UNDERWRITING AGREEMENT
HPSC, INC.
$20,000,000
___% SENIOR NOTES DUE 2007
ADVEST, INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
c/o Advest, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
_______________ __, 1997
Ladies and Gentlemen:
SECTION 1. INTRODUCTION. Subject to the terms and conditions hereof, HPSC,
Inc., a Delaware corporation (the "Company"), proposes to issue and sell an
aggregate of $20,000,000 principal amount of its ___% Senior Notes due 2007 (the
"Firm Notes"), to the several underwriters identified in SCHEDULE A annexed
hereto (collectively, the "Underwriters"), who are acting severally and not
jointly. In addition, the Company has agreed to grant to the Underwriters an
option to purchase up to $3,000,000 principal amount of Senior Notes (the
"Option Notes") on the terms and for the purposes set forth in Section 4. The
Firm Notes and, to the extent such option is exercised, the Option Notes, are
hereinafter collectively referred to as the "Notes." The Notes will be issued
pursuant to an indenture, to be dated as of , 1997 (the
"Indenture") between the Company and The First National Bank of Boston, as
trustee (the "Trustee").
You have advised the Company that the Underwriters intend to make a public
offering of the Notes as soon hereafter as in your judgment is advisable.
The parties hereby agree as follows:
----------------------
* Plus an option to acquire up to $3,000,000 principal amount of Senior
Notes from the Company to cover over-allotments.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the several Underwriters as
follows:
(a) The Company and each of its subsidiaries is, and on each
Closing Date (as hereinafter defined) will be, a corporation duly organized and
incorporated and validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with full corporate power and
authority to conduct all the activities conducted by the Company and each of its
subsidiaries, to own or lease all their respective assets owned or leased by
them, to conduct their respective businesses as described in the Prospectus (as
hereinafter defined) and to enter into this Agreement and the Indenture and
perform the Company's obligations thereunder. The Company and each of its
subsidiaries is, and on each Closing Date will be, duly licensed or qualified to
do business and in good standing as a foreign corporation in each jurisdiction
in which the nature of the activities conducted by the Company or such
subsidiary or the character of the assets owned or leased by the Company or such
subsidiary makes such licensure or qualification necessary. Complete and
correct copies of the Restated Certificate of Incorporation as heretofore
amended, and By-laws of the Company and each of its subsidiaries in effect on
the date of this Agreement (the "Existing Charter Documents") have been
delivered to the Underwriters, and no changes to the Existing Charter Documents
will be made subsequent to the date of this Agreement and prior to the First
Closing Date (as hereinafter defined) or, if later, the Second Closing Date (as
hereinafter defined).
(b) The Company and each of its subsidiaries is not in violation
of any provision of their respective Existing Charter Documents, and at each
Closing Date will not be, in violation of any provision of their respective
Existing Charter Documents. No state of facts exists or will exist at any
Closing Date which, upon notice or lapse of time or both, would constitute a
violation of any provision of the Existing Charter Documents.
(c) The Company had at the date indicated in the Prospectus a duly
authorized and outstanding capitalization as set forth in the column entitled
"Actual" under the caption "Capitalization" as set forth in the Prospectus, and
based on the assumptions stated in the Prospectus, the Company will have on each
Closing Date the adjusted capitalization as set forth in the column entitled "As
Adjusted" under the caption "Capitalization" as set forth in the Prospectus. At
the time of delivery of the Notes to the Underwriters hereunder, all of the
issued and outstanding shares of capital stock of the Company will have been
duly authorized and validly issued, will be fully paid and nonassessable, and
the descriptions thereof contained in the Prospectus and the Registration
Statement (as hereinafter defined) will be complete and accurate in all
respects. All of the issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued and
are fully paid and nonassessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims (except
for restrictions on the disposition of such shares of
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stock by the Company described in the Prospectus pursuant to loan agreements and
notes and guaranties thereof and related agreements to which the Company or any
such subsidiary is a party).
(d) Except as disclosed in the Prospectus, the Company has not
issued, and as of each Closing Date will not have issued (i) any options,
warrants or other rights of any description, contractual or otherwise, entitling
any person to purchase or receive any class of security from the Company or (ii)
any securities or obligations convertible into, or any contracts or commitments
to issue or sell, any shares of the Company's capital stock, or any of such
options, warrants, other rights or convertible securities or obligations.
(e) The Company's Common Stock is listed on the National
Association of Securities Dealers, Inc. National Market (the "Nasdaq National
Market").
(f) The Company has the requisite corporate power and authority to
execute and deliver this Agreement, the Indenture and the Notes, to perform its
obligations (including the issuance, sale and delivery of the Notes) hereunder
and thereunder; and all corporate action required to be taken for the due and
proper authorization, issuance, sale and delivery of the Notes and the
consummation of the transactions contemplated by this Agreement and the
Indenture have been duly and validly taken.
(g) This Agreement has been duly and validly authorized, executed
and delivered by the Company.
(h) The Notes have been duly and validly authorized by the Company
for issuance and when executed by the Company and authenticated by the Trustee
in accordance with the provisions of the Indenture, and delivered to and paid
for by the Underwriters in accordance with the terms hereof, will have been duly
executed, issued and delivered and will constitute valid and legally binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except that
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity) and the discretion of any court before which any proceeding therefor may
be brought.
(i) The Indenture has been duly and validly authorized by the
Company and upon effectiveness of the Registration Statement will be qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and, when executed and delivered by the Company (assuming the due authorization,
execution and delivery by the Trustee), will constitute
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a valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and the discretion of any court
before which any proceeding therefor may be brought.
(j) The Company is subject to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and is in
compliance with the provisions of such section.
(k) The execution, delivery and performance by and on behalf of
the Company of this Agreement and the Indenture, the performance of the
Company's obligations thereunder and the consummation of the transactions
contemplated thereby (including the issuance, sale and delivery of the Notes),
and the execution and delivery of the Notes by the Company and compliance by the
Company with all of the provisions hereof and thereof will not violate any
provision of the Existing Charter Documents; will not result in the breach, or
be in contravention, of or result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company or its subsidiaries
pursuant to the terms or provisions of (i) any provision of any lease,
franchise, license, indenture, loan agreement, mortgage, deed of trust, voting
trust agreement or any other contract, agreement or instrument to which the
Company or any of its subsidiaries are a party or by which the Company or its
subsidiaries or any of their properties may be bound or affected, (ii) any
statute, order, rule or regulation applicable to the Company or any of its
subsidiaries of any court or regulatory body, administrative agency, authority
or other governmental body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or (iii) any order of any court or
regulatory body, administrative agency, authority or other governmental body
rendered in any proceeding to which the Company or any of its subsidiaries was
or is now a party or by which it or any of its subsidiaries and/or any of their
properties is bound, except those, if any, described in the Prospectus or which
would not have a material adverse effect on the business, properties, business
prospects, assets, condition (financial or otherwise), net worth or results of
operations of the Company on a consolidated basis (a "Material Adverse Effect").
(l) No consent, approval, authorization or other order of, or
filing or declaration with, any court or regulatory body, administrative agency
or other governmental body of the United States or any other jurisdiction is
necessary in connection with the execution, delivery and performance of this
Agreement, the Indenture and/or the issuance and/or sale of the Notes by the
Company pursuant to this Agreement and the Indenture and/or the consummation of
the transactions contemplated by this Agreement and the Indenture, other than
such as have been obtained or made by the Company on or before the date of this
Agreement,
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except the registration of the Notes under the Securities Act of 1933, as
amended (the "Act") and the Rules and Regulations (as hereinafter defined), the
qualifications of the Indenture under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be required by
the state securities laws ("Blue Sky Laws") applicable to the public offering of
the Notes by the several Underwriters or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the several Underwriters of the Notes.
(m) The Company has prepared a registration statement on Form S-1
(File No. 333- ) with respect to the Notes, including a form of
preliminary prospectus, in conformity with the requirements of the Act and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") promulgated thereunder and has filed such
registration statement with the Commission under the Act. The Company has
prepared and filed such amendments thereto and such amended preliminary
prospectuses as may have been required to the date hereof, and will file such
additional amendments thereto and such amended preliminary prospectuses as may
hereafter be required. The Company has delivered or caused to be delivered to
each of the Underwriters without charge two (2) signed copies of such
registration statement and each amendment thereto together with two (2) copies
of each exhibit filed therewith; one (1) conformed copy of such registration
statement and each amendment thereto, but without exhibits, for each of the
Underwriters if requested; and such numbers of the related Preliminary
Prospectus (as hereinafter defined) and of the Prospectus as the Underwriters
heretofore have reasonably requested. As used in this Agreement, the term
"Preliminary Prospectus" means each and every prospectus filed with the
registration statement and amendments thereto (except the Prospectus). Such
registration statement, as amended, has been declared effective by the
Commission under the Act and is not proposed to be further amended. If such
registration statement, as it may have been amended, omits information in
accordance with Rule 430A under the Act, promptly after the execution of this
Agreement the Company will file with the Commission 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 or permitted by Rule 424(b)
under the Act and as have been provided to and approved by the Underwriters.
Such registration statement, as finally amended and revised at the time such
registration statement is or was declared effective by the Commission,
(including without limitation the information contained in the form of final
prospectus, filed with the Commission pursuant to Rule 424(b) and Rule 430A of
the Rules and Regulations and deemed to be part of the registration statement)
is referred to herein as the "Registration Statement". "Prospectus" means (a)
the form of prospectus first filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations or (b) the last preliminary prospectus included in
the Registration Statement filed prior to the time it becomes effective or filed
pursuant to Rule 424(a) under the Act that is delivered by the Company to the
Underwriters for delivery to
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purchasers of the Notes, together with the term sheet or abbreviated term sheet
filed with the Commission pursuant to Rule 424(b)((7).
(n) The Company's Common Stock is registered pursuant to Section
12(g) of the Exchange Act.
