$150,000,000 AGGREGATE PRINCIPAL AMOUNT
FINANCIAL FEDERAL CORPORATION
2% CONVERTIBLE SENIOR DEBENTURES DUE 2034
Purchase Agreement
dated April 5, 2004
BANC OF AMERICA SECURITIES, LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
Purchase Agreement
April 5, 2004
BANC OF AMERICA SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
c/o Bank of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Financial Federal Corporation, a Nevada corporation
(the "Company"), proposes to issue and sell to the several
initial purchasers named in Schedule A (the "Initial
Purchasers"), acting severally and not jointly, the
respective amounts set forth in such Schedule A of a
$150,000,000 aggregate principal amount of the Company's 2%
Convertible Senior Debentures Due 2034 (the "Firm
Debentures"). In addition, the Company has granted to the
Initial Purchasers an option to purchase up to an additional
$25,000,000 in aggregate principal amount of its 2%
Convertible Senior Debentures Due 2034 (the "Optional
Debentures" and, together with the Firm Debentures, the
"Debentures"). The Debentures will be redeemable at the
Company's option at any time after April 20, 2009. Banc of
America Securities LLC and ▇.▇. ▇▇▇▇▇▇ Securities Inc. have
agreed to act as the representatives (the "Representatives")
of the several Initial Purchasers in connection with the
offering and sale of the Debentures.
The Debentures are convertible into fully paid, non-
assessable shares of common stock, $0.50 par value per
share, of the Company (the "Common Stock"). The Debentures
are convertible initially at a conversion price of
approximately $44.10 per share (equivalent to an initial
conversion rate of 22.6778 shares per $1,000 principal
amount of the Debentures) on the terms, and subject to the
conditions, set forth in the Indenture (as defined below).
As used herein, "Conversion Shares" means the shares of
Common Stock into which the Debentures are convertible. The
Debentures will be issued pursuant to an indenture (the
"Indenture") to be dated as of the First Closing Date (as
defined in Section 2), between the Company and Deutsche Bank
Trust Company Americas, a New York banking corporation, as
trustee (the "Trustee"). Debentures issued in book-entry
form will be issued in the name of Cede & Co., as nominee of
The Depository Trust Company.
The Debentures will be offered and sold to the Initial
Purchasers without being registered under the Securities Act
of 1933, as amended (the "Securities Act"), and the rules
and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission")
thereunder, in reliance upon an exemption therefrom.
Holders of the Debentures (including the Initial
Purchasers and their direct and indirect transferees) will
be entitled to the benefits of a Resale Registration Rights
Agreement, dated the First Closing Date, between the Company
and the Initial Purchasers (the "Registration Rights
Agreement"), pursuant to which the Company will agree to
file with the Commission a registration statement pursuant
to Rule 415 under the Securities Act (the "Registration
Statement") covering the resale of the Debentures and the
Conversion Shares, and to use its reasonable best efforts to
cause the Registration Statement to be declared effective.
This Agreement, the Indenture, the Debentures and the
Registration Rights Agreement are referred to herein
collectively as the "Operative Documents."
The Company understands that the Initial Purchasers
propose to make an offering of the Debentures on the terms
and in the manner set forth herein and in the Offering
Memorandum (as defined below) and agrees that the Initial
Purchasers may resell, subject to the conditions set forth
herein, all or a portion of the Debentures to purchasers
(the "Subsequent Purchasers") at any time after the date of
execution and delivery of this Agreement. The Debentures
are to be offered and sold to or through the Initial
Purchasers without being registered with the Commission
under the Securities Act in reliance upon exemptions
therefrom. The terms of the Debentures and the Indenture
will require that investors that acquire Debentures
expressly agree that such Debentures (and any Conversion
Shares) may only be resold or otherwise transferred, after
the date hereof, if such Debentures (or Conversion Shares)
are registered for sale under the Securities Act or if an
exemption from the registration requirements of the
Securities Act is available (including the exemption
afforded by Rule 144A ("Rule 144A") thereunder).
The Company has prepared an offering memorandum dated
the April 5, 2004 (the "Final Offering Memorandum") setting
forth information concerning the Company, the Debentures,
the Registration Rights Agreement and the Common Stock in
form and substance reasonably satisfactory to the Initial
Purchasers. As used in this Agreement, "Offering
Memorandum" means, collectively, the Preliminary Offering
Memorandum dated as of April 5, 2004 (the "Preliminary
Offering Memorandum") and the Final Offering Memorandum,
each as amended or supplemented by the Company.
All references in this Agreement to financial
statements and schedules and other information which is
"disclosed in," "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import)
shall be deemed to include all such financial statements and
schedules and other information which are incorporated by
reference in the Offering Memorandum; and all references in
this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to include the filing of any
document under the Securities Exchange Act of 1934 (as
amended, the "Exchange Act," which term, as used herein,
includes the rules and regulations of the Commission
promulgated thereunder) which is incorporated or deemed to
be incorporated by reference in the Offering Memorandum.
The Company hereby confirms its agreements with the
Initial Purchasers as follows:
Section 1. Representations and Warranties of the
Company.
The Company hereby represents and warrants to, and
agrees with, the Initial Purchasers, as of the date hereof,
as of the First Closing Date and as of the Second Closing
Date (as defined in Section 2(b) and 2(c) hereof,
respectively), as follows:
(a) No Registration. Assuming the accuracy of the
representations and warranties of the Initial Purchasers
contained in Section 6 and their compliance with the
agreements set forth therein, it is not necessary, in
connection with the issuance and sale of the Debentures to
the Initial Purchasers, the offer, resale and delivery of
the Debentures by the Initial Purchasers and the conversion
of the Debentures into Conversion Shares, in each case in
the manner contemplated by this Agreement, the Indenture and
the Offering Memorandum, to register the Debentures or the
Conversion Shares under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
(b) No Integration. None of the Company or any of its
subsidiaries (other than the Initial Purchasers in
connection with the transactions contemplated by this
Agreement, about which no representation is made by the
Company) has, directly or through any agent, sold, offered
for sale, solicited offers to buy or otherwise negotiated in
respect of, any "security" (as defined in the Securities
Act) that is or will be integrated with the sale of the
Debentures or the Conversion Shares in a manner that would
require registration under the Securities Act of the
Debentures or the Conversion Shares.
(c) Rule 144A. No securities of the same class
(within the meaning of Rule 144A(d)(3) under the Securities
Act) as the Debentures are listed on any national securities
exchange registered under Section 6 of the Exchange Act, or
quoted on an automated inter-dealer quotation system.
(d) Offering Memorandum. The Company hereby confirms
that it has authorized the use of the Offering Memorandum in
connection with the offer and sale of the Securities by the
Initial Purchasers. Each document, if any, filed or to be
filed pursuant to the Exchange Act and incorporated by
reference in the Offering Memorandum complied or will comply
when it is filed in all material respects with the Exchange
Act. The Preliminary Offering Memorandum does not contain,
and the Final Offering Memorandum in the form used by the
Initial Purchasers to confirm sales and as of a Closing Date
(as defined in Section 2), will not contain, any untrue
statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made,
not misleading; provided that the Company makes no
representation or warranty as to information contained in or
omitted from the Offering Memorandum in reliance upon and in
conformity with written information furnished to the Company
by or on the behalf of the Initial Purchasers specifically
for inclusion therein.
(e) Incorporated Documents. The Offering Memorandum
as delivered from time to time shall incorporate by
reference the most recent Annual Report of the Company on
Form 10-K filed with the Commission and each Quarterly
Report of the Company on Form 10-Q and each Current Report
of the Company on Form 8-K filed with the Commission since
the filing of the end of the fiscal year to which such
Annual Report relates (other than current reports on Form 8-
K containing only information furnished under Item 9 or Item
12 of Form 8-K, unless such report specifically provides for
such incorporation). The documents incorporated or deemed
to be incorporated by reference in the Offering Memorandum
at the time they were or hereafter are filed with the
Commission complied and will comply in all material respects
with the requirements of the Exchange Act.
