EXHIBIT 1.2
STB DRAFT 7/10/97
$100,000,000
MBIA INC.
__% Debentures Due 20__
UNDERWRITING AGREEMENT
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July 14, 1997
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ BROTHERS INC.
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
MBIA Inc., a Connecticut corporation (the "Company"), proposes to
issue and sell to you (the "Underwriters") $100,000,000 principal amount of its
__% Debentures Due 20__ (the "Securities"). The Securities are to be issued
pursuant to the provisions of an Indenture dated as of August 1, 1990 (the
"Indenture") between the Company and The First National Bank of Chicago, as
trustee (the "Trustee").
1. Registration Statement and Prospectus. The Company has prepared
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and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-3 (File No. 333-15003) including a
prospectus relating to the Securities, which has become effective under the Act.
The registration statement as amended at the time when the Company filed with
the Commission its Annual Report on Form 10-K for the year ended December 31,
1996 (the "1996 10-K"), including any documents incorporated or deemed to be
incorporated by reference therein at such time, is hereinafter referred to as
the Registration Statement; and the prospectus (as amended or supplemented by a
prospectus supplement relating to the terms of the offering of the Securities)
in the form first used to confirm sales of Securities is hereinafter referred to
as the Prospectus.
2. Agreements to Sell and Purchase. The Company hereby agrees to
-------------------------------
issue and sell the Securities to the Underwriters, and each of the Underwriters,
upon the basis of the
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representations and warranties contained in this Agreement, and subject to its
terms and conditions, agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Securities set forth opposite the
name of such Underwriter in Schedule I hereto, at _______% of the principal
amount (the "Purchase Price") plus accrued interest, if any, from July 18, 1997
to the date of payment and delivery.
3. Terms of Public Offering. The Company is advised by you that the
------------------------
Underwriters propose (i) to make a public offering of their respective portions
of the Securities as soon as in their judgment is advisable and (ii) initially
to offer the Securities upon the terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and
--------------------
payment for the Securities to be purchased by the Underwriters shall be made at
10:00 A.M., New York City time, on the fourth business day (the "Closing Date")
following the date hereof, at such place outside the State of New York as you
shall designate. The Closing Date and the location of delivery of and the form
of payment for the Securities may be varied by agreement between you and the
Company.
Certificates for the Securities shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date. Such certificates shall be made
available to you for inspection not later than 9:30 A.M., New York City time, on
the business day next preceding the Closing Date. Certificates in definitive
form evidencing the Securities shall be delivered to you on the Closing Date
with any transfer taxes thereon duly paid by the Company, for the respective
accounts of the several Underwriters, against payment of the Purchase Price
therefor in same-day funds to the order of the Company.
5. Agreements of the Company. The Company agrees with you:
-------------------------
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when any post-effective amendment to the
Registration Statement becomes effective, (ii) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the suspension of qualification of the
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purposes, and (iv) of the happening of any event
during the period referred to in paragraph (d) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to make
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the statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to you, without charge, five signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you such number
of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably and timely
request.
(c) Not to file any amendment or supplement to the Registration
Statement or to make any amendment or supplement to the Prospectus of which
you shall not previously have been advised or to which you shall reasonably
object.
(d) On or about 10:00 A.M. New York City time on the first business
day next succeeding the date of this Agreement, and from time to time
thereafter for such period as in the opinion of counsel for the
Underwriters a prospectus is required by law to be delivered in connection
with sales by an Underwriter or a dealer, to furnish in New York City to
each Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer
may reasonably request.
(e) If during the period specified in paragraph (d) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters
it becomes necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus,
as so amended or supplemented, will not in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter or
dealers may reasonably request.
(f) Prior to any public offering of the Securities, to cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Securities for offer and sale by the several
Underwriters and by dealers under the state securities or Blue Sky laws of
such jurisdictions as you may reasonably request
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(provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified), to continue
such qualification in effect so long as required for distribution of the
Securities (but in no event longer than one year from the date hereof) and
to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification.
(g) To mail and make generally available to its security holders as
soon as reasonably practicable an earnings statement covering a period of
at least twelve months after the effective date of the Registration
Statement (but in no event commencing later than 90 days after such date)
which shall satisfy the provisions of Section 11(a) of the Act.
(h) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company substantially
similar to the Securities, or warrants to purchase or securities
convertible into any such debt securities, without your prior written
consent.