(o) Neither the Commission nor the securities authority of any
state or other jurisdiction has issued any order preventing or suspending the
use of any Preliminary Prospectus, and no proceeding for that purpose has been
instituted or threatened by the Commission or any such securities authority. No
stop order suspending the effectiveness of the Registration Statement or any
part thereof has been issued and no proceeding for that purpose has been
instituted or threatened or, to the best of the Company's knowledge,
contemplated by the Commission or any such securities authority. Each
Preliminary Prospectus complies with the requirements of the Act and the Rules
and Regulations and did not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. As of
the effective date of the Registration Statement (the "Effective Date"), and at
all times subsequent thereto up to and including each Closing Date (including
the date of filing of any amendments to such Registration Statement and the date
of effectiveness of any post-effective amendment), the Registration Statement
and the Prospectus contained therein, and any amendments or supplements thereto,
including without limitation the financial statements included in such
Prospectus, contained or will contain all statements that are required to be
stated therein in accordance with the Act and the Rules and Regulations and
conformed or will conform in all respects to the requirements of the Act and the
Rules and Regulations, and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, included or will include
any untrue statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or 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 424(b) (or, if the
Prospectus or such amendment or supplement is not required to be so filed, when
the Registration Statement or amendment thereto containing such amendment or
supplement to the Prospectus was or is declared effective) and at each Closing
Date, the Prospectus, as amended or supplemented at any such time, contained or
will contain all statements that are required to be stated therein in accordance
with the Act and the Rules and Regulations and conformed or will conform in all
respects to the requirements of the Act and the Rules and Regulations and did
not or will not include any untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. The Indenture conforms in all respects to the
requirements of the Trust Indenture Act and the applicable rules and regulations
thereunder. No representation or warranty is made as to information contained
in or omitted from the Registration Statement, the Prospectus or any such
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amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
specifically for inclusion in the Registration Statement or Prospectus or any
amendment or supplement thereto (as confirmed in Section 3 hereof) or as to that
part of the Registration Statement that constitutes the Statement of Eligibility
under the Trust Indenture Act of the Trustee. The Company hereby acknowledges
and agrees that the information set forth under the heading "Underwriting" in
the Prospectus constitutes the only written information furnished to the Company
by or on behalf of any Underwriter specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto.
(p) Coopers & Xxxxxxx L.L.P. and Deloite & Touche LLP (the
"Accountants"), who are certifying and have expressed their opinions with
respect to certain of the financial statements filed with the Commission as a
part of the Registration Statement and included or to be included, as the case
may be, in the Prospectus and in the Registration Statement, are independent
accountants with respect to the Company and its subsidiaries as required by the
Act and the Rules and Regulations.
(q) Except as disclosed in the Prospectus, the financial
statements and related notes thereto included or to be included, as the case may
be, in the Registration Statement and the Prospectus present fairly the
financial position of the Company and its subsidiaries as of the respective
dates thereof and the results of operations and cash flows of the Company and
its subsidiaries for the respective periods covered thereby, all in conformity
with generally accepted accounting principles consistently applied throughout
the entire period involved. No other financial statements or schedules of the
Company and its subsidiaries are required by the Act or the Rules and
Regulations to be included in the Registration Statement or the Prospectus.
Except as disclosed in the Prospectus, the summary financial and statistical
data and the other financial and numerical information included in the
Registration Statement and the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with the financial
statements presented therein.
(r) Neither the Company nor any of its subsidiaries is, and on
each Closing Date will be, in default under any court or administrative order or
decree, or in default with respect to any provision of any lease, loan
agreement, indenture, commission sales agreement, license, permit or other
agreement or contractual obligation to which the Company or any of its
subsidiaries is a party or by which any of their respective properties are
bound, and there does not exist any state of facts which constitute an event of
default as defined in any such document or which, upon notice or lapse of time
or both, would constitute such an event of default, where in any such case such
default or event of default by any party thereto has or is reasonably likely to
have a Material Adverse Effect.
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(s) Except as disclosed in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or threatened
against or affecting the Company or any of its subsidiaries or any property
owned or leased by the Company or any of its subsidiaries or any of the
Company's officers or directors in their capacity as such, before or by any
foreign, federal, state, municipal or local court, commission, regulatory body,
administrative agency or other governmental body, which are required to be
disclosed in the Registration Statement or the Prospectus and are not so
disclosed, or which question the validity of this Agreement or the Indenture or
any action taken or to be taken pursuant thereto.
(t) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and have good and marketable title to
all personal property and other assets reflected as owned by the Company and its
subsidiaries in the financial statements described above (or elsewhere in the
Registration Statement or the Prospectus), free and clear of all liens,
mortgages, pledges, charges, encumbrances or restrictions of every kind or
nature whatsoever except those, if any, reflected in such financial statements
(or elsewhere in the Registration Statement or the Prospectus) or which would
not have a Material Adverse Effect or which do not interfere in any material
respect with the use or proposed use of the property or the conduct of the
business of the Company and its subsidiaries; all properties (including without
limitation real property and buildings) held or used by the Company and its
subsidiaries under leases, licenses, franchises or other agreements are held by
the Company and its subsidiaries under valid, subsisting, binding and
enforceable leases, franchises, licenses or other agreements with respect to
which the Company or any of its subsidiaries are not in default, except to the
extent that such defaults in the aggregate do not have a Material Adverse Effect
on the conduct of their respective businesses as conducted or proposed to be
conducted or to the extent that the enforceability of the rights and remedies of
the Company and its subsidiaries under any such lease, franchise, license or
other agreement may be limited by the application of bankruptcy, reorganization,
insolvency or other laws generally affecting the rights of creditors and by
equitable principles being applied at the discretion of a court before which any
proceeding may be brought.
(u) Neither the Company nor any of its directors, officers,
affiliates or controlling persons has, directly or indirectly (i) taken any
action designed, or which might reasonably be expected, to cause or result in,
or which has constituted, or might reasonably be expected to constitute,
stabilization or manipulation, under the Act or the Exchange Act or otherwise,
of the price of any security of the Company to facilitate the sale or resale of
any of the Notes; or (ii) since the filing of the Registration Statement (A)
sold, bid for, purchased or paid any person any compensation for soliciting
purchases of the Notes or (B) paid or agreed to pay to any person any
compensation for soliciting another person to purchase any securities of the
Company.
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(v) Except as disclosed in the Registration Statement or the
Prospectus, since the respective dates as of which information is given in the
Registration Statement or the Prospectus and prior to the First Closing Date and
Second Closing Date:
(i) the Company or its subsidiaries have not and will not
have incurred any material liabilities or obligations, direct, indirect or
contingent, or entered into any material transactions, other than in the
ordinary course of business or pursuant to this Agreement and the transactions
referred to herein;
(ii) the Company has not and will not have purchased any of
its outstanding capital stock or paid or declared or otherwise made any
dividends or other distributions of any kind with respect to any class of its
capital stock, and the Company and its subsidiaries are not and will not be
delinquent in the payment of principal or interest on any outstanding material
debt obligation; and
(iii) there has not been and will not be (A) any change in
the capital stock or any change in the indebtedness of the Company and its
subsidiaries, or (B) any adverse change or any development involving a
prospective adverse change in their businesses (resulting from litigation or
otherwise), properties, business prospects, condition (financial or otherwise),
net worth or results of operations.
(w) There is no contract or other document, transaction or
relationship of a character required to be described in the Prospectus or the
Registration Statement or to be filed as an exhibit to the Registration
Statement that has not been described, incorporated therein by reference or
filed as required. All such contracts to which the Company or any of its
subsidiaries is a party have been duly authorized, executed and delivered by the
Company or such subsidiary, constitute valid and binding agreements of the
Company or such subsidiary, as the case may be, and are enforceable against the
Company or such subsidiary, as the case may be, in accordance with the terms
thereof, except as enforceability of any such agreement may be limited by the
application of bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors rights generally and by equitable principles being applied
at the discretion of a court before which any proceeding may be brought.
(x) Except as disclosed in the Prospectus, the Company and its
subsidiaries have filed all necessary foreign, federal, state, municipal and
local income and franchise tax returns and paid all taxes shown as due thereon
as well as all other taxes, assessments and governmental charges that are due
and payable; and no tax deficiency has been asserted or threatened against the
Company or any of its subsidiaries that would have a Material Adverse Effect.
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(y) Neither the Company nor any of its subsidiaries has at any
time:
(i) made, directly or indirectly, any unlawful contribution
to any candidate for political office or failed to disclose fully any
contribution in violation of law; or
(ii) directed, authorized or caused any director, officer,
employee or other agent of the Company or any of its subsidiaries to make any
unlawful contribution to any candidate for political office or to fail to
disclose any such contribution in violation of law; or
(iii) made or directed, authorized or caused any director,
officer, employee or agent of the Company or any of its subsidiaries to make any
payment to any foreign, federal, state, municipal or local government officer or
official, orally other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof or any applicable foreign jurisdiction.
(z) The Company and its subsidiaries have in place and effective
such policies of insurance, with limits of liability in such amounts, as are
customary and prudent in the businesses in which each is engaged. Neither the
Company nor any of its subsidiaries has any 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 businesses at a comparable cost.
(aa) Except as disclosed in the Prospectus, the Company and its
subsidiaries own or have adequate rights to use all trademarks, service marks,
trade names, trademark registrations, service xxxx registrations, patent rights,
patent applications, mask works and copyrights necessary for the conduct of
their respective businesses and the ownership of their respective properties,
and neither the Company nor any of its subsidiaries have any knowledge of any
infringement by it of any trademark, service xxxx, trade name right, patent
right, mask work, copyright, license, trade secret or other similar right of any
other person or entity, and there is no claim being made against the Company or
any of its subsidiaries, or to the best of the Company's knowledge, any employee
of the Company or any of its subsidiaries, regarding trademark, service xxxx,
trade name, patent, mask work, copyright, license, trade secret or other
infringement.