(f) Offering Materials Furnished to Initial
Purchasers. The Company has delivered and will deliver to
the Initial Purchasers copies of the Preliminary Offering
Memorandum and Final Offering Memorandum, as amended or
supplemented, in such quantities and at such places as the
Initial Purchasers have reasonably requested.
(g) Authorization of the Purchase Agreement. This
Agreement has been duly authorized, executed and delivered
by the Company.
(h) Authorization of the Indenture. The Indenture has
been duly authorized by the Company and, upon the
effectiveness of the Registration Statement, will be
qualified under the Trust Indenture Act; on the First
Closing Date, the Indenture will have been duly executed and
delivered by the Company and, assuming due authorization,
execution and delivery of the Indenture by the Trustee, will
constitute a legally valid and binding agreement of the
Company enforceable against the Company in accordance with
its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles;
and the Indenture conforms in all material respects to the
description thereof contained in the Offering Memorandum.
(i) Authorization of the Debentures. The Debentures
have been duly authorized by the Company; when the
Debentures are executed, authenticated and issued in
accordance with the terms of the Indenture and delivered to
and paid for by the Initial Purchasers pursuant to this
Agreement on the respective Closing Date (assuming due
authentication of the Debentures by the Trustee), such
Debentures will constitute legally valid and binding
obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance
with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable
principles; and the Debentures will conform in all material
respects to the description thereof contained in the
Offering Memorandum.
(j) Authorization of the Conversion Shares. The
shares of Common Stock initially issuable upon conversion of
the Debentures have been duly authorized and reserved and,
when issued upon conversion of the Debentures in accordance
with the terms of the Debentures and the Indenture, will be
validly issued, fully paid and non-assessable, and the
issuance of such shares will not be subject to any
preemptive or similar rights.
(k) Authorization of the Registration Rights
Agreement. At each of the First Closing Date and the Second
Closing Date, the Registration Rights Agreement will be duly
authorized, executed and delivered by, and will be a valid
and binding agreement of, the Company, enforceable in
accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable
principles and except as rights to indemnification under the
Registration Rights Agreement may be limited by applicable
law, equitable principles or public policy.
(l) No Material Adverse Change. Except as otherwise
disclosed in the Offering Memorandum, subsequent to the
respective dates as of which information is given in the
Offering Memorandum: (i) there has been no material adverse
change in the condition, financial or otherwise, or in the
earnings, business or operations, whether or not arising
from transactions in the ordinary course of business, of the
Company and its subsidiaries, considered as one entity (any
such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have
not incurred any material liability or obligation, indirect,
direct or contingent, not in the ordinary course of
business, nor entered into any material transaction or
agreement not in the ordinary course of business; and
(iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, any of
its subsidiaries on any class of capital stock or repurchase
or redemption by the Company or any of its subsidiaries of
any class of capital stock.
(m) Independent Accountants. KPMG LLP, who have
expressed their opinion with respect to the financial
statements (which term as used in this Agreement includes
the related notes thereto) audited by them and included in
the Offering Memorandum, are independent public or certified
public accountants as required by the Securities Act and the
Exchange Act.
(n) Preparation of the Financial Statements. The
financial statements, together with the related schedules
and notes, included in the Offering Memorandum present
fairly the consolidated financial position of the Company
and its consolidated subsidiaries as of and at the dates
indicated and the results of their operations and cash flows
for the periods specified. Such financial statements have
been prepared in conformity with generally accepted
accounting principles as applied in the United States
applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related
notes thereto.
(o) Incorporation and Good Standing of the Company and
its Subsidiaries. Each of the Company and its subsidiaries
listed on Schedule B hereto ("Significant Subsidiaries") has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation and has corporate power
and authority to own, lease and operate its properties and
to conduct its business as described in the Offering
Memorandum and, in the case of the Company, to enter into
and perform its obligations under each of the Operative
Documents. Each of the Company and each Significant
Subsidiary is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of business, except for such jurisdictions where
the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a Material
Adverse Change. All of the issued and outstanding capital
stock of each Significant Subsidiary has been duly
authorized and validly issued, is fully paid and
nonassessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim.
(p) Capitalization and Other Capital Stock Matters.
The authorized, issued and outstanding capital stock of the
Company is as set forth in the Offering Memorandum under the
caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans
described in the Offering Memorandum or upon exercise of
outstanding options described in the Offering Memorandum).
The Common Stock (including the Conversion Shares) conforms
in all material respects to the description thereof
contained in the Offering Memorandum. All of the issued and
outstanding shares of Common Stock have been duly authorized
and validly issued, are fully paid and nonassessable and
have been issued in compliance with federal and state
securities laws. None of the outstanding shares of Common
Stock were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe
for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase,
or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the
Company or any of its Significant Subsidiaries other than
those accurately described in the Offering Memorandum. The
description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other
rights granted thereunder, set forth in the Offering
Memorandum accurately and fairly describes in all material
respects such plans, arrangements, options and rights.
(q) Stock Exchange Listing. The Common Stock is
registered pursuant to Section 12(b) of the Exchange Act and
is listed on the New York Stock Exchange (the "NYSE"), and
the Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common
Stock from the NYSE, nor has the Company received any
notification that the Commission or the NYSE is
contemplating terminating such registration or listing.
(r) Non-Contravention of Existing Instruments; No
Further Authorizations or Approvals Required. Neither the
Company nor any of its Significant Subsidiaries is in
violation of its respective charter or by-laws or is in
default (or, with the giving of notice or lapse of time,
would be in default) ("Default") under any indenture,
mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument to which the Company or
any of its Significant Subsidiaries is a party or by which
it or any of them may be bound or to which any of the
property or assets of the Company or any of its Significant
Subsidiaries is subject (each, an "Existing Instrument"),
except for such Defaults as would not, individually or in
the aggregate, result in a Material Adverse Change.
The Company's execution, delivery and performance
of the Operative Documents and consummation of the
transactions contemplated thereby and by the Offering
Memorandum (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the
provisions of the charter or by-laws of the Company,
(ii) will not conflict with or constitute a breach of, or a
Default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets
of the Company or any of its Significant Subsidiaries
pursuant to, or require the consent of any other party to,
any Existing Instrument and (iii) will not result in any
violation of any law, administrative regulation or
administrative or court decree applicable to the Company.
No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental
or regulatory authority or agency, is required for the
Company's execution, delivery and performance of the
Operative Documents and consummation of the transactions
contemplated thereby and by the Offering Memorandum, except
(i) with respect to the transactions contemplated by the
Registration Rights Agreement, as may be required under the
Securities Act, the Trust Indenture Act and the Rules and
Regulations promulgated thereunder and (ii) applicable state
securities or blue sky laws.
(s) No Material Actions or Proceedings. There are no
legal or governmental actions, suits or proceedings pending
against or, to the best of the Company's knowledge, either
threatened against or affecting the Company or any of its
Significant Subsidiaries, including any such action, suit or
proceeding (i) which has as the subject thereof any officer
or director of, or property owned or leased by, the Company
or any of its Significant Subsidiaries or (ii) relating to
environmental or discrimination matters, where in the case
of clauses (i) and (ii) (A) there is a reasonable
possibility that such action, suit or proceeding might be
determined adversely to the Company or such Significant
Subsidiary and (B) any such action, suit or proceeding, if
so determined adversely, would reasonably be expected to
result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this
Agreement.
(t) Intellectual Property Rights. The Company and its
subsidiaries own or possess sufficient trademarks, trade
names, patent rights, copyrights, domain names, licenses,
approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") reasonably
necessary to conduct their businesses as now conducted; and
the expected expiration of any of such Intellectual Property
Rights would not result in a Material Adverse Change.
(u) All Necessary Permits, etc. The Company and each
Significant Subsidiary possess such valid and current
certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct their respective businesses,
except for such certificates, authorizations and permits the
absence of which would not result in a Material Adverse
Change. Neither the Company nor any Significant Subsidiary
has received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any
such certificate, authorization or permit which, singly or
in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could result in a Material Adverse
Change.
