant to, and agree with, each of the several Underwriters that:
(a) A registration statement on Form N-2 (File No. 333-92287)
with respect to the Securities, including a prospectus subject to
completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933,
as amended (the "Securities Act"), and one or more amendments to such
registration statement may have been so filed. A Form N-54A Notification
of Election to be Subject to Sections 55 Through 65 of the Investment
Company Act of 1940 Filed Pursuant to Section 54(a) of the Investment
Company Act (File No. 814-00201) (the "Notification of Election") was
filed with the Commission on December 7, 1999 under the Investment
Company Act of 1940, as amended (the "Investment Company Act"). The
Securities have been duly authorized for listing, subject to official
notice of issuance, on the New York Stock Exchange. After the execution
of this Agreement, the Company will file with the Commission either (i)
if such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Securities Act, a
prospectus in the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have been filed,
in such registration statement), with such changes or insertions as are
required by Rule 430A under the Securities Act or permitted by Rule
497(h) under the Securities Act and as have been provided to and approved
by the Representatives prior to the execution of this Agreement, or (ii)
if such registration statement, as it may have been amended, has not been
declared by the Commission to be effective under the Securities Act, an
amendment to such registration statement, including a form of prospectus,
a copy of which amendment has been furnished to and approved by the
Representatives prior to the execution of this Agreement. The Company may
also file a related registration statement with the Commission pursuant
to Rule 462(b) under the Securities Act for the purpose of registering
certain additional Securities, which registration shall be effective upon
filing with the Commission. As used in this Agreement, the term "Original
Registration Statement" means such registration statement initially filed
relating to the Securities, as amended at the time when it was or is
declared effective, including all financial schedules and exhibits
thereto and including any information omitted therefrom pursuant to Rule
430A under the Securities Act and included in the Prospectus (as
hereinafter defined); the term "Rule 462(b) Registration Statement" means
any registration statement filed with the Commission pursuant to Rule
462(b) under the Securities Act (including the Registration Statement and
any Preliminary Prospectus or Prospectus incorporated therein at the time
such Registration Statement becomes effective); the term "Registration
Statement" includes the Original Registration Statement and any Rule
462(b) Registration Statement; the term "Preliminary Prospectus" means
each prospectus subject to completion filed as part of Pre-Effective
Amendment No. 3 to such registration statement or any amendment thereto
(including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time the
Registration Statement was or is declared effective); and the term
"Prospectus" means the prospectus first filed with the Commission
pursuant to Rule 497(b) or (h), as the case may be, under the Securities
Act or, if applicable, as subsequently filed pursuant to Rule 497(d)
under the Securities Act.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the
2
Commission it (i) contained all statements required to be stated therein
in accordance with, and complied in all material respects with the
requirements of, the Securities Act and the Investment Company Act and
the respective rules and regulations of the Commission thereunder, and
(ii) did not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. When the Registration Statement or any amendment thereto
was or is declared effective, it (i) contained or will contain all
statements required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements of, the
Securities Act and the Investment Company Act and the respective rules
and regulations of the Commission thereunder and (ii) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading.
When the Prospectus or any amendment or supplement thereto is filed with
the Commission pursuant to Rule 497(b) or (h) under the Securities Act,
as the case may be, and, if applicable, when subsequently filed with the
Commission pursuant to Rule 497(d) under the Securities Act (or, if the
Prospectus or such amendment or supplement is not required to be so
filed, when the Registration Statement or the amendment thereto
containing such amendment or supplement to the Prospectus was or is
declared effective), and on the Firm Closing Date and any Option Closing
Date (both as hereinafter defined), the Prospectus, as amended or
supplemented at any such time, (i) contained or will contain all
statements required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements of, the
Securities Act and the Investment Company Act and the respective rules
and regulations of the Commission thereunder and (ii) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The foregoing provisions of this paragraph (b) do not apply to statements
or omissions made in any Preliminary Prospectus, the Registration
Statement or any amendment thereto or the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives, specifically for use therein.
(c) When the Notification of Election was filed with the
Commission, it (i) contained all statements required to be stated therein
in accordance with, and complied in all material respects with the
requirements of, the Investment Company Act and the rules and regulations
of the Commission thereunder and (ii) did not include any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein not misleading.
(d) If the Company has elected to rely on Rule 462(b) and the
Rule 462(b) Registration Statement has not been declared effective (i)
the Company has filed a Rule 462(b) Registration Statement in compliance
with and that is effective upon filing pursuant to Rule 462(b) and has
received confirmation of its receipt and (ii) the Company has given
irrevocable instructions for transmission of the applicable filing fee in
connection with the filing of the Rule 462(b) Registration Statement, in
compliance with Rule 111 promulgated under the Securities Act or the
Commission has received payment of such filing fee.
(e) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of Delaware
and is duly
3
qualified to transact business as a foreign corporation and is in good
standing under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have
a material adverse effect on the condition (financial or otherwise),
management, business prospects, net worth or results of operations of the
Company. The Company has no subsidiaries.
(f) The Company has full power (corporate and other) to own or
lease its properties and conduct its business as described in the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(g) The Company has full power (corporate and other) (i) to
enter into this Agreement, the Investment Advisory Agreement dated of
even date herewith, by and between the Company and meVC Advisers (the
"Investment Advisory Agreement"), the Custodian Agreement (the "Custodian
Agreement") dated as of January 31, 2000, by and between the Company and
State Street Bank and Trust Company ("State Street"), in its capacity as
custodian to the Company, the Registrar, Transfer Agency and Service
Agreement (the "Registrar, Transfer Agency and Service Agreement") dated
as of January 31, 2000, by and between the Company and State Street, in
its capacity as transfer agent and registrar to the Company, and to carry
out all the terms and provisions to be carried out by it pursuant to the
foregoing agreements, and; (ii) to adopt a dividend reinvestment plan
(the "Dividend Reinvestment Plan") in substantially the form described in
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(h) All required action has been taken by the Company under
Section 54 of the Investment Company Act to qualify the Company as a
business development company under such Act.
(i) The Company has an authorized, issued and outstanding
capitalization as set forth under the heading "Description of Capital
Stock" in the Prospectus as of the date set forth therein (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
All of the outstanding shares of the Company's Common Stock have been
duly authorized and validly issued and are fully paid and nonassessable.
The Firm Securities and the Option Securities have been duly authorized
and, as of the Firm Closing Date or the related Option Closing Date (as
the case may be), after payment therefor in accordance herewith, will be
validly issued, fully paid and nonassessable. No holders of outstanding
shares of the Company's Common Stock are entitled as such to any
preemptive or other rights to subscribe for any of the Securities, and no
holder of securities of the Company has any right which has not been
fully exercised or waived to require the Company to register the offer or
sale of any securities owned by such holder under the Securities Act in
the public offering contemplated by this Agreement.
(j) The Securities conform to the summary description thereof
contained in the Prospectus under the heading "Description of Capital
Stock" (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(k) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
there are no outstanding (i) securities
4
or obligations of the Company convertible into or exchangeable for any
shares of capital stock of the Company, (ii) warrants, rights or options
to subscribe for or purchase from the Company any shares of its capital
stock or any such convertible or exchangeable securities or obligations,
or (iii) obligations of the Company to issue any shares of its capital
stock, any such convertible or exchangeable securities or obligations, or
any such warrants, rights or options.
(l) The Statement of Assets and Liabilities of the Company
included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly presents the financial position of the Company as of the dates
therein specified. Such Statement of Assets and Liabilities has been
prepared in accordance with generally accepted accounting principles
consistently applied (except as otherwise noted therein).
(m) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and delivered their report with
respect to the Statement of Assets and Liabilities of the Company
included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
are independent public accountants as required by the Securities Act and
the Investment Company Act and the respective rules and regulations
thereunder.