(bb) The Company and its subsidiaries hold and are in substantial
compliance with all material permits, certificates, licenses, approvals,
registrations, franchises and authorizations (collectively, the "Permits")
required under all laws, rules and regulations to own their respective
properties and conduct their respective businesses in the manner described in
the Prospectus, and all of such Permits are in full force and effect; the
Company and its subsidiaries have fulfilled and performed all of their
respective material obligations with respect to such
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Permits; no event has occurred which allows or, after notice or lapse of time or
both, would allow revocation or termination of any such Permit or result in any
other material impairment of the Company's or any of its subsidiaries' rights
under any such Permit; and such Permits contain no restrictions that materially
affect the Company's or its subsidiaries' ability to conduct their respective
businesses as presently conducted or as proposed to be conducted. There are no
pending proceedings, and neither the Company nor any subsidiary has received
notice of any threatened proceedings, relating to the revocation, withdrawal,
cancellation, modification, suspension or non-renewal of any such Permit. The
Company and its subsidiaries are not and have not been (by virtue of any action,
omission to act, contract to which it is a party or by which it is bound, or any
occurrence or state of facts whatsoever) in violation of any applicable foreign,
federal, state, municipal or local statutes, laws, ordinances, rules,
regulations and/or orders issued pursuant to foreign, federal, state, municipal
or local statutes, laws, ordinances, rules or regulations (including without
limitation those relating to environmental protection, occupational safety and
health and equal employment practices) heretofore or currently in effect, except
any such violations that have been fully cured or satisfied without recourse or
that are not, either individually or collectively, reasonably likely to have a
Material Adverse Effect.
(cc) To the best knowledge of the Company, except as reasonably could
not be expected, either singly or in the aggregate, to have a Material Adverse
Effect, and except as disclosed in the Prospectus: (i) the Company and each of
its subsidiaries are in compliance with all applicable Environmental Laws (as
defined herein), which compliance includes, but is not limited to, the
possession by the Company and each of its subsidiaries of all permits and other
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof, and neither the Company nor
any of its subsidiaries has received any communication, from any person or
entity, that alleges that the Company or any of its subsidiaries are not in such
compliance; (ii) there is no pending or threatened claim, lawsuit, or
administrative proceeding against the Company or any of its subsidiaries under
any Environmental Law, nor has the Company or any of its subsidiaries received
any notice from any person or entity alleging that the Company or any of its
subsidiaries are liable for any civil or criminal liability or penalty under any
Environmental Law; (iii) there is no pending or threatened claim, lawsuit or
administrative proceeding against any person or entity, whose liability, under
any Environmental Law, the Company or any of its subsidiaries may have retained
or assumed either contractually or by operation of law; (iv) there have been no
releases, spills or discharges of Hazardous Substances (as defined herein) on or
underneath any of the properties currently or formerly owned, leased or operated
by the Company or any of its subsidiaries; and (v) there are no foreseeable
requirements relating to compliance with applicable Environmental Laws in the
future or liability for past non-compliance with Environmental Laws or disposal
of Hazardous Substances that are reasonably likely to cause the Company or its
subsidiaries to incur any material expenditures. For purposes of this
Agreement, the term "Environmental Law" means any foreign, federal, provincial,
state or local law, regulation,
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code, rule, ordinance, or common law standard, in each case as in effect on the
date hereof, relating to pollution or to the protection of human health, safety
or the environment, including, without limitation, laws relating to releases or
threatened releases of Hazardous Substances into the indoor or outdoor
environment (including, without limitation, ambient air, surface water,
groundwater, land, surface and subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, release,
transport or handling of Hazardous Substances. The term "Hazardous Substances"
means chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or its derivatives, asbestos, polychlorinated biphenyls,
caustic substances, radioactive materials, or any other substance defined as
hazardous, toxic, or dangerous by, or regulated under, any Environmental Law.
(dd) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the best knowledge of the Company, is imminent, in
each case which, if determined adversely to the Company, would not have a
Material Adverse Effect.
(ee) The Company is in compliance in all material respects with all
presently applicable provisions of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder (the "Code"), and the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder ("ERISA"). No "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) established or maintained by the Company or any of its subsidiaries
(each, a "Pension Plan"). To the best of the Company's knowledge, all
contributions required to be made with respect to any Pension Plan have been
timely made. The amount of "unfunded benefit liabilities" (as defined in ERISA)
under all Pension Plans would not have a Material Adverse Effect. Neither the
Company nor any of its subsidiaries nor any person (as defined in Section 3(9)
of ERISA) which together with the Company or a subsidiary of the Company would
be deemed to be a "single employer" within the meaning of Section 404(b), (c),
(m) or (o) of the Code (an "ERISA Affiliate") has incurred or expects to incur
liability under (i) Section 409, 502(i), 502(l) or 515 of ERISA, or (ii) Title
IV of ERISA with respect to termination of, or withdrawal from, any Pension Plan
or (iii) Section 401(a)(29), 4971, 4975 or 4980B of the Code and each Pension
Plan that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification. Using
actuarial assumptions and computation methods consistent with Part 1 of subtitle
E of Title IV of ERISA, the aggregate liabilities of the Company and its
subsidiaries and its ERISA Affiliates to all Pension Plans which are
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of
a complete withdrawal therefrom, as of the close of the most recent fiscal year
of each such Pension Plan ended prior to the date hereof, would not have a
Material Adverse Effect. Except as disclosed in the Prospectus, the Company and
its subsidiaries do not maintain or contribute to any employee welfare benefit
plan (as defined in Section 3(1) of ERISA) which provides
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benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA). To the best of the Company's knowledge, no condition
exists which presents a material risk to the Company or any subsidiary of the
Company or any ERISA Affiliate of incurring a liability with respect to any of
the foregoing which would have a Material Adverse Effect. The execution and
delivery of this Agreement and the Indenture and the issuance and sale of the
Notes will be exempt from, or will not involve any transaction which is subject
to, the prohibitions of Section 406 of ERISA and Section 4975 of the Code and
will not involve any transaction in connection with which a penalty could be
imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to
Section 4975 of the Code.
(ff) Neither the Company nor any of its subsidiaries is an
"investment company," or a company "controlled" by, or an "affiliated person"
of, or a "promoter" or "principal underwriter" for, an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended (the "1940
Act"), and upon the Company's receipt of any proceeds from the sale of the
Notes, it will not become or be deemed to be an "investment company" under the
1940 Act.
(gg) The Company and its subsidiaries make and keep accurate books
and records reflecting the Company's and its subsidiaries' assets and maintains
internal accounting controls which provide reasonable assurance that:
(i) transactions are executed with management's
authorization;
(ii) transactions are recorded as necessary to permit
preparation of the Company's consolidated financial statements in accordance
with generally accepted accounting principles and to maintain accountability for
the assets of the Company and its subsidiaries;
(iii) access to the assets of the Company and its
subsidiaries are permitted only in accordance with management's authorization;
and
(iv) the reported amounts of the assets of the Company and
its subsidiaries are compared with the existing assets of the Company and its
subsidiaries at reasonable intervals and appropriate action is taken with
respect to any differences.
(hh) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to be owned by
such person or to require the Company to include such securities in (i) the
securities registered pursuant to the Registration Statement or (ii) any other
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securities now or hereafter registered pursuant to any other registration
statement filed by the Company under the Act. Except as disclosed in the
Prospectus, no holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement, and all such holders, if any, have waived all such
rights as of the date hereof.
(ii) Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be deemed
a representation and warranty of the Company to the Underwriters as to the
matters covered thereby.
A certificate delivered by the Company to its counsel for purposes of
enabling such counsel to render the opinion referred to in Section 7(g)(i) will
also be furnished to the Underwriters and counsel for the Underwriters and shall
be deemed to be additional representations and warranties to the Underwriters by
the Company as to the matters covered thereby.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representative, on behalf of the several Underwriters, represents and warrants
to the Company that only the information set forth in the section in the
Prospectus entitled "Underwriting," was furnished to the Company by and on
behalf of the Underwriters for use in connection with the preparation of the
Registration Statement and the Prospectus, and that such information is correct
and complete in all material respects and does 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.
SECTION 4. PURCHASE, SALE AND DELIVERY OF THE NOTES. (a) On the basis of
the representations, warranties, covenants and agreements herein contained, but
subject to all of the terms and conditions herein set forth, (i) the Company
agrees to issue and to sell to the Underwriters identified in SCHEDULE A a total
of $20,000,000 principal amount Company Firm Notes; and (ii) each of the
Underwriters agrees, severally and not jointly, to purchase from the Company the
respective number of Firm Notes set forth opposite the name of such Underwriter
in SCHEDULE A at a purchase price equal to _______% of the principal amount
thereof at a closing described in Section 4(c) below.
(b) Upon the basis of the representations, warranties, covenants
and agreements herein contained, but subject to all of the terms and conditions
herein set forth, the Company hereby grants an option (the "Option") to the
several Underwriters to purchase, severally and not jointly, from the Company up
to $3,000,000 principal amount of Option Notes at the purchase price per Note to
be paid by the Underwriters for the Firm Notes, for use solely in covering any
over-allotments made by the Underwriters in the sale and distribution of the
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Firm Notes. The Option many be exercised at any time (but not more than once),
in whole or in part, on or before the thirtieth (30th) day after the date of
this Agreement, upon written or telecopied notice (the "Option Notice") by the
Underwriters to the Company no later than 5:00 p.m. eastern time, setting forth
the aggregate number of Option Notes as to which the Underwriters are exercising
the Option, the names and denominations in which the certificates for such Notes
are to be registered, and the time and place at which such certificates shall be
delivered to and paid for by the Underwriters. Such time of delivery may not be
earlier than the First Closing Date, and is herein called the "Second Closing
Date." The Second Closing Date shall be determined by the Underwriters, but if
at any time other than the First Closing Date, shall not be earlier than three
(3) nor later than ten (10) full business days after delivery of the Option
Notice unless otherwise agreed upon by the Underwriters and the Company.
Certificates for the Option Notes shall be made available for checking and
packaging at 9:00 a.m., eastern time, on the business day immediately preceding
the Second Closing Date at a location to be designated by the Underwriters. On
the Second Closing Date the Company shall issue and sell to the Underwriters the
number of Notes set forth in the Option Notice, and each Underwriter will
purchase the number of Option Notes allocated to it pursuant to the first
sentence of this Section 4(b). The manner of payment for and delivery of
(including the denominations of and the names in which certificates are to be
registered) the Option Notes shall be the same as for the Firm Notes as
specified in Section 4(c).
