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EXHIBIT 1.1
4,000,000 SHARES(1)
MICROFINANCIAL INCORPORATED
COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
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February __, 1999
XXXXX XXXXXXX INC.
CIBC XXXXXXXXXXX CORP.
As Representatives of the several
Underwriters named in Schedule II hereto
c/o Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
MicroFinancial Incorporated, a Massachusetts corporation (the "Company"),
and the stockholders of the Company listed in Schedule I hereto (the "Selling
Stockholders") severally propose to sell to the several Underwriters named in
Schedule II hereto (the "Underwriters") an aggregate of 4,000,000 shares (the
"Firm Shares") of Common Stock, $.01 par value per share (the "Common Stock"),
of the Company. The Firm Shares consist of 3,400,000 authorized but unissued
shares of Common Stock to be issued and sold by the Company and 600,000
outstanding shares of Common Stock to be sold by the Selling Stockholders. The
Selling Stockholders have also granted to the several Underwriters an option to
purchase up to 600,000 additional shares of Common Stock, respectively, on the
terms and for the purposes set forth in Section 3 hereof (the "Option Shares").
The Firm Shares and any Option Shares purchased pursuant to this Purchase
Agreement are herein collectively called the "Securities."
The Company and the Selling Stockholders hereby confirm their agreement
with respect to the sale of the Securities to the several Underwriters, for whom
you are acting as Representatives (the "Representatives").
1. REGISTRATION STATEMENT AND PROSPECTUS. A registration statement on Form
S-1 (Registration No. 333-56339) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission; one or more amendments to such registration statement have also been
so prepared and have been, or will be, so filed; and, if the Company has elected
to
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(1)Plus an option to purchase up to 600,000 additional shares from the Selling
Stockholders to cover over-allotments.
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rely upon Rule 462(b) of the Rules and Regulations to increase the size of the
offering registered under the Act, the Company will prepare and file with the
Commission a registration statement with respect to such increase pursuant to
Rule 462(b). Copies of such registration statement(s) and amendments and each
related preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, and, in
the event of any amendment thereto after the effective date and prior to the
First Closing Date (as hereinafter defined), such registration statement as so
amended (but only from and after the effectiveness of such amendment), including
a registration statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Rules and
Regulations, is hereinafter called the "Registration Statement." The prospectus
included in the Registration Statement at the time it is or was declared
effective by the Commission is hereinafter called the "Prospectus," except that
if any prospectus (including any term sheet meeting the requirements of Rule 434
of the Rules and Regulations provided by the Company for use with a prospectus
subject to completion within the meaning of Rule 434 in order to meet the
requirements of Section 10(a) of the Rules and Regulations) filed by the Company
with the Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the
Rules and Regulations or any other such prospectus provided to the Underwriters
by the Company for use in connection with the offering of the Securities
(whether or not required to be filed by the Company with the Commission pursuant
to Rule 424(b) of the Rules and Regulations) differs from the prospectus on file
at the time the Registration Statement is or was declared effective by the
Commission, the term "Prospectus" shall refer to such differing prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) from and after the time such prospectus is filed with the
Commission or transmitted to the Commission for filing pursuant to such Rule
424(b) (and Rule 434, if applicable) or from and after the time it is first
provided to the Underwriters by the Company for such use. The term "Preliminary
Prospectus" as used herein means any preliminary prospectus included in the
Registration Statement prior to the time it becomes or became effective under
the Act and any prospectus subject to completion as described in Rule 430A or
434 of the Rules and Regulations.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDERS.
(a) The Company represents and warrants to, and agrees with, the
several Underwriters as follows:
(i) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and each Preliminary
Prospectus, at the time of filing thereof, did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; except that the foregoing shall not apply to statements in
or omissions from any Preliminary Prospectus in reliance upon, and in
conformity with, written information
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furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof.
(ii) As of the time the Registration Statement (or any
post-effective amendment thereto, including a registration statement
(if any) filed pursuant to Rule 462(b) of the Rules and Regulations
increasing the size of the offering registered under the Act) is or
was declared effective by the Commission, upon the filing or first
delivery to the Underwriters of the Prospectus (or any supplement to
the Prospectus (including any term sheet meeting the requirements of
Rule 434 of the Rules and Regulations)) and at the First Closing Date
and Second Closing Date (as hereinafter defined), (A) the Registration
Statement and Prospectus (in each case, as so amended and/or
supplemented) conformed or will conform in all material respects to
the requirements of the Act and the Rules and Regulations, (B) the
Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (C) the Prospectus (as so supplemented)
did not or will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they are or were made, not misleading; except
that the foregoing shall not apply to statements in or omissions from
any such document in reliance upon, and in conformity with, written
information furnished to the Company by you, or by any Underwriter
through you, specifically for inclusion in the Registration Statement.
If the Registration Statement has been declared effective by the
Commission, no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been initiated or, to the Company's knowledge, threatened
by the Commission.
(iii) The financial statements of the Company, together with the
notes thereto, set forth in the Registration Statement and Prospectus
comply as to form with the requirements of the Act and fairly present
the financial condition of the Company as of the dates indicated and
the results of operations and changes in cash flows for the periods
therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved
(except as otherwise stated therein); and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein. The selected financial data set forth
under the caption "Selected Consolidated Financial and Operating Data"
in the Prospectus and Registration Statement fairly present, on the
basis stated in the Prospectus and the Registration Statement, the
information included therein. No other financial statements or
schedules are required to be included in the Registration Statement or
Prospectus. PricewaterhouseCoopers LLP, which has expressed its
opinion with respect to the financial statements and schedules filed
as a part of the Registration Statement and included in the
Registration Statement and Prospectus, are independent public
accountants as required by the Act and the Rules and Regulations.
(iv) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. Each of the
Company and its subsidiaries has full corporate power and authority to
own or lease, as the case may be, and to operate its properties and
conduct its business as currently being carried on and as described in
the Registration Statement and Prospectus, and is duly qualified to do
business as a foreign corporation in
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good standing in each jurisdiction in which it owns or leases real
property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would
have a material adverse effect upon the business, condition (financial
or otherwise) or properties of the Company and its subsidiaries, taken
as a whole.
(v) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, or
declared or paid any dividends or made any distribution of any kind
with respect to its capital stock; and there has not been any change
in the capital stock (other than a change in the number of outstanding
shares of Common Stock due to the issuance of shares upon the exercise
of outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock,
of the Company or any of its subsidiaries, or any material adverse
change, or any development which would reasonably be expected to cause
a material adverse change in the business, condition (financial or
otherwise), key personnel or properties of the Company and its
subsidiaries, taken as a whole.
(vi) Except as set forth in the Prospectus, there is not pending
or, to the knowledge of the Company, threatened, any action, suit or
proceeding to which the Company or any of its subsidiaries is a party
before or by any court or governmental agency, authority or body, or
any arbitrator, which would be reasonably expected to (i) have a
material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii)
result in any material adverse change in the business, condition
(financial or otherwise), key personnel or properties of the Company
and its subsidiaries, taken as a whole.
(vii) There are no contracts or documents of the Company or any
of its subsidiaries that are required to be described in or filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations that have not been so described or filed; and the
statements in the Prospectus under the headings "Certain United States
Tax Consequences to Non-United States Holders", "Business--Legal
Proceedings" and "Risk Factors--Government Regulation" fairly
summarize the matters therein described.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company. The execution, delivery and performance of
this Agreement and the consummation of the transactions herein
contemplated will not conflict with, result in a breach or violation
of any of the terms and provisions of or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, or constitute a default under,
any statute, any agreement or instrument to which the Company or any
of its subsidiaries is a party, which conflict or breach of agreement
would be reasonably expected to have a material adverse effect on the
business, condition (financial or otherwise) , key personnel or
properties of the Company or its subsidiaries, taken as a whole or by
which any of them are bound or to which any of its property is
subject, the Company's or any of its subsidiaries' charter or by-laws,
or any order, rule, regulation or decree of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance
of
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this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance or sale of the Securities
by the Company, except such as have been obtained under the Act and
such as may be required under state securities or blue sky laws; and
the Company has full power and authority to enter into this Agreement
and to authorize, issue and sell the Securities as contemplated by
this Agreement.