(v) Company Not an "Investment Company". The Company
is not, and, after receipt of payment for the Debentures and
application of the proceeds as described in the Offering
Memorandum, will not be, required to register as an
"investment company" within the meaning of the Investment
Company Act of 1940.
(w) No Price Stabilization or Manipulation. The
Company has not taken and will not take any action designed
to or that might be reasonably expected to cause or result
in stabilization or manipulation of the price of the
Debentures, the Conversion Shares or any other security of
the Company to facilitate the sale or resale of the
Debentures, other than stabilization transactions of the
Initial Purchasers as described in the Offering Memorandum.
(x) Related Party Transactions. There are no business
relationships or related-party transactions involving the
Company or any Significant Subsidiary or any other person
required by the Securities Act or the Exchange Act to be
described in the documents incorporated by reference which
have not been described as required.
(y) No General Solicitation. None of the Company or
any of its affiliates (as defined in Rule 501(b) of
Regulation D under the Securities Act ("Regulation D")),
has, directly or through an agent, engaged in any form of
general solicitation or general advertising in connection
with the offering of the Debentures or the Conversion Shares
(as those terms are used in Regulation D) under the
Securities Act or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act;
the Company has not entered into any contractual arrangement
with respect to the distribution of the Debentures or the
Conversion Shares except for this Agreement, and the Company
will not enter into any such arrangement except for the
Registration Rights Agreement and as may be contemplated
thereby.
(z) Company's Accounting System. The Company maintains
a system of accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in
accordance with management's general or specific
authorization and (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles as
applied in the United States and to maintain accountability
for assets.
(aa) ERISA Compliance. The Company and its subsidiaries
and any "employee benefit plan" (as defined under the
Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the
Company, its subsidiaries or their "ERISA Affiliates" (as
defined below) are in compliance in all material respects
with ERISA. "ERISA Affiliate" means, with respect to the
Company or a subsidiary, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o)
of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the
"Code") of which the Company or such subsidiary is a member.
No "reportable event" (as defined under ERISA) has occurred
or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates.
No "employee benefit plan" established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates,
if such "employee benefit plan" were terminated, would have
any "amount of unfunded benefit liabilities" (as defined
under ERISA). Neither the Company, its subsidiaries nor any
of their ERISA Affiliates has incurred or reasonably expects
to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of
the Code. Each "employee benefit plan" established or
maintained by the Company, its subsidiaries or any of their
ERISA Affiliates that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would
result in the loss of such qualification.
(bb) No Outstanding Loans or Other Indebtedness. There
are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or
guarantees or indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company
or any of the members of any of their families.
Any certificate signed by an officer of the Company
on behalf of the Company and delivered to the
Representatives or to counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the
Company to each Initial Purchaser as to the matters set
forth therein.
The Company acknowledges that the Initial
Purchasers and, for purposes of the opinions to be delivered
pursuant to Section 5 hereof, counsel to the Company and
counsel to the Initial Purchasers, will rely upon the
accuracy and truthfulness of the foregoing representations
and hereby consents to such reliance.
Section 2. Purchase, Sale and Delivery of the
Debentures.
(a) The Firm Debentures. The Company agrees to issue
and sell to the several Initial Purchasers the Firm
Debentures upon the terms herein set forth. On the basis of
the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions
herein set forth, the Initial Purchasers agree, severally
and not jointly, to purchase from the Company the respective
amount of Firm Debentures set forth opposite their names on
Schedule A at a purchase price of 97.5% of the aggregate
principal amount thereof.
(b) The First Closing Date. The closing with respect
to the Firm Debentures shall be held at the offices of ▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
(or such other place as may be agreed to by the Company and
the Initial Purchasers) at 10:00 a.m. New York time, on
April 12, 2004 (unless postponed in accordance with Section
9) or such other time and date not later than 10:00 a.m. New
York time, on April 20, 2004 as the Representatives shall
designate by notice to the Company (the time and date of
such closing are called the "First Closing Date"). The
Company hereby acknowledges that circumstances under which
the Representatives may provide notice to postpone the First
Closing Date as originally scheduled include, but are in no
way limited to, any determination by the Company or the
Representatives to recirculate copies of an amended or
supplemented Offering Memorandum or a delay as contemplated
by the provisions of Section 9.
(c) The Optional Debentures; the Second Closing Date.
In addition, on the basis of the representations, warranties
and agreements herein contained, and upon the terms but
subject to the conditions herein set forth, the Company
hereby grants an option to the Initial Purchasers to
purchase, severally and not jointly, up to $25,000,000
aggregate principal amount of Optional Debentures from the
Company at the same price as the purchase price to be paid
by the Initial Purchasers for the Firm Debentures, plus
interest from the First Closing Date to the Second Closing
Date. The option granted hereunder may be exercised in
whole or in part at any time (but not more than once) upon
notice by the Representatives to the Company, so long as
such notice is given and the Optional Debentures are issued
by the Company within 13 days from the date of the First
Closing Date. Such notice shall set forth (i) the amount
(which shall be an integral multiple of $1,000 in aggregate
principal amount) of Optional Debentures as to which the
Initial Purchasers are exercising the option, (ii) the names
and denominations in which the Optional Debentures are to be
registered and (iii) the time, date and place at which such
Debentures will be delivered (which time and date may be
simultaneous with, but not earlier than, the First Closing
Date, nor later than 10 days after the date of such notice;
and in the case of simultaneous closings the term "First
Closing Date" shall refer to the time and date of delivery
of the Firm Debentures and the Optional Debentures). Such
time and date of delivery, if subsequent to the First
Closing Date, is called the "Second Closing Date" and shall
be determined by the Representatives. If any Optional
Debentures are to be purchased, each Initial Purchaser
agrees, severally and not jointly, to purchase the principal
amount of Optional Debentures (subject to such adjustments
to eliminate fractional amount as the Representatives may
determine) that bears the same proportion to the total
principal amount of such Optional Debentures to be purchased
as the principal amount of Firm Debentures set forth on
Schedule A opposite the name of such Initial Purchaser bears
to the total principal amount of Firm Debentures. The
Initial Purchasers may cancel the option at any time prior
to its expiration by giving written notice of such
cancellation to the Company. Each of the First Closing Date
and the Second Closing Date is called a "Closing Date."
(d) Payment for the Debentures. Payment for the
Debentures shall be made at the First Closing Date (and, if
applicable, at the Second Closing Date) by wire transfer of
immediately available funds to an account specified by the
Company.
It is understood that the Representatives have been
authorized, for their own accounts and the accounts of the
several Initial Purchasers, to accept delivery of and
receipt for, and make payment of the purchase price for, the
Firm Debentures and any Optional Debentures the Initial
Purchasers have agreed to purchase. The Representatives,
individually and not in their capacity as such, may (but
shall not be obligated to) make payment for any Debentures
to be purchased by any Initial Purchaser whose funds shall
not have been received by the Representatives by the First
Closing Date or the Second Closing Date, as the case may be,
for the account of such Initial Purchaser, but any such
payment shall not relieve such Initial Purchaser from any of
its obligations under this Agreement.
(e) Delivery of the Debentures. The Company shall
deliver, or cause to be delivered, to the Representatives,
for the accounts of the several Initial Purchasers the Firm
Debentures in the form of one or more permanent global
securities in definitive form (the "Global Debentures"),
deposited with the Trustee as custodian for DTC and
registered in the name of Cede & Co., as nominee for DTC, at
the First Closing Date, against the irrevocable release of a
wire transfer of immediately available funds for the amount
of the purchase price therefor. The Company shall also
deliver, or cause to be delivered, to the Representatives
for the accounts of the several Initial Purchasers, the
Optional Debentures in the form of Global Debentures,
deposited with the Trustee as custodian for DTC and
registered in the name of Cede & Co., as nominee for DTC,
which the Initial Purchasers have agreed to purchase at the
First Closing Date or the Second Closing Date, as the case
may be, against the irrevocable release of a wire transfer
of immediately available funds for the amount of the
purchase price therefor. Time shall be of the essence, and
delivery at the time and place specified in this Agreement
is a further condition to the obligations of the Initial
Purchasers.
