1
LITCHFIELD FINANCIAL CORPORATION
$20,000,000
9.25% SERIES B NOTES DUE 2003
UNDERWRITING AGREEMENT
November 23, 1998
MCDONALD INVESTMENTS INC.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
Litchfield Financial Corporation, a Massachusetts corporation (the
"Company"), proposes to sell to the underwriter named in Schedule I hereto (the
"Underwriter") an aggregate $20,000,000 principal amount of its 9.25% Series B
Notes Due 2003 (the "Series B Notes"). The Series B Notes are to be sold to the
Underwriter in such amount as is set forth in Schedule I hereto opposite the
name of such Underwriter. The Series B Notes are to be issued pursuant to an
Indenture, dated as of July 15, 1998, between the Company and The Bank of New
York, as trustee (the "Trustee"), as amended and supplemented by a Second
Supplemental Indenture to be dated as of December 1, 1998. Such Indenture, as
amended and supplemented, is herein referred to as the "Indenture."
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Underwriter that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), a registration statement on Form S-3
(Registration No. 333-59173), including the related preliminary
prospectus, preliminary prospectus supplement and a Form T-1 pursuant
to the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), has filed such amendments thereto, if any, and such amended
preliminary prospectuses and amended preliminary prospectus supplements
as may have been required to the date hereof, and will
2
file such additional amendments thereto and such amended prospectuses
and prospectus supplements as may hereafter be required, relating to
the Series B Notes. Copies of such registration statement and any
amendments, including any post-effective amendments, and all forms of
the related prospectuses and prospectus supplements contained therein
and any supplements thereto, have been delivered to you. Such
registration statement, including the prospectus, prospectus
supplement, Part II, all financial schedules and exhibits thereto, all
information incorporated by reference thereto, and all information
deemed to be a part of such Registration Statement pursuant to Rule
430A under the Securities Act, as amended at the time when it shall
become effective, is herein referred to as the "Registration
Statement," and the prospectus and prospectus supplement used in
connection with the offer and sale of the Series B Notes included as
part of the Registration Statement on file with the Commission that
discloses all the information that was omitted from the prospectus on
the effective date pursuant to Rule 430A of the Rules and Regulations
(as defined below) and in the form filed pursuant to Rule 424(b) under
the Securities Act is herein referred to as the "Final Prospectus." The
prospectus and prospectus supplement used in connection with the offer
and sale of the Series B Notes included as part of the Registration
Statement on the date when the Registration Statement became effective
is referred to herein as the "Effective Prospectus." Any prospectus and
prospectus supplement used in connection with the offer and sale of the
Series B Notes included in the Registration Statement and in any
amendment thereto prior to the date the Series B Notes are first
offered to the public is referred to herein as a "Preliminary
Prospectus." For purposes of this Agreement, "Rules and Regulations"
mean the rules and regulations promulgated by the Commission under
either the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or the Trust Indenture Act, as
applicable.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus, at the time of filing thereof, complied with the
requirements of the Securities Act and the Rules and Regulations, and
did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; except that the foregoing does
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the third
and fourth paragraphs under the caption "Underwriting" in the Final
Prospectus). When the Registration Statement becomes effective and at
all times subsequent thereto up to and including the Closing Date (as
hereinafter defined), (i) the Registration Statement, the Effective
Prospectus and Final Prospectus and any amendments or supplements
thereto will contain all statements which are required to be stated
therein in accordance with the Securities Act, the Exchange Act, the
Trust Indenture Act and the Rules and Regulations and will comply with
the requirements of the Securities Act, the Exchange Act, the Trust
Indenture Act and the Rules and Regulations, and (ii) neither the
Registration Statement, the Effective Prospectus nor the Final
Prospectus nor any amendment or supplement thereto will
2
3
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they are
made, not misleading; except that the foregoing does not apply to
statements or omissions made in reliance upon and in conformity with
written information furnished to the Company by the Underwriter
specifically for use therein (it being understood that the only
information so provided is the information included in the third and
fourth paragraphs under the caption "Underwriting" in the Final
Prospectus) or information contained in the Form T-1 of the Trustee
other than information furnished to the Trustee by the Company
specifically for inclusion therein.
(c) The Company and each subsidiary of the Company (as used
herein, the term "subsidiary" includes any corporation, joint venture
or partnership in which the Company or any subsidiary of the Company
has a majority ownership interest) is duly organized and validly
existing and in good standing under the laws of the respective
jurisdictions of their organization or incorporation, as the case may
be, with full power and authority (corporate, partnership and other, as
the case may be) to own their properties and conduct their businesses
as now conducted and are duly qualified or authorized to do business
and are in good standing in all jurisdictions wherein the nature of
their business or the character of property owned or leased may require
them to be qualified or authorized to do business, except for
jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole. The Company and its subsidiaries hold all licenses, consents and
approvals, and have satisfied all eligibility and other similar
requirements imposed by federal and state regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, in each case as material to the conduct of the respective
businesses in which they are engaged in the Effective Prospectus and
the Final Prospectus.
(d) The outstanding stock of each of the Company's corporate
subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. All of the outstanding stock of each corporate
subsidiary owned by the Company, is clear of any lien, encumbrance,
pledge, equity or claim of any kind. Neither the Company nor any of its
subsidiaries is a partner or joint venturer in any partnership or joint
venture.