(ix) All of the issued and outstanding shares of capital stock of
the Company, including the outstanding shares of Common Stock, are
duly authorized and validly issued, fully paid and nonassessable, have
been issued in compliance with all Federal and state securities laws,
were not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities, and the holders
thereof are not subject to personal liability by reason of being such
holders; the Securities which may be sold hereunder by the Company
have been duly and validly authorized and, when issued, delivered and
paid for in accordance with the terms hereof, will have been validly
issued and will be fully paid and nonassessable, and the holders
thereof will not be subject to personal liability by reason of being
such holders; and the capital stock of the Company, including the
Common Stock, conforms to the description thereof in the Registration
Statement and Prospectus. The Certificates for the Securities are in
valid and sufficient form. Except as otherwise stated in the
Registration Statement and Prospectus, there are no preemptive rights
or other rights to subscribe for or to purchase, or any restriction
upon the voting or transfer of, any shares of Common Stock pursuant to
the Company's charter, by-laws or any agreement or other instrument to
which the Company is a party or by which the Company is bound. Neither
the filing of the Registration Statement nor the offering or sale of
the Securities as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any shares of Common
Stock or other securities of the Company. All of the issued and
outstanding shares of capital stock of each of the Company's
subsidiaries have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise described in
the Registration Statement and Prospectus and except for any
directors' qualifying shares, the Company owns of record and
beneficially, free and clear of any security interests, claims, liens,
proxies, equities or other encumbrances, all of the issued and
outstanding shares of such stock. Except as described in the
Registration Statement and the Prospectus, there are no options,
warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company or any subsidiary of the Company
or rights to convert any obligations into or exchange any Securities
for, any shares of the capital stock of or ownership interests in the
Company or any subsidiary of the Company. The Company has an
authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus.
(x) The Company and each of its subsidiaries holds, and is
operating in compliance in all material respects with, all franchises,
grants, authorizations, licenses, permits, easements, consents,
certificates and orders of any governmental or self-regulatory body
required for the conduct of its business and all such franchises,
grants, authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and effect; and
the Company and each of its subsidiaries is in compliance in all
material respects with all applicable Federal, state, local and
foreign laws, regulations, orders and decrees.
(xi) The Company and its subsidiaries have good and marketable
title to all property described in the Registration Statement and
Prospectus as being
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owned by them, in each case free and clear of all liens, claims,
security interests or other encumbrances except such as are described
in the Registration Statement and the Prospectus; the property held
under lease by the Company and its subsidiaries is held by them under
valid, subsisting and enforceable leases with only such exceptions
with respect to any particular lease as do not interfere in any
material respect with the conduct of the business of the Company or
its subsidiaries; the Company and each of its subsidiaries owns or
possesses all patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets and rights necessary
for the conduct of the business of the Company and its subsidiaries as
currently carried on and as described in the Registration Statement
and Prospectus; except as stated in the Registration Statement and
Prospectus, no name which the Company or any of its subsidiaries uses
and no other aspect of the business of the Company or any of its
subsidiaries will involve or give rise to any infringement of, or
license or similar fees for, any patents, patent applications,
trademarks, service marks, tradenames, trademark registrations,
service xxxx registrations, copyrights, licenses, inventions, trade
secrets or other similar rights of others material to the business or
financial condition of the Company and neither the Company nor any of
its subsidiaries has received any notice alleging any such
infringement or fee.
(xii) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws. Except for such
breaches or defaults which would not have a material adverse effect on
the business, condition (financial or otherwise), key personnel or
properties of the Company and its subsidiaries, taken as a whole,
neither the Company nor any of its subsidiaries is in breach of or
otherwise in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note,
indenture, loan agreement or any other material contract, lease or
other instrument to which it is subject or by which any of them may be
bound, or to which any of the material property or assets of the
Company or any of its subsidiaries is subject.
(xiii) There are no transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the
Company or sale by the Company of the Securities.
(xiv) The Company and its subsidiaries have filed all Federal,
state, local and foreign income and franchise tax returns required to
be filed or has requested extensions thereof (except in any case in
which the failure so to file would not have a material adverse effect
on the business, condition (financial or otherwise), key personnel or
properties of the Company and its subsidiaries, taken as a whole) and
are not in default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto,
other than any which the Company or any of its subsidiaries is
contesting in good faith or as would not have a material adverse
effect on the business, condition (financial or otherwise), key
personnel or properties of the Company and its subsidiaries, taken as
a whole).
(xv) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering
and sale of the Securities other than any Preliminary Prospectus or
the Prospectus or other materials permitted by the Act to be
distributed by the Company.
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(xvi) The Securities have been approved for listing and admitted
and authorized for trading on the New York Stock Exchange, subject to
official notice of issuance and evidence of satisfactory distribution
and, on the date the Registration Statement became or becomes
effective, the Company's Registration Statement on Form 8-A or other
applicable form under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), became or will become effective.
(xvii) Other than the subsidiaries of the Company listed in
Exhibit 21.1 to the Registration Statement and a 50% interest in [ ],
LLC (which is not a "significant subsidiary" as such term is defined
in Rule 1-02 of Regulation S-X), the Company owns no capital stock or
other equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.
(xviii) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xix) Except for the underwriting discount contemplated by the
Prospectus and payable to the Underwriters, the Company has not
incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(xx) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Registration Statement and Prospectus, will not be
an "investment company" as defined in the Investment Company Act of
1940, as amended.
(xxi) Except as described in the Registration Statement, no
holders of Securities of the Company have rights to the registration
of such Securities under the Registration Statement.
(xxii) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
business in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company or any of its subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for, and neither the Company nor any such subsidiary has any
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reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a material adverse effect
on the business, condition (financial or otherwise), key personnel or
properties of the Company and its subsidiaries, taken as a whole,
except as set forth in or contemplated in the Prospectus.
(xxiii) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except
as described in or contemplated by the Prospectus.
(xxiv) The Company has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(xxv) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of
1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in which
employees of the Company and its subsidiaries are eligible to
participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such
regulations and published interpretations. The Company and its
subsidiaries have not incurred any unpaid liability to the Pension
Benefit Guaranty Corporation (other than for the payment of premiums
in the ordinary course) or to any such plan under Title IV of ERISA.
(xxvi) In the ordinary course of its business, the Company
periodically reviews the effect of environmental laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with environmental laws, or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a material
adverse effect on the business, condition (financial or otherwise),
key personnel or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectus.
(xxvii) The Company and its subsidiaries have implemented a
comprehensive, detailed program to analyze and address the risk that
their computer hardware and software may be unable to recognize and
properly execute date-sensitive functions involving certain dates
prior to and any dates after December 31, 1999 (the "Year 2000
Problem") and has determined that their computer hardware and software
are and will be able to process all date information prior to and
after December 31, 1999
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without any errors, aborts, delays or other interruptions in
operations associated with the Year 2000 Problem; and the Company
believes, after due inquiry, that each supplier, vendor, customer or
financial service organization used or serviced by the Company and its
subsidiaries has remedied or will remedy on a timely basis the Year
2000 Problem, except to the extent that a failure to remedy by any
such supplier, vendor, customer or financial service organization
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole. The Company is in compliance with the
Commission's staff legal bulletin No. 5 dated January 12, 1998 related
to Year 2000 compliance.