(i) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), (ii)
the printing and delivery of the Prospectus and all amendments or
supplements to it during the period specified in paragraph (d), (iii) the
printing and delivery of this Agreement, the Preliminary and Supplemental
Blue Sky Memoranda and all other agreements, memoranda, correspondence, and
other documents printed and delivered in connection with the offering of
the Securities (including in each case any disbursements of counsel for the
Underwriters relating to such printing and delivery), (iv) the registration
or qualification of the Securities for offer and sale under the securities
or Blue Sky laws of the several states (including in each case the fees and
disbursements of counsel for the Underwriters relating to such registration
or qualification and memoranda relating thereto), (v) filings and clearance
with the National Association of Securities Dealers, Inc. in connection
with the offering, (vi) furnishing such copies of the Registration
Statement, the Prospectus and all amendments and supplements thereto as may
be requested for use in connection with the offering and sale of the
Securities by the Underwriters or by dealers to whom securities may be
sold.
(j) To use its best efforts to do and perform all things required or
necessary to be done and performed under
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this Agreement by the Company prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Securities.
6. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective or at the time of filing by the Company with the
Commission of its 1996 10-K, as the case may be, did not contain and each
such part, as amended or supplemented, if applicable, will not contain any
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, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all material
respects with the Act and (iii) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any 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 under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph (b) do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act.
(d) The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and authority to carry on its business as it is currently being conducted
and to own, lease and operate its properties, and each is duly qualified
and is in good standing as a foreign corporation authorized to do business
in each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, results of operations or financial
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condition of the Company and its subsidiaries, taken as a whole.
(e) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's Significant Subsidiaries, as
defined in Rule 1-02 of Regulation S-X ("Significant Subsidiaries"), have
been duly authorized and validly issued and are fully paid and non-
assessable, and are owned by the Company, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature.
(f) The Indenture has been duly authorized, executed and delivered by
the Company, has been duly qualified under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and is a valid and legally binding
agreement of the Company enforceable against the Company in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(g) The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement, will be valid and legally binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
(h) The Securities conform as to legal matters to the description
thereof contained in the Prospectus.
(i) Neither the Company nor any of its Significant Subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any other
agreement, indenture or instrument material to the conduct of the business
of the Company and its subsidiaries, taken as a whole, to which the Company
or any of its Significant Subsidiaries is a party or by which it or any of
its Significant Subsidiaries or their respective property is bound.
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(j) The execution, delivery and performance of this Agreement, the
Indenture and the Securities by the Company, compliance by the Company with
all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not require any consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may be
required under the securities or Blue Sky laws of the various states) and
will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or
any of its subsidiaries or any material agreement, indenture or other
instrument to which it or any of its subsidiaries is a party or by which it
or any of its subsidiaries or their respective property is bound, or
violate or conflict with any laws, administrative regulations or rulings or
court decrees applicable to the Company or any of its subsidiaries.
(k) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any of their respective
property is the subject, and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated. No contract or document
of a character required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement
is not so described or filed as required.
(l) Coopers & ▇▇▇▇▇▇▇ L.L.P. are independent public accountants with
respect to the Company as required by the Act.
(m) The financial statements, together with related schedules and
notes, forming part of the Registration Statement and the Prospectus or
incorporated therein by reference (and any amendment or supplement
thereto), present fairly in all material respects the consolidated
financial position, results of operations and changes in financial position
of the Company and its subsidiaries on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the financial and statistical information and data set forth
under the caption "Selected Consolidated Financial and Statistical Data" in
the Prospectus (and any amendment or supplement thereto) is, in all
material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company.
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(n) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(o) [Other than pursuant to the Amended and Restated Shareholders'
Agreement dated as of May 21, 1987, as amended, among the Company and the
shareholders named therein (the "Shareholders' Agreement"), no holder of
any security of the Company has any right to require registration of any
security of the Company.]
7. Indemnification. (a) The Company agrees to indemnify and hold
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harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), from and against any and
all losses, claims, damages, liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriters furnished in
writing to the Company by or on behalf of any Underwriter expressly for use
therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and any person controlling the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to each Underwriter but only with reference
to information relating to such Underwriter furnished in writing by or on behalf
of such Underwriter expressly for use in the Registration Statement or the
Prospectus. The Underwriters severally confirm that the statements with respect
to the public offering of the Securities set forth on the cover page of, and
under the caption "Underwriting" in, the Prospectus are correct and constitute
the only information furnished in writing to the Company by or on behalf of the
Underwriters expressly for use in the Registration Statement and the Prospectus.
