Exhibit 1.1
THE FIRST MARBLEHEAD CORPORATION
Common Stock, par value $.01 per share
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Underwriting Agreement
[__________], 2004
Xxxxxxx, Xxxxx & Co.
X.X. Xxxxxx Securities Inc.
Bear, Xxxxxxx & Co. Inc.
Xxxxx & Company LLC
Xxxxxxxx & Partners, L.P.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
The stockholders of The First Marblehead Corporation, a Delaware
corporation (the "Company") named in SCHEDULE II hereto (the "Selling
Stockholders") propose, subject to the terms and conditions stated herein, to
sell to the Underwriters named in SCHEDULE I hereto (the "Underwriters") an
aggregate of 6,440,271 shares and, at the election of the Underwriters, up to
966,041 additional shares of Common Stock, par value $.01 per share ("Stock") of
the Company. The aggregate of 6,440,271 shares to be sold by the Selling
Stockholders is herein called the "Firm Shares" and the aggregate of 966,041
additional shares to be sold by the Selling Stockholders is herein called the
"Optional Shares". The Firm Shares and the Optional Shares that the Underwriters
elect to purchase pursuant to Section 2 hereof are herein collectively called
the "Shares".
1. (a) The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-116142) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto, to
you for each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or, to
the knowledge of the Company, threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement,
if any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared effective, each
as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; and such final prospectus, in the form
first filed pursuant to Rule 424(b) under the Act, is hereinafter called
the "Prospectus");
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and unless otherwise corrected, modified or
supplemented by the Prospectus, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein or by a Selling Stockholder
expressly for use in the preparation of the answers therein to Items 7 and
11(l) of Form S-1;
(iii) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein or
by a Selling Stockholder expressly for use in the preparation of the
answers therein to Items 7 and 11(l) of Form S-1;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or, to the knowledge of the Company, court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of
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operations of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus;
(v) The Company and its subsidiaries own no real property and have
good and valid title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries;
(vi) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus; each subsidiary of the
Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation with
power and authority (corporate and other) to own its properties and conduct
its business; and each of the Company and its subsidiaries has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction;
(vii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description of the Stock contained in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and, except as set forth in the
Prospectus, are owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims;
(viii) The compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions herein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject, except for
such conflicts, breaches, violations or defaults that would not,
individually or in the aggregate, result in a material adverse effect on
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"), nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties, except for such violations
of statutes, orders, rules or regulations that would not, individually or
in the aggregate, result in a Material Adverse Effect and also prevent the
Company from performing its obligations under this Agreement; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is
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required for the sale of the Shares or the consummation by the Company of
the transactions contemplated by this Agreement, except the registration
under the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required by the National
Association of Securities Dealers, Inc. or under state securities or Blue
Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(ix) Neither the Company nor any of its subsidiaries is (i) in
violation of its Certificate of Incorporation or By-laws or (ii) in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, except for such
defaults that would not, individually or in the aggregate, result in a
Material Adverse Effect;
(x) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock, and under the captions "Underwriting"
and "Shares Eligible for Future Sale", insofar as they purport to describe
the provisions of the laws and documents referred to therein, are accurate,
complete and fair in all material respects;
(xi) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xii) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(xiii) KPMG LLP, who have certified certain financial statements of
the Company and its subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder;
(xiv) (A) Except as otherwise disclosed in the Prospectus under the
caption "Risk Factors -- If we become subject to the licensing or
registration laws of any jurisdiction or any additional government
regulation, our compliance costs could increase significantly", and subject
to the limitations described therein, each of the Company and its
subsidiaries has all certificates, consents, registrations, exemptions,
orders, permits, licenses, qualifications, concessions, franchises, orders,
authorizations or other approvals (each, an "Authorization") of and from,
and has made all declarations and filings with, all Federal and state
governmental authorities, self-regulatory organizations, and all courts and
other tribunals, necessary or required to own or lease their properties and
to engage in the business currently conducted by them in the manner
described in the Prospectus; (B) all Authorizations referred to in clause
(A) of this paragraph are valid and in full force and effect; and (C) each
of the Company and its subsidiaries is in compliance with the terms and
conditions of such Authorizations and with the rules and regulations of the
regulatory authorities and governing bodies having jurisdiction with
respect thereto, other than, in the case of clause (A), (B) and (C), those
Authorizations,
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the failure to obtain or comply with would not, individually or in the
aggregate, result in a Material Adverse Effect;
(xv) Except as set forth in the Shareholders Agreement, dated as of
December 21, 1995, among the Company and the stockholders named therein, no
holder of securities of the Company has any preemptive right to acquire