(b) Each Selling Stockholder represents and warrants to, and agrees
with, the several Underwriters as follows:
(i) Such Selling Stockholder is the record and beneficial owner
of, and has, and on the First Closing Date and/or the Second Closing
Date, as the case may be, will have, valid and marketable title to the
Securities to be sold by such Selling Stockholder, free and clear of
all security interests, claims, liens, restrictions on
transferability, legends, proxies, equities or other encumbrances; and
upon delivery of and payment for such Securities hereunder, the
several Underwriters will acquire valid and marketable title thereto,
free and clear of any security interests, claims, liens, restrictions
on transferability, legends, proxies, equities or other encumbrances.
Such Selling Stockholder is selling the Securities to be sold by such
Selling Stockholder for such Selling Stockholder's own account and is
not selling such Securities, directly or indirectly, for the benefit
of the Company, and no part of the proceeds of such sale received by
such Selling Stockholder will inure, either directly or indirectly, to
the benefit of the Company other than as described in the Registration
Statement and Prospectus.
(ii) Such Selling Stockholder has duly authorized, executed and
delivered a Letter of Transmittal and Custody Agreement ("Custody
Agreement"), which Custody Agreement is a valid and binding obligation
of such Selling Stockholder, to the Company as Custodian (the
"Custodian"); pursuant to the Custody Agreement the Selling
Stockholder has placed in custody with the Custodian, for delivery
under this Agreement, the certificates representing the Securities to
be sold by such Selling Stockholder; such certificates represent
validly issued, outstanding, fully paid and nonassessable shares of
Common Stock; and such certificates were duly and properly endorsed in
blank for transfer, or were accompanied by all documents duly and
properly executed that are necessary to validate the transfer of title
thereto, to the Underwriters, free of any legend, restriction on
transferability, proxy, lien or claim, whatsoever.
(iii) Such Selling Stockholder has the power and authority to
enter into this Agreement and to sell, transfer and deliver the
Securities to be sold by such Selling Stockholder; and such Selling
Stockholder has duly authorized, executed and delivered to Xxxxx
Xxxxxxxxx and Xxxxxxx Xxxxxx, as attorneys-in-fact (the
"Attorneys-in-Fact"), an irrevocable power of attorney (a "Power of
Attorney") authorizing and directing the Attorneys-in-Fact, or either
of them, to effect the sale and delivery of the Securities being sold
by such Selling Stockholder, to enter into this Agreement and to take
all such other action as may be necessary hereunder.
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(iv) This Agreement, the Custody Agreement and the Power of
Attorney have each been duly authorized, executed and delivered by or
on behalf of such Selling Stockholder. The Custody Agreement
constitutes a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms, except as rights to
indemnity thereunder may be limited by Federal or state securities
laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or laws affecting the rights of creditors
generally and subject to general principles of equity. The execution
and delivery of this Agreement, the Custody Agreement and the Power of
Attorney and the performance of the terms hereof and thereof and the
consummation of the transactions herein and therein contemplated will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder is bound, or any law, regulation, order or decree
applicable to such Selling Stockholder; no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement, the Custody Agreement and the Power of Attorney or
for the consummation of the transactions contemplated hereby and
thereby, including the sale of the Securities being sold by such
Selling Stockholder, except such as may be required under the Act or
state securities laws or blue sky laws.
(v) Such Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection
with the offering and sale of the Securities other than any
Preliminary Prospectus or the Prospectus or other materials permitted
by the Act to be distributed by such Selling Stockholder.
(vi) Such Selling Stockholder has reviewed the Registration
Statement and the Prospectus and to the best knowledge of such Selling
Stockholder neither the Registration Statement nor the Prospectus
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading regarding such Selling Stockholder,
the other Selling Stockholders, the Company or otherwise.
(vii) To the best knowledge of such Selling Stockholder, the
representations and warranties of the Company contained in paragraph
(a) of this Section 2 are true and correct.
(c) Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby;
any certificate signed by or on behalf of any Selling Stockholder as such and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by such Selling Stockholder to each Underwriter as
to the matters covered thereby.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell 3,400,000 Firm Shares, and each Selling
Stockholder agrees, severally and not jointly, to sell the number of Firm Shares
set forth opposite the name of such Selling Stockholder in Schedule I hereto, to
the several Underwriters, and each Underwriter agrees, severally and not
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jointly, to purchase from the Company and the Selling Stockholders the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule II
hereto. The purchase price for each Firm Share shall be $ per share. The
obligation of each Underwriter to each of the Company and the Selling
Stockholders shall be to purchase from each of the Company and the Selling
Stockholders that number of Firm Shares (to be adjusted by the Representatives
to avoid fractional shares) which represents the same proportion of the number
of Firm Shares to be sold by each of the Company and the Selling Stockholders
pursuant to this Agreement as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule II hereto represents to the total number of
Firm Shares to be purchased by all Underwriters pursuant to this Agreement. In
making this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in paragraph (c) of this Section 3 and in Section 8
hereof, the agreement of each Underwriter is to purchase only the respective
number of Firm Shares specified in Schedule II.
The Firm Shares will be delivered by the Company and the Custodian to
you for the accounts of the several Underwriters against payment of the purchase
price therefor by certified or official bank check or other next day funds
payable to the order of the Company and the Custodian, as appropriate, at the
offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable, at
9:00 a.m. Central time on the third (or if the Securities are priced, as
contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern
time, the fourth) full business day following the date hereof, or at such other
time and date as you and the Company determine pursuant to Rule 15c6-1(a) under
the Exchange Act, such time and date of delivery being herein referred to as the
"First Closing Date." If the Representatives so elect, delivery of the Firm
Shares may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives. Certificates
representing the Firm Shares, in definitive form and in such denominations and
registered in such names as you may request upon at least two business days'
prior notice to the Company and the Custodian, will be made available for
checking and packaging not later than 10:30 a.m., Central time, on the business
day next preceding the First Closing Date at the offices of Xxxxx Xxxxxxx Inc.,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable.
(b) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Selling Stockholders, with respect to the number of Option Shares set forth
opposite the name of such Selling Stockholder in Schedule I hereto, hereby grant
to the several Underwriters an option to purchase all or any portion of the
Option Shares at the same purchase price as the Firm Shares, for use solely in
covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
at any time (but not more than once) within 30 days after the effective date of
this Agreement upon notice (confirmed in writing) by the Representatives to the
Company and to the Attorneys-in-Fact setting forth the aggregate number of
Option Shares as to which the several Underwriters are exercising the option,
the names and denominations in which the certificates for the Option Shares are
to be registered and the date and time, as determined by you, when the Option
Shares are to be delivered, such time and date being herein referred to as the
"Second Closing" and "Second Closing Date", respectively; provided, however,
that the Second Closing Date shall not be earlier than the First Closing Date
nor earlier than the second business day after the date on which the option
shall have been exercised. If the option is exercised, the obligation of each
Underwriter shall be to purchase from the Selling Stockholders granting an
option to purchase the Option Shares, on a
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pro rata basis up to 600,000 Option Shares, that number of Option Shares (to be
adjusted by the Representatives to avoid fractional shares) which represents the
same proportion that the number of Option Shares granted by each such Selling
Stockholder bears to the total number of Option Shares granted by all such
Selling Stockholders. The number of Option Shares to be purchased by each
Underwriter shall be the same percentage of the total number of Option Shares to
be purchased by the several Underwriters as the number of Firm Shares to be
purchased by such Underwriter is of the total number of Firm Shares to be
purchased by the several Underwriters, as adjusted by the Representatives in
such manner as the Representatives deem advisable to avoid fractional shares. No
Option Shares shall be sold and delivered unless the Firm Shares previously have
been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Custodian and the Company,
as appropriate, to you for the accounts of the several Underwriters against
payment of the purchase price therefor by certified or official bank check or
other next day funds payable to the order of the Custodian or the Company, as
appropriate, at the offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be
mutually acceptable at 9:00 a.m., Central time, on the Second Closing Date. If
the Representatives so elect, delivery of the Option Shares may be made by
credit through full fast transfer to the accounts at The Depository Trust
Company designated by the Representatives. Certificates representing the Option
Shares in definitive form and in such denominations and registered in such names
as you have set forth in your notice of option exercise, will be made available
for checking and packaging not later than 10:30 a.m., Central time, on the
business day next preceding the Second Closing Date at the office of Xxxxx
Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx, or such other location as may be mutually acceptable.