(n) The execution and delivery of this Agreement, the
Investment Advisory Agreement, the Custodian Agreement and the Registrar,
Transfer Agency and Service Agreement has been duly authorized by the
Company; this Agreement, the Investment Advisory Agreement, the Custodian
Agreement and the Registrar, Transfer Agency and Service Agreement have
been duly executed and delivered by the Company; this Agreement, the
Investment Advisory Agreement, the Custodian Agreement and the Registrar,
Transfer Agency and Service Agreement are the legal, valid and binding
agreements of the Company, enforceable against the Company in accordance
with their respective terms; this Agreement, the Investment Advisory
Agreement and the Custodian Agreement comply in all material respects
with the requirements of the Investment Company Act; and the Investment
Advisory Agreement complies in all material respects with the
requirements of the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and the respective rules and regulations of the
Commission thereunder. The Dividend Reinvestment Plan has been duly
adopted by the Company.
(o) No legal or governmental proceedings are pending to which
the Company is a party or to which the property of the Company is subject
that are required to be described in the Registration Statement or the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), and are not described therein, and no such
proceedings have been threatened against the Company or with respect to
any of its properties; and no contract or other document is required to
be described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement that is not described
therein (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) or filed as required.
(p) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement and the
Investment Advisory Agreement, the Custodian Agreement and the Registrar,
Transfer Agency and Services Agreement, and the
5
consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have
been obtained, such as may be required under state securities or blue sky
laws and, if the registration statement filed with respect to the
Securities (as amended) is not effective under the Securities Act as of
the time of execution hereof, such as may be required (and shall be
obtained as provided in this Agreement) under the Securities Act or the
Investment Company Act, or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any material indenture, mortgage, deed of trust, lease or other
material agreement or instrument to which the Company is a party or by
which the Company or any of its properties is bound, or the charter
documents or Bylaws of the Company, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company, which breach,
violation or default would not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), management,
business prospects, net worth or results of operations of the Company.
(q) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
the Company has not sustained any material loss or interference with its
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding and there has not been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth or results of the operations of
the Company, except in each case as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(r) Except for the transactions contemplated herein or in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), the Company has not directly or indirectly (i)
taken any action designed to cause or to result in, or that constituted
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities or (ii) since the filing of the
Registration Statement, (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(s) The Company has not distributed and, prior to the later of
(i) the Firm Closing Date and (ii) the completion of the distribution of
the Securities, will not distribute any offering material in connection
with the offering and sale of the Securities other than the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or other materials, if
any, permitted by the Securities Act.
(t) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
(i) the Company has not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in
the ordinary course of business; (ii) the Company has not purchased any
of its
6
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; and (iii)
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company, except in each case as described
in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(u) The Company neither owns nor leases any real or personal
property.
(v) The Company has no employees.
(w) The Company owns or possesses, or can acquire on reasonable
terms, all material patents, patent applications, trademarks, service
marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed by it in connection with its
business, and the Company has not received any notice of infringement of
or conflict with asserted rights of any third party with respect to any
of the foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company, except as
described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(x) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which it is engaged; the
Company has not been refused any insurance coverage sought or applied
for; and the Company has no reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a material adverse
effect on the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(y) The Company possesses all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct its business, and the Company has not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(z) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not
have a material adverse effect on the condition (financial or otherwise),
management, business prospects, net worth or results of operations of the
Company) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being
7
contested in good faith or as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(aa) The Company is not in violation of any federal or state law
or regulation relating to occupational safety and health or to the
storage, handling or transportation of hazardous or toxic materials and
the Company has received all permits, licenses or other approvals
required of its under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct its
business, and the Company is in compliance with all terms and conditions
of any such permit, license or approval, except any such violation of law
or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the
aggregate, result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(bb) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
(cc) As of the date hereof, the Company does not own any shares
of stock or other equity securities of any corporation, nor does it
currently have any equity interest in any firm, partnership, association
or other entity, except as described in and contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus); PROVIDED, that the Company may, subsequent to
the Firm Closing Date, and prior to any Option Closing Date, make venture
capital investments in portfolio companies in accordance with its
investment objective and strategies as described in the Prospectus.
(dd) There are no holders of securities of the Company, who, by
reason of the filing of the Registration Statement, have the right to
request the Company to register under the Securities Act or to include in
the Registration Statement such Securities held by them, except for such
rights that have been waived by the holders of such Securities.
(ee) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with (A) the general or specific
authorization of the individual or entity executing such transactions,
(B) the Company's investment guidelines and policies and (C) applicable
requirements of the Investment Company Act, and the rules and regulations
thereunder, and the Internal Revenue Code of 1986, as amended (the
"Code"), including the requirements of Subchapter M of the Code, such
that, immediately after the Firm Closing Date, the Company will be
eligible to qualify as a regulated investment company under Subchapter M
of the Code; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles, to calculate net asset value, to maintain
accountability for assets and to maintain material compliance with the
books and records requirements under the Investment Company Act and the
rules and regulations thereunder; (iii) access to assets is permitted
only in accordance with management's
8
general or specific authorization; and (iv) the recorded account for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(ff) The conduct by the Company of its business as described in
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) does not require it to be the owner,
possessor or licensee of any patents, patent licenses, trademarks,
service marks or trade names which it does not own, possess or license.
(gg) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed or trust, lease or other agreement or
instrument to which the Company is a party or by which the Company or any
of its properties is bound or may be affected in any material adverse
respect with regard to property, business or operations of the Company.
(hh) meVC Advisers has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the condition (financial or otherwise), management, business prospects,
net worth or results of operations of meVC Advisers.
(ii) meVC Advisers has full power (corporate and other) to enter
into this Agreement, the Investment Advisory Agreement, the Investment
Sub-Advisory Agreement dated of even date herewith, by and between meVC
Advisers and Xxxxxx Advisers (the "Investment Sub-Advisory Agreement"),
and the Sub-Administration Agreement (the "Sub-Administration
Agreement"), dated as of January 31, 2000, by and between meVC Advisers,
on behalf of the Company, and State Street, in its capacity as
sub-administrator to the Company (the "Sub-Administrator"), and to carry
out all the terms and provisions to be carried out by it pursuant to the
foregoing agreements.
(jj) meVC Advisers is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by any
provision of the Advisers Act or the Investment Company Act, or the
respective rules and regulations of the Commission thereunder, from
performing its obligations under the Investment Advisory Agreement and
the Investment Sub-Advisory Agreement.
(kk) The execution and delivery of this Agreement, the
Investment Advisory Agreement, the Investment Sub-Advisory Agreement and
the Sub-Administration Agreement has been duly authorized by meVC
Advisers; this Agreement, the Investment Advisory Agreement, the
Investment Sub-Advisory Agreement and the Sub-Administration Agreement
have been duly executed and delivered by meVC Advisers; this Agreement,
the Investment Advisory Agreement, the Investment Sub-Advisory Agreement
and the Sub-Administration Agreement are the legal, valid and binding
agreements of meVC Advisers, enforceable against meVC Advisers in
accordance with their respective terms; and the Investment Advisory
Agreement and the Investment Sub-
9
Advisory Agreement comply in all material respects with the Advisers Act
and the Investment Company Act and the respective rules and regulations
of the Commission thereunder.
(ll) No legal or governmental proceedings are pending to which
meVC Advisers is a party or to which the property of meVC Advisers is
subject that are required to be described in the Registration Statement
or the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), and are not described therein, and no
such proceedings have been threatened against meVC Advisers or with
respect to any of its properties; and no contract or other document is
required to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement that is not
described therein (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) or filed as required.
(mm) The compliance by meVC Advisers with the provisions of this
Agreement, the Investment Advisory Agreement, the Investment Sub-Advisory
Agreement and the Sub-Administration Agreement, and the consummation of
the other transactions therein contemplated do not (i) require the
consent, approval, authorization, registration or qualification of or
with any governmental authority, except such as have been obtained, such
as may be required under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as amended)
is not effective under the Securities Act as of the time of execution
hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Securities Act or the Investment Company Act,
or (ii) conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
meVC Advisers is a party or by which meVC Advisers or any of its
properties is bound, or the charter documents or Bylaws of meVC Advisers
or, to the best knowledge of meVC Advisers, any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to meVC Advisers, which breach,
violation or default would reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), management,
business prospects, net worth or results of operations of meVC Advisers.