(e) The Series B Notes have been duly and validly authorized
and, when executed and authenticated in accordance with the Indenture
and delivered and paid for by the Underwriter pursuant to this
Agreement, will constitute legal, valid and binding obligations of the
Company, entitled to the benefits of the Indenture, and will conform in
all material respects to the description thereof contained in the
Effective Prospectus and the Final Prospectus.
(f) The Company has full legal right, power and authority to
enter into this Agreement and the Indenture and to sell and deliver the
Series B Notes to the Underwriter as provided herein, and this
Agreement and the Indenture have been duly authorized,
3
4
executed and delivered by the Company and constitute valid and binding
agreements of the Company enforceable against the Company in accordance
with their terms. The Indenture conforms in all material respects to
the requirements of and has been qualified under the Trust Indenture
Act. No consent, approval, authorization or order of any court or
governmental agency or body or third party is required for the
performance of this Agreement or the Indenture by the Company or the
consummation by the Company of the transactions contemplated hereby or
thereby, except such as have been obtained and such as may be required
by the National Association of Securities Dealers, Inc. or under the
Securities Act, the Trust Indenture Act or state securities or Blue Sky
laws in connection with the purchase and distribution of the Series B
Notes by the Underwriter. The issue and sale of the Series B Notes by
the Company, the Company's performance of this Agreement and the
Indenture and the consummation of the transactions contemplated hereby
or thereby will not result in a breach or violation of, or conflict
with, any of the terms and provisions of, or constitute a default by
the Company or any of its subsidiaries under, any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or to which
the Company or any of its subsidiaries or any of their respective
properties is subject, the Articles of Organization or bylaws of the
Company or any of its subsidiaries or any statute or any judgment,
decree, order, rule or regulation of any court or governmental agency
or body applicable to the Company, or any subsidiary or any of their
respective properties. Neither the Company nor any subsidiary is in
violation of its Articles of Organization, partnership agreement or
joint venture agreement, as the case may be, or bylaws or any law,
administrative rule or regulation or arbitrator's or administrative or
court decree, judgment or order or in violation or default (there being
no existing state of facts which with notice or lapse of time or both
would constitute a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, deed of trust, mortgage, loan agreement, note, lease,
agreement or other instrument or permit to which it is a party or by
which it or any of its properties is or may be bound.
(g) The consolidated financial statements and the related notes
of the Company included or incorporated by reference in the
Registration Statement, the Effective Prospectus and the Final
Prospectus present fairly the financial position, results of operations
and changes in financial position and cash flow of the Company and its
subsidiaries, at the dates and for the periods to which they relate and
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
indicated. The other financial statements and schedules included or
incorporated by reference in or as schedules to the Registration
Statement conform to the requirements of the Securities Act, the
Exchange Act and the Rules and Regulations and present fairly the
information presented therein for the periods shown. The financial and
statistical data set forth or incorporated by reference in the
Effective Prospectus and the Final Prospectus under the captions
"Prospectus Summary," "Use of Proceeds," "Selected Consolidated
Financial Information," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" fairly
presents the information set forth therein on the basis stated in the
4
5
Effective Prospectus and the Final Prospectus. Ernst & Young LLP, whose
reports appear or are incorporated by reference in the Effective
Prospectus and the Final Prospectus, are independent accountants as
required by the Securities Act and the Rules and Regulations.
(h) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, and its Quarterly Reports filed on Form 10-Q
for the quarters ended March 31, 1998, June 30, 1998 and September 30,
1998, respectively, at the time of filing with the Commission,
conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules and
Regulations and none of such documents or statements 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, in light of the circumstances under which they were made, not
misleading.
(i) Subsequent to September 30, 1998, neither the Company nor
any subsidiary has 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 court or governmental action, order or decree, which is not
disclosed or incorporated by reference in the Effective Prospectus and
the Final Prospectus; and subsequent to the respective dates as of
which information is given in the Registration Statement, the Effective
Prospectus and the Final Prospectus, (i) neither the Company nor any of
its subsidiaries has incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions not in
the ordinary course of business, and (ii) there has not been any change
in the capital stock, partnership interests, joint venture interests,
long-term debt, obligations under capital leases or short-term
borrowings of the Company and its subsidiaries or any issuance of
options, warrants or rights to purchase the capital stock of the
Company, or any adverse change, or any development involving a
prospective adverse change, in the general affairs, management,
business, prospects, financial position, net worth or results of
operations of the Company or its subsidiaries, except in each case as
described or incorporated by reference in or contemplated by the
Effective Prospectus and the Final Prospectus.
(j) Except as described or incorporated by reference in the
Effective Prospectus and the Final Prospectus, there is not pending, or
to the knowledge of the Company threatened, any action, suit,
proceeding, inquiry or investigation, to which the Company, any of its
subsidiaries or any of their officers or directors is a party, or to
which the property of the Company or any subsidiary is subject, before
or brought by any court or governmental agency or body, wherein an
unfavorable decision, ruling or finding could prevent or materially
hinder the consummation of this Agreement or result in a material
adverse change in the business condition (financial or other),
prospects, financial position, net worth or results of operations of
the Company or its subsidiaries.
(k) There are no contracts or other documents required by the
Securities Act or by the Rules and Regulations to be described or
incorporated by reference in the Registration
5
6
Statement, the Effective Prospectus or the Final Prospectus or to be
filed as exhibits to the Registration Statement which have not been
described, incorporated by reference or filed as required.