Section 3. Additional Covenants of the Company.
The Company further covenants and agrees with the
Initial Purchasers as follows:
(a) Representatives' Review of Proposed Amendments and
Supplements. During such period beginning on the date
hereof and ending on the date which is the earlier of nine
months after the date hereof or the completion of the resale
of the Debentures by the Initial Purchasers (as notified by
the Initial Purchasers to the Company), prior to amending or
supplementing the Offering Memorandum, the Company shall
furnish to the Representatives and their counsel for review
a copy of each such proposed amendment or supplement, and
the Company shall not print or distribute such proposed
amendment or supplement to which the Representatives
reasonably object.
(b) Amendments and Supplements to the Offering
Memorandum and Other Securities Act Matters. If, at any
time prior to the earlier of nine months after the date
hereof or the completion of the resale of the Debentures by
the Initial Purchasers (as notified by the Initial
Purchasers to the Company), any event shall occur or
condition exist as a result of which it is necessary to
amend or supplement the Offering Memorandum in order that
the Offering Memorandum will not include an untrue statement
of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or if in the
opinion of counsel for the Initial Purchasers it is
otherwise necessary to amend or supplement the Offering
Memorandum to comply with law, the Company shall promptly
notify the Initial Purchasers and prepare, subject to
Section 3(a) hereof, such amendment or supplement as may be
necessary to correct such untrue statement or omission.
The Company hereby expressly acknowledges that the
indemnification and contribution provisions of Sections 7
and 8 hereof are specifically applicable and relate to each
Offering Memorandum, amendment or supplement referred to in
this Section 3.
(c) Copies of Offering Memorandum. The Company agrees
to furnish the Initial Purchasers, without charge, until the
earlier of nine months after the date hereof or the
completion of the resale of the Debentures by the Initial
Purchasers (as notified by the Initial Purchasers to the
Company) as many copies of the Offering Memorandum and any
amendments and supplements thereto as the Initial Purchasers
may reasonably request.
(d) Blue Sky Compliance. The Company shall cooperate
with the Initial Purchasers and counsel for the Initial
Purchasers, as the Initial Purchasers may reasonably request
from time to time, to qualify or register the Debentures for
sale under (or obtain exemptions from the application of)
the state securities or blue sky laws of those jurisdictions
designated by the Representatives and shall continue such
qualifications, registrations and exemptions in effect so
long as required for the distribution of the Debentures.
The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to
general service of process in any such jurisdiction where it
is not presently qualified or where it would be subject to
taxation as a foreign corporation. So long as the Company
is required to continue such qualifications, registrations
or exemptions, the Company will advise the Representatives
promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the
Debentures for offering, sale or trading in any jurisdiction
or any initiation or, to the Company's knowledge, threat of
any proceeding for any such purpose, and in the event of the
issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best
efforts to obtain the withdrawal thereof at the earliest
possible moment.
(e) Rule 144A Information. For so long as any of the
Debentures are "restricted securities" within the meaning of
Rule 144(a)(3) under the Securities Act, the Company shall
provide to any holder of the Debentures or to any
prospective purchaser of the Debentures designated by any
holder, upon request of such holder or prospective
purchaser, information required to be provided by Rule
144A(d)(4) of the Securities Act if, at the time of such
request, the Company is not subject to the reporting
requirements under Section 13 or 15(d) of the Exchange Act.
(f) Legends. Each of the Debentures will bear, to the
extent applicable, the legend contained in "Notice to
Investors" in the Offering Memorandum for the time period
and upon the other terms stated therein.
(g) No General Solicitation. Except following the
effectiveness of the Registration Statement (as defined in
the Registration Rights Agreement), the Company will not,
and will cause its subsidiaries not to, solicit any offer to
buy or offer to sell the Debentures by means of any form of
general solicitation or general advertising (as those terms
are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of
Section 4(2) of the Securities Act.
(h) Rule 144 Tolling. During the period of two years
after the last Closing Date, the Company will not, and will
not permit any of its "affiliates" (as defined in Rule 144
under the Securities Act) to, resell any of the Debentures
which constitute "restricted securities" under Rule 144 that
have been reacquired by any of them.
(i) Use of Proceeds. The Company shall apply the net
proceeds from the sale of the Debentures sold by it in the
manner described under the caption "Use of Proceeds" in the
Offering Memorandum.
(j) Company to Provide Interim Financial Statements.
Prior to the Closing Date, the Company will furnish the
Initial Purchasers, as soon as they have been prepared by or
are available to the Company, a copy of any unaudited
interim financial statements or information as the Initial
Purchasers may request of the Company for any period
subsequent to the period covered by the most recent
financial statements appearing in the Offering Memorandum.
(k) Agreement Not to Offer or Sell Additional
Securities. During the period commencing on the date hereof
and ending on the 60th day following the date hereof, the
Company will not, without the prior written consent of the
Representatives (which consent may be withheld at the sole
discretion of the Representatives), directly or indirectly,
sell, offer, contract or grant any option to sell (including
without limitation any short sale), pledge, transfer or
establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of or transfer, or announce the offering
of, or file any registration statement under the Securities
Act in respect of, any shares of Common Stock, options or
warrants to acquire shares of the Common Stock or securities
exchangeable or exercisable for or convertible into shares
of Common Stock (other than as contemplated by this
Agreement with respect to the Debentures and the Conversion
Shares); provided, however, that the Company may issue
shares of its Common Stock or options to purchase its Common
Stock, or Common Stock upon exercise of options, pursuant to
any stock option, stock bonus or other stock plan or
arrangement described in the Final Offering Memorandum, but
only if the holders of such shares, options, or shares
issued upon exercise of such options, agree in writing not
to sell, offer, dispose of or otherwise transfer any such
shares or options during such 60 day period without the
prior written consent of the Representatives (which consent
may be withheld at the sole discretion of the
Representatives); provided, further, that the Company may
issue restricted shares of Common Stock or options to
purchase its Common Stock to any employee or prospective
employee who has not executed a lock-up agreement pursuant
to Section 5(h) hereof.
(l) Future Reports to the Representatives. During the
period of five years after the First Closing Date the
Company will furnish, to the extent not available on its
website, to the Representatives c/o Banc of America
Securities LLC, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, (i) as soon as practicable after
the end of each fiscal year, copies of the annual report to
shareholders of the Company containing the balance sheet of
the Company as of the close of such fiscal year and
statements of income, stockholders' equity and cash flows
for the year then ended and the opinion thereon of the
Company's independent public or certified public
accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on
Form 10-K, Quarterly Report on Form 10-Q, Current Report on
Form 8-K or other report filed by the Company with the
Commission, the NASD or any securities exchange; and (iii)
as soon as available, copies of any report or communication
of the Company mailed generally to holders of its capital
stock.
Section 4. Payment of Expenses.
The Company agrees to pay all costs, fees and
expenses incurred in connection with the performance of its
obligations hereunder and in connection with the
transactions contemplated hereby, including without
limitation (i) all expenses incident to the issuance and
delivery of the Debentures (including all printing and
engraving costs), (ii) all fees and expenses of the Trustee
under the Indenture, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale
of the Debentures to the Initial Purchasers, (iv) all fees
and expenses of the Company's counsel, independent public or
certified public accountants, (v) all costs and expenses
incurred in connection with the preparation, printing,
shipping and distribution of the Offering Memorandum, all
amendments and supplements thereto and this Agreement, (vi)
all filing fees, attorneys' fees and expenses incurred by
the Company in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration
of) all or any part of the Debentures for offer and sale
under the state securities or blue sky laws (vii) the fees
and expenses associated with including the Conversion Shares
on the NYSE and (viii) all expenses and fees in connection
with admitting the Debentures for trading in the NASD PORTAL
Market ("PORTAL"). Except as provided in this Section 4
hereof, the Initial Purchasers shall pay their own expenses,
including the fees and disbursements of their counsel.