(nn) The description of meVC Advisers and its business set forth
in the Prospectus (or, if the Prospectus is not yet in existence, the
most recent Preliminary Prospectus) under the headings "Business" and
"Management-The Investment Adviser" complies in all material respects
with the requirements of the Securities Act and the Investment Company
Act and the respective rules and regulations of the Commission
thereunder, and does not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(oo) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
meVC Advisers has not sustained any material loss or interference with
its business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding and there has not been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial
10
or otherwise), management, business prospects, net worth or results of
the operations of meVC Advisers, or in the ability of meVC Advisers to
fulfills its respective obligations under this Agreement, the Investment
advisory Agreement, the Investment Sub-Advisory Agreement or the
Sub-Administration Agreement, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(pp) Except for the transactions contemplated herein, meVC
Advisers has not, directly or indirectly, (i) taken any action designed
to cause or to result in, or that constituted or which might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Securities or (i) since the filing of the Registration Statement, (A)
sold, bid for, purchased, or paid anyone any compensation for soliciting
purchases of, the Securities or (B) paid or agreed to pay to any person
any compensation for soliciting another to purchase any other securities
of the Company.
(qq) meVC Advisers has the financial resources available to it
necessary for the performance of the investment advisory services
proposed to be provided by it as contemplated in the Investment Advisory
Agreement.
(rr) Xxxxxx Advisers has been duly organized and is validly
existing as a limited liability company in good standing under the laws
of the State of California and is duly qualified to transact business and
is in good standing under the laws of all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
would not have a material adverse effect on the condition (financial or
otherwise), management business prospects, net worth or results of
operations of Xxxxxx Advisers.
(ss) The description of Xxxxxx Advisers in the Prospectus (or,
if the Prospectus is not yet in existence, the most recent Preliminary
Prospectus) under the headings "Business" and "Management-The Investment
Sub-Adviser" does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(tt) The execution and delivery of this Agreement and the
Investment Sub-Advisory Agreement has been duly authorized by the members
of Xxxxxx Advisers; this Agreement and the Investment Sub-Advisory
Agreement have been duly executed and delivered by the managing member of
Xxxxxx Advisers; this Agreement and the Investment Sub-Advisory Agreement
are the legal, valid and binding agreements of Xxxxxx Advisers,
enforceable against Xxxxxx Advisers in accordance with their respective
terms; and the Investment Sub-Advisory Agreement complies in all material
respects with the Advisers Act and the Investment Company Act and the
respective rules and regulations of the Commission thereunder.
(uu) No legal or government proceedings are pending to which
Xxxxxx Advisers is a party or to which the property of Xxxxxx Advisers is
subject that are required to be described in the Registration Statement
or the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), and are not described therein, and no
such proceedings have been threatened against Xxxxxx Advisers
11
or with respect to any of its properties; and no contract or other
document is required to be described in the Registration Statement that
is not described therein (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) or files as required.
(vv) The compliance by Xxxxxx Advisers with the provisions of
this Agreement and the Investment Sub-Advisory Agreement, and the
consummation of the other transactions therein contemplated do not (i)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have
been obtained, such as may be required under state securities or blue sky
laws and, if the registration statement filed with respect to the
Securities (as amended) is not effective under the Securities Act as of
the time of execution hereof, such as may be required (and shall be
obtained as provided in this Agreement) under the Securities Act or the
Investment Company Act, or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any material indenture, mortgage, deed of trust, lease or other
material agreement or instrument to which Xxxxxx Advisers is a party or
by which Xxxxxx Advisers or any of its properties is bound, or the
certificate of formation or operating agreement of Xxxxxx Advisers or, to
the best knowledge of Xxxxxx Advisers, any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to Xxxxxx Advisers, which breach,
violation or default would not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), business
prospects, net worth or results of operations of Xxxxxx Advisers.
(ww) Xxxxxx Advisers has the financial resources available to it
necessary for the performance of the investment advisory services
proposed to be provided by it as contemplated in the Investment
Sub-Advisory Agreement.
(xx) Xxxxxx Advisers has full power (corporate and other) to
enter into this Agreement and the Investment Sub-Advisory Agreement, and
to carry out all the terms and provisions to be carried out by it
pursuant to the foregoing agreements.
(yy) Xxxxxx Advisers is duly registered with the Commission as
an investment adviser under the Advisers Act and is not prohibited by any
provision of the Advisers Act or the Investment Company Act, or the
respective rules and regulations of the Commission thereunder, from
performing its obligations under the Investment Sub-Advisory Agreement.
(zz) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
Xxxxxx Advisers has not sustained any material loss or interference with
its business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding and there has not been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth or results of the operations of
Xxxxxx Advisers, or in the ability of Xxxxxx Advisers to fulfills its
respective obligations under this Agreement or the Investment
Sub-Advisory Agreement, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
12
(aaa) Except for the transactions contemplated herein, Xxxxxx
Advisers has not, directly or indirectly, (i) taken any action designed
to cause or to result in, or that constituted or which might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Securities or (i) since the filing of the Registration Statement, (A)
sold, bid for, purchased, or paid anyone any compensation for soliciting
purchases of, the Securities or (B) paid or agreed to pay to any person
any compensation for soliciting another to purchase any other securities
of the Company.
3 PURCHASE, SALE AND DELIVERY OF THE SECURITIES. (a) On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters
severally and not jointly agree to purchase from the Company, at a purchase
price of $19.00 per share, the number of Firm Securities set forth opposite the
name of such Underwriter in Schedule 1 hereto. One or more certificates in
definitive form for the Firm Securities that the several Underwriters have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Representatives request upon notice to
the Company at least 48 hours prior to the Firm Closing Date, shall be delivered
by or on behalf of the Company to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by wire transfer in same day funds
("Wired Funds") to the account of the Company; PROVIDED, that such payment by
the Underwriters shall be less the fee payable by the Company to Prudential
Securities Incorporated pursuant to the Financial Advisory Services Agreement of
even date herewith between the Company and Prudential Securities Incorporated.
Such delivery of and payment for the Firm Securities shall be made at the
offices of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx at 10:00 A.M., New York time, on March 30, 2000, or at such other place,
time or date as the Representatives and the Company may agree upon or as the
Representatives may determine pursuant to Section 9 hereof, such time and date
of delivery against payment being herein referred to as the "Firm Closing Date."
The Company will make such certificate or certificates for the Firm Securities
available for checking and packaging by the Representatives at the offices in
New York, New York of State Street Bank and Trust Company or of Prudential
Securities Incorporated at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as contemplated
by the Prospectus, the Company hereby grants to the several Underwriters an
option to purchase, severally and not jointly, the Option Securities. The
purchase price to be paid for any Option Securities shall be the same price per
share as the price per share for the Firm Securities set forth above in
paragraph (a) of this Section 3. The option granted hereby may be exercised as
to all or any part of the Option Securities at any time (but not more than three
times) on or before the 30th day after the date on which trading of the
Securities commences on the New York Stock Exchange (or, if such 30th day shall
be a Saturday or Sunday or holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading). The Underwriters shall not be
under any obligation to purchase any of the Option Securities prior to the
exercise of such option. The Representatives may exercise the option granted
hereby by giving notice in writing or by telephone (confirmed in writing) to the
Company setting forth the aggregate number of Option Securities to be purchased
and the date and time for delivery of and payment for such Option Securities.