from the Company any securities of the Company; and no holder of securities
of the Company has any right to require the Company to register securities
under the Registration Statement;
(xvi) The consolidated historical financial statements, including the
notes thereto, included in the Registration Statement and the Prospectus
fairly present the financial position, results of operations and changes in
the consolidated financial position of the Company and its subsidiaries as
of the respective dates, or for the respective periods, indicated, all in
conformity with United States generally accepted accounting principles
consistently applied throughout such periods; the consolidated pro forma
financial statements, including the notes thereto, included in the
Registration Statement and the Prospectus have been prepared on a basis
consistent with such historical statements, except for the pro forma
adjustments specified therein, and fairly present the historical and
proposed transactions described in the Registration Statement and the
Prospectus or contemplated by this Agreement, on the basis of assumptions
that, in the reasonable opinion of the Company, were reasonable at the time
such pro forma financial statements were prepared; and all other historical
and pro forma financial information and other financial data included in
the Registration Statement and the Prospectus are accurately presented and
prepared on a basis consistent with such financial statements and the books
and records of the Company and its subsidiaries;
(xvii) All material tax returns required to be filed by the Company or
any of its subsidiaries in any jurisdiction have been timely and duly
filed, other than those filings being contested in good faith; there are no
tax returns of the Company or any of its subsidiaries that are currently
being audited by state, local, Federal or foreign taxing authorities or
agencies (and with respect to which the Company or any of its subsidiaries
has received notice); and all taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges which are known by the
Company, or which could have been known by the Company after reasonable
investigation, to be due or claimed to be due from such entities have been
paid, other than those being contested in good faith and for which adequate
reserves have been provided or those currently payable without penalty or
interest, and other than those that are not material;
(xviii) The Company and its subsidiaries maintain insurance covering
their respective properties, operations, personnel and businesses that
insures against such losses and risks as are adequate in accordance with
reasonable business judgment to protect the Company and its subsidiaries
and their respective businesses; and all such insurance is outstanding and
duly in force on the date hereof and to the best of the Company's knowledge
will be outstanding and duly in force at each Time of Delivery (as defined
in Section 4 hereof);
(xix) The Company and its subsidiaries own, possess, license or have
other rights to use all patents, patent applications, trade and service
marks, trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "Intellectual Property") necessary
for the conduct of the Company's business as now conducted or as proposed
in the Prospectus to be conducted, except any failure to so own, possess,
license or have rights to use Intellectual
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Property which would not, individually or in the aggregate, result in a
Material Adverse Effect; and
(xx) Each of the Company and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto;
(b) Each of the Selling Stockholders severally represents and warrants to,
and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement
and the Power of Attorney and the Custody Agreement hereinafter referred
to, and for the sale and delivery of the Shares to be sold by such Selling
Stockholder hereunder, have been obtained; and such Selling Stockholder has
full right, power and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement and to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
By-laws of such Selling Stockholder if such Selling Stockholder is a
corporation, the Partnership Agreement of such Selling Stockholder if such
Selling Stockholder is a partnership, the Trust Agreement or Declaration of
Trust of such Selling Stockholder if such Selling Stockholder is a trust,
the Certificate of Formation or Limited Liability Company Agreement of such
Selling Stockholder if such Selling Stockholder is a limited liability
company, or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder;
(iii) Such Selling Stockholder, (a) if it has placed in custody under
the Custody Agreement Certificates or Exercised Shares (as such terms are
defined in the Custody Agreement), has, and immediately prior to each Time
of Delivery such Selling Stockholder will have, good and valid title to the
Shares to be sold by such Selling Stockholder hereunder, free and clear of
all liens, encumbrances, equities or claims; and, upon delivery of such
Shares and payment therefor pursuant hereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims, will
pass to the several Underwriters, and (b) if it has placed in custody under
the Custody Agreement Exercise Notices (as such term is defined in the
Custody Agreement), has, and immediately prior to each Time of Delivery
such Selling Stockholder will have, good and valid title to the options
with respect to which such
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Exercise Notices have been given, and, at each Time of Delivery, such
Selling Stockholder will have, good and valid title to the Shares to be
sold by such Selling Stockholder hereunder, in each case free and clear of
all liens, encumbrances, equities or claims; and, upon delivery of such
Shares and payment therefor pursuant hereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims, will
pass to the several Underwriters;
(iv) During the period beginning from the date hereof and continuing
to and including the date 90 calendar days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent
the right to receive, Stock or any such substantially similar securities
(other than pursuant to employee stock option plans existing on, or upon
the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without your prior written
consent. Notwithstanding the foregoing, a Selling Stockholder may transfer
Stock (i) to the Underwriters pursuant to this Agreement, (ii) as a bona
fide gift or gifts, provided that the donee or donees thereof agree to be
bound in writing by the foregoing restrictions, or (iii) to any trust for
the direct or indirect benefit of the Selling Stockholder or the immediate
family of the Selling Stockholder, provided that the trustee of the trust
agrees to be bound in writing by the foregoing restrictions, and provided
further that any such transfer shall not involve a disposition for value.
