EXHIBIT 1.1
[3,120,000] SHARES OF COMMON STOCK
RENT-A-CENTER, INC.
COMMON STOCK, PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
MAY [__], 2002
May [__], 2002
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Brothers Inc.
Bear, Xxxxxxx & Co. Inc.
SunTrust Capital Markets, Inc.
First Union Securities, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Certain stockholders named in Schedule I hereto (the "SELLING
STOCKHOLDERS") of Rent-A-Center, Inc., a Delaware corporation (the "COMPANY")
severally propose to sell to the several Underwriters named in Schedule II
hereto (the "UNDERWRITERS"), [3,120,000] shares of the common stock, par value
$.01 per share, of the Company (the "FIRM SHARES"), each Selling Stockholder
selling the amount set forth opposite such Selling Stockholder's name in
Schedule I hereto.
Certain Selling Stockholders named in Schedule I hereto severally
propose to sell to the several Underwriters an aggregate of not more than an
additional [468,000] shares of the common stock, par value $.01 per share, of
the Company (the "ADDITIONAL SHARES") if and to the extent that you, as Managers
of the offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Section 3 hereof. To the extent the Underwriters elect to
purchase less than the full number of Additional Shares, such shares shall be
sold pro rata, subject to rounding, by each of the Selling Stockholders. The
Firm Shares and the Additional Shares are hereinafter collectively referred to
as the "Shares." The shares of common stock, par value $.01 per share, of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "COMMON STOCK." The Selling Stockholders are
hereinafter sometimes collectively referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the
"REGISTRATION STATEMENT"; the prospectus in the form first used to confirm sales
of Shares is hereinafter referred to as the "PROSPECTUS" (all references herein
to the Registration Statement and the Prospectus shall include all documents
incorporated therein by reference (the "INCORPORATED DOCUMENTS")). If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"RULE 462 REGISTRATION STATEMENT"), then any reference herein to the term
"REGISTRATION STATEMENT" shall be deemed to include such Rule 462 Registration
Statement.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters 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) The Registration Statement, when it became effective,
did 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 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 Securities Act and, in
the case of the Incorporated Documents, the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and the applicable rules and
regulations of the Commission thereunder 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 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 through you
expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
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(d) Each subsidiary of the Company named in Schedule III
hereto (each, a "SUBSIDIARY") has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its Subsidiaries, taken as a whole; all of the issued shares of capital
stock of each Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens, encumbrances,
equities or claims, except those liens and encumbrances securing the
Company's obligations under that certain Amended and Restated Credit
Agreement, dated August 5, 1998, as amended and restated as of May 3,
2002, among the Company, and the lenders and the agents named therein,
as amended from time to time (the "SENIOR CREDIT FACILITIES").
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding on the date hereof
have been duly authorized and are validly issued, fully paid and
non-assessable. The Shares have been duly authorized and reserved and,
when issued upon conversion of the Series A Preferred Stock in
accordance with the Certificate of Designations, Preferences and
Relative Rights and Limitations relating to the Series A Preferred
Stock of the Company (the "Series A Certificate of Designations"), will
be validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive rights.
(h) Except for the provisions of certain agreements that have
been duly and properly waived by the parties thereto, the execution and
delivery by the Company of, and the performance by the Company of its
obligations under, this Agreement will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company
or any of its Subsidiaries that is material to the Company and its
Subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or any Subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body, agency or court is
required for the execution, delivery and performance by the Company of
its obligations under this Agreement, except such as may be required by
the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares.
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(i) Since the date as of which information is given in the
Prospectus, except as otherwise stated therein, [and other than with
respect to the dividend declared on [ ]for the quarter ended [ ], which
is payable on [ ]to the holders of record of the Series A Preferred
Stock (as hereinafter defined) at the close of business on [ ],] (i)
there has been no material adverse change or any development involving
a prospective material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, management or business
prospects of the Company or any of its Subsidiaries, whether or not
arising in the ordinary course of business, (ii) the Company and its
Subsidiaries have not incurred any material liability or obligation,
direct or contingent, other than in the ordinary course of business,
(iii) the Company and its Subsidiaries have not entered into any
material transaction other than in the ordinary course of business and
(iv) there has not been any change in the capital stock or long-term
debt of the Company or any of its Subsidiaries, or any dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(j) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its Subsidiaries is a party
or to which any of the properties of the Company or any of its
Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(k) The financial statements, including the notes thereto,
included in the Registration Statement and the Prospectus present
fairly in all material respects the financial position of the entities
purported to be shown thereby at the respective dates indicated and the
results of operations for the respective periods specified, and, except
as otherwise stated in the Registration Statement, such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis.