Section 5. Conditions of the Obligations of the
Initial Purchasers.
The obligations of the Initial Purchasers to
purchase and pay for the Debentures as provided herein on
the First Closing Date and, with respect to the Optional
Debentures, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part
of the Company set forth in Section 1 hereof as of the date
hereof and as of the First Closing Date as though then made
and, with respect to the Optional Debentures, as of the
Second Closing Date as though then made, to the timely
performance by the Company of its covenants and other
obligations hereunder, and to each of the following
additional conditions:
(a) Accountants' Comfort Letter. On the date hereof,
the Representatives shall have received from KPMG LLP,
independent public or certified public accountants for the
Company, a letter dated the date hereof addressed to the
Initial Purchasers, in form and substance satisfactory to
the Representatives, containing statements and information
of the type ordinarily included in accountants' "comfort
letters" to Initial Purchasers, delivered according to
Statement of Auditing Standards No. 72, 76 and 100 (or any
successor bulletin), with respect to the audited and
unaudited financial statements and certain financial
information contained in the Offering Memorandum.
(b) No Material Adverse Change or Rating Agency
Change. For the period from and after the date of this
Agreement and prior to the First Closing Date and, with
respect to the Optional Debentures, the Second Closing Date:
(i) in the judgment of the Initial Purchasers there shall
not have occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any securities of the Company or any
of its Significant Subsidiaries or in the rating outlook for
the Company or any of its Significant Subsidiaries by any
"nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under
the Securities Act.
(c) Opinion of Counsel for the Company. On each of
the First Closing Date and the Second Closing Date the
Initial Purchasers shall have received the favorable opinion
of (i) ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel for the
Company, (ii) ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, Nevada counsel and (iii)
▇▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel for the Company, all dated as
of such Closing Date, the forms of which are attached as
Exhibits A-1, A-2, and A-3.
(d) Opinion of Counsel for the Initial Purchasers. On
each of the First Closing Date and the Second Closing Date
the Representatives shall have received the favorable
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Initial
Purchasers, dated as of such Closing Date, in form and
substance satisfactory to the Representatives.
(e) Officers' Certificate. On each of the First
Closing Date and the Second Closing Date the Initial
Purchasers shall have received a written certificate of the
Company executed by the Chairman of the Board, Chief
Executive Officer and President of the Company and the Chief
Financial Officer or Chief Accounting Officer of the
Company, on behalf of the Company, dated as of such Closing
Date, to the effect set forth in subsection (b)(ii) of this
Section 5, and further to the effect that:
(i) for the period from and after the date of this
Agreement and prior to such Closing Date, there has not
occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the
Company set forth in Section 1 of this Agreement are true
and correct with the same force and effect as though
expressly made on and as of such Closing Date; and
(iii) the Company has complied with all the agreements
hereunder and satisfied all the conditions on its part to be
performed or satisfied hereunder at or prior to such Closing
Date.
(f) Bring-down Comfort Letter. On each of the First
Closing Date and the Second Closing Date the Representatives
shall have received from KPMG LLP, independent auditors for
the Company, a letter dated such date, in form and substance
satisfactory to the Representatives, to the effect that they
reaffirm the statements made in the letter furnished by them
pursuant to subsection (a) of this Section 5, except that
the specified date referred to therein for the carrying out
of procedures shall be no more than five business days prior
to the First Closing Date or Second Closing Date, as the
case may be.
(g) Registration Rights Agreement. On the First
Closing Date, the Company and the Initial Purchasers shall
have executed and delivered the Registration Rights
Agreement (in form and substance satisfactory to the Initial
Purchasers), and the Registration Rights Agreement shall be
in full force and effect.
(h) Lock-Up Agreement from Certain Securityholders of
the Company. On or prior to the date hereof, the Company
shall have furnished to the Initial Purchasers an agreement
in the form of Exhibit B hereto from each of the officers
and directors of the Company, and such agreement shall be in
full force and effect on each of the First Closing Date and
the Second Closing Date.
(i) PORTAL Designation. On the First Closing Date,
the Debentures shall have been designated PORTAL-eligible
securities in accordance with the rules and regulations of
the NASD.
(j) Additional Documents. On or before each of the
First Closing Date and the Second Closing Date, the
Representatives and counsel for the Initial Purchasers shall
have received such information, documents and opinions as
they may reasonably require for the purposes of enabling
them to pass upon the issuance and sale of the Debentures as
contemplated herein, or in order to evidence the accuracy of
any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein
contained.
(k) Approval of Listing. At the First Closing Date
the Conversion Shares shall have been approved for listing
on the NYSE, subject only to official notice of issuance.
If any condition specified in this Section 5 is not
satisfied when and as required to be satisfied, this
Agreement may be terminated by the Initial Purchasers by
notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Debentures,
at any time prior to the Second Closing Date, which
termination shall be without liability on the part of any
party to any other party, except that Section 4, Section 7
and Section 8 shall at all times be effective and shall
survive such termination.
Section 6. Representations, Warranties and Agreements
of Initial Purchaser.
Each of the Initial Purchasers represent and
warrant that it is a "qualified institutional buyer"
("QIB"), as defined in Rule 144A of the Securities Act.
Each Initial Purchaser agrees with the Company that:
(a) The Debentures and the Conversion Shares have
not been and will not be registered under the Securities Act
in connection with the initial offering of the Debentures.
(b) The Initial Purchasers are purchasing the
Debentures pursuant to a private sale exemption from
registration under the Securities Act.
(c) The Debentures have not been and will not be
offered or sold by the Initial Purchasers or their
affiliates acting on their behalf except in accordance with
Rule 144A.
(d) The Initial Purchasers will not offer or sell
the Debentures in the United States by means of any form of
general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D, including (i) any
advertisement, article, notice or other communication
published in any newspaper, magazine or similar medium or
broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general
solicitation or general advertising in the United States.
(e) The Initial Purchasers have not offered or
sold, and will not offer or sell, any Debentures except to
persons whom they reasonably believe to be QIBs.
Section 7. Indemnification.
(a) Indemnification of the Initial Purchasers. The
Company agrees to indemnify and hold harmless each Initial
Purchaser, its directors, officers and employees, and each
person, if any, who controls any Initial Purchaser within
the meaning of the Securities Act and the Exchange Act
against any loss, claim, damage, liability or expense, as
incurred, to which such Initial Purchaser or such
controlling person may become subject, under the Securities
Act, the Exchange Act or other federal or state statutory
law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar
as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out
of or is based (i) upon any untrue statement or alleged
untrue statement of a material fact contained in the
Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a
material fact, in each case, necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading; or (ii) in whole or in
part upon any inaccuracy in the representations and
warranties of the Company contained herein; or (iii) in
whole or in part upon any failure of the Company to perform
its obligations hereunder or under law; provided, however,
that the foregoing indemnity agreement shall not apply to
any loss, claim, damage, liability or expense to the extent,
but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity
with written information furnished to the Company by the
Representatives expressly for use in the Offering Memorandum
(or any amendment or supplement thereto); provided, further,
that with respect to any Preliminary Offering Memorandum,
the foregoing indemnity agreement shall not inure to the
benefit of any Initial Purchaser from whom the person
asserting any loss, claim, damage, liability or expense
purchased Debentures, or any person controlling such Initial
Purchaser, if copies of the Final Offering Memorandum were
timely delivered to such Initial Purchaser pursuant to
Section 2 and a copy of the Final Offering Memorandum (as
then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Initial Purchaser to
such person, at or prior to the written confirmation of the
sale of the Debentures to such person, and if the Final
Offering Memorandum (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim,
damage, liability or expense; and provided, further, that
nothing in this Section 7(a) shall obligate the Company to
indemnify any Initial Purchaser, its directors, officers and
employees and controlling persons, who has failed or refused
to purchase Debentures which they have agreed to purchase on
the First Closing Date or the Second Closing Date, as the
case may be. The indemnity agreement set forth in this
Section 7(a) shall be in addition to any liabilities that
the Company may otherwise have.