(l) Except as described or incorporated by reference in the
Effective Prospectus and the Final Prospectus, the Company and each of
its subsidiaries have good and marketable title to all real and
material personal property owned by them, free and clear of all liens,
charges, encumbrances or defects except those reflected in the
financial statements hereinabove described. The real and personal
property and buildings referred to in the Effective Prospectus and the
Final Prospectus which are leased from others by the Company are held
under valid, subsisting and enforceable leases. The Company or its
subsidiaries owns or leases all such properties as are necessary to its
operations as now conducted.
(m) The Company's system of internal accounting controls taken
as a whole is sufficient to meet the broad objectives of internal
accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that
would be material in relation to the Company's financial statements;
and, except as disclosed in the Effective Prospectus and the Final
Prospectus, neither the Company nor any of its subsidiaries nor any
employee or agent of the Company or any subsidiary has made any payment
of funds of the Company or any subsidiary or received or retained any
funds in violation of any law, rule or regulation.
(n) The Company and its subsidiaries have filed all federal,
state and local income and franchise tax returns required to be filed
through the date hereof and have paid all taxes shown as due therefrom;
and there is no tax deficiency that has been, nor does the Company or
any subsidiary have knowledge of any tax deficiency which is likely to
be, asserted against the Company or its subsidiaries, which if
determined adversely could materially and adversely affect the
earnings, assets, affairs, business prospects or condition (financial
or other) of the Company or its subsidiaries.
(o) The Company and its subsidiaries operate their business in
conformity in all material respects with all applicable statutes,
common laws, ordinances, decrees, orders, rules and regulations of
governmental bodies. The Company and its subsidiaries have all
licenses, approvals or consents to operate their respective business in
all locations in which such businesses are currently being operated,
and the Company and its subsidiaries are not aware of any existing or
imminent matter which may adversely impact their operations or business
prospects other than as specifically disclosed in the Effective
Prospectus and the Final Prospectus. The Company has not engaged in any
activity, whether alone or in concert with one of its customers,
creating the potential for exposure to material civil or criminal
monetary liability or other material sanctions under federal or state
laws regulating consumer credit transactions, debt collection practices
or land sales practices.
6
7
(p) Neither the Company nor any of its subsidiaries have failed
to file with the applicable regulatory authorities any statement,
report, information or form required by any applicable law, regulation
or order where the failure to file the same would have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
all such filings or submissions were in material compliance with
applicable laws when filed and no deficiencies have been asserted by
any regulatory commission, agency or authority with respect to such
filings or submissions. Neither the Company nor any of its subsidiaries
have failed to maintain in full force and effect any license or permit
necessary or proper for the conduct of its business, or received any
notification that any revocation or limitation thereof is threatened or
pending, and, except as disclosed in the Effective Prospectus and the
Final Prospectus, there is not pending any change under any law,
regulation, license or permit which could materially adversely affect
its business, operations, property or business prospects. Neither the
Company nor any of its subsidiaries have received any notice of
violation of or been threatened with a charge of violating and are not
under investigation with respect to a possible violation of any
provision of any law, regulation or order.
(q) No labor dispute exists with the Company's employees or with
employees of its subsidiaries or is imminent which could materially
adversely affect the Company or any of its subsidiaries. The Company is
not aware of any existing or imminent labor disturbance by its
employees or by any employees of its subsidiaries which could be
expected to materially adversely effect the condition (financial or
otherwise), results of operations, properties, affairs, management,
business affairs or business prospects of the Company or any of its
subsidiaries.
(r) Except as disclosed in the Effective Prospectus and the
Final Prospectus, the Company and its subsidiaries own or possess, or
can acquire on reasonable terms, the licenses, copyrights, trademarks,
service marks and trade names presently employed by them in connection
with the businesses now operated by them, and neither the Company nor
any of its subsidiaries have received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing which, alone or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company or its
subsidiaries.
(s) The Company has not taken, directly or indirectly, any
action designed, or which might reasonably be expected to cause or
result in, or which will constitute, stabilization or manipulation of
the price of the Series B Notes to facilitate the sale of the Series B
Notes, and the Company is not aware of any such action taken or to be
taken by any affiliates of the Company.
7
8
2. PURCHASE, SALE AND DELIVERY OF THE SERIES B NOTES.
(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 sell to the Underwriter, and
the Underwriter, agrees to purchase at a purchase price of $965.00 per
each $1,000 principal amount, the number of Series B Notes set forth
opposite the Underwriter's name in Schedule I hereto.
(b) A Certificate in definitive form for the Series B Notes
which the Underwriter has agreed to purchase hereunder shall be
delivered by or on behalf of the Company to the Underwriter for the
account of the Underwriter against payment by the Underwriter or on its
behalf of the purchase price therefor by same day funds due to the
order of the Company, at the offices of McDonald Investments Inc., 000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000 ("McDonald"), or at such other
place as may be agreed upon by McDonald and the Company, at 10:00 A.M.,
E.S.T. time, on the fifth full business day after this Agreement
becomes effective, or at such other time not later than the ninth
full business day thereafter as the Underwriter and the Company may
determine, such time of delivery against payment being herein referred
to as the "Closing Date." The Series B Notes to be delivered will be in
such denominations and registered in such names as McDonald may request
not less than 48 hours prior to the Closing Date.