(l) The Company and its Subsidiaries possess all material
licenses, certificates, authorizations and permits issued by, and have
made all declarations and filings with, the appropriate federal, state
or foreign regulatory agencies or bodies that are necessary or
desirable for the ownership of their respective properties or the
conduct of their respective businesses as described in the Prospectus,
except where the failure to possess or make the same would not,
singularly or in the aggregate, have a material adverse effect on the
Company and its Subsidiaries taken as a whole, and neither the Company
nor any of its Subsidiaries has received notification of any revocation
or modification of any such license, certificate, authorization or
permit or has any reason to believe that any
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such license, certificate, authorization or permit will not be renewed
in the ordinary course.
(m) The Company and its Subsidiaries have filed all federal,
state, local and foreign income and franchise tax returns required to
be filed through the date hereof and have paid all taxes due thereon,
except such returns, which individually or in the aggregate, do not
involve material amounts or where the failure to file such returns by
the Company and its Subsidiaries, as the case may be, would not,
individually or in the aggregate have a material adverse effect on such
entity, and no tax deficiency has been determined adversely to the
Company or any of its Subsidiaries, as the case may be, which has had
(nor does the Company or any of its Subsidiaries have any knowledge of
any tax deficiency which, if determined adversely to the Company or any
of its Subsidiaries, as the case may be, could reasonably be expected
to have) a material adverse effect on the Company and its Subsidiaries
taken as a whole, except to the extent that the validity thereof is
being contested in good faith pursuant to appropriate proceedings.
(n) 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 Securities Act (each,
a "PRELIMINARY PROSPECTUS"), complied when so filed in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(o) The Company is not required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(p) The Company and its Subsidiaries maintain insurance of the
types and in the amounts generally deemed adequate for their businesses
and consistent with insurance coverage maintained by similar companies
and businesses, all of which insurance is in full force and effect.
(q) The Company and its Subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the
conduct of their respective businesses; and the Company and its
Subsidiaries have not received any notice of any claim of conflict
with, any such rights of others, except for such notices of conflicts,
which, if individually or in the aggregate determined adversely to the
Company or any of its Subsidiaries, as the
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case may be, would not have a material adverse effect on the Company
and its Subsidiaries taken as a whole.
(r) The Company and its Subsidiaries have good and marketable
title to, or have valid rights to lease or otherwise use, all items of
real and personal property which are material to the business of the
Company and, in each case free and clear of all liens, encumbrances,
claims and defects and imperfections of title except such as (i) do not
materially interfere with the use made and proposed to be made of such
property by the Company and its Subsidiaries, (ii) could not reasonably
be expected to have a material adverse effect on the Company and its
Subsidiaries taken as a whole or (iii) are securing the Company's and
the Subsidiaries' obligations under the Senior Credit Facilities.
(s) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in a Preliminary Prospectus or the Prospectus has been made
or reaffirmed without, in light of the circumstances under which such
statements were made, a reasonable basis or has been disclosed other
than in good faith.
(t) There are no costs or liabilities associated with any
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS") (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) which would, singly or in the aggregate,
have a material adverse effect on the Company and its Subsidiaries,
taken as a whole.
(u) Except as otherwise disclosed in the Registration
Statement or the Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such person
the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company or,
except to the extent properly waived, to require the Company to include
such securities with the Shares registered pursuant to the Registration
Statement.
2. Representations and Warranties of the Selling Stockholders. Each of
the Selling Stockholders severally represents and warrants to and agrees with
each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder.