In addition, notwithstanding the foregoing, if the Selling Stockholder is
(i) a corporation, the corporation may transfer the capital stock of the
Company to any stockholder or wholly-owned subsidiary of such corporation,
(ii) a limited partnership, the limited partnership may transfer the
capital stock of the Company to its partners, (iii) a limited liability
company, the limited liability company may transfer the capital stock of
the Company to any member of such limited liability company or (iv) a
trust, the trustee may transfer the capital stock of the Company to any
beneficiary, trustee or settlor of such trust; PROVIDED, HOWEVER, that in
any such case, it shall be a condition to the transfer that each transferee
execute an agreement stating that such transferee is receiving and holding
such capital stock subject to the foregoing provisions and there shall be
no further transfer of such capital stock except in accordance with these
provisions, and PROVIDED FURTHER that any such transfer shall not involve a
disposition for value;
(v) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by such Selling
Stockholder expressly for use therein, such Preliminary Prospectus and the
Registration Statement did, and the Prospectus and any further amendments
or supplements to the Registration Statement and the Prospectus, when they
become effective or are filed with the Commission, as the case may be, and
will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to
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the transactions herein contemplated, such Selling Stockholder will deliver
to you prior to or at the First Time of Delivery (as defined in Section 4
hereof) a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
(viii) Certificates and Exercised Shares in negotiable form
representing all of the Shares to be sold by such Selling Stockholder
hereunder and/or Exercise Notices representing all of the Shares to be sold
by such Selling Stockholder hereunder have in each case been placed in
custody under a Custody Agreement, in the form heretofore furnished to you
(the "Custody Agreement"), duly executed and delivered by such Selling
Stockholder to The First Marblehead Corporation, as custodian (the
"Custodian"), and such Selling Stockholder has duly executed and delivered
a Power of Attorney, in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in SCHEDULE II hereto, and
each of them, as such Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this Agreement
on behalf of such Selling Stockholder, to determine the purchase price to
be paid by the Underwriters to the Selling Stockholders as provided in
Section 2 hereof, to authorize the delivery of the Shares to be sold by
such Selling Stockholder hereunder and otherwise to act on behalf of such
Selling Stockholder in connection with the transactions contemplated by
this Agreement and the Custody Agreement; and
(ix) The Shares represented by the Certificates, Exercised Shares
and/or the Exercise Notices held in custody for such Selling Stockholder
under the Custody Agreement are subject to the interests of the
Underwriters hereunder; the arrangements made by such Selling Stockholder
for such custody, and the appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable;
the obligations of the Selling Stockholders hereunder shall not be
terminated by operation of law, whether by the death or incapacity of any
individual Selling Stockholder or, in the case of an estate or trust, by
the death or incapacity of any executor or trustee or the termination of
such estate or trust, or in the case of a partnership or corporation, by
the dissolution of such partnership or corporation, or by the occurrence of
any other event; if any individual Selling Stockholder or any such executor
or trustee should die or become incapacitated, or if any such estate or
trust should be terminated, or if any such partnership or corporation
should be dissolved, or if any other such event should occur, before the
delivery of the Shares hereunder, Certificates and/or Exercised Shares
representing the Shares shall be delivered by or on behalf of the Selling
Stockholders in accordance with the terms and conditions of this Agreement
and of the Custody Agreements; and actions taken by the Attorneys-in-Fact
pursuant to the Powers of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred,
regardless of whether or not the Custodian, the Attorneys-in-Fact, or any
of them, shall have received notice of such death, incapacity, termination,
dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) each of the
Selling Stockholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Selling Stockholders, at a purchase price per share of
$[_____], the number of Firm Shares (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying the aggregate number of Firm Shares
to be sold by each of the Selling Stockholders as set forth opposite their
respective names in SCHEDULE II hereto by a fraction, the numerator of which is
the aggregate number of Firm Shares to be purchased by such
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Underwriter as set forth opposite the name of such Underwriter in SCHEDULE I
hereto and the denominator of which is the aggregate number of Firm Shares to be
purchased by all of the Underwriters from all of the Selling Stockholders
hereunder and (b) in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Shares as provided below, each of the
Selling Stockholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Selling Stockholders, at the purchase price per share
set forth in clause (a) of this Section 2, that portion of the number of
Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in SCHEDULE I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.
The Selling Stockholders, as and to the extent indicated in SCHEDULE II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to 966,041 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the number of Firm Shares. Any such
election to purchase Optional Shares shall be made in proportion to the maximum
number of Optional Shares to be sold by each Selling Stockholder as set forth in
SCHEDULE II hereto. Any such election to purchase Optional Shares may be
exercised one time and only by written notice from you to the Attorneys-in-Fact,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery or, unless you and the
Attorneys-in-Fact otherwise agree in writing, earlier than two or later than
five business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Selling Stockholders shall be delivered by or on behalf of the
Selling Stockholders to Xxxxxxx, Sachs & Co., through the facilities of the
Depository Trust Company ("DTC"), for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the
Custodian, to Xxxxxxx, Xxxxx & Co. at least forty-eight hours in advance. The
Company will cause the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to the Time of
Delivery with respect thereto at the office of DTC or its designated custodian
or at the office of Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Designated Office"). The time and date of such delivery and payment
shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on
[__________], 2004 or such other time and date as Xxxxxxx, Xxxxx & Co. and the
Company may agree upon in writing, and, with respect to the Optional Shares,
9:30 a.m., New York time, on the date specified by Xxxxxxx, Sachs & Co. in the
written notice given by Xxxxxxx, Xxxxx & Co. of the Underwriters' election to
purchase such Optional Shares, or such other time and date as Xxxxxxx, Sachs &
Co. and the Company may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Shares, if not
9
the First Time of Delivery, is herein called the "Second Time of Delivery", and
each such time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(l) hereof, will be delivered at the offices of Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000 (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at such Time of Delivery. A meeting will be held at the Closing Location at
2:00 p.m., New York City time, on the New York Business Day next preceding such
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to advise
you, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Promptly to furnish the Underwriters with written and electronic
copies of the Prospectus in New York City in such quantities as you may
reasonably request, and, if the delivery of a prospectus is required at any
time prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Shares and if at
such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to
10
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such period to amend or supplement the Prospectus
in order to comply with the Act, to notify you and upon your request to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many written and electronic copies as you may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Shares at any time nine months or
more after the time of issue of the Prospectus, upon your request but at
the expense of such Underwriter, to prepare and deliver to such Underwriter
as many written and electronic copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date 90 calendar days after the date of the Prospectus,
not to offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any securities of the Company that are substantially
similar to the Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities (other than
pursuant to employee stock option or purchase plans existing on, upon the
conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement, or upon the issuance by the
Company of securities in order to acquire assets or equity of one or more
businesses, provided that the Company will not issue in excess of an
aggregate of $20 million of securities for such acquisitions), without your
prior written consent;
(f) To furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the Company
and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement), to make
available to its stockholders consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish or make available to you copies of all
reports or other communications (financial or other) furnished to
stockholders, and to deliver to you (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed with
the Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you may
from time to time reasonably request (such financial statements to be on a
11
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(h) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act;
(i) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act; and
(j) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the on-line
offering of the Shares (the "License"); PROVIDED, HOWEVER, that the License
shall be used solely for the purpose described above, is granted without
any fee and may not be assigned or transferred.