(c) At 9:00 a.m., eastern time, on the fourth business day after
the date of this Agreement, unless otherwise required by the Commission pursuant
to Rule 15c6-1 of the Exchange Act or at such other time on such other day not
later than five business days after such fourth business day as the Underwriters
and the Company may agree, the Company shall deliver to the Underwriters, at the
offices of Advest, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or through
the facilities of the Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, for the accounts of the several Underwriters, certificates in
definitive form representing the Firm Notes to be sold by them, against payment
in Hartford, Connecticut or such other location agreed upon by the parties of
the purchase price therefor by certified or bank cashier's check in New York
Clearing House (next day) funds payable to the order of the Company. Such time
of delivery against payment is referred to herein as the "First Closing Date,"
and the First Closing Date and the Second Closing Date are referred to herein
individually as a "Closing Date." The certificates representing the Firm Notes
to be delivered shall be in denominations and registered in such names as the
Underwriters request by notice to the Company prior to 9:00 a.m., eastern time,
on the second full business day preceding the First Closing Date, and shall be
made available for checking and packaging at 9:00 a.m., eastern time, on the
business day immediately preceding the First Closing Date at a location to be
designated by the Underwriters.
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(d) The Company shall bear the cost of original issue tax stamps,
if any, in connection with the issuance and delivery of the Firm Notes and the
Option Notes sold by the Company to the respective Underwriters. The Company
shall pay and save each Underwriter and any subsequent holder of each Note
harmless from any and all liabilities with respect to or resulting from any
failure or delay in paying foreign, federal and state stamp and other transfer
taxes, if any, which may be payable or determined to be payable in connection
with the original issuance or sale to such Underwriter of the Firm Notes and/or
the Option Notes.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the several Underwriters that:
(a) The Company shall not during such period as the Prospectus is
required by law to be delivered in connection with sales of the Notes by an
underwriter or any dealer, file any amendment or supplement to the Registration
Statement or any Preliminary Prospectus or the Prospectus (including without
limitation a prospectus filed pursuant to Rule 424(b)), unless a copy thereof
shall first have been submitted to the Underwriters within a reasonable period
of time prior to the filing thereof and the Underwriters shall not have objected
thereto in good faith.
(b) The Company shall use its best efforts to cause the
Registration Statement to continue to be effective and each post-effective
amendment thereto to become effective, and shall notify the Underwriters and
counsel to the Underwriters promptly, and shall confirm such advice in writing,
(i) when any post-effective amendment to the Registration Statement becomes
effective; (ii) of any request by the Commission or any securities authority of
any other jurisdiction for amendments or supplements to the Registration
Statement or the Prospectus or for additional information; (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose or
the threat thereof; (iv) of receipt by the Company or any representative or
attorney of the Company of any other communication from the Commission relating
to the Company, the Registration Statement, any Preliminary Prospectus or the
Prospectus (other than a communication confirming the effectiveness of the
Registration Statement); and (v) of receipt by the Company of any notification
of the suspension of qualification of the Notes for sale in any jurisdiction or
the initiation of any proceedings for that purpose or threat thereof. The
Company shall use its best efforts to prevent the issuance of any such stop
order or suspension.
(c) The Company shall comply with all the provisions of any
undertakings contained in the Registration Statement.
(d) The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Notes may be
- 16 -
sold, both in connection with the offering or sale of the Notes and for any
period of time thereafter during which the Prospectus is required by law to be
delivered in connection therewith.
(e) The Company shall furnish to its securityholders as soon as
practicable after the end of each fiscal year an annual report (including,
without limitation, a balance sheet and statements of income, stockholders'
equity and cash flow of the Company and its consolidated subsidiaries certified
by independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the Effective Date), the Company shall make available to
its securityholders consolidated summary financial information of the Company
and its consolidated subsidiaries for such quarter in reasonable detail.
(f) The Company shall make generally available to holders of its
securities and the Underwriters as soon as may be practicable, but in no event
later than the forty-fifth (45th) day following the end of the first quarter
first occurring after the first anniversary of the Effective Date, an earnings
statement (which need not be audited but shall be in reasonable detail)
satisfying the provisions of Section 11(a) of the Act (including without
limitation Rule 158 of the Rules and Regulations).
(g) Neither the Company nor any of its officers, directors or
affiliates will at any time, directly or indirectly, (i) take any action
designed, or which might reasonably be expected, to cause or result in, or which
shall constitute, or might reasonably be expected to constitute, stabilization
or manipulation, under the Act or the Exchange Act or otherwise, of the price of
any security of the Company to facilitate the sale or resale of any of the
Notes, (ii) sell, bid for, purchase or pay any person any compensation for
soliciting purchases of the Notes or (iii) pay or agree to pay any person any
compensation for soliciting another person to purchase any securities of the
Company.
(h) The Company shall apply the net proceeds from the offering and
sale of the Notes to be sold by it hereunder solely for the purposes set forth
in the Prospectus under "Use of Proceeds" and shall file such reports with the
Commission with respect to the sale of the Notes and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.
(i) If any information shall have been omitted from the
Registration Statement in reliance upon Rule 430A, the Company, at the earliest
possible time, shall furnish the Underwriters with a copy of the Prospectus to
be filed by the Company with the Commission to comply with Rule 424(b) and Rule
430A under the Act, and, if the Underwriters do not object to the contents
thereof, shall file such Prospectus with the Commission in compliance with such
- 17 -
Rules, PROVIDED that the Company shall file such prospectus with the Commission
not later than the earlier of (i) the second business day following the
execution and delivery of this Agreement or (ii) the fifteenth business day
after the Effective Date. Upon filing the Prospectus with the Commission in
compliance with such Rules, the Company shall so advise the Underwriters
promptly.
(j) If, at any time when a prospectus relating to the Notes is
required by law to be delivered, any event occurs as a result of which the
Prospectus or the Registration Statement, including any subsequent amendment or
supplement, would include an untrue statement of a material fact, or would 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, or if it is necessary at any time to amend or supplement
the Prospectus, including any amendment or supplement thereto, to comply with
any applicable law, the Company promptly shall advise the Underwriters and
counsel to the Underwriters thereof and forthwith shall prepare and duly file
with the Commission an appropriate amendment or supplement that will correct
such statement or omission or an amendment that will effect such compliance and
will furnish without charge to each Underwriter and to any dealer in securities
as many copies of such amended or supplemented Prospectus as the Underwriters
may from time to time reasonably request. If any Underwriter is required to
deliver a prospectus nine months or more after the Effective Date, the Company,
upon request of the Underwriters but at the expense of the Company, shall
prepare promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act. Neither the
Underwriters' consent to nor delivery of, any such amendment or supplement shall
constitute a waiver of any condition set forth in Section 7.
(k) Except as contemplated by the Prospectus, the Company shall
not, prior to the Second Closing Date or thirty (30) days after the date of this
Agreement, whichever occurs first, incur any material liability or obligation,
direct or contingent, or enter into any material transaction or any transaction
with a related party which is required to be disclosed in the Prospectus
pursuant to Item 404 of Regulation S-K under the Act unless the Company gives
the Underwriters adequate prior notice of any such transaction and, if the
Underwriters reasonably request but at the Company's expense, files a post-
effective amendment to the Registration Statement to include the required
disclosure regarding any such transaction.
(l) Except as disclosed in the Prospectus, the Company shall not
acquire any of its Common Stock before the Second Closing Date or thirty (30)
days after the date of this Agreement, whichever occurs first; and the Company
shall not declare or pay any dividend or make any other distribution upon its
Common Stock payable to shareholders of record on a date prior to such earlier
date.
- 18 -
(m) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or any dealer, the Company
shall furnish or cause to be furnished to the Underwriters, at the expense of
the Company, copies of the Registration Statement, the Prospectus, any
Preliminary Prospectus and all amendments and supplements to any such documents,
in each case as soon as available and in such quantities as the Underwriters
reasonably may request for the purposes contemplated by the Act.
(n) Prior to any public offering of the Notes, the Company shall
cooperate with the Underwriters and counsel to the Underwriters in qualifying or
registering the Notes for offer and sale under the Blue Sky Laws of such
jurisdictions as the Underwriters reasonably may designate, PROVIDED the Company
shall not be required to qualify as a foreign corporation in any jurisdiction
where it is not now so qualified or to consent to general service of process
under the law of any state where it is not now so qualified (except with respect
to the offering and sale of the Notes), and the Company shall continue such
qualifications or registrations in effect so long as reasonably requested by the
Underwriters to effect the distribution of the Notes. In each jurisdiction where
any of the Notes shall have been qualified as provided above, the Company shall
file such reports and statements as may be required to continue such
qualification in effect for so long a period as the Underwriters may reasonably
request for a distribution of the Notes.
(o) For so long as any of the Notes remain outstanding, (i) as
soon as practicable after the end of each of its fiscal years, the Company shall
furnish to the Underwriters two (2) copies of the annual report of the Company
containing the consolidated balance sheet of the Company as of the close of such
fiscal year and corresponding consolidated statements of earnings, shareholders
equity and cash flows for the year then ended, such consolidated financial
statements to be under the certificate or opinion of the Company's independent
accountants, and (ii) the Company shall file promptly and shall furnish to the
Underwriters at or before the filing thereof copies of all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Sections 13, 14 or 15 of the Exchange Act.
During such period, the Company also shall furnish to the Underwriters one (1)
copy of each of the following:
(A) as soon as practicable after the filing thereof, each
report, statement, or other document filed by the Company with the
Commission, except that the portions of any such report, statement or other
document for which the Company has requested confidential treatment from
the Commission may be withheld from the Underwriters at the Company's
discretion;
(B) as soon as practicable after the filing thereof, all
reports, statements, other documents and financial statements furnished by
the Company to either the NASD or the Nasdaq National Market pursuant to
requirements of or agreements
- 19 -
with the NASD or the Nasdaq National Market, except that the portions of
any such report, statement or other document for which the Company has
requested confidential treatment from the NASD or the Nasdaq National
Market may be withheld from the Underwriters at the Company's discretion;
and
(C) as soon as available, each report, statement or other
document of the Company mailed to its securityholders.
(p) The Company shall use its best efforts to satisfy or cause to
be satisfied the conditions to the obligations of the Underwriters in Section 7.
(q) The Company shall prepare and timely file with the Commission,
from time to time, such reports and statements as may be required to be filed by
the Exchange Act and or the Rules and Regulations.