(c) It is understood that you, individually and not as Representatives
of the several Underwriters, may (but shall not be obligated to) make payment to
the Company or the Selling Stockholders, on behalf of any Underwriter for the
Securities to be purchased by such Underwriter. Any such payment by you shall
not relieve any such Underwriter of any of its obligations hereunder. Nothing
herein contained shall constitute any of the Underwriters an unincorporated
association or partner with the Company or any Selling Stockholder.
4. COVENANTS.
(a) The Company covenants and agrees with the several Underwriters as
follows:
(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to
cause the Registration Statement and any post-effective amendments
thereto to become effective as promptly as possible; the Company will
notify you promptly of the time when the Registration Statement or any
post-effective amendment to the Registration Statement has become
effective or any supplement to the Prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) has
been filed and of any request by the Commission for any amendment or
supplement to the Registration Statement or Prospectus or additional
information; if the Company has elected to rely on Rule 430A of the
Rules and Regulations, the Company will prepare and file a Prospectus
(or term sheet within the meaning of Rule 434 of the Rules and
Regulations) containing the information omitted therefrom pursuant to
Rule 430A of the Rules and Regulations
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with the Commission within the time period required by, and otherwise
in accordance with the provisions of, Rules 424(b), 430A and 434, if
applicable, of the Rules and Regulations; if the Company has elected
to rely upon Rule 462(b) of the Rules and Regulations to increase the
size of the offering registered under the Act, the Company will
prepare and file a registration statement with respect to such
increase with the Commission within the time period required by, and
otherwise in accordance with the provisions of, Rule 462(b); the
Company will prepare and file with the Commission, promptly upon your
request, any amendments or supplements to the Registration Statement
or Prospectus (including any term sheet within the meaning of Rule 434
of the Rules and Regulations) that, in your opinion, may be necessary
or advisable in connection with the distribution of the Securities by
the Underwriters; and the Company will not file any amendment or
supplement to the Registration Statement or Prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and
Regulations) to which you shall reasonably object by notice to the
Company after having been furnished a copy a reasonable time prior to
the filing.
(ii) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement, of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose; and the Company
will promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such a stop order should be
issued.
(iii) Within the time during which a prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and
Regulations) relating to the Securities is required to be delivered
under the Act, the Company will comply as far as it is able with all
requirements imposed upon it by the Act, as now and hereafter amended,
and by the Rules and Regulations, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealings in
the Securities as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of
which the Prospectus would include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the
Act, the Company will promptly notify you and will amend the
Registration Statement or supplement the Prospectus (at the expense of
the Company) so as to correct such statement or omission or effect
such compliance.
(iv) The Company will use its best efforts to qualify the
Securities for sale under the securities laws of such jurisdictions as
you reasonably designate and to continue such qualifications in effect
so long as required for the distribution of the Securities, except
that the Company shall not be required in connection therewith to
qualify as a foreign corporation or to execute a general consent to
service of process in any state.
(v) The Company will furnish to the Underwriters copies of the
Registration Statement (three of which will be signed and will include
all exhibits), each Preliminary Prospectus, the Prospectus, and all
amendments and supplements (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) to such
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documents, in each case as soon as available and in such quantities as
you may from time to time reasonably request.
(vi) During a period of five years commencing with the date
hereof, the Company will furnish to the Representatives, and to each
Underwriter who may so request in writing, copies of all periodic and
special reports furnished to the stockholders of the Company and all
information, documents and reports filed with the Commission, the
National Association of Securities Dealers, Inc., NASDAQ or any
securities exchange.
(vii) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month
period beginning after the effective date of the Registration
Statement that shall satisfy the provisions of Section 11(a) of the
Act and Rule 158 of the Rules and Regulations.
(viii) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming
effective under the provisions of Section 9(a) hereof or is
terminated, will pay or cause to be paid (A) all expenses (including
transfer taxes allocated to the respective transferees) incurred in
connection with the delivery to the Underwriters of the Securities,
(B) all expenses and fees (including, without limitation, fees and
expenses of the Company's accountants and counsel but, except as
otherwise provided below, not including fees of the Underwriters'
counsel) in connection with the preparation, printing, filing,
delivery, and shipping of the Registration Statement (including the
financial statements therein and all amendments, schedules, and
exhibits thereto), the Securities, each Preliminary Prospectus, the
Prospectus, and any amendment thereof or supplement thereto, and the
printing, delivery, and shipping of this Agreement and other
underwriting documents, including Blue Sky Memoranda, (C) all filing
fees and the reasonable fees and disbursements of the Underwriters'
counsel incurred in connection with the qualification of the
Securities for offering and sale by the Underwriters or by dealers
under the securities or blue sky laws of the states and other
jurisdictions which you shall designate in accordance with Section
4(d) hereof, (D) the fees and expenses of any transfer agent or
registrar, (E) the filing fees incident to any required review by the
National Association of Securities Dealers, Inc. of the terms of the
sale of the Securities, (F) listing fees, if any, and (G) all other
costs and expenses incident to the performance of its obligations
hereunder that are not otherwise specifically provided for herein. If
the sale of the Securities provided for herein is not consummated by
reason of action by the Company pursuant to Section 9(a) hereof which
prevents this Agreement from becoming effective, or by reason of any
failure, refusal or inability on the part of the Company or the
Selling Stockholders to perform any agreement on its or their part to
be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company or the
Selling Stockholders is not fulfilled, the Company will reimburse the
several Underwriters for all reasonable out-of-pocket disbursements
(including reasonable fees and disbursements of counsel) incurred by
the Underwriters in connection with their investigation, preparing to
market and marketing the Securities or in contemplation of performing
their obligations hereunder. The Company shall not in any event be
liable to any of the Underwriters for loss of anticipated profits from
the transactions covered by this Agreement.
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(ix) The Company will apply the net proceeds from the sale of the
Securities to be sold by it hereunder for the purposes set forth in
the Prospectus and will file such reports with the Commission with
respect to the sale of the Securities and the application of the
proceeds therefrom as may be required in accordance with Rule 463 of
the Rules and Regulations.
(x) [Except for granting options under the Company's option plans
and the issuance of shares of Common Stock upon the exercise of
options issued under the Company's option plans, the] Company will
not, without your prior written consent, offer for sale, sell,
contract to sell, grant any option for the sale of or otherwise issue
or dispose of any Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire,
Common Stock, except to the Underwriters pursuant to this Agreement
for a period of 180 days after the commencement of the public offering
of the Securities by the Underwriters.
(xi) The Company either has caused to be delivered to you or will
cause to be delivered to you prior to the effective date of the
Registration Statement a letter in the form of Exhibit A hereto from
each of the Company's directors and officers stating that such person
agrees that he or she will not, without your prior written consent,
offer for sale, sell, contract to sell or otherwise dispose of any
shares of Common Stock or rights to purchase Common Stock, except to
the Underwriters pursuant to this Agreement, for a period of 180 days
after commencement of the public offering of the Securities by the
Underwriters.