3. OFFERING BY THE UNDERWRITER. After this Agreement becomes
effective, the Underwriter proposes to offer for sale to the public the Series B
Notes at the price and upon the terms set forth in the Final Prospectus.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the Underwriter that:
(a) The Company shall comply with the provisions of and make all
requisite filings with the Commission pursuant to Rules 424 and 430A of
the Rules and Regulations and to notify you promptly (in writing, if
requested) of all such filings. The Company shall notify you promptly
of any request by the Commission for any amendment of or supplement to
the Registration Statement, the Effective Prospectus or the Final
Prospectus or for additional information; the Company shall prepare and
file with the Commission, promptly upon your request, any amendments of
or supplements to the Registration Statement, the Effective Prospectus
or the Final Prospectus which, in your opinion, may be necessary or
advisable in connection with the distribution of the Series B Notes;
and the Company shall not file any amendment of or supplement to the
Registration Statement, the Effective Prospectus or the Final
Prospectus which is not approved by you after reasonable notice
thereof. The Company shall advise you promptly of the issuance by the
Commission or any jurisdiction or other regulatory body of any stop
order or other order suspending the effectiveness of the Registration
Statement, suspending or preventing the use of any Preliminary
Prospectus, the Effective Prospectus or the Final Prospectus or
suspending the
8
9
qualification of the Series B Notes for offering or sale in any
jurisdiction, or of the institution of any proceedings for any such
purpose; and the Company shall use its best efforts to prevent the
issuance of any stop order or other such order and, should a stop order
or other such order be issued, to obtain as soon as possible the
lifting thereof.
(b) The Company will take or cause to be taken all necessary
action and furnish to whomever you direct such information as may be
reasonably required in qualifying the Series B Notes for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Underwriter may designate (which shall not include the State of New
York unless the Company otherwise requests) and will continue such
qualifications in effect for as long as may be reasonably necessary to
complete the distribution. The Company shall not be required to qualify
as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not presently qualified or
where it would be subject to taxation as a foreign corporation.
(c) Within the time during which a Final Prospectus relating to
the Series B Notes is required to be delivered under the Securities
Act, the Company shall comply with all requirements imposed upon it by
the Securities Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Series B Notes as
contemplated by the provisions hereof and the Final Prospectus. If
during such period any event occurs as a result of which the Final
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to
amend the Registration Statement or supplement the Final Prospectus to
comply with the Securities Act, the Company shall promptly notify you
and shall amend the Registration Statement or supplement the Final
Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) The Company will furnish without charge to the Underwriter
and make available to the Underwriter copies of the Registration
Statement (four of which shall be signed and shall be accompanied by
all exhibits, including any which are incorporated by reference, which
have not previously been furnished), each Preliminary Prospectus, the
Effective Prospectus and the Final Prospectus, and all amendments and
supplements thereto, including any prospectus or supplement prepared
after the effective date of the Registration Statement, in each case as
soon as available and in such quantities as the Underwriter may
reasonably request. The Company will deliver to the Underwriter a copy
of each document incorporated by reference in the effective Prospectus
and the Final Prospectus which has not previously been furnished.
(e) The Company will (i) deliver to you at such office or
offices as you may designate as many copies of the Preliminary
Prospectus and Final Prospectus as you may reasonably request, and (ii)
for a period of not more than nine months after this Agreement
9
10
becomes effective, send to you as many additional copies of the Final
Prospectus and any supplement thereto as you may reasonably request.
(f) The Company shall make generally available to its security
holders, in the manner contemplated by Rule 158(b) under the Securities
Act as promptly as practicable and in any event no later than 90 days
after the end of its fiscal quarter in which the first anniversary of
the effective date of the Registration Statement occurs, an earning
statement satisfying the provisions of Section 11(a) of the Securities
Act covering a period of at least 12 consecutive months beginning after
the effective date of the Registration Statement.
(g) The Company will apply the net proceeds from the sale of the
Series B Notes as set forth under the caption "Use of Proceeds" in the
Final Prospectus.
(h) During a period of five years from the effective date of
this Agreement, the Company will furnish to the Underwriter copies of
all reports and other communications (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.
(i) The Company will not at any time, directly or indirectly,
take any action designed, or which might reasonably be expected to
cause or result in, or which will constitute, stabilization or
manipulation of the price of the Series B Notes to facilitate the sale
or resale of any of the Series B Notes. The Company will not make bids
for or purchases of or induce bids for or purchases of, directly or
indirectly, any Series B Notes until the distribution of all Series B
Notes has been completed.
5. EXPENSES. The Company agrees with the Underwriter that (a) whether
or not the transactions contemplated by this Agreement are consummated or this
Agreement becomes effective or is terminated, the Company will pay all fees and
expenses incident to the performance of the obligations of the Company
hereunder, including, but not limited to, (i) the Commission's registration fee,
(ii) the expenses of printing (or reproduction) and distributing the
Registration Statement (including the financial statements therein and all
amendments and exhibits thereto), each Preliminary Prospectus, the Effective
Prospectus, the Final Prospectus, any amendments or supplements thereto, and
this Agreement and other underwriting documents, including Underwriter's
Questionnaires, Underwriter's Powers of Attorney and Blue Sky Memoranda, (iii)
fees and expenses of accountants and counsel for the Company, (iv) expenses of
registration or qualification of the Series B Notes under state Blue Sky and
securities laws, including the fees and disbursements of counsel to the
Underwriter in connection therewith, (v) filing fees paid or incurred by the
Underwriter and related fees and expenses of counsel to the Underwriter in
connection with filings with the National Association of Securities Dealers,
Inc. ("NASD"), (vi) all travel, lodging and reasonable living expenses incurred
by the Company in connection with marketing, dealer and other meetings attended
by the Company and the Underwriter in marketing the Series B Notes, (vii) the
10
11
costs and charges of the Company's transfer agent, registrar, paying agent, and
redemption agent, and the cost of preparing the certificates for the Series B
Notes, (viii) the fees and expenses of the Trustee in connection with the
Indenture and the Series B Notes, and (ix) all other costs and expenses incident
to the performance of their obligations hereunder not otherwise provided for in
this Section; and (b) all out-of-pocket expenses, including counsel fees,
disbursements and expenses, incurred by the Underwriter in connection with
investigating, preparing to market and marketing the Series B Notes and
proposing to purchase and purchasing the Series B Notes under this Agreement,
will be borne and paid by the Company if the sale of the Series B Notes provided
for herein is not consummated by reason of the termination of this Agreement by
the Company pursuant to Section 12(a)(i), or because of any failure or refusal
on the part of the Company to comply with the terms or fulfill any of the
conditions of this Agreement. Except as provided in this Section 5, the
Underwriter shall pay all of its own expenses.
6. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligations of
the Underwriter to purchase and pay for the Series B Notes shall be subject, in
its discretion, to the accuracy of the representations and warranties of the
Company herein as of the date hereof and as of the Closing Date as if made on
and as of the Closing Date, to the accuracy of the statements of the Company's
officers made pursuant to the provisions hereof, to the performance by the
Company of all of its covenants and agreements hereunder and to the following
additional conditions:
(a) All filings required by Rule 424, Rule 430A and Rule 462 of
the Rules and Regulations shall have been made; no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened or, to the knowledge of the Company or the
Underwriter, shall be contemplated by the Commission; any request of
the Commission for additional information (to be included in the
Registration Statement or the Final Prospectus or otherwise) shall have
been complied with to your satisfaction; and the NASD, upon review of
the terms of the public offering of the Series B Notes, shall not have
objected to such offering, such terms or the Underwriter's
participation in the same.
(b) The Underwriter shall not have advised the Company that the
Registration Statement, Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or any supplement
thereto, contains an untrue statement of fact which, in your judgment,
is material, or omits to state a fact which, in your judgment, is
material and is required to be stated therein or necessary to make the
statements therein not misleading and the Company shall not have cured
such untrue statement of fact or stated a statement of fact required to
be stated therein.
(c) The Underwriter shall have received an opinion, dated the
Closing Date, from Xxxxxxxx, Xxxxxxx & Xxxxxxx, counsel for the
Company, substantially to the effect that:
(i) The Company is validly existing in good standing as a
corporation under the laws of the Commonwealth of Massachusetts,
with corporate power and
11
12
authority to own its properties and conduct its business as now
conducted, and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the
failure to so qualify would have a material adverse effect upon
the Company and its subsidiaries taken as a whole. The Company
holds all licenses, certificates, permits, franchises and
authorizations from governmental authorities which are material to
the conduct of its business in all locations in which such
business is currently being conducted.
(ii) Each of the Company's subsidiaries is validly
existing and in good standing under the laws of the state of its
incorporation or organization, as the case may be, with power and
authority to own its properties and conduct its business as now
conducted, and is duly qualified or authorized to do business and
is in good standing in all other jurisdictions where the failure
to so qualify would have a material adverse effect upon the
business of the Company and its subsidiaries taken as a whole. The
outstanding stock of each of the Company's subsidiaries is duly
authorized, validly issued, fully paid and nonassessable. All of
the outstanding stock of each of the corporate subsidiaries owned
beneficially and of record by the Company, is free and clear of
all liens, encumbrances, equities and claims. No options or
warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations
into any shares of capital stock or of ownership interests in any
of the Company's subsidiaries are outstanding. Each of the
Company's subsidiaries holds all licenses, certificates, permits,
franchises and authorizations from governmental authorities which
are material to the conduct of its business in all locations in
which such business is currently being conducted.
(iii) The Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms,
except as enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer, fraudulent conveyance or other laws affecting
creditors' rights generally. The Indenture has been qualified
under the Trust Indenture Act. The Series B Notes have been duly
and validly authorized and when executed and authenticated in
accordance with the provisions of the Indenture and delivered to
and paid for by the Underwriter as provided herein will constitute
legal, valid and binding obligations of the Company, entitled to
the benefits of the Indenture, and conformed to the description
thereof contained in the Effective Prospectus and the Final
Prospectus.
(iv) No consent, approval, authorization or order of any
court or governmental agency or body or third party is required
for the performance of this Agreement by the Company or the
consummation by the Company of the transactions contemplated
hereby, except such as have been obtained under the Securities Act
and such as may be required by the NASD and under state securities
12
13
or Blue Sky laws in connection with the purchase and distribution
of the Series B Notes by the Underwriter. The performance of this
Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby will not conflict with or
result in a breach or violation by the Company of any of the terms
or provisions of, or constitute a default by the Company under,
any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument known to such counsel to which the
Company is a party or to which the Company or its properties is
subject, the Articles of Organization or bylaws of the Company,
any statute, or any judgment, decree, order, rule or regulation
known to such counsel of any court or governmental agency or body
applicable to the Company or any of its subsidiaries or their
properties.
(v) The Company has full legal right, power and authority
to enter into this Agreement and the Indenture and to issue, sell
and deliver the Series B Notes to be sold by it to the Underwriter
as provided herein, and this Agreement has been duly authorized,
executed and delivered by the Company and constitutes the valid
and legally binding obligation of the Company enforceable against
the Company in accordance with its terms, except as enforceability
may be limited by general equitable principles, bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer,
fraudulent conveyance or other laws affecting creditors' rights
generally.