(r) The Company shall comply in all respects with the undertakings
given by the Company in connection with the qualification or registration of the
Notes for offering and sale under the Blue Sky Laws.
(s) The Company will not, so long as the Notes are outstanding, be
or become an investment company, unit investment trust or face-amount
certificate company that is required to be registered under the 1940 Act, and is
not, and will not be or become, a closed-end investment company required to be
registered, under the 1940 Act.
(t) The Company will cooperate with the Underwriters and the
Trustee to permit the Notes to be eligible for clearance and settlement through
The Depository Trust Company.
(u) During the period beginning on the date hereof and continuing
through the Second Closing Date, not to offer for sale, sell, contract to sell
or otherwise dispose of, directly or indirectly, any debt securities of the
Company (other than the Notes) without the prior written consent of the
Underwriters.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated, or if this Agreement is terminated for
any reason, the Company shall pay, or reimburse the Underwriters if paid by the
Underwriters, for all costs, fees and expenses incurred by or on behalf of the
Company in connection with the public offering. Such costs, fees and expenses to
be paid by the Company are the following:
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(a) All costs, fees and expenses (other than expenses customarily
paid by the Underwriters) incurred in connection with the performance of the
Company's obligations hereunder, including, without limiting the generality of
the foregoing, all fees and expenses of the Company's accountants and the fees
and expenses of counsel for the Company, the fees and expenses of the Trustee,
any agent of the Trustee or counsel to the Trustee, all costs and expenses
incurred in connection with the preparation, printing, filing, and distribution
of the Registration Statement as originally filed and each amendment thereto and
any post-effective amendments, each Preliminary Prospectus and the Prospectus
(including all exhibits and financial statements) and all agreements, amendments
and supplements provided for herein, and with the reproduction of this
Agreement, the Indenture, the Agreement Among Underwriters, the Dealers
Agreement, the Underwriters' Questionnaire, various Underwriters' letters
(including powers-of-attorney), and the Preliminary and all Supplemental Blue
Sky Memoranda. Except as set forth in Section 6(b) or if the provisions of
Section 8 become applicable, the Company shall not be responsible for the legal
fees and disbursements of counsel for the Underwriters or the expenses
customarily paid by the Underwriters.
(b) All filing and registration fees and expenses, including
without limitation the legal fees and disbursements of counsel for the
Underwriters, incurred in connection with qualifying or registering all or any
part of the Notes for offer and sale under the Blue Sky Laws (including without
limitation the preparation of the Preliminary and all Supplemental Blue Sky
Memoranda) and the clearing of the public offering of the Notes with the NASD.
(c) All fees and expenses of the Company's transfer agent, the
cost of printing and delivering the certificates representing the Notes, and all
transfer taxes, if any, with respect to the sale and delivery of the Notes.
Except as provided in Sections 6, 8, 10 and 13, the Underwriters shall pay
all of their own costs and expenses.
SECTION 7. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters under this Agreement shall be subject to
the accuracy of the representations and warranties on the part of the Company
herein set forth as of the date hereof and as of the First Closing Date or the
Second Closing Date, as the case may be; to the accuracy of the statements of
the Company's officers; to the performance by the Company of its obligations
hereunder; and to the following additional conditions, except to the extent
waived in writing by the Underwriters:
(a) The Underwriters shall have been notified not later than 5:00
p.m. eastern time, on the date of this Agreement, that the Commission has
declared the Registration Statement effective. The Underwriters shall also be
notified not later than the time specified in
- 21 -
Section 5(j) hereof that all filings of the Company required by Rule 424 and
Rule 430A of the Rules and Regulations have been made.
(b) No stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceedings for such
purpose shall be pending before or, to the knowledge of the Company, threatened
or contemplated by the Commission. Any request for additional information on the
part of the staff of the Commission or any such authority shall have been
complied with to the satisfaction of the staff of the Commission or such
authority. After the date of this Agreement, no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Underwriters and the Underwriters did not
object thereto in good faith.
(c) The Notes shall have been qualified or registered for sale
under the Blue Sky Laws of such jurisdictions as shall have been reasonably
specified by the Underwriters as contemplated by Section 5(n); each such
qualification shall be in effect and not subject to any stop order and no
proceeding for such purpose shall be pending before or, to the knowledge of the
Company, threatened or contemplated by the authorities of any such jurisdiction
on the applicable Closing Date; and the offering of the Notes shall have been
cleared by the NASD.
(d) The legality and sufficiency of the authorization, issuance
and sale of the Notes, the validity and form of the certificates representing
the Notes, the execution and delivery of this Underwriting Agreement and the
Indenture, and all corporate proceedings and other legal matters incident
thereto, and the form of the Registration Statement and the Prospectus (except
financial statements and other statistical or financial data included therein)
shall have been approved by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
counsel for the Underwriters.
(e) The Underwriters shall not have been advised by the Company
that the Registration Statement or Prospectus, or any amendment or supplement
thereto, contains a material untrue statement of fact or omits to state a fact
which is material and is required to be stated therein or necessary to make the
statements therein not misleading.
(f) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus:
(i) There shall not have been any material adverse change
or development in the business (whether by reason of any court, legislative,
other governmental action, order or decree, or otherwise), business prospects,
properties, general affairs, management, condition (financial or otherwise), net
worth or results of operations of the Company, whether or not arising from
transactions in the ordinary course of business, which
- 22 -
has not been disclosed in or otherwise contemplated by the Registration
Statement or the Prospectus; and
(ii) The Company shall not have sustained any material loss
or interference with its business or properties from any labor dispute, strike,
fire, flood, windstorm, accident or other calamity (whether or not covered by
insurance) or from any court or legislative or other governmental action, order
or decree, which is not set forth in the Registration Statement and the
Prospectus, if any such development or developments described in Section 7(f)(i)
or Section 7(f)(ii), in the sole judgment of the Underwriters makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Notes on the terms and in the manner contemplated in the Registration
Statement, the Prospectus, the Indenture and/or this Agreement.
(g) There shall have been furnished to the Underwriters, on each
Closing Date, except as otherwise expressly provided below:
(i) An opinion of Hill & Xxxxxx, counsel for the Company,
reasonably satisfactory to the Underwriters and counsel for the Underwriters,
addressed to the Underwriters and dated the First Closing Date or the Second
Closing Date, as the case may be, to the effect that:
(A) The Company and each of its subsidiaries have been duly
organized and incorporated, are validly existing and are in good standing
as corporations under the laws of their respective jurisdiction of
incorporation, with full corporate power and authority to conduct all their
respective activities, to own or lease all the respective assets owned or
leased by the Company and its subsidiaries and to conduct their businesses
as described in the Prospectus. Except for its subsidiaries, the Company
does not control, directly or indirectly, any corporation, partnership or
joint venture. There are no jurisdictions in which the nature of the
respective activities of the Company and its subsidiaries or the character
of the assets owned or leased by the Company or its subsidiaries make it
necessary for them to be licensed or qualified to do business as a foreign
corporation, except where the failure to so qualify would not have a
Material Adverse Effect; and
(B) The Indenture has been duly and validly authorized,
executed and delivered by the Company and duly qualified under the Trust
Indenture Act and, assuming due authorization, execution and delivery
thereof by the Trustee, is a valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
- 23 -
creditors' rights generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at
law) or by an implied covenant of good faith and fair dealing; and
(C) The Indenture conforms as to form in all material
respects with the requirements of the Trust Indenture Act and the Rules and
Regulations applicable to an indenture which is qualified thereunder; and
(D) The Notes are in the form contemplated by the Indenture
and have been duly and validly authorized and executed and, assuming the
due execution, authentication and delivery thereof by the Trustee pursuant
to the Indenture (and payment therefor by the Underwriters in accordance
with the terms of this Agreement), are valid and legally binding
obligations of the Company enforceable against the Company in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) or by an implied covenant of good faith dealing, and
entitled to the benefits of the Indenture; and
(E) On each Closing Date, the authorized capital stock of
the Company will consist solely of 15,000,000 shares of Common Stock, $.01
par value, and 1,000,000 shares of Preferred Stock, $1.00 par value, and
all such stock, and the Indenture and Notes of the Company, conform in all
material respects to the descriptions thereof in the Prospectus as of the
date of the Prospectus; and
(F) Neither the Company nor any of its subsidiaries are in
violation of any provision of their respective Existing Charter Documents;
and
(G) The Company had at the date indicated in the Prospectus
a duly authorized and outstanding capitalization as set forth in the column
entitled "Actual" under the caption "Capitalization" as set forth in the
Prospectus, and, based on the assumptions stated in the Prospectus, the
Company will have on each Closing Date the adjusted capitalization as set
forth in the column entitled "As Adjusted" under the caption
"Capitalization" as set forth in the Prospectus; and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus; and all of the issued
shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued and are fully paid, non-assessable and
are owned directly or indirectly by the Company and, to such counsel's
knowledge, free and clear of all liens, encumbrances, equities or claims
(except for
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restrictions on the disposition of such shares of stock by the Company
described in the Prospectus pursuant to loan agreements and notes and
guarantees thereof and related agreements to which the Company or any such
subsidiary is a party); and
(H) Except as disclosed in the Prospectus, to such
counsel's knowledge, the Company has not issued (1) any options, warrants
or other rights of any description, contractual or otherwise, entitling any
person to purchase or receive any class of security from the Company, or
(2) any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of the Company's capital stock, or
any of such options, warrants, other rights or convertible securities or
obligations; and
(I) Neither the Company nor any of its subsidiaries is an
"investment company," or a company "controlled" by, or an "affiliated
person" of, or a "promoter" or "principal underwriter" for, an "investment
company" within the meaning of the 1940 Act, and upon the Company's receipt
of any proceeds from the sale of the Notes, it will not become or be deemed
to be an "investment company" under the 1940 Act; and
(J) The Company has the requisite corporate power and
authority to execute and deliver this Agreement, the Indenture, and the
Notes, to perform its obligations (including the issuance, sale and
delivery of the Notes) hereunder and thereunder; and all requisite
corporate action required to be taken for the due and proper authorization,
issuance, sale and delivery of the Notes and the consummation of the
transactions contemplated by this Agreement and by the Indenture have been
duly and validly taken by the Company; and
(K) This Agreement has been duly and validly authorized,
executed and delivered by the Company; and
(L) The execution, delivery and performance by and on
behalf of the Company of this Agreement and the Indenture, the performance
of the Company's obligations thereunder, and the consummation of the
transactions contemplated thereby (including the issuance sale and delivery
of the Notes), and the execution and delivery of the Notes by the Company
and compliance by the Company with all of the provisions hereof and thereof
will not violate any provision of the Existing Charter Documents of the
Company and each of its subsidiaries; will not result in the breach, or be
in contravention, of or result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company or its
subsidiaries pursuant to the terms or provisions of (1) any provision of
any lease, franchise, license, indenture, loan
- 26 -