(xii) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities, and has
not effected any sales of Common Stock which are required to be
disclosed in response to Item 701 of Regulation S-K under the Act
which have not been so disclosed in the Registration Statement.
(xiii) Except for the underwriting discount contemplated by the
Prospectus and payable to the Underwriters, the Company will not incur
any liability for any finder's or broker's fee or agent's commission
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(b) Each Selling Stockholder covenants and agrees with the several
Underwriters as follows:
(i) Except as otherwise agreed to by the Company and the Selling
Stockholder, such Selling Stockholder will pay all taxes, if any, on
the transfer and sale, respectively, of the Securities being sold by
such Selling Stockholder, the fees of such Selling Stockholder's
counsel and such Selling Stockholder's proportionate share (based upon
the number of Securities being offered by such Selling Stockholder
pursuant to the Registration Statement) of all costs and expenses
(except for legal and accounting expenses and fees of the registrar
and transfer agent) incurred by the Company pursuant to the provisions
of Section 4(a)(viii) of this Agreement; provided, however, that each
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Selling Stockholder severally agrees to reimburse the Company for any
reimbursement made by the Company to the Underwriters pursuant to
Section 4(a)(viii) hereof to the extent such reimbursement resulted
from the failure or refusal on the part of such Selling Stockholder to
comply under the terms or fulfill any of the conditions of this
Agreement.
(ii) If this Agreement shall be terminated by the Underwriters
because of any failure, refusal or inability on the part of such
Selling Stockholder to perform any agreement on such Selling
Stockholder's part to be performed, or because any other condition of
the Underwriters' obligations hereunder required to be fulfilled by
such Selling Stockholder is not fulfilled, such Selling Stockholder
agrees to reimburse the several Underwriters for all out-of-pocket
disbursements (including reasonable fees and disbursements of counsel
for the Underwriters) incurred by the Underwriters in connection with
their investigation, preparing to market and marketing the Securities
or in contemplation of performing their obligations hereunder. The
Selling Stockholder shall not in any event be liable to any of the
Underwriters for loss of anticipated profits from the transactions
covered by this Agreement.
(iii) The Securities to be sold by such Selling Stockholder,
represented by the certificates on deposit with the Custodian pursuant
to the Custody Agreement of such Selling Stockholder, are subject to
the interest of the several Underwriters and the other Selling
Stockholders; the arrangements made for such custody are, except as
specifically provided in the Custody Agreement, irrevocable; and the
obligations of such Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement or in the Custody
Agreement, by any act of such Selling Stockholder, by operation of
law, whether by the liquidation, dissolution or merger of such Selling
Stockholder, by the death of such Selling Stockholder, or by the
occurrence of any other event. If any Selling Stockholder should
liquidate, dissolve or be a party to a merger or if any other such
event should occur before the delivery of the Securities hereunder,
certificates for the Securities deposited with the Custodian shall be
delivered by the Custodian in accordance with the terms and conditions
of this Agreement as if such liquidation, dissolution, merger or other
event had not occurred, whether or not the Custodian shall have
received notice thereof.
(iv) Such Selling Stockholder will not, without your prior
written consent, offer for sale, sell, contract to sell, grant any
option for the sale of or otherwise dispose of any Common Stock or any
securities convertible into or exchangeable for, or any options or
rights to purchase or acquire, Common Stock, except to the
Underwriters pursuant to this Agreement, for a period of 180 days
after the commencement of the public offering of the Securities by the
Underwriters.
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities, and has not effected any sales
of Common Stock which, if effected by the Company, would be required
to be disclosed in response to Item 701 of Regulation S-K.
(vi) Such Selling Stockholder shall immediately notify you if any
event occurs, or of any change in information relating to such Selling
Stockholder or the Company or any new information relating to the
Company or relating to any matter
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stated in the Prospectus or any supplement thereto (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations),
which results in the Prospectus (as supplemented) including an untrue
statement of a material fact or omitting to state any material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the several
Underwriters hereunder are subject to the accuracy, as of the date hereof and at
each of the First Closing Date and the Second Closing Date (as if made at such
Closing Date), of and compliance with all representations, warranties and
agreements of the Company and the Selling Stockholders contained herein, to the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than 5:00 p.m., Central time, on the date of this Agreement,
or such later time and date as you, as Representatives of the several
Underwriters, shall approve and all filings required by Rules 424, 430A and 434
of the Rules and Regulations shall have been timely made; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereof shall have been issued; no proceedings for the issuance of such an order
shall have been initiated or threatened; and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
the Commission.
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or supplement
thereto (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations), contains an untrue statement of fact which, in your opinion,
is material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, neither the Company nor any of its subsidiaries shall have
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock; and there
shall not have been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of shares upon
the exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt of the Company, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock
of the Company or any of its subsidiaries, or any material adverse change or any
development involving a prospective material adverse change (whether or not
arising in the ordinary course of business), in the general affairs, condition
(financial or otherwise), business, key personnel, property, prospects, net
worth or results of operations of the Company and its subsidiaries, taken as a
whole, that, in your judgment, makes it impractical or inadvisable to offer or
deliver the Securities on the terms and in the manner contemplated in the
Prospectus.
(d) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of Xxxxxxx & Xxxxxx,
LLP, counsel for the Company, dated such Closing Date and addressed to you, to
the effect that:
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(i) Each of the Company and its subsidiaries is duly organized
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. Each of the Company and its
subsidiaries has full corporate power and authority to own or lease,
as the case may be, and to operate its properties and conduct its
business as currently being carried on and as described in the
Registration Statement and Prospectus.
(ii) The Company's authorized capital stock is as set forth in
the Prospectus under the heading "Description of Capital Stock." The
description of the Company's capital stock, as set forth in the
Prospectus under the heading "Description of Capital Stock," to the
extent such description constitutes matters of law, summaries of legal
matters or legal conclusions, has been reviewed by us and is correct
in all material respects. All of the issued and outstanding shares of
the capital stock of the Company (including the securities being sold
hereunder by the Selling Stockholders) have been duly authorized and
validly issued and are fully paid and nonassessable, and the holders
thereof are not subject to personal liability by reason of being such
holders. The Securities to be issued and sold by the Company hereunder
have been duly authorized and, when issued, delivered and paid for in
accordance with the terms of this Agreement, will have been validly
issued and will be fully paid and nonassessable. The form of
certificate for the Securities has been duly approved and adopted by
the Company and complies with the provisions of Massachusetts law.
Except as otherwise stated in the Registration Statement and
Prospectus, to the knowledge of such counsel, there are no preemptive
rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock
pursuant to the Company's charter, by-laws or any agreement or other
instrument known to such counsel to which the Company is a party or by
which the Company is bound. The Securities being sold hereunder by the
Company and the Selling Stockholders are duly authorized for listing,
subject to official notice of issuance and evidence of satisfactory
distribution, on the New York Stock Exchange. To the knowledge of such
counsel, except with respect to the Securities being sold hereunder,
neither the filing of the Registration Statement nor the offering or
sale of the Securities as contemplated by this Agreement gives rise to
any rights for or relating to the registration of any other shares of
Common Stock or other securities of the Company.
(iii) All of the issued and outstanding shares of capital stock
of each of the Company's subsidiaries have been duly authorized and
issued and are fully paid and nonassessable, and, to the knowledge of
such counsel, except as otherwise described in the Registration
Statement and Prospectus and except for directors' qualifying shares,
the Company owns of record and beneficially, free and clear of any
security interests, claims, liens, proxies, equities or other
encumbrances, all of the issued and outstanding shares of such stock.