(vi) Except as described in the Final Prospectus, there is
not pending, or to the best knowledge of such counsel threatened,
any action, suit, proceeding, inquiry or investigation, to which
the Company or any of its subsidiaries is a party, or to which the
property of the Company or any of its subsidiaries is subject,
before or brought by any court or governmental agency or body,
which, if determined adversely to the Company or any of its
subsidiaries, could result in any material adverse change in the
business, financial position, net worth or results of operations,
or could materially adversely affect the properties or assets, of
the Company or any of its subsidiaries.
(vii) To the best knowledge of such counsel, no default
exists, and no event has occurred which with notice or after the
lapse of time to cure or both, would constitute a default, in the
due performance and observance of any term, covenant or condition
of any indenture, mortgage, deed of trust, loan agreement, lease
or other material agreement or instrument to which the Company or
any of its subsidiaries is a party or to which they or their
properties are subject, or of the Articles of Organization or
bylaws of the Company or any of its subsidiaries.
(viii) The statements under the captions "Business --
Regulation" and "Business -- Legal Proceedings" in the Company's
most recent Annual Report on Form 10-K filed with the Commission,
insofar as such statements constitute
13
14
summaries of the legal matters, documents and proceedings referred
to therein, fairly present the information called for with respect
to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein in all material
respects.
(ix) The Registration Statement and all post effective
amendments thereto have become effective under the Securities Act,
and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
instituted or are threatened, pending or contemplated by the
Commission. All filings required by Rule 424, Rule 430A and Rule
462 of the Rules and Regulations have been made; the Registration
Statement, the Effective Prospectus and Final Prospectus, and any
amendments or supplements thereto (except for the financial
statements and schedules included therein as to which such counsel
need express no opinion), as of their respective effective or
issue dates, complied as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
the descriptions in the Registration Statement, the Effective
Prospectus and the Final Prospectus of statutes, regulations,
legal and governmental proceedings, and contracts and other
documents are accurate in all material respects and present fairly
the information required to be stated; and such counsel does not
know of any pending or threatened legal or governmental
proceedings, statutes or regulations required to be described in
the Final Prospectus which are not described as required nor of
any contracts or documents of a character required to be described
in the Registration Statement or the Final Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required.
(x) The information in the Effective Prospectus and the
Final Prospectus under the caption "Description of the Series B
Notes," insofar as it purports to summarize the provisions of the
Series B Notes, is correct in all material respects.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the attention of such
counsel which leads them to believe that the Registration Statement, the
Effective Prospectus and the Final Prospectus or any amendment or supplement
thereto contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (except that such counsel need express no view as to
financial statements, schedules and other financial information included
therein).
(d) The Underwriter shall have received an opinion or opinions,
dated the Closing Date, of Bass, Xxxxx & Xxxx PLC, counsel for the
Underwriter, with respect to the Registration Statement and the Final
Prospectus, and such other related matters as the Underwriter may
require, and the Company shall have furnished to such counsel such
14
15
documents as they may reasonably request for the purpose of enabling
them to pass upon such matters. Such counsel may rely on Xxxxxxxx,
Xxxxxxx & Xxxxxxx, Xxxxxx X. XxXxxx, Esq., and Xxxx X. Xxxxxx, Esq. as
to matters of Massachusetts law.
(e) The Underwriter shall have received from Ernst & Young LLP,
a letter dated the date hereof and, at the Closing Date, a second
letter dated the Closing Date, in form and substance satisfactory to
the Underwriter, stating that they are independent public accountants
with respect to the Company and its subsidiaries within the meaning of
the Securities Act and the applicable Rules and Regulations, and to the
effect that:
(i) In their opinion, the financial statements and
schedules examined by them and included or incorporated by
reference in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of
the Securities Act and the published Rules and Regulations and are
presented in accordance with generally accepted accounting
principles; and they have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial
statements, selected financial data, and/or condensed financial
statements derived from audited financial statements of the
Company;
(ii) On the basis of a reading of the latest available
interim consolidated financial statements (unaudited) of the
Company and its subsidiaries, a reading of the minute books of the
Company and its subsidiaries, inquiries of officials of the
Company responsible for financial and accounting matters and other
specified procedures, all of which have been agreed to by the
Underwriter, nothing came to their attention that caused them to
believe that:
(A) the unaudited financial statements included or
incorporated by reference in the Registration Statement do
not comply as to form in all material respects with the
accounting requirements of the federal securities laws and
the related published rules and regulations thereunder or
are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
the basis for the audited financial statements contained in
the Registration Statement;
(B) any other unaudited financial statement data
included or incorporated by reference in the Final
Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which data
was derived and any such unaudited data were not determined
on a basis substantially consistent with the basis for the
corresponding amounts in the audited financial statements
included or incorporated by reference in the Prospectus;
15
16
(C) at a specified date not more than five days
prior to the date of delivery of such respective letter,
there was any change in the consolidated capital stock,
decline in stockholders' equity or increase in long-term
debt of the Company and its subsidiaries, or other items
specified by the Underwriter in each case as compared with
amounts shown in the latest balance sheets included or
incorporated by reference in the Final Prospectus, except in
each case for changes, decreases or increases which the
Final Prospectus discloses have occurred or may occur or
which are described in such letters; and
(D) for the period from the closing date of the
latest consolidated statements of income included or
incorporated by reference in the Effective Prospectus and
the Final Prospectus to a specified date not more than five
days prior to the date of delivery of such respective
letter, there were any decreases in total revenues or net
income of the Company, or other items specified by the
Underwriter, or any increases in any items specified by the
Underwriter, in each case as compared with the corresponding
period of the preceding year, except in each case for
decreases which the Final Prospectus discloses have occurred
or may occur or which are described in such letter.