Any such date of delivery shall be determined by the Representatives but shall
not be earlier than two business days nor later than five business days after
such exercise of the option and, in any event, shall not be earlier than the
Firm Closing Date. The time and date set forth in such notice, or such other
time on such other date as the Representatives and the Company may agree upon or
as the Representatives may determine pursuant to Section 9 hereof, is herein
called the "Option Closing Date" with respect to such Option
13
Securities. Upon exercise of the option as provided herein, the Company shall
become obligated to sell to each of the several Underwriters, and, subject to
the terms and conditions herein set forth, each of the Underwriters (severally
and not jointly) shall become obligated to purchase from the Company, the same
percentage of the total number of the Option Securities as to which the several
Underwriters are then exercising the option as such Underwriter is obligated to
purchase of the aggregate number of Firm Securities, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares. If the option is exercised as to all or any portion of the Option
Securities, one or more certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on the related Option
Closing Date in the manner, and upon the terms and conditions, set forth in
paragraph (a) of this Section 3, except that reference therein to the Firm
Securities and the Firm Closing Date shall be deemed, for purposes of this
paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(c) The Company hereby acknowledges that the wire transfer by
or on behalf of the Underwriters of the purchase price for any Securities does
not constitute closing of a purchase and sale of such Securities. Only execution
and delivery of a receipt for Securities by the Underwriters indicates
completion of the closing of a purchase of such Securities from the Company.
Furthermore, in the event that the Underwriters wire funds to the Company prior
to the completion of the closing of a purchase of the Securities, the Company
hereby acknowledges that until the Underwriters execute and deliver a receipt
for such Securities, by facsimile or otherwise, the Company will not be entitled
to the Wired Funds and shall return the Wired Funds to the Underwriters as soon
as practicable (by wire transfer of same-day funds) upon demand. In the event
that the closing of a purchase of Securities is not completed and the Wired
Funds are not returned by the Company to the Underwriters on the same day the
Wired Funds were received by the Company, the Company agrees to pay to the
Underwriters in respect of each day the Wired Funds are not returned by it, in
same-day funds, interest on the amount of such Wired Funds in an amount
representing the Underwriters' cost of financing as reasonably determined by
Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not as
one of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations hereunder.
4 OFFERING BY THE UNDERWRITERS. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
5 COVENANTS. The Company, meVC Advisers and Xxxxxx Advisers
severally covenant and agree with each of the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto, to become effective as promptly as
possible. If required, the Company will file the Prospectus and any
amendment or supplement thereto with the Commission in the manner and
within the time period required by Rule 497(b), (d) or (h), as the case
may be, under the Securities Act. During any time when a prospectus
relating to the Securities is required to be delivered under the
Securities Act, the Company (i) will comply with all requirements imposed
upon it by the Securities Act and the Investment Company Act and the
respective rules and regulations of the Commission thereunder to the
extent necessary to permit the continuance of sales of or dealings in the
Securities in
14
accordance with the provisions hereof and of the Prospectus, as then
amended or supplemented, and (ii) will not file with the Commission the
prospectus or the amendment referred to in the fourth sentence of Section
2(a) hereof, any amendment or supplement to such Prospectus or any
amendment to the Registration Statement or any Rule 462(b) Registration
Statement of which the Representatives previously have been advised and
furnished with a copy for a reasonable period of time prior to the
proposed filing and as to which filing the Representatives shall not have
given their consent, which consent shall not be unreasonably withheld.
The Company will prepare and file with the Commission, in accordance with
the rules and regulations of the Commission, promptly upon request by the
Representatives or counsel for the Underwriters, any amendments to the
Registration Statement or amendments or supplements to the Prospectus
that may be necessary or advisable in connection with the distribution of
the Securities by the several Underwriters, and will use its best efforts
to cause any such amendment to the Registration Statement to be declared
effective by the Commission as promptly as possible. The Company will
advise the Representatives, promptly after receiving notice thereof, of
the time when the Registration Statement or any amendment thereto has
been filed or declared effective or the Prospectus or any amendment or
supplement thereto has been filed and will provide evidence satisfactory
to the Representatives of each such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Original Registration Statement or any Rule 462(b) Registration Statement
or any amendment thereto or any order preventing or suspending the use of
any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, (ii) the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, (iii) the
institution, threatening or contemplation of any proceeding for any such
purpose or (iv) any request made by the Commission for amending any
Registration Statement, for amending or supplementing the Prospectus or
for additional information. The Company will use its best efforts to
prevent the issuance of any such stop order and, if any such stop order
is issued, to obtain the withdrawal thereof as promptly as possible.
(c) The Company will cooperate with the Underwriters concerning
the qualification of the Securities for offering and sale under the
securities or blue sky laws of such jurisdictions as the Representatives
may designate and will continue such qualifications in effect for as long
as may be necessary to complete the distribution of the Securities;
PROVIDED, that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date
when a prospectus relating to the Securities is required to be delivered
under the Securities Act or (ii) the Option Closing Date, any event
occurs as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Securities Act, the
Investment Company Act or the respective rules or regulations of the
Commission thereunder, the Company will promptly notify the
Representatives thereof
15
and, subject to Section 5(a) hereof, will prepare and file with the
Commission, at the Company's expense, an amendment to the Registration
Statement or an amendment or supplement to the Prospectus that corrects
such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters (A) a conformed copy
of the Notification of Election and (B) a conformed copy of the
registration statement originally filed with respect to the Securities
and each amendment thereto (in each case including exhibits thereto) or
any Rule 462(b) Registration Statement, certified by the Secretary or an
Assistant Secretary of the Company to be true and complete copies thereof
as filed with the Commission by electronic transmission, (ii) to each
other Underwriter, a conformed copy of such Notification of Election and
such registration statement or any Rule 462(b) Registration Statement and
each amendment thereto (in each case without exhibits thereto), (iii) to
the Underwriters, for so long as a prospectus relating to the Securities
is required to be delivered under the Securities Act, as many copies of
each Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, as the case may be, as the Representatives may
reasonably request; without limiting the application of clause (iii) of
this sentence, the Company (A) not later than 6:00 P.M., New York City
time, on the date of determination of the public offering price, if such
determination occurred at or prior to 10:00 A.M., New York City time, on
such date, or 2:00 P.M., New York City time, on the business day
following the date of determination of the public offering price, if such
determination occurred after 10:00 A.M., New York City time, on such
date, and (B) as requested by the Underwriters in connection with any
sales of Option Securities, will deliver to the Underwriters, without
charge, as many copies of the Prospectus and any amendment or supplement
thereto as the Representatives may reasonably request for purposes of
confirming orders that are expected to settle on any Option Closing Date.
(f) The Company, as soon as practicable, will make generally
available to its security holders and to the Representatives a
consolidated earnings statement of the Company that satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
(g) The Company will apply the net proceeds from the sale of
the Securities as set forth under the heading "Use of Proceeds" in the
Prospectus.
(h) During a period of five years from the effective date of
the Registration Statement, the Company will furnish to the
Representatives copies of all reports and other communication (financial
or other) furnished by the Company to its shareholders and, as soon as
available, copies of any reports or financial statements furnished or
filed by the Company to or with the Commission or any national securities
exchange on which any class of securities of the Company may be listed;
PROVIDED, that the Company shall not be required to furnish to the
Representatives xxxxx of any reports or financial statements furnished or
filed by the Company to or with the Commission that are publicly
available on XXXXX free of charge.
(i) The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of
the Underwriters, offer, sell, offer to sell, contract to sell, pledge,
grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, offer of sale, contract of sale, pledge, grant of any
16
option to purchase or other sale or disposition) of any shares of its
Common Stock, or any securities convertible into, or exchangeable or
exercisable for, shares of its Common Stock for a period of 180 days
after the date hereof, except pursuant to this Agreement or the Dividend
Reinvestment Plan.
(j) Except as contemplated herein or in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), none of the Company, meVC Advisers or Xxxxxx Advisers will,
directly or indirectly, (i) take any action designed to cause or to
result in, or that has constituted or which might reasonably be expected
to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Securities or to (B) pay or
agree to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(k) The Company will obtain the agreements described in
Section 7(i) hereof prior to the Firm Closing Date.