6. The Company and each of the Selling Stockholders covenant and agree with
one another and with the several Underwriters that (a) the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
reproducing any Agreement among Underwriters, this Agreement, the Blue Sky
Memorandum, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (iv) all fees and expenses in connection with listing the
Shares on the New York Stock Exchange; (v) the filing fees incident to, and the
reasonable fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Shares; (vi) the cost of preparing
stock certificates; (vii) the cost and charges of any transfer agent or
registrar; and (viii) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section; and (b) such Selling Stockholder will pay or cause to be paid
all costs and expenses incident to the performance of such Selling Stockholder's
obligations hereunder which are not otherwise specifically provided for in this
Section, including (i) any fees and expenses of counsel for such Selling
Stockholder, (ii) such Selling Stockholder's pro rata share of the fees and
expenses of the Attorneys-in-Fact and the Custodian, and (iii) all expenses and
taxes incident to the sale and delivery of the Shares to be sold by such Selling
Stockholder to the Underwriters hereunder. In connection with clause (b)(iii) of
the preceding sentence, Xxxxxxx, Sachs & Co. agrees to pay New York State stock
transfer tax, and the Selling Stockholder agrees to reimburse Xxxxxxx, Xxxxx &
Co. for associated carrying costs if such tax payment is not rebated on the day
of payment and for any portion of such tax payment not rebated. It is
understood, however, that the Company shall bear, and the Selling Stockholders
shall not be required to pay or to reimburse the Company for, the cost of any
other matters not directly relating to the sale and
12
purchase of the Shares pursuant to this Agreement, and that, except as provided
in this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Xxxxxxx Procter LLP, counsel for the Underwriters, shall have
furnished to you such written opinion or opinions, dated such Time of
Delivery, with respect to such matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, counsel for the
Company, shall have furnished to you their written opinion (a draft of such
opinion is attached as Annex II(a) hereto), dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has the corporate power and authority to carry on its
business and to own, lease and operate its properties, as such
business and properties are described in the Prospectus;
(ii) Each subsidiary of the Company has been duly incorporated as
a corporation and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation as set
forth opposite its respective name on Schedule A thereto;
(iii) The Company is duly qualified and is in good standing as a
foreign corporation authorized to do business in the Commonwealth of
Massachusetts and the State of New York. Each subsidiary of the
Company is duly qualified and is in good standing as a foreign
corporation authorized to do business in the jurisdictions set forth
opposite their respective names on Schedule A thereto;
(iv) The Company has an authorized capital as set forth under the
caption "Description of Capital Stock" in the Prospectus. The Shares
conform in all material respects to the description of Common Stock
set forth under the caption "Description of Capital Stock" in the
Prospectus;
13
(v) All of the outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued
and are fully paid and non-assessable and are owned of record directly
or indirectly by the Company;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The statements in the Prospectus under the captions
"Description of Capital Stock," "Shares Eligible for Future Sale" and
certain paragraphs of "Underwriting", insofar as such statements
constitute matters of law or legal conclusions or summarize the terms
of agreements, are correct in all material respects;
(viii) The execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby will not (A) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency, except such as have been obtained under
the Act and the Securities Exchange Act of 1934 (the "Exchange Act"),
and except as may be required under the securities or Blue Sky laws of
any foreign jurisdiction or of any state or other jurisdiction of the
United States, as to which such counsel expresses no opinion, (B)
conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the Certificate of Incorporation or By-laws of
the Company or any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which the Company or any subsidiary of the
Company is a party filed as an exhibit to the Registration Statement,
except exhibits 10.1 through and including 10.27 and exhibit 10.35, as
to which such counsel expresses no opinion, or (C) violate or conflict
with any applicable U.S. federal or Massachusetts state law, rule or
regulation, which in such counsel's experience is normally applicable
in transactions of the type contemplated by this Agreement, the
Delaware General Corporation Law statute or any judgment, order or
decree specifically naming the Company or its property of which such
counsel is aware;
(x) To such counsel's knowledge, there is no action, proceeding
or litigation pending or threatened against the Company or any of the
subsidiaries of the Company before any court, governmental or
administrative agency or body that is required by the Act or the rules
and regulations thereunder to be described in the Registration
Statement or the Prospectus that is not so described;
(xi) The Company is not an "investment company" as such term is
defined in the Investment Company Act;
(xii) To such counsel's knowledge, except as described in the
Registration Statement, there are no contracts, agreements or
understandings between the Company and any person granting such person
the right to require the Company to file a registration statement
under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares
registered pursuant to the Registration Statement, except for any such
rights which have been waived;
(xiii) The Shares to be delivered at the Time of Delivery are
listed on the New York Stock Exchange;
(xiv) In the course of acting as counsel for the Company in
connection with the preparation of the Registration Statement and the
Prospectus, such counsel has participated in conferences with officers
and other representatives of the Company,
14
regulatory counsel for the Company, representatives of and counsel for
the Underwriters and representatives of the independent public
accountants of the Company, during which the Registration Statement
and the Prospectus were discussed. While the limitations inherent in
the independent verification of factual matters and the character of
determinations involved in the registration process are such that such
counsel is not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus, subject to the foregoing
and based on such participation, inquiries and discussions, no facts