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(b) The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations
under, this Agreement, the Custody Agreement signed by such Selling
Stockholder and Mellon Investor Services LLC, as Custodian, relating to
the deposit of the Series A Preferred Shares to be converted into the
Shares to be sold by such Selling Stockholder (the "CUSTODY AGREEMENT")
and the Power of Attorney appointing certain individuals as such
Selling Stockholder's attorneys-in-fact to the extent set forth
therein, relating to the transactions contemplated hereby and by the
Registration Statement (the "POWER OF ATTORNEY") will not contravene
any provision of applicable law, or the certificate of incorporation or
by-laws of such Selling Stockholder (if such Selling Stockholder is a
corporation), or the limited partnership agreement of such Selling
Stockholder (if such Selling Stockholder is a limited partnership) or
any agreement or other instrument binding upon such Selling Stockholder
or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over such Selling Stockholder, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by such
Selling Stockholder of its obligations under this Agreement or the
Custody Agreement or Power of Attorney of such Selling Stockholder,
except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Shares.
(c) Such Selling Stockholder has, and on the Closing Date will
have, valid title to, or a valid "security entitlement" within the
meaning of Section 8-501 of the New York Uniform Commercial Code in
respect of, the Shares to be sold by such Selling Stockholder free and
clear of all security interests, claims, liens, equities or other
encumbrances and the legal right and power, and all authorization and
approval required by law, to enter into this Agreement, the Custody
Agreement and the Power of Attorney, and to sell, transfer and deliver
the Shares to be sold by such Selling Stockholder or a security
entitlement in respect of such Shares.
(d) The Custody Agreement and the Power of Attorney have been
duly authorized, executed and delivered by such Selling Stockholder and
are valid and binding agreements of such Selling Stockholder.
(e) Delivery of the Shares to be sold by such Selling
Stockholder and payment therefor pursuant to this Agreement will pass
valid title to such Shares, free and clear of any adverse claim within
the meaning of Section 8-102 of the New York Uniform Commercial Code,
to each Underwriter who has purchased such Shares without notice of an
adverse claim.
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(f) All information furnished by or on behalf of such Selling
Stockholder for use in the Prospectus under the caption "Selling
Stockholders" is, and on the Closing Date and any Additional Closing
Date will be, true, correct and complete, and does not, and on the
Closing Date and any Additional Closing Date will not, contain any
untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading.
3. Agreements to Sell and Purchase. Each Seller, severally and not
jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at [ ] a share (the "PURCHASE
PRICE") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
number of Firm Shares to be sold by such Seller as the number of Firm Shares set
forth in Schedule II hereto opposite the name of such Underwriter bears to the
total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Sellers, severally and
not jointly, agree to sell to the Underwriters the Additional Shares as set
forth on Schedule I. You may exercise this right on behalf of the Underwriters
in whole or from time to time in part by giving written notice of each election
to exercise the option not later than 30 days after the date of this Agreement.
Any exercise notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Each purchase date must be at least one business day after the
written notice is given and may not be earlier than the closing date for the
Firm Shares nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. On each day, if any, that Additional Shares are to be purchased
(an "Additional Closing Date"), each Underwriter agrees, severally and not
jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased on such
Additional Closing Date as the number of Firm Shares set forth in Schedule II
hereto.
The Company agrees that, without the prior written consent of Xxxxxx
Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 90 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, distribute to members or partners or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of
8
ownership of the Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the issuance of Common Stock issuable upon conversion of the Series A Preferred
Stock, (B) options granted or stock issued upon the exercise of outstanding
stock options or otherwise pursuant to the Company's stock incentive or employee
stock purchase plans, (C) with the prior consent of Xxxxxx Xxxxxxx & Co.
Incorporated, securities issued by the Company in connection with an acquisition
of a business or assets; provided that Xxxxxx Xxxxxxx & Co. Incorporated agrees
to respond to any request for its consent pursuant to this clause (C) as soon as
reasonably practicable after its Equity Capital Markets Desk has been notified
of such request.
4. Terms of Public Offering. The Company and the Sellers are advised by
you that the Underwriters propose to make a public offering of the Sellers'
respective portions of the Shares as soon after the Registration Statement and
this Agreement have become effective as in your judgment is advisable. The
Company and the Sellers are further advised by you that the Shares are to be
offered to the public initially at [ ] a share (the "PUBLIC OFFERING PRICE") and
to certain dealers selected by you at a price that represents a concession not
in excess of [ ] a share under the Public Offering Price, and that no
Underwriter may allow, and no dealer may reallow, a concession to other
underwriters or to dealers.