(c) In case any action shall be brought involving any person in respect of
which indemnity may be sought pursuant to either of the two preceding
paragraphs, such person (hereinafter the indemnified party) shall promptly
notify the person against whom such indemnity may be sought (hereinafter the
indemnifying party) in writing and the indemnifying party shall assume the
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defense thereof, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses. Any indemnified
party shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both the indemnified party and the
indemnifying party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood, however, that the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for each of (a) the
Underwriters and their controlling persons (which firm shall be designated in
writing by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation) and (b) the
Company and its controlling persons, and that all such fees and expenses shall
be reimbursed as they are incurred. The indemnifying party shall not be liable
for any settlement of any such action effected without the written consent of
the indemnifying party but, if settled with the written consent of the
indemnifying party or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify and hold harmless the indemnified party
from and against any loss or liability by reason of such settlement or final
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability or claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable
to an indemnified party or insufficient in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters, respectively, 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 Underwriters in connection with the
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statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Underwriters 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 the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Securities, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were 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 immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, 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 which 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 to contribute
pursuant to this Section 7(d) are several in proportion to the respective number
of Securities purchased by each of the Underwriters hereunder and not joint.
8. Conditions of Underwriters' Obligations. The several obligations
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of the Underwriters to purchase the Securities under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and
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correct on the Closing Date with the same force and effect as if made on
and as of the Closing Date.
(b) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been commenced or shall be pending before or contemplated by the
Commission.
(c) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business, whether or not arising in the ordinary
course of business, of the Company and its subsidiaries, taken as a whole,
and (ii) on the Closing Date you shall have received a certificate dated
the Closing Date, signed by an executive officer of the Company, confirming
the matters set forth in paragraphs (a), (b), and (c) of this Section 8.
(d) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of (A) any intended or potential
downgrading or (B) any review or possible change that does not indicate the
direction of a possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating organization",
as such term is defined for purposes of Rule 436(g)(2) under the Act.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., General Counsel of the Company, to the
effect that:
(i) the Company and each of its subsidiaries (other than
MBIA Insurance Corporation ("MBIA Corp."), which is discussed below)
has been duly incorporated, is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority required to carry on its
business as it is currently being conducted and to own, lease and
operate its properties;
(ii) the Company and each of its subsidiaries (other than
MBIA Corp., which is discussed below) is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the business, results of operations or financial
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condition of the Company and its subsidiaries, taken as a whole;
(iii) (A) MBIA Corp. has been duly incorporated, is validly
existing as an insurance company in good standing under the laws of
the State of New York and (B) is duly licensed and in good standing to
conduct its business in each state in the United States and the
District of Columbia;
(iv) all of the outstanding shares of capital stock of, or
other ownership interests in, each of the Company's Significant
Subsidiaries have been duly and validly authorized and issued and are
fully paid and non-assessable, and are owned of record and, to the
best knowledge of such counsel, beneficially by the Company, free and
clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature;
(v) (A) the Indenture has been duly authorized, executed
and delivered by the Company, has been duly qualified under the Trust
Indenture Act and is a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing, and (B) the
Securities have been duly authorized by the Company and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement, will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company enforceable in accordance with its terms (except as rights to
indemnity and contribution hereunder may be limited by applicable
law), subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization,
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moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing;
(vii) the Securities conform in all material respects as to
legal matters to the description thereof contained in the Prospectus;
(viii) the Registration Statement became effective under
the Act on _______ __, 1996 and, to the knowledge of such counsel, no
stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the knowledge of such counsel,
pending before or contemplated by the Commission;
(ix) the statements under the captions "Description of
Debentures" and "Description of Debt Securities" in the Prospectus and
Item 15 of Part II of the Registration Statement, insofar as such
statements constitute a summary of legal matters, documents or
proceedings referred to therein, fairly present, in all material
respects, the information called for with respect to such legal
matters, documents and proceedings;
(x) the execution, delivery and performance of this
Agreement, the Indenture and the Securities by the Company, compliance
by the Company with all the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will
not require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental
body under United States Federal law or the laws of the State of
Connecticut or the State of New York (except as such may be required
under the Act, the Trust Indenture Act or other securities or Blue Sky
laws) and will not conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the charter or by-laws of
the Company or any of its subsidiaries or any material agreement,
indenture or other material instrument known to such counsel to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its respective properties are
bound, or violate or conflict with any laws, administrative
regulations or rulings or court decrees under United States Federal
law or the laws of the State of Connecticut or the State of New York
known to such counsel and applicable to the Company or any of its
subsidiaries or its respective properties;
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(xi) after due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of their
respective property is subject which is required to be described in
the Registration Statement or the Prospectus and is not so described,
or of any contract or other document which is required to be described
in the Registration Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement which is not
described or filed as required;
(xii) the Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(xiii) [to the best of such counsel's knowledge, after due
inquiry, other than pursuant to the Shareholders' Agreement, no holder
of any security of the Company has any right to require registration
of any security of the Company]; and
(xiv) (A) the Registration Statement and the Prospectus and
any supplement or amendment thereto (except for financial statements
and other financial and statistical information contained or
incorporated by reference therein as to which no opinion need be
expressed) comply as to form in all material respects with the Act,
and (B) such counsel believes that (except for financial statements
and other financial and statistical information contained or
incorporated by reference therein, as aforesaid) the Registration
Statement at the time it became effective and at the time of filing by
the Company with the Commission of its 1996 10-K did not contain any
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 that the Prospectus as of its date and as
of the Closing Date, as amended or supplemented, if applicable (except
for financial statements and other financial and statistical contained
or incorporated by reference therein, as aforesaid) does not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In giving such opinion with respect to the matters covered by clause
(xv) such counsel may state that his opinion and belief are based upon his
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without
15
independent check or verification except as specified. Each of the
opinions delivered pursuant to this paragraph (e) may rely as to matters of
Connecticut law on the opinion of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇ or of such other
local counsel as shall be reasonably satisfactory to you.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Debevoise & ▇▇▇▇▇▇▇▇, counsel for the Company, as to the matters
referred to in clauses (i) (but only as to the Company), (iii)(A), (v),
(vi), (vii), (viii), (ix), (x) (but only as to the statements in the
Prospectus under "Description of Debentures" and "Description of Debt
Securities") and (xv) of paragraph (e) above.