(b) Indemnification of the Company, its Directors and
Officers. Each Initial Purchaser, severally and not
jointly, agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers and each person,
if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the
Company, or any such director, officer or controlling person
may become subject, under the Securities Act, the Exchange
Act, or other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected with the
written consent of such Initial Purchaser), insofar as such
loss, claim, damage, liability or expense (or actions in
respect thereof as contemplated below) arises out of or is
based upon any untrue or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), or arises out of or is
based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein in
light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the
Offering Memorandum (or any amendment or supplement
thereto), in reliance upon and in conformity with written
information furnished to the Company by the Representatives
expressly for use therein; and to reimburse the Company, or
any such director, officer or controlling person for any
legal and other expense reasonably incurred by the Company,
or any such director, officer or controlling person in
connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage,
liability, expense or action. The Company hereby
acknowledges that the only information that the Initial
Purchasers have furnished to the Company expressly for use
in the Offering Memorandum (or any amendment or supplement
thereto) are the statements set forth in Schedule C; and the
Initial Purchasers confirm that such statements are correct.
The indemnity agreement set forth in this Section 7(b) shall
be in addition to any liabilities that each Initial
Purchaser may otherwise have.
(c) Notifications and Other Indemnification
Procedures. Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any
action, such indemnified party will, if a claim in respect
thereof may be made against an indemnifying party under this
Section 7, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability
which it may have to any indemnified party for contribution
or otherwise than under the indemnity agreement contained in
this Section 7 or to the extent it is not prejudiced as a
proximate result of such failure. In case any such action
is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled
to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly
notified, by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from
such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying
party and counsel for the indemnified party shall have
reasonably concluded that a conflict may arise between the
positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other
indemnified parties which are different from or additional
to those available to the indemnifying party, the
indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt
of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the
defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 7 for any legal or
other fees or expenses subsequently incurred by such
indemnified party in connection with the defense thereof
unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next
preceding sentence or (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party
(it being understood, however, that the indemnifying party
shall not be liable for the fees or expenses of more than
one separate counsel (together with local counsel), approved
by the indemnifying party (the Representatives in the case
of Section 7(b) and Section 8), representing the indemnified
parties who are parties to such action).
(d) Settlements. The indemnifying party under this
Section 7 shall not be liable for any settlement of any
proceeding effected without its written consent, but if
settled with such consent or if there is a final judgment
for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any loss, claim,
damage, liability or expense by reason of such settlement or
judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment
in any pending or threatened action, suit or proceeding in
respect of which any indemnified party is or could
reasonably have been a party and indemnity was or could
reasonably have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent (x)
includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of
such action, suit or proceeding and (y) 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.
Section 8. Contribution.
If the indemnification provided for in Section 7 is
for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company, on the one
hand, and the Initial Purchasers, on the other hand, from
the offering of the Debentures pursuant to this Agreement or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault
of the Company, on the one hand, and the Initial Purchasers,
on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by
the Company, on the one hand, and the Initial Purchasers, on
the other hand, in connection with the offering of the
Debentures pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds
from the offering of the Debentures pursuant to this
Agreement (before deducting expenses) received by the
Company, and the total discount received by the Initial
Purchasers bear to the aggregate initial offering price of
the Debentures. The relative fault of the Company, on the
one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a
material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied
by the Company, on the one hand, or the Initial Purchasers,
on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The amount paid or payable by a party as a result
of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the
limitations set forth in Section 7(c), any legal or other
fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or
claim. The provisions set forth in Section 7(c) with
respect to notice of commencement of any action shall apply
if a claim for contribution is to be made under this
Section 8; provided, however, that no additional notice
shall be required with respect to any action for which
notice has been given under Section 7(c) for purposes of
indemnification.
The Company and the Initial Purchasers agree that
it would not be just and equitable if contribution pursuant
to this Section 8 were determined by pro rata allocation or
by any other method of allocation which does not take
account of the equitable considerations referred to in this
Section 8.
Notwithstanding the provisions of this Section 8, no
Initial Purchaser shall be required to contribute any amount
in excess of the discount received by such Initial Purchaser
in connection with the Debentures distributed by it. No
person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to this
Section 8 are several, and not joint, in proportion to their
respective commitments as set forth opposite their names in
Schedule A. For purposes of this Section 8, each officer
and employee of an Initial Purchaser and each person, if
any, who controls an Initial Purchaser within the meaning of
the Securities Act and the Exchange Act shall have the same
rights to contribution as such Initial Purchaser, and each
director of the Company, each officer of the Company, and
each person, if any, who controls the Company within the
meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as the Company.
Section 9. Default of One or More of the Several
Initial Purchasers.
If, on the First Closing Date or the Second Closing
Date, as they case may be, any one or more of the several
Initial Purchasers shall fail or refuse to purchase
Debentures that it or they have agreed to purchase hereunder
on such date, and the aggregate principal amount of
Debentures which such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase
does not exceed 10% of the aggregate principal amount of the
Debentures to be purchased on such date, the other Initial
Purchasers shall be obligated, severally, in the proportions
that the principal amount of Firm Debentures set forth
opposite their respective names on Schedule A bears to the
aggregate principal amount of Firm Debentures set forth
opposite the names of all such non-defaulting Initial
Purchasers, or in such other proportions as may be specified
by the Representatives with the consent of the non-
defaulting Initial Purchasers, to purchase the Debentures
which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on such
date. If, on the First Closing Date or the Second Closing
Date, as the case may be, any one or more of the Initial
Purchasers shall fail or refuse to purchase Debentures and
the aggregate principal amount of Debentures with respect to
which such default occurs exceeds 10% of the aggregate
principal amount of Debentures to be purchased on such date,
and arrangements satisfactory to the Representatives and the
Company for the purchase of such Debentures are not made
within 48 hours after such default, this Agreement shall
terminate without liability of any party (other than a
defaulting Initial Purchaser) to any other party except that
the provisions of Section 4, Section 7 and Section 8 shall
at all times be effective and shall survive such
termination. In any such case either the Representatives or
the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the
required changes, if any, to the Offering Memorandum or any
other documents or arrangements may be effected.
As used in this Agreement the term "Initial Purchaser"
shall be deemed to include any person substituted for a
defaulting Initial Purchaser under this Section 9. Any
action taken under this Section 9 shall not relieve any
defaulting Initial Purchaser from liability in respect of
any default of such Initial Purchaser under this Agreement.
Section 10. Termination of this Agreement.
On or prior to the First Closing Date this
Agreement may be terminated by the Representatives by notice
given to the Company if at any time after the date hereof
(i) trading or quotation in any of the Company's securities
shall have been suspended or limited by the Commission or by
the NYSE or trading in securities generally on either the
Nasdaq Stock Market or the NYSE shall have been suspended or
limited, or minimum or maximum prices shall have been
generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium
shall have been declared by any federal or New York
authority; or (iii) there shall have occurred any outbreak
or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States
or international financial markets, or any substantial
change or development involving a prospective substantial
change in United States' or international political,
financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it
impracticable to market the Debentures in the manner and on
the terms described in the Offering Memorandum or to enforce
contracts for the sale of securities. Any termination
pursuant to this Section 10 shall be without liability on
the part of (a) the Company to any Initial Purchaser, (b)
the Initial Purchasers to the Company, or (c) of any party
hereto to any other party except that the provisions of
Section 7 and Section 8 shall at all times be effective and
shall survive such termination.
Section 11. Representations and Indemnities to Survive
Delivery.
The respective indemnities, contribution,
agreements, representations, warranties and other statements
of the Company, of its officers and of the several Initial
Purchasers set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect,
regardless of (i) any investigation, or statement as to the
result hereof, made by or on behalf of any Initial Purchaser
or the Company or any of its or their partners, officers or
directors or any controlling person, as the case may be, and
(ii) acceptance of the Debentures and payment for them
hereunder.
Section 12. Notices.
All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and
confirmed to the parties hereto as follows:
If to the Representatives, c/o:
Banc of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
If to the Company:
Financial Federal Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Any party hereto may change the address for receipt of
communications by giving written notice to the others.