have come to such counsel's attention that have caused such counsel to
believe that the Registration Statement, as of the Effective Date,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading (except that such
counsel expresses no such view with respect to the financial
statements, including the notes and schedules thereto, or any other
financial or accounting information or data included therein), or that
the Prospectus, as of the date it was filed with the Commission
pursuant to Rule 424(b) under the Act or as of the date hereof,
contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading (except that such counsel expresses no such view with
respect to the financial statements, including the notes and schedules
thereto, or any other financial or accounting information or data
included therein). Such counsel is not aware of any contract or other
document of a character required by the Act and the applicable rules
and regulations of the Commission thereunder to be filed as an exhibit
to the Registration Statement that is not so filed;
Such counsel shall be entitled to rely in respect of their
opinion in respect of certain matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such certificates and shall provide you with
original signed copies of such certificates;
(d) Xxxxxx Xxxxxx, regulatory counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is attached
as Annex II(b) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) (A) Except as otherwise disclosed in the Prospectus under the
caption "Risk Factors -- If we become subject to the licensing or
registration laws of any jurisdiction or any additional government
regulation, our compliance costs could increase significantly", and
subject to the limitations described therein, each of the Company and
its subsidiaries has all Authorizations of and from, and has made all
declarations and filings with, all Federal and state governmental
authorities, self-regulatory organizations, and all courts and other
tribunals, necessary or required to own or lease their properties and
to engage in the business currently conducted by it in the manner
described in the Prospectus; (B) all Authorizations referred to in
clause (A) of this paragraph are valid and in full force and effect;
and (C) to the best of such counsel's knowledge, each of the Company
and its subsidiaries is in compliance with the terms and conditions of
such Authorizations and with the rules and regulations of the
regulatory authorities and governing bodies having jurisdiction with
respect thereto, other than, in the case of clause (A), those
Authorizations, the failure to obtain would not, individually or in
the aggregate, result in a
15
material adverse change in, or a material adverse effect on, the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries;
(ii) The compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject and which are filed as
exhibits 10.1 through 10.27 and 10.35 to the Registration Statement
(provided that such counsel need render no opinion with respect to the
confidentiality provisions of Section 11.15(a) of the Master Servicing
Agreement between the Company and The Education Resources Institute,
Inc.) (the "Reviewed Agreements"), nor will such action result in any
violation of any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties; and
(iii) Insofar as the statements set forth in the Prospectus under
the captions "Risk Factors -- If we become subject to the licensing or
registration laws of any jurisdiction or any additional government
regulation, our compliance costs could increase significantly,
--Failure to comply with consumer protection laws could subject us to
civil and criminal penalties and affect the value of our assets.
Compliance with recently enacted identity theft laws and regulations
will increase the cost and complexity of our operations and MAY reduce
our ability to process growing loan volumes in a timely fashion," and
"Business--Government Regulation" constitute a summary of matters of
law or legal conclusions pertaining to the regulation of the Company's
business by any Federal or state governmental authority,
self-regulatory organization, court or other tribunal, they are
correct in all material respects.
In addition to the matters set forth above, such letter shall
also contain a statement of such counsel to the effect that although
they do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement
or the Prospectus, (i) to the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened, and (ii)
with respect to the sections of the Registration Statement and the
Prospectus appearing under the captions "Prospectus Summary," "Risk
Factors," "Management Discussion and Analysis of Financial Condition
and Results of Operation," and "Business" (the "Reviewed Portions"),
they have no reason to believe that, as of its effective date, the
Reviewed Portions as set forth in the Registration Statement or any
further amendment thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related
16
schedules therein, as to which such counsel need express no opinion)
contained an 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 or that, as of its date, the
Reviewed Portions as set forth in the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of such Time of Delivery, either the Reviewed Portions as set forth in
the Registration Statement or the Reviewed Portions as set forth in
the Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contain an untrue statement of a material
fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and they do not know of any amendment to
the Registration Statement relating to the Reviewed Portions required
to be filed or of any contracts or other documents of a character
similar to the Reviewed Agreements required to be filed as an exhibit
to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or
described as required.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
Federal laws of the United States and the state laws of the
Commonwealth of Massachusetts (provided that the limitation to the
state laws of the Commonwealth of Massachusetts shall not apply to the
opinion set forth in subsection (i) of this Section 7(d)). Such
counsel shall be entitled to rely in respect of their opinion in
respect of certain matters of fact upon certificates of officers of
the Company or its subsidiaries, provided that such counsel shall
state that they believe that both you and they are justified in
relying upon such certificates and shall provide you with original
signed copies of such certificates;
(e) The respective counsel for each of the Selling Stockholders, as
indicated in Schedule II hereto, each shall have furnished to you their
written opinion with respect to each of the Selling Stockholders for whom
they are acting as counsel (a draft of each such opinion is attached as
Annex II(c) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have been duly
executed and delivered by such Selling Stockholder and constitute