(l) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to any
Option Closing Date, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion
the market price of the Securities has been or is likely to be materially
affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus), the Company
will, after notice from you advising the Company to the effect set forth
above, forthwith prepare, consult with you concerning the substance of,
and disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor,
publication or event.
(m) If the Company elects to rely on Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) and pay the applicable fees in accordance
with Rule 111 promulgated under the Securities Act by the earlier of (A)
10:00 P.M. Eastern time on the date of this Agreement and (B) the time
confirmations are sent or given, as specified by Rule 462(b)(2).
(n) The Company shall cause the Securities to be duly
authorized for listing by the New York Stock Exchange prior to the Firm
Closing Date, and shall use its best efforts to cause the New York Stock
Exchange to delay the commencement of trading of the Securities on the
New York Stock Exchange for a period of up to 90 days following the Firm
Closing Date.
6 EXPENSES. The Company, meVC Advisers and Xxxxxx Advisers jointly
and severally agree to pay all costs and expenses incident to the performance of
their respective obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus and the Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (ii)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (iii) the fees and disbursements of counsel, the
accountants, State Street and any other experts or advisors retained by the
Company, meVC
17
Advisers or Xxxxxx Advisers in connection with the offering of the Securities,
(iv) the preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Securities, including transfer agent's and
registrar's fees, (v) the qualification of the Securities under state securities
and blue sky laws, including filing fees and fees and disbursements of counsel
for the Underwriters relating thereto, (vi) the filing fees of the Commission
and the National Association of Securities Dealers, Inc. relating to the
Securities, (vii) the listing of the Securities on the New York Stock Exchange,
(viii) any meetings with prospective investors in the Securities (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters) and (ix) advertising relating to the offering of the
Securities (other than shall have been specifically approved by the
Representatives to be paid for by the Underwriters). If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 hereof is not satisfied,
because this Agreement is terminated pursuant to Section 11(a)(i) or Section
11(a)(ii) hereof or because of any failure, refusal or inability on the part of
the Company, meVC Advisers or Xxxxxx Advisers to perform all of their respective
obligations and satisfy all conditions on their respective parts to be performed
or satisfied hereunder other than by reason of a default by any of the
Underwriters, the Company, meVC Advisers and Xxxxxx Advisers jointly and
severally agree to reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including counsel fees and disbursements) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities. None of the Company, meVC Advisers nor Xxxxxx Advisers shall in
any event be liable to any of the Underwriters for the loss of anticipated
profits from the transactions covered by this Agreement.
7 CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
respective representations and warranties of the Company, meVC Advisers and
Xxxxxx Advisers contained herein as of the date hereof and as of the Firm
Closing Date, as if made on and as of the Firm Closing Date, to the accuracy of
the statements of officers of the Company and meVC Advisers and members of
Xxxxxx Advisers, as the case may be, made pursuant to the provisions hereof, to
the performance by the Company, meVC Advisers and Xxxxxx Advisers of their
respective covenants and agreements hereunder and to the following additional
conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared effective as
of the time of execution hereof, the Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b), the 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to
the registration statement originally filed with respect to the Securities or to
the Registration Statement, as the case may be, containing information regarding
the initial public offering price of the Securities has been filed with the
Commission and (ii) the time confirmations are sent or given as specified by
Rule 462(b)(2), or such later time and date as shall have been consented to by
the Representatives; the Prospectus and any amendment or supplement thereto
shall have been filed with the Commission in the manner and within the time
period required by Rule 497(b), (d) or (h), as the case may be, under the
Securities Act; no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto shall have been issued, and no proceedings
for that purpose shall have been instituted or threatened or, to the knowledge
of the Company or the Representatives, shall be contemplated by the Commission;
and the Company shall have complied with any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise).
(b) The Representatives shall have received an opinion or
opinions, dated as of the Firm Closing Date or an Option Closing Date, as
applicable, of Pillsbury, Madison & Sutro LLP, counsel for the Company and meVC
Advisers, to the effect that:
18
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Delaware and is duly qualified to transact
business as a foreign corporation and is in good standing under
the laws of all other jurisdictions where its ownership or leasing
of property or the conduct of its business requires such
qualification, except where the failure to be so qualified or in
good standing would not have a material adverse effect on the
condition (financial or otherwise), management, business
prospects, net worth or results of operations of the Company;
(ii) meVC Advisers has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Delaware and is duly qualified to transact
business as a foreign corporation and is in good standing under
the laws of each jurisdiction specifically identified to such
counsel by meVC Advisers as a jurisdiction in which meVC Advisers
owns or leases property or conducts material business operations;
(iii) the Company has the corporate power necessary to
conduct its business as described in the Prospectus and to enter
into this Agreement, the Investment Advisory Agreement, the
Custodian Agreement and the Registrar, Transfer Agency and Service
Agreement and to carry out all the terms and provisions to be
carried out by it hereunder and thereunder;
(iv) meVC Advisers has the corporate power necessary to
conduct its business as described in the Prospectus and to enter
into this Agreement, the Investment Advisory Agreement, the
Investment Sub-Advisory Agreement and the Sub-Administration
Agreement and to carry out all the terms and provisions to be
carried out by it hereunder and thereunder;
(v) the Company has filed the Notice of Election with
the Commission pursuant to Section 54(a) of the Investment Company
Act and the Company's Bylaws comply in all material respects with
the Investment Company Act and the rules and regulations of the
Commission thereunder;
(vi) meVC Advisers is registered with the Commission as
an investment adviser under the Advisers Act and, to the best of
such counsel's knowledge after due inquiry, is not prohibited by
any provision of the Advisers Act or the Investment Company Act,
or the respective rules and regulations of the Commission
thereunder, from performing its obligations under the Investment
Advisory Agreement as contemplated by the Prospectus;
(vii) the Company has an authorized, issued and
outstanding capitalization as set forth in the table included
under the heading "Description of Capital Stock-Common Stock" in
the Prospectus as of the dates stated therein; all of the
outstanding shares of the Company's Common Stock have been duly
authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable
federal and state securities laws and, were not issued in
violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities; the Securities have been
duly authorized by all necessary corporate action of the Company
and, when issued and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable; the Securities have been duly authorized for
listing,
19
subject to official notice of issuance, on the New York Stock
Exchange; no holders of outstanding shares of the Company's Common
Stock are entitled as such to any preemptive or other rights to
subscribe for any of the Securities; and no holders of securities
of the Company are entitled to have such securities registered
under the Registration Statement;
(viii) the statements set forth under the heading
"Description of Capital Stock" in the Prospectus, insofar as such
statements purport to summarize certain provisions of the capital
stock of the Company, provide a fair summary of such provisions;
and the statements included under the headings "Prospectus
Summary-Compensation of Investment Adviser and Investment
Sub-Adviser," "Prospectus Summary-Liquidation," "Fee Table and
Synopsis-Annual Expenses," "Risk Factors" (but only with respect
to certain statements included in the in the first and third risk
factors on page 13 of the Prospectus and the last three risk
factors on page 15 of the Prospectus), "Use of Proceeds" (but only
with respect to the last sentence of the first paragraph of such
section), "Business," "Management-Directors and Officers" (but
only with respect to the first paragraph of such section),
"Management-Legal Proceedings," "Management-The Investment
Adviser," "Management-The Investment Sub-Adviser" (but only with
respect to the first three paragraphs of such section),
"Investment Company Act Regulation," "Distributions," and
"Dividend Reinvestment Plan" in the Prospectus, insofar as such
statements purport to constitute a summary of the legal matters,
documents or proceedings referred to therein, provide a fair
summary of such legal matters, documents and proceedings;
(ix) the execution and delivery of each of this
Agreement, the Investment Advisory Agreement, the Custodian
Agreement and the Registrar, Transfer Agency and Service Agreement
has been duly authorized by all necessary corporate action of the
Company; this Agreement, the Investment Advisory Agreement, the
Custodian Agreement and the Registrar, Transfer Agency and Service
Agreement have been duly executed and delivered by the Company;
the Investment Advisory Agreement and the Custodian Agreement
comply in all material respects with all applicable provisions of
the Investment Company Act; and the Investment Advisory Agreement
complies in all material respects with all applicable provisions
of the Advisers Act;
(x) the execution and delivery of this Agreement; the