To the knowledge of such counsel, except as described in the
Registration Statement and Prospectus, there are no options, warrants,
agreements, contracts or other rights in existence to purchase or
acquire from the Company or any subsidiary of the Company or rights to
convert any obligations into or exchange any Securities for, any
shares of the capital stock or ownership interests of the Company or
any subsidiary of the Company.
(iv) The Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b)
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and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge
of such counsel, threatened by the Commission.
(v) The descriptions in the Registration Statement and Prospectus
of contracts and other documents, insofar as such descriptions purport
to summarize certain provisions thereof, provide a fair summary of
such provisions; and the statements in the Prospectus under the
headings "Certain United States Tax Consequences to Non-United States
Holders" and "Business--Legal Proceedings" and, in the case of the
laws of the Commonwealth of Massachusetts, "Risk Factors--Government
Regulation" fairly summarize the matters therein described, to the
extent such statements constitute matters of law, summaries of legal
matters or legal conclusions, have been reviewed by us and are correct
in all material respects and such counsel does not know of any
statutes or legal or governmental proceedings required to be described
in the Prospectus that are not described as required by the Act and
the rules thereunder, or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus
or included as exhibits to the Registration Statement that are not
described or included as required by the Act and the rules thereunder.
(vi) The Company has the corporate power and authority to enter
into this Agreement, and this Agreement has been duly authorized,
executed and delivered by the Company; the execution, delivery and
performance of this Agreement and the consummation by the Company as
of the applicable Closing Date of the transactions herein contemplated
will not conflict with, result in a breach or violation of any of the
terms and provisions of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or constitute a default under, any
Massachusetts or U.S. Federal statute, rule or regulation, any
agreement or instrument (in each case governed by the laws of the
Commonwealth of Massachusetts) known to such counsel to which the
Company or any of its subsidiaries is a party or by which any of them
are bound or to which any of their property is subject, the Company's
or any of its subsidiaries' charter or by-laws, or any order or decree
known to such counsel and binding on the Company or any of its
subsidiaries of any Massachusetts or U.S. Federal court or
Massachusetts or U.S. Federal governmental agency having jurisdiction
over the Company or any of its subsidiaries or any of their respective
properties; and no consent, approval, authorization or order of, or
filing with, any Massachusetts or U.S. Federal court or Massachusetts
or U.S. Federal governmental agency is required to be obtained by the
Company as of the applicable Closing Date under applicable
Massachusetts or U.S. Federal law for the execution, performance and
delivery of this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance or sale of the Securities
by the Company, except such as have been obtained under the Act and
such as may be required under the blue sky or securities laws of any
State in the United States or by the securities laws of any
jurisdiction outside the United States, as to which such counsel
renders no opinion.
(vii) The Company is not, and, immediately after giving effect to
the offering and sale of the Securities and the application of the
proceeds thereof as described in the Registration Statement and the
Prospectus, will not be, an "investment company" as defined in the
Investment Company Act of 1940, as amended.
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(viii) The Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations but
excluding the financial statements and the other financial information
contained therein, as to which we express no opinion), comply as to
form in all material respects with the applicable requirements of the
Act and the Rules and Regulations; and on the basis of conferences
with representatives of the Underwriters, officers and other
representatives of the Company and its subsidiaries, the Selling
Stockholders and officers and other representatives of the Selling
Stockholders and representatives of the independent certified public
accountants of the Company and its subsidiaries, at which conferences
the contents of the foregoing were discussed, examination of documents
referred to in the Registration Statement and Prospectus and such
other procedures as such counsel deemed appropriate, and although such
counsel does not assume any responsibility for, or express any opinion
as to the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations (except
and only to the extent as set forth in such counsel's opinions
rendered pursuant to the first sentence of clause (ii) above and
pursuant to clause (v) above), on the basis of the foregoing, nothing
has come to the attention of such counsel that would lead such counsel
to believe that the Registration Statement or any amendment thereof,
at the time the Registration Statement became effective and as of such
Closing Date (including any Registration Statement filed under Rule
462(b) of the Rules and Regulations), contained any untrue statement
of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein
not misleading or (b) that the Prospectus (as of its date and as of
such Closing Date), as amended or supplemented, includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being
understood that such counsel need express no opinion as to the
financial statements and schedules or other financial data included in
or omitted from any of the documents mentioned in this clause.
In rendering such opinion such counsel may rely (i) as to matters
of law other than Massachusetts and Federal law, to the extent they deem
appropriate and specified in such opinion, upon the opinion or opinions of local
counsel whom they believe to be reliable and who are satisfactory to counsel for
the Underwrites and (ii) as to matters of fact, to the extent such counsel deems
reasonable, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials provided that the extent of such reliance
is specified in such opinion.
(e) On each Closing Date, there shall have been furnished to you,
as Representatives of the several Underwriters, the opinion of Xxxxxxx & Xxxxxx,
LLP counsel for the Selling Stockholders, dated such Closing Date and addressed
to you, to the effect that:
(i) The delivery on behalf on each Selling Stockholder by
the Attorney-in-Fact to the Underwriters of certificates for the
Securities being sold as of the applicable Closing Date pursuant
to this Agreement by such Selling Stockholder against payment
therefor as provided in this Agreement will (assuming the
Underwriters have purchased such Securities in good faith and
without notice of any adverse claim, and assuming that there are
no events or circumstances peculiar to any individual Underwriter
which might result in any adverse claim), to the knowledge of
such counsel,
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pass good title to such Securities, free and clear of all liens,
security interests, claims and other encumbrances.
(ii) Each of the Selling Stockholders has the power and
authority to enter into the Custody Agreement, the Power of
Attorney and this Agreement and to perform and discharge such
Selling Stockholder's obligations thereunder and hereunder; and
this Agreement, the Custody Agreements and the Powers of Attorney
have been duly authorized, executed and delivered by (or by the
Attorneys-in-Fact, or either of them, on behalf of) the Selling
Stockholders and the Custody Agreement is a valid and binding
agreement of the Selling Stockholders, enforceable in accordance
with its respective terms (except as rights to indemnity
hereunder or thereunder may be limited by Federal or state
securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and subject to general
principles of equity).
(iii) To our knowledge the execution and delivery of this
Agreement, the Custody Agreement and the Power of Attorney by
each Selling Stockholder and the performance by such Selling
Stockholder of the terms hereof and thereof and the consummation
by such Selling Stockholder as of the applicable Closing Date of
the transactions herein and therein contemplated will not result
in a breach or violation of any of the terms and provisions of,
or constitute a default under, any Massachusetts or U.S. Federal
statute, or regulation, or any agreement or instrument (in each
case governed by the laws of the Commonwealth of Massachusetts)
known to such counsel to which such Selling Stockholder is a
party or by which such Selling Stockholder is bound, or any order
or decree known to such counsel and binding on such Selling
Stockholder of any Massachusetts or U.S. Federal court or
Massachusetts or U.S. Federal government agency having
jurisdiction over such Selling Stockholder or any of its
respective properties; and to our knowledge no consent, approval,
authorization or order of, or filing with, any Massachusetts or
U.S. Federal court or Massachusetts or U.S. Federal governmental
agency is required to be obtained by such Selling Stockholder as
of the applicable Closing Date under applicable Massachusetts or
U.S. Federal law for the execution, performance and delivery of
this Agreement, the Custody Agreement and the Power of Attorney
or for the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby, including the sale
of the Securities being sold by such Selling Stockholder, except
such as may be required under the Act or the blue sky or
securities laws of any State in the United States or by the
securities laws of any jurisdiction outside the United States, as
to which such counsel renders no opinion.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Massachusetts and Federal law, upon the opinion or opinions of
local counsel provided that the extent of such reliance is specified in such
opinion and that such counsel shall state that such opinion or opinions of local
counsel are satisfactory to them and that they believe they and you are
justified in relying thereon and (ii) as to matters of fact, to the extent such
counsel deems reasonable upon certificates of officers of the Selling
Stockholders provided that the extent of such reliance is specified in such
opinion.