valid and binding agreements of such Selling Stockholder;
(ii) This Agreement has been duly executed and delivered by or on
behalf of such Selling Stockholder; and the sale of the Shares to be
sold by such Selling Stockholder hereunder and the consummation of the
transactions herein contemplated will not (A) require any consent,
approval, authorization or other order of, or qualification with, any
court or governmental body or agency, except such as have been
obtained under the Securities Act and the Exchange Act, and except as
may be required under the securities or Blue Sky laws of any foreign
jurisdiction or of any state or other jurisdiction of the United
States, as to which we express no opinion, (B) conflict with or result
in a breach or violation of any terms or provisions of, or constitute
a default under, any
17
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which such Selling Stockholder
is a party or by which such Selling Stockholder is bound or to which
any of the property or assets of such Selling Stockholder is subject,
or (C) violate or conflict with any applicable United States federal
or Massachusetts state law, rule or regulation, which in such
counsel's experience is normally applicable in transactions of the
type contemplated by this Agreement, or any judgment, order or decree
specifically naming the Selling Stockholder which is known to such
counsel;
(iii) Based solely on a certificate of such Selling Stockholder
and the representations and warranties of such Selling Stockholder in
the Custody Agreement and this Agreement, at such Time of Delivery,
such Selling Stockholder had, after giving effect to the exercise of
options as contemplated by this Underwriting Agreement, the Custody
Agreement and the Power of Attorney, good and valid title to the
Shares to be sold at such Time of Delivery by such Selling Stockholder
under this Agreement, free and clear of all liens, encumbrances,
equities or claims, and such Selling Stockholder has full legal right
and authority to sell, transfer and deliver in the manner provided in
this Agreement and the Custody Agreement the Shares being sold by such
Selling Stockholder under this Agreement; and
(iv) Assuming that each Underwriter acquires a securities
entitlement (within the meaning of Sections 8-102(a)(17) and 8-501 of
the Uniform Commercial Code (the "UCC")) in the Shares transferred by
such Selling Stockholder by having such Shares credited to the
securities account or accounts of such Underwriter maintained with The
Depository Trust Company or another securities intermediary, and makes
payment for such Shares as provided in this Agreement, in each case
without notice of any adverse claim (within the meaning of Sections
8-105 and 8-502 of the UCC), no action based on an adverse claim
(within the meaning of Section 8-102 of the UCC) may be asserted
against such Underwriter with respect to such Shares.
Such counsel shall be entitled to rely in respect of their
opinion in respect of matters of fact upon certificates of officers of
the Company or its subsidiaries or upon certificates of the Selling
Stockholders, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such certificates
and shall provide you with original signed copies of such
certificates;
(f) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent
to the date of this Agreement and also at such Time of Delivery, KPMG LLP
shall have furnished to you a letter or letters, dated the respective dates
of delivery thereof, in form and substance satisfactory to you and KPMG
LLP, to the effect set forth in Annex I hereto (the executed copy of the
letter delivered prior to the execution of this Agreement is attached as
Annex I(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex I(b)
hereto);
(g)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree,
18
otherwise than as set forth or contemplated in the Prospectus, and (ii)
since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities or a material
disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus;
(i) The Shares to be delivered at the Time of Delivery are listed on
the New York Stock Exchange;
(j) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each of the Selling Stockholders,
substantially to the effect set forth in Subsection 1(b)(iv) hereof in form
and substance satisfactory to you;
(k) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses promptly
following the date of this Agreement;
(l) The Company and the Selling Stockholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of the
Company signed by officers of the Company and of the Selling Stockholders,
respectively, satisfactory to you as to the accuracy of the representations
and warranties of the Company and the Selling Stockholders, respectively,
herein at and as of such Time of Delivery, as to the performance by the
Company and the Selling Stockholders of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, and as to
such other matters as you may reasonably request, and the Company shall
have furnished or caused to be furnished certificates as to the matters set
forth in subsections (a) and (g) of this Section; and
(m) Deutsch Xxxxxxxx Xxxxxx XxXxxxxx & Xxxxxxx, P.C., special counsel
for the Company, shall have furnished to you their written opinion, dated
such Time of Delivery, in form and substance satisfactory to you, to the
effect that, they are of the opinion that all the outstanding shares of
capital stock of the Company that were issued by the Company prior to
October 30, 2003, have been duly authorized and validly issued and are
fully paid and non-assessable.
19
8. (a) The Company and each of the Selling Stockholders (other than the
Selling Stockholders listed on Schedule III hereto) (such Selling Stockholders,
hereinafter the "Indemnification Stockholders"), jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company and the Indemnification Stockholders shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Sachs & Co. expressly for use therein; provided, further, that
the liability of an Indemnification Stockholder pursuant to this subsection 8(a)
shall not exceed the product of (i) the number of Shares sold by such
Indemnification Stockholder, including any Optional Shares, and (ii) the public
offering price of the Shares as set forth in the Prospectus, net of underwriting
discounts and commissions.
(b) Each of the Selling Stockholders listed on Schedule III hereto (such
Selling Stockholders, hereinafter the "Limited Indemnification Stockholders"),
severally and not jointly, will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Limited Indemnification Stockholder
for use therein and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the liability of a Limited Indemnification
Stockholder pursuant to this subsection 8(a) shall not exceed the product of (i)
the number of Shares sold by such Limited Indemnification Stockholder, including
any Optional Shares, and (ii) the public offering price of the Shares as set
forth in the Prospectus, net of underwriting discounts and commissions.