Investment Advisory Agreement, the Investment Sub-Advisory
Agreement and the Sub-Administration Agreement has been duly
authorized by all necessary corporate action of meVC Advisers and
duly executed and delivered by meVC Advisers and the Investment
Advisory Agreement and the Investment Sub-Advisory Agreement
comply in all material respects with the applicable provisions of
the Investment Company Act and the Advisers Act;
(xi) to the best of such counsel's knowledge after due
inquiry, (A) no legal or governmental proceedings are pending to
which the Company is a party or to which the property of the
Company is subject that are required to be described in the
Registration Statement or the Prospectus and are not described
therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against the Company or with
respect to any of its properties and (B) no contract or other
document is required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required;
20
(xii) to the best of such counsel's knowledge after due
inquiry, no legal or governmental proceedings are pending to which
meVC Advisers is a party or to which the property of meVC Advisers
is subject that are required to be described in the Registration
Statement or the Prospectus and are not described therein, and, to
the best knowledge of such counsel, no such proceedings have been
threatened against meVC Advisers or with respect to any of its
properties;
(xiii) the issuance, offering and sale of the Securities to
the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this
Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with any
governmental authority, except such as have been obtained and such
as may be required under state securities or blue sky laws, or (B)
conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any
agreement or instrument, known to such counsel, to which the
Company is a party or by which the Company is bound, or the
charter documents or Bylaws of the Company, or any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Company;
(xiv) this Agreement, the Investment Advisory Agreement,
the Investment Sub-Advisory Agreement and the Sub-Administration
Agreement, and the consummation of the transactions provided
therein by meVC Advisers and the compliance therewith by meVC
Advisers, do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental
authority, except such as have been obtained and such as may be
required under state securities or blue sky laws, or (B) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any agreement or
instrument, known to such counsel, to which meVC Advisers is a
party or by which meVC Advisers is bound, or the charter documents
or Bylaws of meVC Advisers, or any statute or any judgment,
decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to meVC Advisers;
(xv) the Registration Statement is effective under the
Securities Act; any required filing of the Prospectus has been
made in the manner and within the time period required; and to the
best of such counsel's knowledge after due inquiry, no stop order
suspending the effectiveness of the Registration Statement or any
amendment thereto has been issued, and no proceedings for that
purpose have been instituted or threatened or, to the best
knowledge of such counsel, are contemplated by the Commission;
(xvi) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, any Rule
462(b) Registration Statement and the Prospectus (in each case,
other than the financial statements and other financial and/or
statistical information contained therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Securities Act
and the Investment Company Act and the respective rules and
regulations of the Commission thereunder;
Such counsel shall also state that, although it has not verified
the accuracy or completeness of the statements contained in the Registration
Statement or the Prospectus, nothing has
21
come to such counsel's attention which caused such counsel to believe that, at
the time it became effective (and after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the Securities Act), the
Registration Statement (except for any financial statements and notes thereto,
schedules and financial and statistical information included therein or which
should have been included therein, as to which such counsel need express no
opinion) contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (except for any financial
statements and notes thereto, schedules and financial and statistical
information included therein or which should have been included therein, as to
which such counsel need express no opinion), as of the date of such opinion,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates and
other statements and representations, oral or written, of responsible officers
of the Company, meVC Advisers, Xxxxxx Advisers, public officials and others.
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto as of the
date of such opinion.
(c) The Representatives shall have received an opinion or
opinions, dated, respectively, the Firm Closing Date and any Option Closing
Date, of Manatt Xxxxxx & Xxxxxxxx, LLP, counsel to Xxxxxx Advisers, to the
effect that:
(i) Xxxxxx Advisers has been organized and is existing
as a limited liability company in good standing under the laws of
the State of California and is qualified to transact business, as
required, and is in good standing under the laws of each
jurisdiction specifically identified to such counsel by Xxxxxx
Advisers as a jurisdiction in which Xxxxxx Advisers owns or leases
property or conducts material business operations;
(ii) Xxxxxx Advisers has the power to conduct its
business as described in the Prospectus, to enter into this
Agreement and the Investment Sub-Advisory Agreement and to carry
out all the terms and provisions to be carried out by it hereunder
and thereunder;
(iii) Xxxxxx Advisers is registered with the Commission as
an investment adviser under the Advisers Act, and to the best of
such counsel's knowledge after due inquiry, is not prohibited by
any provision of the Advisers Act or the Investment Company Act,
or the respective rules and regulations of the Commission
thereunder, from performing its obligations under the Investment
Sub-Advisory Agreement as contemplated by the Prospectus;
(iv) the execution and delivery of this Agreement and the
Investment Sub-Advisory Agreement has been duly authorized by all
necessary corporate action of Xxxxxx Advisers, and this Agreement
and the Investment Sub-Advisory Agreement have been duly executed
and delivered by the managing member of Xxxxxx Advisers;
(v) the execution and delivery of this Agreement and the
Investment Sub-Advisory Agreement and the consummation of the
transactions provided therein by Xxxxxx Advisers, the compliance
by Xxxxxx Advisers with the other provisions of this
22
Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with any
governmental authority, except such as have been obtained and such
as may be required under state securities or blue sky laws, or (B)
conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any
agreement or instrument, known to such counsel, to which Xxxxxx
Advisers is a party or by which Xxxxxx Advisers is bound, or the
certificate of formation or operating agreement of Xxxxxx
Advisers, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to Xxxxxx
Advisers;
(vi) to the best of such counsel's knowledge after due
inquiry, no legal or governmental proceedings are pending to which
Xxxxxx Advisers is a party or to which the property of Xxxxxx
Advisers is subject that are required to be described in the
Registration Statement or the Prospectus and are not described
therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against Xxxxxx Advisers or with
respect to any of its properties.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates and
other statements and representations, oral or written, of responsible officers
of the Company, meVC Advisers, Xxxxxx Advisers, public officials and others.
References to the Registration Statement and the Prospectus in
this paragraph (d) shall include any amendment or supplement thereto as of the
date of such opinion.
(d) The Representatives shall have received an opinion or
opinions, dated the Firm Closing Date and, if requested by the Representatives,
any Option Closing Date, of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the
Underwriters, with respect to the issuance and sale of the Securities, the
Registration Statement and the Prospectus, and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(e) The Representatives shall have received from
PricewaterhouseCoopers LLP, independent accountants to the Company, a letter or
letters dated, respectively, the date hereof, the Firm Closing Date and any
Option Closing Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) they are independent accountants with respect to the
Company within the meaning of the Securities Act and the
Investment Company Act and the applicable published rules and
regulations thereunder;
(ii) in their opinion, the Statement of Assets and
Liabilities audited by them and included in the Registration
Statement and the Prospectus complies as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the Investment Company Act and the related
published rules and regulations of the Commission thereunder;
(iii) on the basis of a reading of the latest available
interim financial statements of the Company, carrying out certain
specified procedures (which do not constitute an examination made
in accordance with generally accepted auditing
23
standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this
paragraph (iii), a reading of the minute books of the board of
directors of the Company, and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters, nothing came to their attention that caused them to
believe that at a specific date not more than five business days
prior to the date of such letter, there were any changes in the
capital stock or long-term debt of the Company or any decreases in
net current assets or stockholders' equity of the Company, in each
case compared with amounts shown on the Statement of Assets and
Liabilities included in the Registration Statement; and
(iv) they have recalculated certain data of a statistical
or financial nature identified by the Representatives and
appearing in the Prospectus, including without limitation, under
the caption "Fee Table and Synopsis," and agree with the Company's
calculation of such data as set forth in the Prospectus.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by
the written explanation of the Company as to the significance thereof, unless
the Representatives deem such explanation unnecessary, and (B) such changes or
decreases do not, in the sole judgment of the Representatives, make it
impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in
this paragraph (e) with respect to either letter referred to above shall include
any amendment or supplement thereto at the date of such letter.