5. Payment and Delivery. Payment for the Firm Shares to be sold by each
Seller shall be made to such Seller in Federal or other funds immediately
available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on [ ], or at such other time on the same or such other date, not later
than [ ], as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Sellers in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
corresponding notice described in Section 3 or at such other time on the same or
on such other date, in any event not later than _______, 2002 as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "Additional Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or applicable Additional Closing Date, as the case may be. The
certificates evidencing the Firm Shares and Additional Shares shall be delivered
to you on the Closing Date or applicable Additional Closing Date, as the case
may be, for the respective accounts of the several Underwriters, with any
transfer taxes payable in
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connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 4:00 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the 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
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its Subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated
in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 6(a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing
Date, that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., outside counsel for the
Company, dated the Closing Date, to the effect that:
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(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and its Subsidiaries, taken as a whole;
(ii) each Subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its Subsidiaries,
taken as a whole;
(iii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(iv) the shares of Common Stock (including the Shares
to be sold by the Selling Stockholders) outstanding prior to
the sale of the Shares by the Selling Stockholders have been
duly authorized and are validly issued, fully paid and
non-assessable.
(v) all of the issued shares of capital stock of each
Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims, except those liens
and encumbrances securing the Company's and the Subsidiaries'
obligations under the Senior Credit Facilities;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of applicable
law or
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the certificate of incorporation or by-laws of the Company or,
to the best of such counsel's knowledge, any agreement binding
upon the Company or any of its Subsidiaries that has been
filed as an exhibit (including exhibits previously filed and
incorporated therein) to the Company's Annual Report on Form
10-K for the year ended December 31, 2001 or the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31,
2002, or any agreement that, but for the passage of time,
would have to be filed as an exhibit to the Company's
Quarterly Report on Form 10-Q, or, to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Company or any Subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of
the Shares;
(viii) the statements (A) in the Prospectus under the
captions "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Liquidity and Capital
Resources-Senior Credit Facilities," "Management's Discussion
and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources-Senior Subordinated
Notes," "Business-Government Regulation," "Business-Legal
Proceedings," "Description of Capital Stock," and
"Underwriters" and (B) in the Registration Statement in Item
15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings
referred to therein pertaining to the Company or any of its
Subsidiaries, fairly present the information called for with
respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(ix) such counsel shall also state, after due
inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any
of the properties of the Company or any of its Subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
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(x) to such counsel's knowledge, the Company and its
Subsidiaries possess all material licenses, certificates,
authorizations and permits issued by the appropriate federal,
state or foreign regulatory agencies or bodies which are
necessary in connection with rent-to-own transactions, except
where the failure to possess the same would not, singularly or
in the aggregate, have a material adverse effect on the
Company and its Subsidiaries taken as a whole;
(xi) the Company is not required to register as an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended;
(xii) such counsel shall also state that (A) such
counsel believes that the Registration Statement and
Prospectus (except for financial statements and schedules and
other financial and statistical data included therein as to
which such counsel need not express any belief) comply as to
form in all material respects with the Securities Act and, in
the case of the Incorporated Documents, the Exchange Act and
the applicable rules and regulations of the Commission
thereunder, (B) such counsel has no reason to believe that
(except for financial statements and schedules and other
financial and statistical data included therein as to which
such counsel need not express any belief) the Registration
Statement and the Prospectus included therein at the time the
Registration Statement became effective contained any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading and (C) such counsel has no
reason to believe that (except for financial statements and
schedules and other financial and statistical data included
therein as to which such counsel need not express any belief)
the Prospectus contains any untrue statement of a material
fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) The Underwriters shall have received on the Closing Date
opinions of (i) Akin Gump Xxxxxxx Xxxxx & Xxxx, L.L.P. or Xxxxxxx X.