agreement, mortgage, deed of trust, voting trust agreement or any other
contract, agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
or any of their properties may be bound or affected of which such counsel
is aware, (2) any statute, rule or regulation applicable to the Company or
any of its subsidiaries of any court or regulatory body, administrative
agency, authority or other governmental body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or (3) any
order of which such counsel is aware of any court or regulatory body,
administrative agency, authority or other governmental body rendered in any
proceeding to which the Company or any of its subsidiaries was or is now a
party or by which they and/or any of their properties is bound, except
those, if any, described in the Prospectus or which would not have a
Material Adverse Effect; and
(M) No consent, approval, authorization or other order of,
or filing or declaration with, any court or regulatory body, administrative
agency or other governmental body of the United States or any other
jurisdiction is necessary in connection with the execution, delivery and
performance of this Agreement, the Indenture and/or the issuance and/or
sale of the Notes by the Company pursuant to this Agreement and the
Indenture and/or the consummation of the transactions contemplated by this
Agreement and the Indenture, other than such as have been obtained or made
by the Company on or before the date of this Agreement, except the
registration of the Notes under the Act and the Rules and Regulations, the
qualification of the Indenture under the Trust Indenture Act, and such
consents, approvals, authorizations, registrations or qualifications as may
be required by the Blue Sky Laws applicable to the public offering of the
Notes by the several Underwriters (as to which such counsel need express no
opinion) or the by-laws and rules of the NASD in connection with the
purchase and distribution by the several Underwriters of the Notes (as to
which such counsel need express no opinion); and
(N) (1) The Registration Statement has become effective
under the Act and any required filing pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); (2) to
the best knowledge of such counsel after due inquiry no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for such purpose are pending before or threatened or
contemplated by the Commission; (3) all requests for additional information
on the part of the staff of the Commission or any such authority have been
complied with to the satisfaction of the staff of the Commission or such
authority; (4) the Registration Statement, the Prospectus and each
amendment or supplement thereto (except for the financial statements and
other statistical or financial data included therein as to which such
counsel need express no opinion) comply as to form in all material respects
with
- 26 -
the requirements of the Act and the Rules and Regulations; (5) the
Indenture complies as to form in all material respects with the
requirements of the Trust Indenture Act and the applicable rules and
regulations thereunder; and (6) such counsel is not aware of any contracts
or other documents, transactions or relationships of a character required
to be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described,
incorporated therein or filed as required; and
(O) To the best of such counsel's knowledge after due
inquiry, neither the Company nor any of its subsidiaries are in default
under any court or administrative order or decree, or in default with
respect to any provision of any material lease, license agreement,
franchise agreement, loan agreement, indenture, commission sales agreement
or other agreement or contractual obligation to which the Company or any of
its subsidiaries are a party or by which any of their respective properties
are bound, and of which such counsel is aware, including, but not limited
to the contracts listed as exhibits to the Registration Statement
(collectively, the "Material Contracts"), and to the best of such counsel's
knowledge there does not exist any state of facts which constitutes an
event of default by the Company or any of its subsidiaries as defined in
any such Material Contract or which, upon notice or lapse of time or both,
would constitute such an event of default, where in any such case such
default or event of default by such party thereto has or is reasonably
likely to have a Material Adverse Effect on the conduct of the business of
the Company or any of its subsidiaries. Each such Material Contract
constitutes a valid and binding agreement of the Company or its subsidiary,
as the case may be, and is enforceable against the Company or its
subsidiary, as the case may be, in accordance with the terms thereof,
except to the extent that the enforcement of any such contract may be
limited by the application of bankruptcy, reorganization, insolvency or
other laws generally affecting the rights of creditors and by equitable
principles being applied at the discretion of a court before which any
proceeding may be brought; and
(P) To the best of such counsel's knowledge after due
inquiry, there are no actions, suits or proceedings pending or threatened
against or affecting the Company or any of its subsidiaries or any property
owned or leased by the Company or any of its subsidiaries or any of the
Company's or its subsidiaries' officers or directors in their capacity as
such, before or by any foreign, federal, state, municipal or local court,
commission, regulatory body, administrative agency or other governmental
body, which (i) are required to be disclosed in the Registration Statement
or the Prospectus and are not so disclosed, or (ii) question the validity
of this Agreement, the Indenture or any action taken or to be taken
pursuant thereto or (iii) relate to the revocation, withdrawal,
cancellation, modification, suspension or non-renewal of any material
permits,
- 27 -
certificates, licenses, approvals, registrations and authorizations of the
Company or any of its subsidiaries; and
(Q) All contracts listed as exhibits to the Registration
Statement to which the Company or any of its subsidiaries are a party have
been duly authorized, executed and delivered by the Company or its
subsidiaries, as the case may be; and
(R) Except as disclosed in the Prospectus, to the best of
such counsel's knowledge after due inquiry there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities in (1) the securities registered pursuant to the Registration
Statement or (2) any other securities now or hereafter registered pursuant
to any other registration statement filed by the Company under the Act. All
registration rights held by holders of securities of the Company with
respect to shares of Common Stock or other securities of the Company of
which such counsel is aware have, with respect to the offering contemplated
by this Agreement, been waived; and
(S) The description in the Registration Statement and the
Prospectus of statutes and contracts and other legal documents
described therein present fairly the information required to be shown.
Such counsel may rely as to factual matters on certificates of
officers of the Company and of state officials and, as to legal matters in
jurisdictions other than Massachusetts, on opinions of local counsel, in each
case satisfactory in form and substance to the Underwriters and counsel to the
Underwriters, in which case the opinion of counsel to the Company shall state
that they are so doing and that they have no reason to believe that (x) any such
certificate is not complete and accurate and (y) they and the Underwriters are
not entitled to so rely, and copies of such certificates or opinions shall be
attached to such counsel's opinion.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that although such counsel has not undertaken,
except as otherwise indicated in their opinion, to determine independently, and
does not assume responsibility for, the accuracy or completeness of statements
in the Registration Statement or the Prospectus, such counsel has participated
in the preparation of the Registration Statement and the Prospectus, including
without limitation review and discussion of the contents thereof, and no facts
have come to the attention of such counsel which lead them to believe that
either the Registration Statement or the Prospectus, or any amendment or
supplement to the Registration Statement or the Prospectus, as of their
respective effective or issue dates, contained any untrue statement of
- 28 -
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances under which such statements were made or that the Prospectus,
as amended or supplemented, if applicable, as of the First Closing Date or the
Second Closing Date, as the case may be, 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 in light of the
circumstances under which such statements were made (except for the financial
statements and other statistical or financial data included therein as to which
such counsel need express no opinion).
(ii) Such opinion or opinions of Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C., counsel for the Underwriters, dated the First Closing Date or
the Second Closing Date, as the case may be, with respect to the incorporation
of the Company, validity of the Notes, the Registration Statement and the
Prospectus, and other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such documents and
shall have exhibited to them such papers and records as such counsel reasonably
request for the purpose of enabling them to pass upon such matters.
(iii) Concurrently with the execution of this Agreement and on each
Closing Date, a certificate of the chief executive officer and the principal
financial officer of the Company, dated the date of this Agreement, the First
Closing Date or the Second Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, to the effect that:
(A) Each of the representations and warranties of the
Company set forth in Section 2 are true and correct as of the date of this
Agreement and as of the First Closing Date or the Second Closing Date, as
the case may be; and
(B) The Company has duly, timely and fully performed each
of the covenants required to be performed by it under this Agreement; and
the Company has duly, timely and fully satisfied or fulfilled each
condition required to be satisfied or fulfilled by it on or prior to the
date of such certificate; and
(C) To the best of such officers' information and belief
after due inquiry, the Commission has not issued an order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus filed as
a part of the Registration Statement or any amendment thereto; no stop
order suspending the effectiveness of the Registration Statement has been
issued; and no proceedings for that purpose have been instituted or, to the
best knowledge of the respective signatories, are pending or contemplated
under the Act; and
- 29 -
(D) To the best of such officers' knowledge and belief
after due inquiry, no order suspending the qualification or registration of
the Notes under the Blue Sky Laws of any jurisdiction shall be in effect
and no proceeding for such purpose shall be pending before or, to the
knowledge of the Company, threatened or contemplated by the authorities of
any such jurisdiction; and
(E) Each of the respective signatories of the certificate
has carefully examined the Registration Statement and the Prospectus, and
the Registration Statement and the Prospectus and any amendment or
supplement thereto contain all statements and information required to be
included therein, and neither the Registration Statement nor the Prospectus
nor any amendment or supplement thereto includes any untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make all statements therein not misleading in light
of the circumstances under which such statements were made, and since the
date on which the Registration Statement was initially filed with the
Commission, no event has occurred that was required to be set forth in an
amended or supplemented prospectus or in an amendment to the Registration
Statement that has not been so set forth; and
(F) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there, has not been
any material adverse change or development (or development involving a
potential adverse change) in the business, properties, financial condition
or earnings of the Company, whether or not arising from transactions in the
ordinary course of business, having a Material Adverse Effect, except as
disclosed in or otherwise contemplated by the Prospectus and the
Registration Statement as heretofore amended or (but only if the
Underwriters expressly consent thereto in writing) as disclosed in an
amendment or supplement thereto filed with the Commission and delivered to
the Underwriters after the execution of this Agreement; since such
respective dates and except as so disclosed the Company has not incurred
any liability or obligation, direct or indirect, or entered into any
transaction that is material to the Company and was not contemplated by the
Prospectus; since such respective dates and except as so disclosed there
has not been any material change in the outstanding capital stock of the
Company, or any change in the short-term debt or long-term debt of the
Company that is material to the Company; since such respective dates and
except as so disclosed the Company has not acquired any of the Common Stock
or other capital stock of the Company nor has the Company declared or paid
any dividend, or made any other distribution not expressly consented to in
writing by the Underwriters upon its outstanding Common Stock payable to
shareholders of record on a date prior to the First Closing Date or Second
Closing Date, as the case may be; since such respective dates and except as
so disclosed the Company has not incurred any material contingent
obligations, and no material litigation is pending or threatened against
the Company; and
- 30 -
since such respective dates and except as so disclosed the Company has not
sustained any material loss or interference (1) from any strike, fire,
flood, windstorm, accident or other calamity or casualty (whether or not
insured) or (2) from any court or governmental action, order or decree.