In giving such opinion with respect to the matters covered by
clause (xv) such counsel may state that their opinion and belief are based
upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified. Each of the opinions delivered pursuant
to this paragraph (f) may rely as to matters of Connecticut law on the
opinion of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇ or of such other local counsel as shall be
reasonably satisfactory to you.
(g) You shall have received on the Closing Date an opinion, dated the
Closing Date, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters,
as to the matters referred to in clauses (vi), (vii), (ix), (x) (but only
with respect to the statements in the Prospectus under "Description of
Debentures" and "Description of Debt Securities") and (xv) of paragraph
(e). In giving such opinion with respect to the matters covered by clause
(xv) such counsel may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified. Each of the opinions delivered pursuant
to this paragraph (g) may rely as to matters of Connecticut law on the
opinion of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇ or of such other local counsel as shall be
reasonably satisfactory to you.
(h) You shall have received on and as of the Closing Date a letter,
in form and substance satisfactory to you, from Coopers & ▇▇▇▇▇▇▇ L.L.P.,
independent public accountants, with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus and substantially in the form
16
and the substance of the letter delivered to you by Coopers & ▇▇▇▇▇▇▇
L.L.P. on the date of this Agreement.
(i) The Company shall not have failed at or prior to the Closing Date
to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company at or prior to the
Closing Date.
9. Effective Date of Agreement and Termination. This Agreement
-------------------------------------------
shall become effective upon the execution of this Agreement.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if (a) any of the following has occurred
after the execution and delivery of this Agreement and prior to the Closing
Date: (i) trading in securities generally on the New York Stock Exchange or the
American Stock Exchange shall have been suspended or materially limited, (ii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iii) there shall
have occurred any material outbreak or escalation of hostilities or any change
in the financial markets or other calamity or crisis that, in your judgment, is
material and adverse; and (b) in the case of any of the events specified in (a)
above, such event singly or together with any other such event makes it, in your
judgment, impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
If on the Closing Date either of the Underwriters shall fail or refuse
to purchase the Securities which it or they have agreed to purchase hereunder on
such date and the aggregate number of Securities which such defaulting
Underwriter agreed but failed or refused to purchase is not more than one-tenth
of the total number of Securities to be purchased on such date by all
Underwriters, the non-defaulting Underwriter shall be obligated to purchase the
Securities which such defaulting Underwriter agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Securities
--------
which either Underwriter has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
number of Securities without the written consent of such Underwriter. If on the
Closing Date either Underwriter shall fail or refuse to purchase Securities and
the aggregate number of Securities with respect to which such default occurs is
more than one-tenth of the aggregate number of Securities to be purchased on
such date by all Underwriters and arrangements satisfactory to you and the
Company for purchase of such Securities are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of the non-
defaulting Underwriter and the Company. In any such case which does not result
in termination of this Agreement, either you or the Company shall have the right
to postpone the Closing
17
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or any other
documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of any such Underwriter under this Agreement.
10. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Company, to MBIA Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (b) if to you, to you c/▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations
and warranties of the Company and of the several Underwriters set forth in or
made pursuant to this Agreement shall remain operative and in full force and
effect, and will survive regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter or by or on behalf
of the Company, the officers or directors of the Company or any controlling
person of the Company, (ii) acceptance of the Securities and payment for them
hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from any of the several Underwriters merely because of
such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
MBIA INC.
By____________________________
Name:
Title:
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ BROTHERS INC.
By ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By__________________________
Name:
Title:
SCHEDULE I
----------
Principal
Amount
of Securities
Underwriter To Be Purchased
----------- ----------------
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities $
Corporation
▇▇▇▇▇▇ Brothers Inc. $
------------
Total..................... $100,000,000
============