Section 13. Successors.
This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute
Initial Purchaser pursuant to Section 9 hereof, and to the
benefit of the employees, officers and directors and
controlling persons referred to in Section 7 and Section 8,
and in each case their respective successors, and no other
person will have any right or obligation hereunder. The
term "successors" shall not include any purchaser of the
Debentures as such from any Initial Purchaser merely by
reason of such purchase.
Section 14. Partial Unenforceability.
The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect
the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to
be invalid or unenforceable, there shall be deemed to be
made such minor changes (and only such minor changes) as are
necessary to make it valid and enforceable.
Section 15. Governing Law Provisions; Consent to
Jurisdiction.
(a) Governing Law Provisions. This Agreement
shall be governed by and construed in accordance with the
laws of the State of New York.
(b) Consent to Jurisdiction. Any legal suit,
action or proceeding arising out of or based upon this
Agreement or the transactions contemplated hereby ("Related
Proceedings") may be instituted in the federal courts of the
United States of America located in the City and County of
New York or the courts of the State of New York in each case
located in the City and County of New York (collectively,
the "Specified Courts"), and each party irrevocably submits
to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any
such court, as to which such jurisdiction is non-exclusive)
of such courts in any such suit, action or proceeding.
Service of any process, summons, notice or document by mail
to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding
brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue
of any suit, action or other proceeding in the Specified
Courts and irrevocably and unconditionally waive and agree
not to plead or claim in any such court that any such suit,
action or other proceeding brought in any such court has
been brought in an inconvenient forum.
Section 16. General Provisions.
This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject
matter hereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties
hereto. The Table of Contents and the Section headings
herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is
a sophisticated business person who was adequately
represented by counsel during negotiations regarding the
provisions hereof, including, without limitation, the
indemnification provisions of Section 7 and the contribution
provisions of Section 8, and is fully informed regarding
said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 7 and 8 hereto
fairly allocate the risks in light of the ability of the
parties to investigate the Company, its affairs and its
business in order to assure that adequate disclosure has
been made in the Offering Memorandum (and any amendments and
supplements thereto), as required by the Securities Act and
the Exchange Act.
If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return to
the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become
a binding agreement in accordance with its terms.
Very truly yours,
FINANCIAL FEDERAL CORPORATION
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
The foregoing Purchase Agreement is hereby confirmed
and accepted by the Initial Purchasers as of the date first
above written.
BANC OF AMERICA SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
Acting as Representatives of the
Several Initial Purchasers named in
the attached Schedule A
BANC OF AMERICA SECURITIES LLC
By: _________________________________
Name:
Title
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: _________________________________
Name:
Title
SCHEDULE A
Initial Purchasers Aggregate
Principal
Amount of
Debentures
to be
Purchased
Banc of America Securities LLC $63,750,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. 63,750,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. 15,000,000
Citigroup Global Markets, Inc. 7,500,000
Total $150,000,000
SCHEDULE B
SIGNIFICANT SUBSIDIARIES OF THE COMPANY
1. Financial Federal Credit Inc.
2. Financial Federal Funding LLC
SCHEDULE C
Information the Initial Purchasers have furnished to the
Company for use in the Offering Memorandum:
1. The last sentence of the text on the cover page of the
Offering Memorandum, concerning delivery of the Debentures
by the Initial Purchasers;
2. The names and corresponding amounts set forth in the
table of Initial Purchasers in the first paragraph of text
under the caption "Plan of Distribution" in the Offering
Memorandum; and
3. Paragraphs 6 (2nd and 3rd sentences), 8 and 9 set forth
under the caption "Plan of Distribution" in the Offering
Memorandum.
EXHIBIT A-1
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP,
COUNSEL FOR THE COMPANY, TO BE DELIVERED PURSUANT TO
SECTION 5(c) OF THE PURCHASE AGREEMENT
(i) The Company is duly qualified as a foreign
corporation to do business as a foreign corporation in
the State of New York and is in good standing in the
State of New York.
(ii) Funding has been duly organized and is validly
existing as a limited liability company in good
standing in the State of Delaware, has requisite power
and authority to own, lease and operate its properties
and to conduct its business as described in the
Offering Memorandum.
(iii) Each of the Purchase Agreement, the
Indenture, the Debentures and the Registration Rights
Agreement has been duly authorized, executed and
delivered by the Company.
(iv) Each of the Indenture and the Registration Rights
Agreement is a valid and binding agreement of the
Company enforceable in accordance with its terms, and,
upon receipt of payment by the Initial Purchasers, the
Debentures will be a valid and binding obligation of
the Company enforceable in accordance with its terms.
(v) The shares of Common Stock initially issuable upon
conversion of the Debentures have been duly authorized
and reserved, and, when issued upon conversion of the
Debentures in accordance with the terms of the
Debentures, will be validly issued, fully paid and non-
assessable.
(vi) It is not necessary in connection with the offer,
sale and delivery of the Debentures to the Initial
Purchasers, or in connection with the initial resale of
such Debentures by the Initial Purchasers, in the
manner contemplated by the Purchase Agreement and the
Offering Memorandum, to register the Debentures under
the Securities Act of 1933, as amended, or to qualify
the Indenture under the Trust Indenture Act of 1939, as
amended.
(vii) The documents incorporated by reference in
the Offering Memorandum, when filed with the
Commission, complied as to form in all material
respects with the requirements of with the Exchange Act
and the rules and regulations of the Commission
thereunder.
(viii) The statements in the Offering Memorandum
under the captions "Description of Debentures",
"Description of Capital Stock" and "Certain United
States Tax Considerations," insofar as such statements
constitute matters of law, summaries of (a) legal
matters, (b) the Company's charter or by-law
provisions, (c) legal documents, or (d) legal
conclusions, fairly present and summarize, in all
material respects, the matters referred to therein.
(ix) No consent, approval or authorization of, or
registration or filing with, any governmental or
regulatory authority or agency, is required for the
Company's execution, delivery and performance of the
Purchase Agreement, the Indenture, the Registration
Rights Agreement or the Debentures, except as required
under the Securities Act, applicable state securities
or blue sky laws and by the NASD.
(x) The execution and delivery of the Purchase
Agreement, the Indenture and the Debentures by the
Company and the performance by the Company of its
obligations thereunder will not result in any violation
of New York or federal law or regulation applicable to
the Company or any Significant Subsidiary.
(xi) The Company is not and, after receipt of payment
for the Debentures and the application of the proceeds
thereof as described in the Offering Memorandum, will
not be an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
In addition, such counsel shall state that in
connection with the preparation of the Offering
Memorandum, they have participated in conferences with
representatives of the Initial Purchasers and with
certain officers and employees of the Company, at which
the contents of the Offering Memorandum and related
matters were discussed and, although such counsel has
not undertaken to investigate or verify independently,
and does not assume responsibility for, the accuracy or
completeness of the statements contained in the
Offering Memorandum (other than as explicitly stated in
paragraph (viii) above), based upon that participation
and review, no facts have come to their attention to
lead them to believe that (except for financial
statements and schedules and other financial and
statistical data included in or omitted from the
Offering Memorandum, as to which they need express no
opinion), the Offering Memorandum, as of its date,
contained, and on the date of this letter, contains any
untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading.
Such counsel may rely solely upon the opinion of ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ addressed to the Initial Purchasers as to
matters pertaining to the law of the State of Nevada.
Such counsel need make no independent examination of
such matters.
EXHIBIT A-2
FORM OF OPINION OF ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, NEVADA COUNSEL
FOR THE COMPANY, TO BE DELIVERED PURSUANT TO SECTION
5(c) OF THE PURCHASE AGREEMENT
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the State of Nevada.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and
to conduct its business as described in the Offering
Memorandum and to enter into and perform its
obligations under the Purchase Agreement.
(iii) The authorized, issued and outstanding
capital stock of the Company (including the Common
Stock) is as described in the Offering Memorandum under
the caption "Capitalization" as of the stated dates.