(iv) Concurrently with the execution of this Agreement, the
Accountants shall have delivered to the Underwriters letters, dated the date of
this Agreement, addressed to the Underwriters and the directors of the Company,
in form and substance satisfactory to the Underwriters, confirming that the
Accountants are independent accountants with respect to the Company and its
subsidiaries as required by the Act and the Rules and Regulations and with
respect to certain financial and other statistical and numerical information
contained in the Registration Statement. On the First Closing Date and, as to
the Option Notes, the Second Closing Date, the Accountants shall have furnished
to the Underwriters letters, dated the date of the applicable Closing Date,
which shall confirm, on the basis of a review in accordance with the procedures
set forth in such letters from the Accountants, that nothing has come to their
attention during the period from the date of this Agreement to a date (specified
in such letters) not more than five (5) days prior to the First Closing Date or
the Second Closing Date, as the case may be, which would require any change in
their letters dated the date of this Agreement if it were required to be dated
and delivered at the First Closing Date or the Second Closing Date, as
applicable. There shall not have been any change or decrease set forth in any of
the letters referred to in this Section 7(g)(iv) that makes it impracticable or
inadvisable in the judgment of the Underwriters to proceed with the public
offering or purchase of the Notes contemplated hereby.
(v) Such further certificates and documents as the Underwriters
reasonably may request (including without limitation certificates of officers of
the Company).
All such opinions, certificates, letters and documents shall be in
compliance with the provisions of this Agreement only if they are reasonably
satisfactory to the Underwriters and to Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., counsel for the Underwriters. The Company shall furnish the
Underwriters with such manually signed or conformed copies of such opinions,
certificates, letters and documents as the Underwriters reasonably may request.
(h) On the First Closing Date and the Second Closing Date the Common
Stock shall be listed on the Nasdaq National Market and no proceeding relating
to delisting the Common Stock from the Nasdaq National Market shall be pending.
(i) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
subsidiaries, or any their officers or directors in
- 31 -
their capacities as such, for or by any foreign, federal, state, municipal or
local court, commission, regulatory body, administrative agency or other
governmental body, in which litigation or proceeding an unfavorable ruling,
decision or finding would have a Material Adverse Effect.
(j) Each of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
at the First Closing Date and, with respect to the Option Notes, at the Second
Closing Date, and all covenants and agreements contained in this Agreement to be
performed on the part of the Company and all conditions contained herein to be
fulfilled or complied with by the Company at or prior to the First Closing Date
and, with respect to the Option Notes, at or prior to the Second Closing Date,
shall have been duly performed, fulfilled or complied with.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date or the Second Closing Date is not so
satisfied, this Agreement, at the Underwriters election, shall, upon
notification of the Company, terminate without liability on the part of any
Underwriter, or the Company, except for the expenses to be paid by the Company
pursuant to Section 6 or reimbursed by the Company pursuant to Section 8 and
except to the extent provided in Section 10.
SECTION 8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to the
Underwriters of the Notes at the First Closing is not consummated because any
condition to the Underwriters' obligations under this Agreement is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof, the Company
agrees to reimburse the Underwriters upon demand for all reasonable out-of-
pocket expenses (including without limitation fees and disbursements of counsel)
that shall have been incurred by the Underwriters in connection with the
proposed purchase and the sale of Notes. Any such failure of consummation shall
be without liability of any party to any other except that the provisions of
this Section 8 and Sections 6 and 10 shall at all times be effective and shall
apply.
SECTION 9. MAINTENANCE OF EFFECTIVENESS OF REGISTRATION STATEMENT. The
Underwriters and the Company shall use their respective best efforts to prevent
the issuance of any stop order suspending the effectiveness of the Registration
Statement and, if any such stop order is issued, to obtain the withdrawal of
such order at the earliest possible moment.
SECTION 10. INDEMNIFICATION. (a) The Company agrees to indemnify and hold
harmless each Underwriter; the directors, officers, employees and agents of each
Underwriter; and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act; from and
against any losses, claims, damages, expenses,
- 32 -
liabilities or actions in respect thereof (including without limitation any and
all investigative, legal and other expenses, reasonably incurred in connection
with, and any amounts paid in settlement of, any action, suit or proceeding or
any claim asserted) (collectively, "Claims"), whether joint or several, to which
any such Underwriter, person or controlling person may become subject under the
Act, the Exchange Act, any Blue Sky Law, or any other federal or state statutory
law or regulation, at common law or otherwise (including without limitation
payments made in settlement of any litigation, if such settlement is effected
with the written consent of the Company, which consent shall not be unreasonably
withheld), insofar as such Claims arise out of or are based upon the inaccuracy
or breach of any representation, warranty or covenant of the Company contained
in this Agreement or any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances in which they were made,
and will reimburse each Underwriter, each such other person and each such
controlling person for any legal fees or other expenses incurred by such
Underwriter or any such other person or any such controlling person in
connection with investigating, defending against or appearing as a third witness
in connection with any such Claim; PROVIDED, however, that the Company will not
be liable in any such case to the extent that:
(i) any such Claim arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with the
written information furnished by or on behalf of the Underwriters to the Company
pursuant to Section 3; or
(ii) such statement or omission was contained or made in any
Preliminary Prospectus and corrected in the Prospectus and (A) any such Claim
suffered or incurred by any Underwriter (or any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) resulted from an action, claim, or suit by any person who
purchased Notes that are the subject thereof from such Underwriter in the
offering, and (B) such Underwriter failed to deliver a copy of the Prospectus
(as then amended if the Company shall have amended the Prospectus) to such
person at or prior to the confirmation of the sale of such Notes in any case
where such delivery is required by the Act, unless such failure was due to
failure by the Company to provide copies of the Prospectus (as so amended) to
the Underwriters as required by this Agreement. The indemnification obligations
of the Company pursuant to this Section 10(a) are in addition to any liabilities
the Company may otherwise have.
- 33 -
The Company will not, without the prior written consent of the
Underwriters, settle or compromise or consent to the entry of any judgment in
any pending or threatened Claim (or related cause of action or portion thereof)
in respect of which indemnification may be sought hereunder (whether or not any
Underwriter is a party to such Claim), unless such settlement, compromise or
consent includes an unconditional release of each Underwriter from all liability
arising out of such Claim (or related cause of action or portion thereof).
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors, and each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, against any Claim to which the Company or any of its directors,
officers or controlling persons may become subject under the Act, the Exchange
Act, any Blue Sky Law or any other federal or state statutory law or regulation,
at common law or otherwise (including without limitation payments made in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter, which consent shall not be unreasonably withheld),
insofar as such Claims arise out of or are based upon any untrue or alleged
untrue statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein 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 the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement by such Underwriter
to the Company pursuant to Section 3. Each Underwriter will severally reimburse
any legal fees or other expenses reasonably incurred by the Company, or any of
its directors, officers or controlling persons in connection with investigating
or defending any such Claim, and from any and all Claims resulting from failure
of an Underwriter to deliver a copy of the Prospectus, if the person asserting
such Claim purchases Notes from such Underwriter and a copy of the Prospectus
(as then amended if the Company shall have amended the Prospectus) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Notes to such person, and if the Prospectus (as so amended) would have
cured the defect giving rise to such Claim. The indemnification obligations of
each Underwriter pursuant to this Section 10(b) are in addition to any
liabilities any such Underwriter may otherwise have.
(c) Any party that proposes to assert its right to be indemnified
under this Section 10 shall, promptly after receipt of notice of the
commencement of any action against such party in respect of a Claim, if a Claim
in respect thereof is to be made against an indemnifying party under this
Section 10, notify each such indemnifying party in writing of the commencement
thereof (a "Commencement Notice"), and such Commencement Notice shall
- 34 -
include a copy of all papers served upon the notifying party, PROVIDED that the
omission to so notify such indemnifying party or parties shall only relieve the
indemnifying party or parties from any liability it or they may have to any
indemnified party under this Section 10 to the extent that such omission results
in the loss of substantive rights or defenses by the indemnifying party. If any
such action is brought against any indemnified party, and such indemnified party
notifies an indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving a
Commencement Notice, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party; PROVIDED, HOWEVER, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded (based on advice of counsel)
that there may be legal defenses available to the indemnified party and/or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties in accordance with clause (d) hereof.
(d) Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election to assume the defense of
such action and upon approval by the indemnified party of counsel selected by
the indemnifying party, the indemnifying party shall not be liable to such
indemnified party under Section 10(a) or Section 10(b) for any legal fees or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with such defense,
unless:
(i) the indemnified party shall have employed separate
counsel in connection with the assumption of legal defenses in accordance with
the proviso to the last sentence of Section 10(c) (it being understood, however,
that the indemnifying party shall not be liable for the legal fees and expenses
of more than one separate counsel, approved by the Underwriters if one or more
of the Underwriters or their controlling persons are the indemnified parties);
or
(ii) the indemnifying party has authorized in writing the
employment of counsel at the expense of the indemnifying party; or
(iii) a conflict or potential conflict exists (based on
advice of counsel to the indemnified party) between the indemnified party and
any indemnifying party (in which case the indemnifying party shall not have the
right to direct the defense of such action on behalf of the indemnified party).
- 35 -
It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction at any one time for
all such indemnified party or parties. All such fees, disbursements and other
charges shall be reimbursed by the indemnifying party or parties promptly as
they are incurred. No indemnifying party shall be liable for any settlement of
any action or claim effected without such indemnifying party's written consent
(which consent shall not be unreasonably withheld).