(f) The Representatives shall have received a certificate or
certificates, dated, respectively, the Firm Closing Date and any Option Closing
Date, as applicable, of the principal executive officer and the principal
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the
Firm Closing Date or any Option Closing Date, as applicable; the
Registration Statement, as amended as of the Firm Closing Date or
the Option Closing Date, as applicable, does not include any
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading, and
the Prospectus, as amended or supplemented as of the Firm Closing
Date or any Option Closing Date, as applicable, does not include
any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and the Company has performed all covenants and
agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Firm Closing Date or any
Option Closing Date, as applicable;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued,
and no proceedings for that purpose have been instituted or
threatened or, to the best of the Company's knowledge, are
contemplated by the Commission; and
24
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, the Company has not sustained any material loss or
interference with their respective businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective
material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth or results
of operations of the Company, except in each case as described in
or contemplated by the Prospectus (inclusive of any amendment or
supplement thereto.
(g) The Representatives shall have received a certificate or
certificates, dated, respectively, the Firm Closing Date and any Option Closing
Date, as applicable, of the principal executive officer and the principal
financial or accounting officer of meVC Advisers to the effect that:
(i) the representations and warranties of meVC Advisers
in this Agreement are true and correct as if made on and as of the
Firm Closing Date or any Option Closing Date, as applicable; and
the description of meVC Advisers and its business included in the
Prospectus, as amended or supplemented as of the Firm Closing Date
or any Option Closing Date, as applicable, does not include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and
(ii) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, meVC Advisers has not sustained any material loss or
interference with its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, and there has not been any material adverse change, or
any development involving a prospective material adverse change,
in the condition (financial or otherwise), management, business
prospects, net worth or results of operations of meVC Advisers,
except in each case as described in or contemplated by the
Prospectus (inclusive of any amendment or supplement thereto).
(h) The Representatives shall have received a certificate or
certificates, dated, respectively, the Firm Closing Date and any Option Closing
Date, as applicable, of the managing member of Xxxxxx Advisers to the effect
that:
(i) the representations and warranties of Xxxxxx
Advisers in this Agreement are true and correct as if made on and
as of the Firm Closing Date or any Option Closing Date, as
applicable; and the description of Xxxxxx Advisers and its
business included in the Prospectus, as amended or supplemented as
of the Firm Closing Date or any Option Closing Date, as
applicable, does not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and
(ii) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, Xxxxxx Advisers has not sustained any material loss or
interference with its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, and there has not been any material adverse change, or
any development involving a prospective material adverse change,
in
25
the condition (financial or otherwise), management, business
prospects, net worth or results of operations of Xxxxxx Advisers,
except in each case as described in or contemplated by the
Prospectus (inclusive of any amendment or supplement thereto).
(i) On or before the Firm Closing Date, the Representatives
shall have received from each director and officer of the Company and meVC
Advisers who is purchasing Securities in the Company's initial public offering,
and from each member of Xxxxxx Advisers who is purchasing Securities in the
Company's initial public offering, a letter, dated the Firm Closing Date,
containing the agreement of such director, officer or member, as the case may
be, not to, directly or indirectly, without the prior written consent of
Prudential Securities Incorporated, on behalf of the Underwriters, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer to sell, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of any shares of the Company's Common Stock or any securities convertible into,
or exchangeable or exercisable for, shares of the Company's Common Stock, for a
period of 180 days after the date hereof.
(j) On or before the Firm Closing Date or any Option Closing
Date, as applicable, the Representatives and counsel for the Underwriters shall
have received such further certificates, documents or other information as they
may have reasonably requested from the Company.
(k) Prior to the commencement of the offering of the
Securities, (i) the Securities shall have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance, and (ii) the New
York Stock Exchange shall have approved or authorized a delay in the
commencement of trading of the Securities for a period of up to 90 days
following the Firm Closing Date (subject to reservations or conditions as may be
imposed by the New York Stock Exchange in connection with the grant or such
approval or authorization).
(l) On the Firm Closing Date the Company shall pay to
Prudential Securities Incorporated the fee due under the Financial Advisory
Services Agreement of even date herewith between the Company and Prudential
Services Incorporated.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company, meVC Advisers and Xxxxxx Advisers
shall furnish to the Representatives such conformed copies of such opinions,
certificates, letters and documents in such quantities as the Representatives
and counsel for the Underwriters shall reasonably request.
The respective obligations of the several Underwriters to purchase
and pay for any Option Securities shall be subject, in their discretion, to each
of the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8 INDEMNIFICATION AND CONTRIBUTION.
(a) The Company, meVC Advisers and Xxxxxx Advisers, jointly and
severally agree to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject under the Securities
26
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company, meVC Advisers or Xxxxxx Advisers,
respectively, in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, (B) the Adviser
Guide or the Prospectus wrap or (C) any application or other
document, including the Notification of Election, or any amendment
or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed
in any jurisdiction in order to qualify the Securities under the
securities laws thereof or filed with the Commission or any
securities association or securities exchange (each an
"Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or
(iv) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials
provided by the Company or based upon written information
furnished by or on behalf of the Company and approved by the
Company prior to its use including, without limitation, the taped
roadshow broadcast over the Internet, slides, videos, films and
tape recordings used in connection with the marketing of the
Securities;
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; PROVIDED, that none of the Company, meVC Advisers
or Xxxxxx Advisers 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
such registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and PROVIDED, FURTHER, that none of the Company,
meVC Advisers or Xxxxxx Advisers will be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Securities Act, unless such failure to deliver the Prospectus
(as amended or supplemented) was a result of noncompliance by the Company with
Sections 5(d) and (e) of this Agreement. This indemnity agreement will be in
addition to any liability which the Company, meVC Advisers or Xxxxxx Advisers
may otherwise have. None of the Company, meVC Advisers or Xxxxxx Advisers will,
without the prior written consent of the Underwriter or Underwriters purchasing,
in the aggregate more than fifty percent (50%) of the Securities, settle or
compromise or consent to the entry of any judgment in any
27
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of all of the Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Company, meVC Advisers and Xxxxxx Advisers, each of the
Company's directors, each of the Company's officers who signed the Registration
Statement and each person, if any, who controls the Company, meVC Advisers or
Xxxxxx Advisers within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company or any such director, officer or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application or (ii) the omission or the alleged omission to
state therein a material fact required to be stated in the Registration
Statement or any amendment thereto any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, or any Application or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein; and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company, meVC Advisers or Xxxxxx
Advisers or any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or any action
in respect thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; PROVIDED, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be
28
liable for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Representatives in the case of paragraph (a) of this Section
8, representing the indemnified parties under such paragraph (a) who are parties
to such action or actions) or (ii) the indemnifying party does not promptly
retain counsel satisfactory to the indemnified party or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. After such notice from the indemnifying party
to such indemnified party, the indemnifying party will not be liable for the
costs and expenses of any settlement of such action effected by such indemnified
party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof) as well as any other relevant equitable
considerations. The relative benefits received by the Company, meVC Advisers and
Xxxxxx Advisers, on the one hand, and the Underwriters, on the other hand, shall
be deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, meVC Advisers, Xxxxxx Advisers or the Underwriters, the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances. The Company, meVC Advisers,
Xxxxxx Advisers and the Underwriters agree that it would not be equitable if the
amount of such contribution were determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (d). Notwithstanding any
other provision of this paragraph (d), no Underwriter shall be obligated to make
contributions hereunder that in the aggregate exceed the total public offering
price of the Securities purchased by such Underwriter under this Agreement, less
the aggregate amount of any damages that such Underwriter has otherwise been
required to pay in respect of the same or any substantially similar claim, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Prudential Securities Incorporated Master
Agreement Among Underwriters. For purposes of this paragraph (d), each person,
if any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement and each person, if any,
who controls the Company, meVC Advisers or Xxxxxx Advisers within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have
the same rights to contribution as the Company, meVC Advisers or Xxxxxx
Advisers, as the case may be.