(iii) They have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial information specified by you which are
derived from the general accounting records of the Company and its
subsidiaries, which appear in the Effective Prospectus and the
Final Prospectus and have compared and agreed such amounts,
percentages and financial information with the accounting records
of the Company and its subsidiaries or to analyses and schedules
prepared by the Company and its subsidiaries from its detailed
accounting records.
In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases, it shall be a further
condition to the obligations of the Underwriter that the Underwriter
shall have determined, after discussions with officers of the Company
responsible for financial and accounting matters and with Ernst & Young
LLP, that such changes, decreases or increases as are set forth in such
letters do not reflect a material adverse change in the stockholders'
equity or long-term debt of the Company as compared with the amounts
shown in the latest consolidated balance sheets of the Company included
in the Final Prospectus, or a material adverse change in total revenues
or net income, of the Company, in each case as compared with the
corresponding period of the prior year.
(f) There shall have been furnished to you a certificate, dated
the Closing Date and addressed to you, signed by the Chief Executive
Officer and by the Chief Financial Officer of the Company to the effect
that:
16
17
(i) the representations and warranties of the Company in
Section 1 of this Agreement are true and correct, as if made at
and as of the Closing Date, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for
that purpose have been initiated or are pending, or to their
knowledge, threatened under the Securities Act;
(iii) all filings required by Rule 424 and Rule 430A of the
Rules and Regulations have been made;
(iv) they have carefully examined the Registration
Statement, the Effective Prospectus and the Final Prospectus, and
any amendments or supplements thereto, and such documents do not
include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading; and
(v) since the effective date of the Registration
Statement, there has occurred no event required to be set forth in
an amendment or supplement to the Registration Statement, the
Effective Prospectus or the Final Prospectus which has not been so
set forth.
(g) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Final Prospectus, and
except as stated therein, the Company and its subsidiaries have 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 court or governmental action, order or decree, or become
a party to or the subject of any litigation which is material to the
Company and its subsidiaries taken as a whole, nor shall there have
been any material adverse change, or any development involving a
prospective material adverse change, in the business, properties, key
personnel, capitalization, net worth results of operations or condition
(financial or other) of the Company and its subsidiaries taken as a
whole, which loss, interference, litigation or change, in your judgment
shall render it unadvisable to commence or continue the offering of the
Series B Notes at the offering price to the public set forth on the
cover page of the Prospectus or to proceed with the delivery of the
Series B Notes.
All such opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory to the Underwriter and its counsel. The Company
shall furnish to the Underwriter such conformed copies of such opinions,
certificates, letters and documents in such quantities as the Underwriter shall
reasonably request.
17
18
7. CONDITION OF THE COMPANY'S OBLIGATIONS. The obligations hereunder
of the Company are subject to the condition set forth in Section 6(a) hereof.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless the
Underwriter, and each person, if any, who controls the Underwriter
within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based in whole or in
part upon (i) any inaccuracy in the representations and warranties of
the Company contained herein, (ii) any failure of the Company to
perform its obligations hereunder or under law or (iii) any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or supplement thereto,
or in any Blue Sky application or other written information furnished
by the Company filed in any state or other jurisdiction in order to
qualify any or all of the Series B Notes under the securities laws
thereof (a "Blue Sky Application"), or arise out of or are based upon
the omission or alleged omission to state in the Registration
Statement, any Preliminary Prospectus, the Effective Prospectus or
Final Prospectus or any amendment or supplement thereto or any Blue Sky
Application a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse the
Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, or liability arises
out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, the Preliminary Prospectus, the Effective Prospectus or
Final Prospectus or such amendment or such supplement or any Blue Sky
Application in reliance upon and in conformity with written information
furnished to the Company by the Underwriter specifically for use
therein (it being understood that the only information so provided is
the information included in the third and sixth paragraphs under the
caption "Underwriting" in any Preliminary Prospectus and the Final
Prospectus and the Effective Prospectus).