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 10 is
applicable in accordance with its terms but for any reason is held to be
unavailable from the Company or the Underwriters, the Company and the
Underwriters shall contribute to the total losses, claims, liabilities, expenses
and damages (including without limitation any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any Claim, but after deducting any contribution received by the
Company from persons other than the Underwriters, such as persons who control
the Company within the meaning of the Act, officers of the Company who signed
the Registration Statement and directors of the Company, who also may be liable
for contribution) to which each indemnified party may be subject as a result of
such Claim:
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Notes; or
(ii) if the allocation provided by Section 10(e)(i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in Section 10(e)(i) above, but also
the relative fault of the Company on the one hand and the Underwriters on the
other hand in connection with the statements or omissions that resulted in such
Claim, as well as any other relevant equitable considerations.
The respective relative benefits received by the Company on the one hand
and the Underwriters on the other hand shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault of the Company on the
one hand and the Underwriters on the other hand 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 on the one hand or the
Underwriters on the other hand and the parties' relative intent, knowledge,
- 36 -
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 10(e) were to be determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to in this Section 10(e). The
amount paid or payable by an indemnified party as a result of the Claims
referred to above shall be deemed to include, subject to the limitations set
forth in Sections 10(c) and 10(d), any legal or other fees or expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim.
(f) Notwithstanding the other provisions of this Section 10, no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts received by it, and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 10 are several in proportion to the respective number of Firm Notes set
forth opposite their names in SCHEDULE A (or such number of Firm Notes increased
as set forth in Section 11) and not joint. For purposes of this Section 10, any
person who controls a party to this Agreement within the meaning of the Act
shall have the same rights to contribution as that party, and each officer of
the Company who signed the Registration Statement shall have the same rights to
contribution as the Company, subject in each case to the provisions of this
Section 10. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against any such party in respect of which
a claim for contribution may be made under this Section 10, shall notify any
such party or parties from whom contribution may be sought, but the omission so
to notify shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 10. No
party shall be liable for contribution with respect to any action or claim
settled without its written consent (which consent shall not be unreasonably
withheld).
(g) The indemnity and contribution agreements contained in this
Section 10 shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii) acceptance of
any of the Notes and payment therefor or (iii) any termination of this
Agreement.
SECTION 11. SUBSTITUTION OF UNDERWRITERS. It shall be a condition to this
Agreement and to the obligations of the Company to sell and deliver the Notes
hereunder, and to the obligations of each Underwriter to purchase the Notes in
the manner as described herein, that, except as hereinafter provided in this
Section 11, each of the Underwriters shall purchase and pay for all the Notes
agreed to be purchased by such Underwriter hereunder upon tender to the
Underwriters of all such Notes in accordance with the terms hereof. If any
Underwriter or
- 37 -
Underwriters defaults in its or their obligations to purchase Notes hereunder on
either the First Closing Date or the Second Closing Date and the aggregate
amount of Notes that such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase does not exceed ten percent (10%) of the total
amount of Notes the Underwriters are obligated to purchase on such Closing Date,
the Underwriters may make arrangements for the purchase of such Notes by other
persons, including without limitation any of the Underwriters, but if no such
arrangements are made by such Closing Date the nondefaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Notes such defaulting Underwriters agreed but failed or refused
to purchase on such Closing Date, PROVIDED that in no event shall the maximum
amount of Notes which any Underwriter has become obligated to purchase pursuant
to Section 4 be increased pursuant to this Section 11 by more than one-eleventh
of such amount of Notes without the prior written consent of such Underwriter.
If any Underwriter or Underwriters so default and the aggregate amount of Notes
with respect to which such default or defaults occur is greater than the above
percentage and arrangements satisfactory to the Underwriters for the purchase of
such Notes by other persons are not made within thirty-six (36) hours after such
default, this Agreement shall terminate without liability on the part of any
nondefaulting Underwriter and the Company, except for the expenses to be paid by
the Company pursuant to Section 6 and except to the extent provided in Section
10.
If the Notes to which such a default relates are to be purchased by the
nondefaulting Underwriters or by another party or parties, the Underwriters or
the Company shall have the right to postpone the First or Second Closing Date,
as the case may be, for not more than seven (7) business days so that the
required changes in the Registration Statement, Prospectus and any other
documents, as well as any other arrangements, may be effected. The term
"Underwriter" shall include any person substituting for a defaulting Underwriter
hereunder. Nothing contained in this Agreement shall relieve a defaulting
Underwriter from liability for its default.
SECTION 12. EFFECTIVE DATE OF THIS AGREEMENT. This Agreement shall become
effective immediately upon the execution hereof on the date hereof.
SECTION 13. TERMINATION. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof, this Agreement may be
terminated by the Underwriters prior to the First Closing Date and the Option,
if exercised, may be canceled by the Underwriters at any time prior to the
Second Closing Date, prior to delivery of and payment for the applicable Notes,
if in the Underwriters's sole judgment, payment for and delivery of the Notes is
rendered impracticable or inadvisable because:
(a) additional governmental restrictions, not in force and effect
on the date hereof, shall have been imposed upon trading in securities generally
or minimum or maximum prices shall have been generally established over-the-
counter on the Nasdaq Stock Market,
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American Stock Exchange or on the New York Stock Exchange, or trading in
securities generally shall have been suspended or limited on the Nasdaq Stock
Market, American Stock Exchange or the New York Stock Exchange by the
Commission, by such exchange or over-the-counter market or by any other
regulatory body or governmental authority having jurisdiction; or
(b) (i) neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth in the Prospectus, or (ii) since such date there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, consolidated financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is, in the judgment of
the Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Notes on
the terms and in the manner contemplated in the Prospectus; or
(c) a general banking moratorium shall have been established by
federal, New York or Connecticut authorities; or
(d) any event shall have occurred or shall exist that makes untrue
or incorrect in any material respect any statement or information contained in
the Registration Statement or that is not reflected in the Registration
Statement but should be reflected therein to make the statements or information
contained therein not misleading in an material respect; or
(e) any outbreak or escalation of major hostilities or other
national or international calamity or crisis or any substantial change in
political, financial or economic conditions or any other event or events shall
have occurred or shall have accelerated to such extent, in the Underwriters's
sole judgment, as to have a material adverse effect on the general financial
and/or securities markets of the United States or make it impracticable or
inadvisable to proceed with completion of the sale of and payment for the Notes
as provided in this Agreement; or
(f) trading in any of the equity securities of the Company shall
have been suspended by the Commission, by an exchange that lists the Common
Stock or by the Nasdaq Stock Market.
- 39 -
Any termination pursuant to this Section 13 shall be without liability on
the part of any Underwriter to the Company or on the part of the Company to any
Underwriter (except for expenses to be paid by the Company pursuant to Section 6
or reimbursed by the Company pursuant to Section 8 and except as to
indemnification to the extent provided in Section 10).
SECTION 14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties, covenants and
other statements of the Company or its officers or directors, and of the several
Underwriters set forth in or made by or on behalf of them pursuant to this
Agreement shall remain in full force and effect, regardless of (a) any
investigation made by or on behalf of any Underwriter, the Company, or any of
its or their partners, officers, directors, or any controlling person, as the
case may be; (b) any termination of this Agreement; and (c) delivery of and
payment for the Notes sold hereunder.
SECTION 15. NOTICES. All communications hereunder shall be in writing
and, if sent to the Underwriters, shall be mailed, delivered, telecopied
(with receipt confirmed) or telegraphed and confirmed to Advest, Inc. at
00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Xxxxxx
Xxxxx, Jr., with a copy to Xxxxx X. Xxxxxx, Esq., Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000;
and if sent to the Company, shall be mailed, delivered, telecopied (with
receipt confirmed) or telegraphed and confirmed to the Company at 00 Xxxxx
Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxx, President, with a copy
to Xxxxxx X. Xxxxxxx, Esq., Hill & Xxxxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx, 00000.
SECTION 16. SUCCESSORS. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns,
and to the benefit of the officers and directors (and their personal
representatives and controlling persons referred to in Section 10), and no other
person shall acquire or have any right or obligation hereunder. The term
successors and assigns shall not include any purchaser of the Notes as such from
any of the Underwriters merely by reason of such purchase.
SECTION 17. PARTIAL UNENFORCEABILITY. If any Section, subsection, clause
or provision of this Agreement is for any reason determined to be invalid or
unenforceable, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible.
- 40 -
SECTION 18. WAIVER OF JURY TRIAL. The Company and the Underwriters each
hereby waive any right they may have to a trial by jury in respect of any claim
based upon or arising out of this Agreement or any of the transactions
contemplated hereby.
SECTION 19. APPLICABLE LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Connecticut.
No doctrine of choice of law shall be used to apply any law other than that of
the State of Connecticut, and no defense, counterclaim or right of set-off given
or allowed by the laws of any other state jurisdiction, or arising out of the
enactment, modification or repeal of any law, regulation, ordinance or decree of
any foreign jurisdiction, shall be interposed in any action upon or relating to
this Agreement.
SECTION 20. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the parties hereto with respect to the transactions contemplated herein,
and there have been and there are no agreements between the parties with respect
to such transactions other than as set forth, or provided for herein.
SECTION 21. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
SECTION 22. HEADINGS FOR CONVENIENCE. The Section titles contained in this
Agreement are for convenience of reference only and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties.
SECTION 23. CONSTRUCTION. The terms "hereof," "herein," "hereunder" and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Section, paragraph and Schedule
references are to this Agreement unless otherwise specified.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon this
Agreement shall become a binding agreement among the Company and the several
Underwriters all in accordance with its terms.
Very truly yours,
HPSC, INC.
By:
------------------------------------
Title:
---------------------------------
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
the several Underwriters identified
in SCHEDULE A annexed hereto, as of
the date first above written.
ADVEST, INC.
By:
-----------------------------
Title:
------------------------------
XXXX XXXXX XXXX XXXXXX, INCORPORATED
By:
-------------------------------
Title:
-------------------------------
- 42 -
SCHEDULE A
Principal Amount
of Firm Notes
Name of Underwriter to be Purchased
------------------- ---------------
Advest, Inc. $10,000,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated 10,000,000
Total: $20,000,000
-----------
-----------
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