Xxxxxx, General Counsel, Apollo Advisors IV, L.P., counsel for each of
Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV, L.P,
(the "APOLLO SELLING STOCKHOLDERS") and (ii) [ ], General Counsel,
Bear, Xxxxxxx & Co. Inc., counsel for Bear Xxxxxxx MB 1998-1999
Pre-Fund, LLC (the "BEAR XXXXXXX MB SELLING STOCKHOLDER" and together
with the Apollo Selling Stockholders, the "SELLING STOCKHOLDERS"),
dated the Closing Date, to the effect that:
13
(i) this Agreement has been duly authorized, executed
and delivered by or on behalf of each of the Selling
Stockholders;
(ii) the execution and delivery by each Selling
Stockholder of, and the performance by such Selling
Stockholder of its obligations under, this Agreement and the
Custody Agreement and Powers of Attorney of such Selling
Stockholder will not contravene any provision of applicable
law, or the certificate of incorporation or by-laws of such
Selling Stockholder (if such Selling Stockholder is a
corporation), or the limited partnership agreement of such
Selling Stockholder (if such Selling Stockholder is a limited
partnership) or, to such counsel's knowledge, any agreement or
other instrument binding upon such Selling Stockholder or, to
such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
such Selling Stockholder, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
such Selling Stockholder of its obligations under this
Agreement or the Custody Agreement or Power of Attorney of
such Selling Stockholder, except such as may be required by
the securities or Blue Sky laws of the various states in
connection with offer and sale of the Shares;
(iii) each of the Selling Stockholders has valid
title to, or a valid security entitlement in respect of, the
Shares to be sold by such Selling Stockholder free and clear
of all security interests, claims, liens, equities and other
encumbrances, and each of the Selling Stockholders has the
legal right and power, and all authorization and approval
required by law, to enter into this Agreement and the Custody
Agreement and Power of Attorney of such Selling Stockholder
and to sell, transfer and deliver the Shares to be sold by
such Selling Stockholder of a security entitlement in respect
of such shares;
(iv) the Custody Agreement and the Power of Attorney
of each Selling Stockholder have been duly authorized,
executed and delivered by such Selling Stockholder and are
valid and binding agreements of such Selling Stockholder; and
(v) delivery of stock certificates representing the
Shares to be sold by the Selling Stockholders, endorsed to the
Underwriters and payment therefor pursuant to this Agreement
will pass valid title to such Shares, free and clear of any
adverse claim within the meaning of Section 8-102 of the New
York Uniform Commercial Code, to each Underwriter who has
purchased such Shares without notice of an adverse claim.
14
(e) The Underwriters shall have received on the Closing Date
an opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
6(c)(vi) and 6(c)(viii) (but only as to the statements in the
Prospectus under "Underwriters") and 6(c)(xii)(B) and (C) above.
With respect to Section 6(c)(xiii) above, Xxxxxxxx Xxxxxxxx & Xxxxxx
P.C. and Xxxxx Xxxx & Xxxxxxxx may state that their opinions and beliefs are
based upon their participation in the preparation of the Incorporated Documents
(in the case of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.), 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. With respect to Section 6(c) above, Xxxxxxxx Xxxxxxxx &
Xxxxxx P.C. may rely, with respect to factual matters and to the extent such
counsel deems appropriate, upon representations of the Company contained herein.
With respect to Section 6(d) above, [ ], General Counsel, Bear Xxxxxxx & Co.
Inc. and Xxxxxxx X. Xxxxxx, General Counsel, Apollo Advisors IV, L.P. or Akin
Gump Xxxxxxx Xxxxx & Xxxx, L.L.P. (as the case may be) may rely, with respect to
factual matters and to the extent such counsel deems appropriate, upon the
representations of each Selling Stockholder contained herein and in the Custody
Agreement and Power of Attorney of such Selling Stockholder and in other
documents and instruments; provided that copies of such Custody Agreements and
Powers of Attorney and of any such other documents and instruments shall be
delivered to you and shall be in form and substance satisfactory to your
counsel.
The opinions of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C. described in Sections
6(c) above and [ ], General Counsel, Bear Xxxxxxx & Co. Inc. and Xxxxxxx X.
Xxxxxx, General Counsel, Apollo Advisors IV, L.P. or Akin Gump Xxxxxxx Xxxxx &
Xxxx, L.L.P. (as the case may be) described in Section 6(d) above shall be
rendered to the Underwriters at the request of the Company or one or more of the
Selling Stockholders, as the case may be, and shall so state therein.
(f) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Xxxxx Xxxxxxxx LLP, independent certified public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof; provided further that
such letter shall include as an attachment a copy of a report issued by
such accountants under Statement on Standards for Attestation
Engagements (SSAE) No. 10 on the "Management's Discussion and Analysis
of Financial Condition and Results of Operations" section of the
Prospectus.
15
(g) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and certain stockholders, executive
officers and directors of the Company relating to sales and certain
other dispositions of shares of Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in
full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the applicable Additional
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Shares to be sold on such Additional Closing Date and other matters
related to the issuance of such Additional Shares.
7. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, six signed copies of
the Registration Statement (including exhibits thereto and the
Incorporated Documents) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto
but including the Incorporated Documents) and to furnish to you in New
York City, without charge, prior to 10:00 a.m. New York City time on
the business day next succeeding the date of this Agreement and during
the period mentioned in Section 7(c) below, as many copies of the
Prospectus, any Incorporated Documents and any supplements and
amendments thereto or to the Registration Statement as you may
reasonably request. The terms "supplement" and "amendment" or "amend"
as used in this Agreement shall include the Incorporated Documents.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or
16
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, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Shares may have been sold by you on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements
to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending June 30, 2003 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company and the
Sellers agree to pay or cause to be paid all expenses incident to the
performance of their obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel, the Company's accountants
and counsel for the Selling Stockholders in connection with the registration and
delivery of the Shares under the Securities Act and all other fees or expenses
in connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section 7(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) all costs and expenses incident to listing the
Shares on the Nasdaq National Market, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer agent,
registrar or depositary,
17
(viii) the costs and expenses of the Company relating to investor presentations
on any "road show" undertaken in connection with the marketing of the offering
of the Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, and (ix) all
other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section. It
is understood, however, that except as provided in this Section, Section 9
entitled "Indemnity and Contribution", and the last paragraph of Section 11
below, the Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, stock transfer taxes payable on resale of
any of the Shares by them and any advertising expenses connected with any offers
they may make.
The provisions of this Section shall not supersede or otherwise affect
any agreement that the Company and the Sellers may otherwise have for the
allocation of such expenses among themselves.
9. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter, each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus 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 or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein; provided that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured
18
the defect giving rise to such losses, claims, damages or liabilities, unless
such failure is the result of noncompliance by the Company, with Section 7(a)
hereof.
(b) Each Selling Stockholder agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement, the Underwriters, and
each person, if any, who controls the Company or the Underwriters, as
the case may be, within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and each affiliate of
any Underwriter within the meaning of Rule 405 under the Securities
Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
any amendment thereof, any preliminary prospectus 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, but
only with reference to information relating to such Selling Stockholder
furnished by or on behalf of such Selling Stockholder expressly for use
in any preliminary prospectus, or the Prospectus under the caption
"Selling Stockholders" or any amendments or supplements thereto.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholders, the
directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the
Company or any Selling Stockholder within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus 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, but only with
reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in
the Registration Statement, any preliminary prospectus, the Prospectus
or any amendments or supplements thereto.
19
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 9(a), 9(b) or 9(c),
such person (the "INDEMNIFIED PARTY") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified 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 that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (i) the fees and
expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act or who are affiliates of any
Underwriter within the meaning of Rule 405 under the Securities Act,
(ii) the fees and expenses of more than one separate firm (in addition
to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls
the Company within the meaning of either such Section and (iii) the
fees and expenses of more than one separate firm (in addition to any
local counsel) for all Selling Stockholders and all persons, if any,
who control any Selling Stockholder within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the
Underwriters and such control persons and affiliates of any
Underwriters, such firm shall be designated in writing by Xxxxxx
Xxxxxxx & Co. Incorporated. In the case of any such separate firm for
the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. In
the case of any such separate firm for the Selling Stockholders and
such control persons of any Selling Stockholders, such firm shall be
designated in writing by the Selling Stockholders. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or
20
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. 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 on claims that are the subject
matter of such proceeding.
(e) To the extent the indemnification provided for in Section
9(a), 9(b) or 9(c) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph,
in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received
by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause 9(e)(i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 9(e)(i)
above but also the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other
hand 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 Sellers on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of
the Shares (before deducting expenses) received by each Seller and the
total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of
the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Sellers on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Sellers or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
21
omission. The Underwriters' respective obligations to contribute
pursuant to this Section 9 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 9 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 that does not take account of the equitable considerations
referred to in Section 9(e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities 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 9, no Underwriter shall
be required to contribute any amount in excess of the amount by which
the total price at which the Shares 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 Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section
9 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in
equity.
(g) The indemnity and contribution provisions contained in
this Section 9 and the representations, warranties and other statements
of the Company and the Selling Stockholders contained in this Agreement
shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter, or any person controlling any Underwriter or
any affiliate of any Underwriter, any Selling Stockholder or any person
controlling any Selling Stockholder, or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Series A Preferred Shares.