All of the issued and outstanding shares of Common
Stock of the Company have been duly and validly
authorized and issued, are fully paid and
nonassessable.
(iv) Each of the Purchase Agreement, the
Indenture, the Debentures and the Registration Rights
Agreement has been duly authorized, executed and
delivered by the Company and, each of the Indenture and
the Registration Rights Agreement is a valid and
binding agreement of the Company enforceable in
accordance with its terms, and, upon receipt of payment
from the Initial Purchasers, the Debentures will be
valid and binding obligations of the Company
enforceable in accordance with their terms.
(v) The shares of Common Stock initially issuable
upon conversion of the Debentures have been duly
authorized and reserved and, when issued upon
conversion of the Debentures in accordance with the
terms of the Debentures, will be validly issued, fully
paid and non-assessable.
(vi) No shareholder of the Company has any
preemptive right, right of first refusal or other
similar right to subscribe for or purchase securities
of the Company arising by operation of the charter or
by-laws of the Company or the laws of the State of
Nevada.
(vii) The execution and delivery by the
Company of the Purchase Agreement, the Indenture and
the Debentures, and performance by the Company of its
obligations under such instruments and will not (a)
result in any violation of the provisions of the
Company's Restated Articles of Incorporation or Bylaws;
(b) or to such counsel's knowledge, conflict with or
result in the violation of any law or regulation
applicable to the Company.
EXHIBIT A-3
FORM OF OPINION OF INTERNAL COUNSEL FOR THE COMPANY, TO
BE DELIVERED PURSUANT TO SECTION 5(c) OF THE PURCHASE
AGREEMENT
(i) Financial Federal Credit Inc. ("Credit") has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power
and authority to own, lease and operate its properties
and to conduct its business as described in the
Offering Memorandum and, to my knowledge, each of
Credit and Financial Federal Funding, LLC. ("Funding")
is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction
in which such qualification is required, whether by
reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions
where the failure to so qualify or to be in good
standing would not, singly or in the aggregate, result
in a Material Adverse Change.
(ii) All of the outstanding shares of Common Stock of
the Company have been duly authorized and validly
issued, are fully paid and nonassessable.
(iii) All of the issued and outstanding capital
stock of each Significant Subsidiary of the Company is
held of record by the Company or Credit and has been
duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or
through subsidiaries, to my knowledge, free and clear
of any security interest, mortgage, pledge, lien,
encumbrance or any pending or threatened claim.
(iv) The authorized, issued and outstanding capital
stock of the Company (including the Common Stock) is as
set forth in the Offering Memorandum under the caption
"Capitalization".
(v) The Company and each Significant Subsidiary
possess such valid and current certificates,
authorizations or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies
necessary to conduct their respective businesses, and,
to my knowledge, neither the Company nor any
Significant Subsidiary has received any notice of
proceedings relating to the revocation or modification
of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision,
ruling or finding, could result in a Material Adverse
Change.
(vi) The statements in the Company's Annual Report on
Form 10-K for the year ended July 31, 2003 under the
captions "Item 1. Business Proprietary Rights," "Item
3. Legal Proceedings," and "Item 13. Certain
Relationships and Related Transactions," insofar as
such statements constitute summaries of (a) legal
matters, (b) the Company's charter or by-law
provisions, (c) legal documents, (d) legal conclusions
or legal proceedings, fairly present and summarize, in
all material respects, the matters referred to therein.
(vii) There are no legal or governmental actions,
suits or proceedings pending or, to my knowledge,
threatened against the Company or any of its
Significant Subsidiaries, including any such action,
suit or proceeding (a) which has as the subject thereof
any officer or director of, or property owned or leased
by, the Company or any of its Significant Subsidiaries
or (b) relating to environmental or discrimination
matters, where in the case of clauses (a) and (b) (1)
it is reasonably likely that such action, suit or
proceeding would be determined adversely to the Company
or such Significant Subsidiary and (2) any such action,
suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse
Change or adversely affect the consummation of the
transactions contemplated by this Agreement.
(viii) The execution and delivery of the Purchase
Agreement, the Indenture, the Registration Rights
Agreement and the Debentures by the Company and the
performance by the Company of its obligations
thereunder will not conflict with or constitute a
breach of, or Default under, or result in the creation
or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
Significant Subsidiaries pursuant to any material
Existing Instrument.
(ix) To my knowledge, neither the Company nor any
Significant Subsidiary is in violation of its charter
or by laws or any law, administrative regulation or
administrative or court decree applicable to the
Company or any Significant Subsidiary or is in Default
in the performance or observance of any obligation,
agreement, covenant or condition contained in any
material Existing Instrument, except in each such case
for such violations or Defaults as would not, singly or
in the aggregate, result in a Material Adverse Change.
(x) To my knowledge, no stockholder of the Company or
any other person has any preemptive right, right of
first refusal or other similar right to subscribe for
or purchase securities of the Company.
In addition, such counsel shall state that
although they have not undertaken to investigate or
verify independently, and do not assume responsibility
for, the accuracy or completeness of the statements
contained in the Offering Memorandum (other than as
explicitly stated in paragraph (vi) above), no facts
have come to their attention to lead them to believe
that (except for financial statements and schedules and
other financial and statistical data included in or
omitted from the Offering Memorandum, as to which such
counsel need express no opinion), the Offering
Memorandum, as of its date, contained, and on the date
of this letter, contains any untrue statement of a
material fact or omitted or omits to state a material
fact necessary in order to make the statements therein,
in the light of the circumstances under which they were
made, not misleading.
EXHIBIT B
? , 2004
BANC OF AMERICA SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES, INC.
As Representatives of the Several Initial Purchasers
c/o Banc of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Financial Federal Corporation (the "Company")
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially
of certain shares of common stock, $0.50 par value per
share, of the Company ("Common Stock") or securities
convertible into or exchangeable or exercisable for
Common Stock. The Company proposes to carry out an
offering of Convertible Senior Debentures (the
"Offering") for which you will act as the
representatives (the "Representatives") of the Initial
Purchasers in the Offering. The Convertible Senior
Debentures will be convertible into shares of Common
Stock. The undersigned acknowledges that you and the
other initial purchasers are relying on the agreements
of the undersigned contained in this letter in carrying
out the Offering and in entering into arrangements with
the Company with respect to the Offering.
In consideration of the foregoing, the undersigned
hereby agrees that the undersigned will not (and will
cause any spouse or immediate family member of the
spouse or the undersigned living in the undersigned's
household not to), without your prior written consent
(which consent may be withheld in your sole
discretion), directly or indirectly, sell, offer,
contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish
an open "put equivalent position" within the meaning of
Rule 16a-1(h) under the Securities Exchange Act of
1934, as amended, or otherwise dispose of any shares of
Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable
for, or convertible into shares of Common Stock
currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) by the
undersigned (or such spouse or family member), or
publicly announce an intention to do any of the
foregoing, for a period commencing on the date hereof
and continuing through the close of trading on the date
60 days after the date of the purchase agreement
between the Company and the initial purchasers with
respect to the Offering; provided, however, that
nothing herein shall prevent the undersigned from (i)
selling shares of Common Stock pursuant to a 10b5-1
selling plan implemented prior to the date hereof or
(ii) exercising vested Common Stock options (including
through a cashless exercise mechanism). The
undersigned agrees that any shares of Common Stock
acquired in transactions described in clause (ii) of
the previous sentence will be subject to this
agreement. The undersigned also agrees and consents to
the entry by the Company of stop transfer instructions
with the Company's transfer agent and registrar against
the transfer of shares of Common Stock or securities
convertible into or exchangeable or exercisable for
Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
If the Offering is not consummated on or prior to April
20, 2004, the agreements contained herein shall
terminate and be of no further force or effect.
This agreement is irrevocable and will be binding on
the undersigned and the respective successors, heirs,
personal representatives, and assigns of the
undersigned.
Printed Name of Holder
By:
Signature
Printed Name of Person Signing
(please indicate capacity of
person signing if signing as
custodian, trustee, or on behalf
of an entity)