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of
20
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through
Xxxxxxx, Xxxxx & Co. expressly for use therein; and will reimburse the Company
and each Selling Stockholder for any legal or other expenses reasonably incurred
by the Company or such Selling Stockholder in connection with investigating or
defending any such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission to so notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (d) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Stockholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds
21
from the offering (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholders on
the one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, each of the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (e) 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 above in this subsection (e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (e) shall be
deemed to include 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 subsection (e), (i) 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 which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and (ii) no Selling
Stockholder shall be required to contribute in excess of an amount equal to the
product of the number of Shares sold by the Selling Stockholder, including any
Optional Shares, and the public offering price of the Shares set forth in the
Prospectus, net of underwriting discounts and commissions. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint. Notwithstanding anything to the contrary in this
subsection (e), the Limited Indemnification Stockholders shall only be required
to contribute insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Limited Indemnification Stockholder for use therein; and no Limited
Indemnification Stockholder shall be required to contribute any amount in excess
of an amount equal to the product of (i) the number of Shares sold by such
Limited Indemnification Stockholder, including any Optional Shares, and (ii) the
public offering price of the Shares as set forth in the Prospectus, net of
underwriting discounts and commissions.
(f) The obligations of the Company and the Selling Stockholders under this
Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the
22
Company (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company) and to each
person, if any, who controls the Company or any Selling Stockholder within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Selling Stockholders shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Selling Stockholders
that you have so arranged for the purchase of such Shares, or the Selling
Stockholders notify you that they have so arranged for the purchase of such
Shares, you or the Selling Stockholders shall have the right to postpone a Time
of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your reasonable opinion may thereby be made necessary. The
term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholders as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, then the
Selling Stockholders shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholders as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased exceeds one-eleventh of the aggregate number of
all of the Shares to be purchased at such Time of Delivery, or if the Selling
Stockholders shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Second
Time of Delivery, the obligations of the Underwriters to purchase and of the
Selling Stockholders to sell the Optional Shares) shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company
or the Selling Stockholders, except for the expenses to be borne by the Company
and the Selling Stockholders and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the
23
Company, or any of the Selling Stockholders, or any officer or director or
controlling person of the Company, or any controlling person of any Selling
Stockholder, and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Selling Stockholders as provided herein, the Company will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares not so delivered, but the Company and the Selling Stockholders shall then
be under no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives at Xxxxxxx, Sachs & Co., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department; if
to any Selling Stockholder shall be delivered or sent by mail, telex or
facsimile transmission to counsel for such Selling Stockholder at its address
set forth in SCHEDULE II hereto; and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: Secretary; PROVIDED, HOWEVER,
that any notice to an Underwriter pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by you on request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company, any Selling Stockholder or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
24
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
17. The Company and the Selling Stockholders are authorized, subject to
applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. federal income tax benefits expected to
be claimed with respect to such transaction, and all materials of any kind
(including tax opinions and other tax analyses) related to those benefits,
without the Underwriters imposing any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and each of the Representatives plus one for
each counsel and the Custodian, if any, counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company and each of the Selling Stockholders. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and the Selling Stockholders
for examination, upon request, but without warranty on your part as to the
authority of the signers thereof.
25
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
THE FIRST MARBLEHEAD CORPORATION
By: .....................................
Name:
Title:
26
Selling Stockholders
INTERLAKEN INVESTMENT PARTNERS, L.P.
XXXXXX XXXXXXX XXXXXX
XXXXX X. XXXXX
XXXXXXX X. XXXXXXXX
GENERAL REINSURANCE CORP.
XXXXXX X. XXXXX, XX.
XXXX X. XXXXX
XXXXXX X. XXXXXXX
ROXBURY MANAGEMENT COMPANY LLC
XXXXXXXX FIELDS
EVEREST REINSURANCE CO.
STEINE SKAANE
ACUITY, A MUTUAL INSURANCE COMPANY
PRIMERICA LIFE INSURANCE COMPANY
XXXX X. XXXXXX
XXXXXX X. XXXXX
XXXXX XXXXXX
XXXXX XXXXXXXX
XXXXXXXXX XXXX XXXXXX
XXXXX X. XXXXXX XX
XXXXXXX X. XXXXXX
XXXXXXX XXXXXX
XXXX XXXXXXX
XXXXXXX LIVING TRUST
XXXXX X. XXXXX
XXXXXXX X. XXXXX
XX-XXX XXXXXXX
XXXXX XXXXXXXXX
XXXX XXXXX
DOOPY L.P.
XXXXX XXXXXXX
XXXXXX X. XXXX
XXX X'XXXX
XXXXX XXXX
XXXX XXXXX
XXXXXXX XXXXX
XXXXXXX XXXXX
XXXXXXXXX XXXXX
XXXX XXXXXXXX
By: .................................
Name:
Title:
As Attorney-in-Fact acting on
behalf of each of the Selling
Stockholders named in SCHEDULE
II to this Agreement.
27
Accepted as of the date hereof
in New York, New York
Xxxxxxx, Xxxxx & Co.
X.X. Xxxxxx Securities Inc.
Bear, Xxxxxxx & Co. Inc.
Xxxxx & Company LLC
Xxxxxxxx & Partners, L.P.