29
9 DEFAULT OF UNDERWRITERS. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as applicable,
the other Underwriters shall be obligated severally in proportion to their
respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as applicable, to be purchased by all of
the Underwriters at such time hereunder, and if arrangements satisfactory to the
Representatives are not made within 36 hours after such default for the purchase
by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter, the Company, meVC Advisers or Xxxxxx
Advisers other than as provided in Section 10 hereof. In the event of any
default by one or more Underwriters as described in this Section 9, the
Representatives shall have the right to postpone the Firm Closing Date or the
Option Closing Date, as applicable, established as provided in Section 3 hereof
for not more than seven business days in order that any necessary changes may be
made in the arrangements or documents for the purchase and delivery of the Firm
Securities or Option Securities, as applicable. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10 SURVIVAL. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, meVC Advisers and
Xxxxxx Advisers and the officers of the Company, meVC Advisers and Xxxxxx
Advisers and the several Underwriters set forth in this Agreement or made by or
on behalf of them pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
meVC Advisers, Xxxxxx Advisers, any of their officers or trustees, any
Underwriter or any controlling person referred to in Section 8 hereof and (ii)
delivery of and payment for the Securities. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6 and 8 hereof
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
11 TERMINATION. (a) This Agreement may be terminated with respect to
the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, as applicable, in the event that the Company,
meVC Advisers or Xxxxxx Advisers shall have failed, refused or been unable to
perform all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder at or prior thereto or, if at or prior to the Firm
Closing Date or such Option Closing Date, as applicable:
(i) the Company, meVC Advisers or Xxxxxx Advisers shall
have, in the sole judgment of the Representatives, sustained any
material loss or interference with its business or properties from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any legal or
governmental proceeding or there shall have been any material
adverse change, or any development involving a prospective
material adverse change (including without limitation a change in
management or control of the Company, meVC Advisers or Xxxxxx
Advisers, as the case may be), in the condition (financial or
otherwise), business prospects, net worth or results
30
of operations of the Company, meVC Advisers or Xxxxxx Advisers, as
the case may be, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or
supplement thereto);
(ii) trading in the Securities shall have been suspended
by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have
been suspended or minimum or maximum prices shall have been
established; PROVIDED, that this Agreement may not be terminated
pursuant to this clause (ii) solely because of a delay in the
commencement of trading of the Securities for a period of up to 90
days after the Firm Closing Date, which delay is contemplated in
the Prospectus;
(iii) a banking moratorium shall have been declared by New
York or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign power,
(B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States or (C) any other calamity or
crisis or material adverse change in general economic, political
of financial conditions having an effect on the U.S. financial
markets that, in the sole judgment of the Representatives, makes
it impractical or inadvisable to proceed with the public offering
or the delivery of the Securities as contemplated by the
Registration Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12 INFORMATION SUPPLIED BY UNDERWRITERS. The statements set forth in
the last paragraph on the front cover page and under the heading "Underwriting"
in any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b) and 8 hereof. The Underwriters confirm that such statements (to
such extent) are complete and correct.
13 NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; if sent to the Company, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to meVC Xxxxxx Xxxxxx
Jurvetson Fund I, Inc., 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx,
00000; if sent to meVC Advisers, shall be mailed, delivered or telegraphed and
confirmed in writing to meVC Advisers, Inc., 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxxxx, Xxxxxxxxxx, 00000; and if sent to Xxxxxx Advisers, shall be mailed,
delivered or telegraphed and confirmed to it in writing to Xxxxxx Xxxxxx
Jurvetson MeVC Management Co., LLC, 000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxx,
Xxxxxxxxxx, 00000.
14 SUCCESSORS. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company, meVC Advisers, Xxxxxx
Advisers and their respective successors and legal representatives, and nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof
31
being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the indemnities
of the Company, meVC Advisers and Xxxxxx Advisers contained in Section 8 of this
Agreement shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and (ii) the indemnities of the Underwriters contained in
Section 8 of this Agreement shall also be for the benefit of the directors of
the Company, the officers of the Company who have signed the Registration
Statement and any person or persons who control the Company, meVC Advisers or
Xxxxxx Advisers within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act. No purchaser of Securities from any Underwriter
shall be deemed a successor because of such purchase.
15 APPLICABLE LAW. The validity and interpretation of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
16 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery each of this Agreement, the Company, meVC Advisers and
Xxxxxx Advisers accepts for itself and in connection with its properties,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts and waives any defense of forum non conveniens and irrevocably agrees to
be bound by any judgment rendered thereby in connection with this Agreement.
Each of the Company, meVC Advisers and Xxxxxx Advisers designates and appoints
CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, and such other persons
as may hereafter be selected by each of the Company, meVC Advisers and Xxxxxx
Advisers irrevocably agreeing in writing to so serve, as its agent to receive on
its behalf service of all process in any such proceedings in any such court,
such service being hereby acknowledged by each of the Company, meVC Advisers and
Xxxxxx Advisers to be effective and binding service in every respect. A copy of
any such process so served shall be mailed by registered mail to each of the
Company, meVC Advisers and Xxxxxx Advisers, as applicable, at its address
provided in Section 13 hereof; PROVIDED, that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of such process. If any agent appointed by each of the Company, meVC
Advisers and Xxxxxx Advisers refuses to accept service, each of the Company,
meVC Advisers and Xxxxxx Advisers hereby agrees that service of process
sufficient for personal jurisdiction in any action against each of the Company,
meVC Advisers and Xxxxxx Advisers in the State of New York may be made by
registered or certified mail, return receipt requested, to each of the Company,
meVC Advisers and Xxxxxx Advisers at its address provided in Section 13 hereof,
and each of the Company, meVC Advisers and Xxxxxx Advisers hereby acknowledges
that such service shall be effective and binding in every respect. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of any Underwriter to bring proceedings against
each of the Company, meVC Advisers and Xxxxxx Advisers in the courts of any
other jurisdiction.
17 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
32
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company, meVC
Advisers, Xxxxxx Advisers and each of the several Underwriters.
Very truly yours,
MEVC XXXXXX XXXXXX JURVETSON
FUND I, INC.
By
-------------------------------------
Xxxxx X. Xxxxxxxxxxx
VICE CHAIRMAN
MEVC ADVISERS, INC.
By
-------------------------------------
Xxxxxx X. Xxxxxx
CHIEF EXECUTIVE OFFICER
XXXXXX XXXXXX JURVETSON MEVC
MANAGEMENT CO., LLC
By
-------------------------------------
Xxxx X. Xxxxxxx
MANAGING MEMBER
33
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL XXXXX TECHNOLOGY
a unit of Prudential Securities
XXXXXXX XXXXX & ASSOCIATES, INC.
GRUNTAL & CO.
DLJDIRECT, INC.
FIDELITY CAPITAL MARKETS,
a division of National Financial Services Corporation
By PRUDENTIAL SECURITIES INCORPORATED
By
-------------------------------------
Xxxx-Xxxxxx Canfin
MANAGING DIRECTOR
For itself and on behalf of the Representatives.
34
SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- ------------
Prudential Xxxxx Technology, a division of
Prudential Securities Incorporated
Xxxxxxx Xxxxx & Associates, Inc.
Gruntal & Co.
DLJDIRECT, Inc.
Fidelity Capital Markets, a division of National
Financial Services Corporation
Total
35