(b) The Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act against any losses,
claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final
18
19
Prospectus, or any amendment or supplement thereto, or any Blue Sky
Application, or arise out of or are based upon the omission or the
alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus or
any amendment or supplement thereto or any Blue Sky Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by the
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the third
and sixth paragraphs under the caption "Underwriting" in any
Preliminary Prospectus and in the Effective Prospectus and the Final
Prospectus);
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, including
governmental proceedings, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 8 notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; and after
notice from the indemnifying party to such indemnified party of its
election to so assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation except that the indemnified party shall have the right to
employ separate counsel if, in its reasonable judgment, it is advisable
for the indemnified party to be represented by separate counsel, and in
that event the fees and expenses of separate counsel shall be paid by
the indemnifying party. The Company shall not, without the prior
written consent of the Underwriter, settle or compromise or consent to
the entry of any judgment in any pending or threatened action or claim
or related cause of action or portion of such cause of action in
respect of which the Company reasonably believes the Underwriter may
seek indemnification hereunder (whether or not such Underwriter is a
party of such action or claim), unless such settlement, compromise or
consent includes an unconditional release of such Underwriter from all
liability arising out of such action or claim (or related cause of
action or portion thereof).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding part of this Section 8 is for any reason held to be
unavailable to the Underwriter or the Company or is insufficient to
hold harmless an indemnified party, then the Company shall contribute
to the damages paid by the Underwriter, and the Underwriter shall
contribute to the damages paid by the Company
19
20
provided, however, that no person guilty of fraudulent misrepresenta-
tion (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution
to which the respective parties are entitled, there shall be considered
the relative benefits received by each party from the offering of the
Series B Notes (taking into account the portion of the proceeds of the
offering realized by each), the parties' relative knowledge and access
to information concerning the matter with respect to which the claim
was asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate under the
circumstances. The Company and the Underwriter agree that it would not
be equitable if the amount of such contribution were determined by pro
rata or per capita allocation. The Underwriter or person controlling
such Underwriter shall not be obligated to make contribution hereunder
which in the aggregate exceeds the underwriting discount applicable to
the Series B Notes purchased by such Underwriter under this Agreement,
less the aggregate amount of any damages which such Underwriter and its
controlling persons have otherwise been required to pay in respect of
the same or any similar claim. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of
Section 15 of the Securities Act shall have the same rights to
contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, shall have the same rights to
contribution as the Company.
9. SURVIVAL CLAUSE. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the Underwriter set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, the Underwriter or any controlling person,
(ii) any termination of this Agreement and (iii) delivery of and payment for the
Series B Notes.
10. EFFECTIVE DATE. This Agreement shall become effective at whichever
of the following shall first occur (i) execution and delivery of this Agreement
by the parties hereto or (ii) such time as the Underwriter shall release the
Series B Notes for sale to the public; provided, however, that the provisions of
Sections 5, 8, 9 and 10 hereof shall at all times be effective. For purposes of
this Section 10, the Series B Notes shall be deemed to have been so released
upon the release by the Underwriter for publication, at any time after the date
hereof, of any newspaper advertisement relating to the Series B Notes or upon
the release by the Underwriter of telegrams offering the Series B Notes for sale
to securities dealers, whichever may occur first.
11. TERMINATION.
(a) The Company's obligations under this Agreement may be
terminated by the Company by notice to the Underwriter (i) at any time
before it becomes effective in accordance with Section 10 hereof, or
(ii) in the event that the condition set forth in Section 7 shall not
have been satisfied at or prior to the Closing Date.
20
21
(b) This Agreement may be terminated by the Underwriter by
notice to the Company (i) at any time before it becomes effective in
accordance with Section 10 hereof; (ii) in the event that at or prior
to the Closing Date the Company shall have failed, refused or been
unable to perform any agreement on the part of the Company to be
performed hereunder, or any other condition to the obligations of the
Underwriter hereunder is not fulfilled; (iii) if at or prior to the
Closing Date trading in securities on the New York Stock Exchange, the
American Stock Exchange or the over-the-counter market shall have been
suspended or materially limited, or minimum or maximum prices shall
have been established on either of such Exchanges or such market, or a
banking moratorium shall have been declared by Federal or state
authorities; (iv) if at or prior to the Closing Date trading in
securities of the Company shall have been suspended; or (v) if there
shall have been such a material change in general economic, political
or financial conditions or if the effect of international conditions on
the financial markets in the United States shall be such as, in your
reasonable judgment, makes it inadvisable to commence or continue the
offering of the Series B Notes to the public.
(c) This Agreement shall automatically terminate upon
satisfaction and discharge of the Series B Notes by the Company in
accordance with the Indenture.
(d) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party other than
as provided in Sections 5 and 8 hereof.
12. NOTICES. All communications hereunder shall be in writing and, if
sent to the Underwriter, shall be mailed or delivered or telegraphed and
confirmed in writing to McDonald Investments Inc., 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000, Attention: Xxxx X. Xxxxx or if sent to the Company shall
be mailed, delivered or telegraphed and confirmed in writing to the Company at
000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X.
Xxxxxxxx.
13. MISCELLANEOUS. This Agreement shall inure to the benefit of and be
binding upon the Underwriter, the Company and their respective successors and
legal representatives. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Company and the Underwriter and for the benefit of no
other person except that (i) the representations and warranties of the Company
contained in this Agreement shall also be for the benefit of any person or
persons who control the Underwriter within the meaning of Section 15 of the
Securities Act, and (ii) the indemnities by the Underwriter shall also be for
the benefit of the directors of the Company, officers of the Company who have
signed the Registration Statement and any person or persons who control the
Company within the meaning of Section 15 of the Securities Act. No purchaser of
Series B Notes from the Underwriter will be deemed a successor because of such
purchase. The validity and interpretation of this Agreement shall be governed by
the laws of the Commonwealth of Massachusetts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute
21
22
one and the same instrument. You hereby represent and warrant to the Company
that you have authority to act hereunder, and any action hereunder taken by you
will be binding.
If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between the Company and the Underwriter.
Very truly yours,
LITCHFIELD FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxx,
Title: President
--------------------------
Confirmed and accepted as of the
date first above written.
MCDONALD INVESTMENTS INC.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
By: /s/ Xxxx X. Xxxxx
---------------------------
Title: Managing Director
------------------------
22
23
SCHEDULE I
UNDERWRITER
Principal Amount
of Series B Notes
Underwriter to Be Purchased
-----------------------------------------------------------------------------
McDonald Investments Inc.................................... $20,000,000
-----------
TOTAL........................................ $20,000,000
===========
23