10. Termination. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance
22
services in the United States shall have occurred, (iv) any moratorium on
commercial banking activities shall have been declared by Federal or New York
State authorities or (v) there shall have occurred any outbreak or escalation of
hostilities, or any change in financial markets or any calamity or crisis that,
in your judgment, is material and adverse and which, singly or together with any
other event specified in this clause (v), makes it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Shares on the terms and in the manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Additional Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule II bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased, and arrangements satisfactory to you, the Company and
the Selling Stockholders for the purchase of such Firm Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Stockholders. In any such case either you or the relevant Sellers shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. If, on an Additional Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased on such
Additional Closing Date, the non-defaulting Underwriters shall have the option
to (i) terminate their obligation hereunder to purchase the Additional Shares to
be sold on such Additional Closing Date or (ii) purchase not less than the
number of Additional Shares that such non-defaulting Underwriters would have
been obligated to purchase in the absence of such default. Any action taken
under this
23
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any of the Company or any
Selling Stockholder to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason any of the Company or any Selling
Stockholder shall be unable to perform its obligations under this Agreement, the
Company and the Selling Stockholders will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
24
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
RENT-A-CENTER, INC.
By:
--------------------------------------
Name:
Title:
The Selling Stockholders named in
Schedule I hereto, acting severally
By:
--------------------------------------
Attorney-in-Fact
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Brothers Inc.
Bear, Xxxxxxx & Co. Inc.
SunTrust Capital Markets, Inc.
First Union Securities, Inc.
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
-----------------------------------
Name:
Title:
25
SCHEDULE I
NUMBER OF
NUMBER OF ADDITIONAL
FIRM SHARES SHARES
SELLING STOCKHOLDER TO BE SOLD TO BE SOLD
------------------- ----------- -----------
APOLLO INVESTMENT FUND IV, L.P. 2,847,378 427,107
APOLLO OVERSEAS PARTNERS IV, L.P. 152,777 22,916
BEAR XXXXXXX MB 1998-1999 PRE-FUND, LLC 119,845 17,977
---------- --------
TOTAL: [3,120,000] [468,000]
========== ========
SCHEDULE II
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
XXXXXX XXXXXXX & CO. INCORPORATED [TO COME]
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
SUNTRUST CAPITAL MARKETS, INC.
FIRST UNION SECURITIES, INC.
[OTHER UNDERWRITERS]
----------
TOTAL: [3,120,000]
==========
SCHEDULE III
SUBSIDIARIES
Advantage Companies, Inc.
ColorTyme, Inc.
EXHIBIT A
[FORM OF LOCK-UP LETTER]
____________, 2002
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Brothers Inc.
Bear, Xxxxxxx & Co. Inc.
Sun Trust Capital Markets, Inc.
First Union Securities, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Rent-A-Center, Inc., a Delaware corporation (the
"COMPANY"), providing for the public offering (the "PUBLIC OFFERING") by the
several Underwriters, including Xxxxxx Xxxxxxx (the "UNDERWRITERS"), of
[3,120,000] shares (the "SHARES") of the Common Stock , $.01 par value per
share, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend,
distribute to members or partners or otherwise transfer or dispose of, directly
or indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the shares of the Series A Preferred Stock (the
"SERIES A PREFERRED STOCK"), par value $.01 per share, of the Company to be sold
pursuant to the Underwriting Agreement, (B) shares of Common Stock or other
securities acquired in open market transactions
after the completion of the Public Offering, (C) bona fide gifts of Common Stock
by the undersigned; provided that each recipient of any such gift shall deliver
an executed copy of this Agreement to the Underwriters prior to or
contemporaneously with such transaction or (D) the sale or transfer of shares of
securities, in connection with a sale of the Company pursuant to an offer made
on substantially the same terms to all Company stockholders of which the
Underwriters have been advised in writing. In addition, the undersigned agrees
that, without the prior written consent of Xxxxxx Xxxxxxx on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 90 days after the date of the Prospectus, make any demand for or exercise
any right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
undersigned's share of Common Stock except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters. Notwithstanding anything
to the contrary herein, this Lock-Up Agreement shall expire if the Public
Offering is not consummated on or before July 31, 2002.
Very truly yours,
-----------------------------------------
(Name)
-----------------------------------------
(Address)
2