By:..............................
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
28
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
Xxxxxxx, Sachs & Co...............
X.X. Xxxxxx Securities Inc........
Bear, Xxxxxxx & Co. Inc...........
Xxxxx & Company LLC...............
Xxxxxxxx & Partners, L.P..........
---------------- ----------------
Total....................
================ ================
29
SCHEDULE II
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
The Selling Stockholders:* 6,440,271 966,041
Interlaken Investment Partners, L.P..... 1,000,000 150,000
Xxxxxx Xxxxxxx Xxxxxx................... 869,565 130,435
Xxxxx X. Xxxxx.......................... 869,565 130,435
Xxxxxxx X. Xxxxxxxx..................... 791,287 118,693
General Reinsurance Corp................ 555,455 83,318
Xxxxxx X. Xxxxx, Xx..................... 304,348 45,652
Xxxx X. Xxxxx........................... 238,470 35,770
Xxxxxx X. Xxxxxxx....................... 195,652 29,348
Roxbury Management Company LLC.......... 173,913 26,087
Xxxxxxxx Fields......................... 173,913 26,087
Everest Reinsurance Co.................. 166,637 24,996
Steine Skaane........................... 115,000 17,250
Acuity, A Mutual Insurance Company...... 111,091 16,664
Primerica Life Insurance Company........ 111,091 16,664
Xxxx X. Xxxxxx.......................... 104,348 15,652
Xxxxxx X. Xxxxx......................... 77,322 11,598
Xxxxx Xxxxxx............................ 73,913 11,087
Xxxxx Xxxxxxxx.......................... 60,870 9,130
Xxxxxxxxx Xxxx Xxxxxx................... 55,546 8,332
Xxxxx X. Xxxxxx XX...................... 52,174 7,826
Xxxxxxx X. Xxxxxx....................... 51,152 7,673
Xxxxxxx Xxxxxx.......................... 40,000 6,000
Xxxx XxXxxxx............................ 26,087 3,913
Xxxxxxx Living Trust.................... 22,218 3,333
Xxxxx X. Xxxxx.......................... 22,218 3,333
Xxxxxxx X. Xxxxx........................ 22,218 3,333
Xx-Xxx Xxxxxxx.......................... 20,522 3,078
Xxxxx Xxxxxxxxx......................... 20,087 3,013
Xxxx Xxxxx.............................. 19,826 2,974
Doopy L.P............................... 17,391 2,609
Xxxxx Xxxxxxx........................... 17,174 2,576
Xxxxxx X. Xxxx.......................... 13,043 1,957
Xxx X'Xxxx.............................. 10,000 1,500
Xxxxx Xxxx.............................. 8,696 1,304
Xxxx Xxxxx.............................. 8,696 1,304
Xxxxxxx Xxxxx........................... 8,348 1,252
Xxxxxxx Xxxxx........................... 5,652 848
Xxxxxxxxx Xxxxx......................... 4,174 626
Xxxx Xxxxxxxx........................... 2,609 391
Total ............................................... -------------- --------------
6,440,271 966,041
============== ==============
--------------
* Each of the Selling Stockholders has appointed Xxxxxx Xxxxxxx Xxxxxx and
Xxxxxx X. Xxxx, and each of them, as Attorneys-in-Fact for such Selling
Stockholder.
30
Schedule III
Limited Indemnification Stockholders
XXXXXX X. XXXXX, XX.
XXXXXX X. XXXXXXX
ROXBURY MANAGEMENT COMPANY LLC
XXXXXXXX FIELDS
GENERAL REINSURANCE CORP.
EVEREST REINSURANCE CO.
ACUITY, A MUTUAL INSURANCE COMPANY
PRIMERICA LIFE INSURANCE COMPANY
STEINE SKAANE
XXXXXX X. XXXXX
XXXXX XXXXXX
XXXXXXXXX XXXX XXXXXX
XXXXX X. XXXXXX XX
XXXXXXX X. XXXXXX
XXXXX XXXXXXXX
XXXXXXX XXXXXX
XXXX XXXXXXX
XXXXX XXXXXXXXX
XXXX XXXXX
XX-XXX XXXXXXX
XXXXXXX LIVING TRUST
XXXXX X. XXXXX
XXXXXXX X. XXXXX
DOOPY L.P.
XXXXX XXXXXXX
XXX X'XXXX
XXXX XXXXX
XXXXXXX XXXXX
XXXXXXX XXXXX
XXXXXXXXX XXXXX
XXXX XXXXXXXX
31
ANNEX I
FORM OF COMFORT LETTER
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited consolidated interim financial statements, selected financial
data, pro forma financial information, financial forecasts and/or condensed
financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus as
indicated in their reports thereon copies of which have been separately
furnished to the Representatives and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus agrees
with the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for such five fiscal years which
were included or incorporated by reference in the Company's Annual Reports
on Form 10-K for such fiscal years;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included in the Prospectus, inquiries
of officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as
32
may be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived any unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in clause (E) there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated
net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for decreases or increases
33
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vi) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records
of the Company and its subsidiaries, which appear in the Prospectus,
or in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found
them to be in agreement.
34
ANNEX II(a)
FORM OF OPINION OF XXXX AND XXXX LLP
35
ANNEX II(b)
FORM OF OPINION OF XXXXXX XXXXXX
36
ANNEX II(c)
FORM OF OPINION OF COUNSEL TO SELLING STOCKHOLDERS
37