(f) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, such opinion or opinions from
Cravath, Swaine & Xxxxx, counsel for the several Underwriters, dated such
Closing Date and addressed to you, with respect to the formation of the Company,
the validity of the Securities, the Registration
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Statement, the Prospectus and other related matters as you reasonably may
request, and such counsel shall have received such papers and information as
they request to enable them to pass upon such matters.
(g) On each Closing Date you, as Representatives of the several
Underwriters, shall have received a letter of PricewaterhouseCoopers LLP, dated
such Closing Date and addressed to you, confirming that they are independent
public accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under Rule
2-01 of Regulation S-X of the Commission, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of such
letter), the conclusions and findings of said firm with respect to the financial
information and other matters covered by its letter delivered to you
concurrently with the execution of this Agreement, and the effect of the letter
so to be delivered on such Closing Date shall be to confirm the conclusions and
findings set forth in such prior letter.
(h) On each Closing Date, there shall have been furnished to you, as
Representatives of the Underwriters, a certificate, dated such Closing Date and
addressed to you, signed by the chief executive officer and by the chief
financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, in all material respects, as if made
at and as of such Closing Date, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date;
(ii) No stop order or other order suspending the effectiveness of
the Registration Statement or any amendment thereof or the
qualification of the Securities for offering or sale has been issued,
and no proceeding for that purpose has been instituted or, to their
knowledge, is contemplated by the Commission or any state or
regulatory body; and
(iii) Since the date of the most recent financial statements of
the Company included in the Prospectus (exclusive or any supplement
thereto), there has been no material adverse change in the business,
condition (financial or otherwise) or properties of the Company and
its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated by the Prospectus (exclusive of any supplement
thereto).
(i) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, a certificate or certificates,
dated such Closing Date and addressed to you, signed by each of the Selling
Stockholders or either of such Selling Stockholder's Attorneys-in-Fact to the
effect that the representations and warranties of such Selling Stockholder
contained in this Agreement are true and correct as if made at and as of such
Closing Date, and that such Selling Stockholder has complied with all the
agreements and satisfied all the conditions on such Selling Stockholder's part
to be performed or satisfied at or prior to such Closing Date.
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(j) The Securities shall have been listed and admitted and authorized
for trading on the New York Stock Exchange, and satisfactory evidence of such
actions shall have been provided to the Representatives.
(k) The Company shall have furnished to you and counsel for the
Underwriters such additional documents, certificates and evidence as you or they
may have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and counsel for the Underwriters. The Company will furnish
you with such conformed copies of such opinions, certificates, letters and other
documents as you shall reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and each Selling Stockholder, jointly and severally,
agree to indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of the
Company and/or such Selling Stockholders, as the case may be), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including the information
deemed to be a part of the Registration Statement at the time of effectiveness
pursuant to Rules 430A and 434(d) of the Rules and Regulations, if applicable,
any Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations), 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, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action; provided, however, that neither the Company nor any Selling
Stockholder shall be liable in any such case to the extent that any such loss,
claim, damage, liability or action 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
such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof; and further provided, however,
that in no event shall any Selling Stockholder be liable under the provisions of
this Section 6 for any amount in excess of the aggregate amount of proceeds such
Selling Stockholder received from the sale of the Securities pursuant to this
Agreement.
In addition to their other obligations under this Section 6(a), the
Company and each Selling Stockholder, jointly and severally, agree that, as an
interim measure during the pendency of any claim, action, investigation, inquiry
or other proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, described in this Section 6(a), they will
reimburse each Underwriter on a monthly basis for all reasonable legal fees or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Company's and/or the Selling Stockholder's obligation to reimburse the
Underwriters for such expenses and the possibility that
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such payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, the Underwriter that received such payment shall
promptly return it to the party or parties that made such payment, together with
interest, compounded daily, determined on the basis of the prime rate (or other
commercial lending rate for borrowers of the highest credit standing) announced
from time to time by ____________________ (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Underwriter within 30 days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request. This indemnity agreement shall be in addition to any liabilities
which the Company or the Selling Stockholders may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company and
each Selling Stockholder against any losses, claims, damages or liabilities to
which the Company and the Selling Stockholders may become subject, under the Act
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), 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 such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by you, or by such Underwriter
through you, specifically for use in the preparation thereof, and will reimburse
the Company and the Selling Stockholders for any legal or other expenses
reasonably incurred by the Company or any such Selling Stockholder in connection
with investigating or defending against any such loss, claim, damage, liability
or action.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party. In case any such action shall be
brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that if, in the sole judgment of the Representatives, it is advisable for the
Underwriters to be represented as a group by separate counsel, the
Representatives shall have the right to employ a single counsel to represent the
Representatives and all Underwriters who may be subject to liability arising
from any claim in respect of which indemnity may be sought by the Underwriters
under subsection (a) of this Section 6, in which event the reasonable fees and
expenses of such separate counsel shall be
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borne by the indemnifying party or parties and reimbursed to the Underwriters as
incurred (in accordance with the provisions of the second paragraph in
subsection (a) above). An indemnifying party shall not be obligated under any
settlement agreement relating to any action under this Section 6 to which it has
not agreed in writing.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholders on the one hand and the Underwriters
on the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and Selling Stockholders 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 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, the Selling Stockholders or the Underwriters and the parties' relevant
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) 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 account of the equitable
considerations referred to in the first sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
action or claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Selling Stockholders under
this Section 6 shall be in addition to any liability which the Company and the
Selling Stockholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 6
shall be in addition to any liability that the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
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director of the Company (including any person who, with his consent, is named in
the Registration Statement as about to become a director of the Company), to
each officer of the Company who has signed the Registration Statement and to
each person, if any, who controls the Company or any Selling Stockholder within
the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All representations,
warranties, and agreements of the Company herein or in certificates delivered
pursuant hereto, and the agreements of the several Underwriters, the Company and
the Selling Stockholders contained in Section 6 hereof, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter or any controlling person thereof, or the Company or
any of its officers, directors, or controlling persons, or any Selling
Stockholders or any controlling person thereof, and shall survive delivery of,
and payment for, the Securities to and by the Underwriters hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Firm Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Firm Shares in accordance with the
terms hereof, and the amount of Firm Shares not purchased does not aggregate
more than 10% of the total amount of Firm Shares set forth in Schedule II
hereto, the remaining Underwriters shall be obligated to take up and pay for (in
proportion to their respective underwriting obligations hereunder as set forth
in Schedule II hereto except as may otherwise be determined by you) the Firm
Shares that the withdrawing or defaulting Underwriters agreed but failed to
purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Firm Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Firm Shares in accordance with the
terms hereof, and the amount of Firm Shares not purchased aggregates more than
10% of the total amount of Firm Shares set forth in Schedule II hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other
persons are not made within 36 hours thereafter, this Agreement shall terminate.
In the event of any such termination neither the Company nor any Selling
Stockholder shall be under any liability to any Underwriter (except to the
extent provided in Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof)
nor shall any Underwriter (other than an Underwriter who shall have failed,
otherwise than for some reason permitted under this Agreement, to purchase the
amount of Firm Shares agreed by such Underwriter to be purchased hereunder) be
under any liability to the Company or the Selling Stockholders (except to the
extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the
non-defaulting Underwriters or by any other party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8.
9. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m., Central time,
on the first full business day following the effective date of the Registration
Statement, or at such
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earlier time after the effective time of the Registration Statement as you in
your discretion shall first release the Securities for sale to the public;
provided, that if the Registration Statement is effective at the time this
Agreement is executed, this Agreement shall become effective at such time as you
in your discretion shall first release the Securities for sale to the public.
For the purpose of this Section, the Securities shall be deemed to have been
released for sale to the public upon release by you of the publication of a
newspaper advertisement relating thereto or upon release by you of telexes
offering the Securities for sale to securities dealers, whichever shall first
occur. By giving notice as hereinafter specified before the time this Agreement
becomes effective, you, as Representatives of the several Underwriters, or the
Company may prevent this Agreement from becoming effective without liability of
any party to any other party, except that the provisions of Section 4(a)(viii),
Section 4(b)(ii) and Section 6 hereof shall at all times be effective.
(b) You, as Representatives of the several Underwriters, shall have
the right to terminate this Agreement by giving notice as hereinafter specified
at any time at or prior to the First Closing Date, and the option referred to in
Section 3(b), if exercised, may be canceled at any time prior to the Second
Closing Date, if (i) the Company shall have failed, refused or been unable, at
or prior to such Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the Underwriters' obligations
hereunder is not fulfilled, (iii) trading on the New York Stock Exchange or the
American Stock Exchange shall have been wholly suspended, (iv) minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required, on the New York Stock Exchange or the
American Stock Exchange, by such Exchange or by order of the Commission or any
other governmental authority having jurisdiction, (v) a banking moratorium shall
have been declared by Federal, New York or Massachusetts authorities, or (vi)
there has occurred any material adverse change in the financial markets in the
United States or an outbreak of major hostilities (or an escalation thereof) in
which the United States is involved, a declaration of war by Congress, any other
substantial national or international calamity or any other event or occurrence
of a similar character shall have occurred since the execution of this Agreement
that, in your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof shall at
all times be effective.
(c) If you elect to prevent this Agreement from becoming effective or
to terminate this Agreement as provided in this Section, the Company and an
Attorney-in-Fact, on behalf of the Selling Stockholders, shall be notified
promptly by you by telephone or telegram, confirmed by letter. If the Company
elects to prevent this Agreement from becoming effective, you and an
Attorney-in-Fact, on behalf of the Selling Stockholders, shall be notified by
the Company by telephone or telegram, confirmed by letter.
10. DEFAULT BY ONE OR MORE OF THE SELLING STOCKHOLDERS OR THE COMPANY. If
one or more of the Selling Stockholders shall fail at the First Closing Date to
sell and deliver the number of Securities which such Selling Stockholder or
Selling Stockholders are obligated to sell hereunder, and the remaining Selling
Stockholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number of Securities to be sold by all Selling Stockholders as set forth in
Schedule I, then the Underwriters may at your option, by notice from you to the
Company and the non-defaulting Selling Stockholders, either (a) terminate this
Agreement without any liability on the part of any
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non-defaulting party or (b) elect to purchase the Securities which the Company
and the non-defaulting Selling Stockholders have agreed to sell hereunder.
In the event of a default by any Selling Stockholder as referred to in
this Section, either you or the Company or, by joint action only, the
non-defaulting Selling Stockholders shall have the right to postpone the First
Closing Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements.
If the Company shall fail at the First Closing Date to sell and
deliver the number of Securities which it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
non-defaulting party.
No action taken pursuant to this Section shall relieve the Company or
any Selling Stockholders so defaulting from liability, if any, in respect of
such default.
11. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth in the
last paragraph of the cover page and under the caption "Underwriting" in any
Preliminary Prospectus and in the Prospectus constitute the written information
furnished by or on behalf of the Underwriters referred to in Section 2 and
Section 6 hereof.
12. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to the Representatives c/o Xxxxx Xxxxxxx
Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
except that notices given to an Underwriter pursuant to Section 6 hereof shall
be sent to such Underwriter at the address stated in the Underwriters'
Questionnaire furnished by such Underwriter in connection with this offering; if
to the Company, shall be mailed, telegraphed or delivered to it at 000 Xxxxxx
Xxxxxx, Xxxxx 00000, Xxxxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxxx; if to any
of the Selling Stockholders, at the address of the Attorneys-in-Fact as set
forth in the Powers of Attorney, or in each case to such other address as the
person to be notified may have requested in writing. All notices given by
telegram shall be promptly confirmed by letter. Any party to this Agreement may
change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the
Company, the Selling Stockholders and the several Underwriters in accordance
with its terms.
Very truly yours,
MICROFINANCIAL INCORPORATED
By.......................................
President and Chief Executive Officer
SELLING STOCKHOLDERS
By.......................................
Attorney-in-Fact
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
XXXXX XXXXXXX INC.
By.............................
Managing Director
CIBC XXXXXXXXXXX CORP.
By.............................
Managing Director
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SCHEDULE I
Selling Stockholders
Number of Maximum Number of
Firm Shares Option Shares
Name to be Sold Subject to Option
---- ---------- -----------------
Xxxxx X. Xxxxxxxxx 129,550 129,550
Xxxxxxxx X. Xxxxxx 114,650 114,650
Trust for Xxxxxx Xxxx Harder 7,800 7,800
Trust for Xxxxxx X. Xxxxxx 7,800 7,800
Xxxxx X. Xxxxx 118,500 118,500
Xxxxxxxx Xxxxx 80,050 80,050
Entrepreneurial Ventures, Inc. 29,200 29,200
Spindle Limited Partnership 30,000 30,000
Xxxxxxx X. Xxxxxx 35,450 35,450
Rock Creek Partnership 18,125 18,125
Xxxxxx X. Xxxxxxx 15,000 15,000
Xxxxxxx Xxxxxx 8,200 8,200
Xxxx Xxxxxxx 3,725 3,725
Xxxxxx Xxxxx 1,950 1,950
------- -------
Total. . . . . . . . . 600,000 600,000
======= =======
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SCHEDULE II
Underwriter Number of Firm Shares (1)
----------- -------------------------
Xxxxx Xxxxxxx Inc.
CIBC Xxxxxxxxxxx Corp.
--------
Total. . . . . . . . . . . . . . . . . . . . . . 4,000,000
=========
-----------------
(1) The Underwriters may purchase up to an additional 600,000 Option
Shares, to the extent the option described in Section 3(b) of the
Agreement is exercised, in the proportions and in the manner described
in the Agreement.
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EXHIBIT A
[Letterhead of officer, director or major stockholder of
MicroFinancial Incorporated]
MicroFinancial Incorporated
---------------------------
Public Offering of Common Stock
-------------------------------
, 19
Xxxxx Xxxxxxx Inc.
CIBC Xxxxxxxxxxx Corp.
As Representatives of the several Underwriters,
c/o Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between MicroFinancial
Incorporated, a Massachusetts corporation (the "Company"), and each of you as
representatives of a group of Underwriters named therein, relating to the
underwritten public offering of Common Stock, $0.01 par value (the "Common
Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxx Xxxxxxx Inc., offer, sell, contract to sell, pledge or
otherwise dispose of, or file (or participate in the filing of) a registration
statement with the Securities and Exchange Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder with respect to, any shares of
capital stock of the Company or any securities convertible into exercisable or
exchangeable for such capital stock, or publicly announce an intention to effect
any such transaction, for a period of 180 days after the date of this Agreement,
other than shares of Common Stock disposed of as bona fide gifts approved by
Xxxxx Xxxxxxx Inc.
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If for any reason the Underwriting Agreement shall be terminated prior to
the Closing Dated (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
Yours very truly,
[Signature of officer, director or major
stockholder]
[Name and address of officer, director or
major stockholder]
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