EXHIBIT 1
EXECUTION COPY
FBR ASSET INVESTMENT CORPORATION
4,500,000 Shares of Common Stock
UNDERWRITING AGREEMENT
August 1, 2001
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
as Representatives of the several Underwriters
listed in Schedule I hereto
Dear Sirs:
FBR Asset Investment Corporation, a Virginia corporation that has
elected to be taxed as a real estate investment trust (the "Company"), confirms
its agreement with each of the Underwriters listed in Schedule I hereto
(collectively, the "Underwriters"), for whom Xxxxxx, Xxxxxxxx & Company,
Incorporated and Friedman, Billings, Xxxxxx & Co., Inc. are each acting as a
representative (in such capacity, the "Representatives"), with respect to (i)
the sale by the Company and the purchase by the Underwriters, of 4,500,000
shares of common stock of the Company, $0.01 par value per share (the "Common
Shares"), and the purchase by the Underwriters, acting severally and not
jointly, of the respective number of Common Shares set forth opposite the names
of the Underwriters in Schedule I hereto and (ii) the grant by the Company to
the Underwriters, of the option described in Section 1(b) hereof to purchase all
or any part of 675,000 additional Common Shares to cover over-allotments, if
any. The 4,500,000 Common Shares to be purchased by the Underwriters (the
"Initial Shares") and all or any part of the 675,000 Common Shares subject to
the option described in Section 1(b) hereof (the "Option Shares") are
hereinafter called, collectively, the "Shares."
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-11 (No. 333-63344), and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as
amended (the "Securities Act"), and the rules and regulations thereunder (the
"Securities Act Regulations"). The Company has prepared and filed such
amendments thereto, if any, as may have been required to the date hereof, and
will file such additional amendments thereto and such amended prospectuses as
may hereafter be required. The registration statement has been declared
effective under the Securities Act by the Commission. The registration
statement as amended at the time it became effective (including all
information deemed (by incorporation by reference) to be a part of the
registration statement at the time it became effective pursuant to Rule
430A(b) of the Securities Act Regulations) is hereinafter called the
"Registration Statement," except that, if the Company files a post-effective
amendment to such registration statement that becomes effective prior to the
Closing Time (as defined below), "Registration Statement" shall refer to such
registration statement as so amended. Any registration statement filed
pursuant to Rule 462(b) of the Securities Act Regulations is hereinafter
called the "Rule 462(b) Registration Statement," and after such filing the
term "Registration Statement" shall include the 462(b) Registration
Statement. Each prospectus included in the registration statement, or
amendments thereof or supplements thereto, before it became effective under
the Securities Act and any prospectus filed with the Commission by the
Company with the consent of the Underwriters pursuant to Rule 424(a) of the
Securities Act Regulations is hereafter called the "Preliminary Prospectus."
The term "Prospectus" means the final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Securities
Act Regulations, and any amendments thereof or supplements thereto. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE.
(a) INITIAL SHARES. Upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter agrees, severally and not jointly, to purchase from the Company at
the purchase price per share of $23.00, the number of Initial Shares set forth
in Schedule I opposite such Underwriter's name, plus any additional number of
Initial Shares which such Underwriter may become obligated to purchase pursuant
to the provisions of Section 8 hereof, subject, in each case, to such
adjustments as the Representatives in their sole discretion shall make to
eliminate any sales or purchases of fractional shares. The Underwriters may from
time to time increase or decrease the public offering price after the initial
public offering to such extent as the Underwriters may determine.
(b) OPTION SHARES. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase from the Company all or any part of the Option Shares at the purchase
price set forth in paragraph (a) above plus any additional number of Option
Shares that such Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of
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the Initial Shares upon notice by the Representatives to the Company setting
forth the number of Option Shares as to which the Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Shares. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Representatives, but shall not be later than seven
full business days (nor earlier, without the consent of the Company, than two
full business days) after the exercise of said option, nor in any event prior
to the Closing Time, as hereinafter defined. If the option is exercised as to
all or any portion of the Option Shares, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number
of Option Shares then being purchased, which the number of Initial Shares set
forth in Schedule I opposite the name of such Underwriter bears to the total
number of Initial Shares, subject in each case to such adjustments among
Underwriters as the Representatives in their sole discretion shall make to
eliminate any sales or purchases of fractional shares.
2. PAYMENT AND DELIVERY.
(a) INITIAL SHARES. Payment of the purchase price for the Initial
Shares shall be made to the Company by wire transfer of immediately available
funds to an account designated by the Company against delivery of the
certificates for the Initial Shares to the Representatives for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 9:30
a.m., New York City time, on the third (or fourth, if pricing occurs after 4:30
p.m., New York City time) business day after the day hereof (unless another
time, not later than ten business days after such date, shall be agreed to by
the Representatives and the Company). The time at which such payment and
delivery are actually made is hereinafter sometimes called the "Closing Time."
Unless the Representatives elect to take delivery of the Initial Shares by
credit through full FAST transfer to the accounts at The Depository Trust
Company designated by the Representatives, certificates for the Initial Shares
shall be delivered to the Representatives in definitive form registered in such
names and in such denominations as the Representatives shall specify. For the
purpose of expediting the checking of the certificates for the Initial Shares by
the Representatives, the Company agrees to make such certificates available to
the Representatives for such purpose at least one full business day preceding
the Closing Time.
(b) OPTION SHARES. In addition, payment of the purchase price for the
Option Shares shall be made to the Company by wire transfer of immediately
available funds to an account designated by the Company against delivery of the
certificates for the Option Shares to the Representatives for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 9:30
a.m., New York City time, on each Date of Delivery. Unless the Representatives
elect to take delivery of the Option Shares by credit through full FAST transfer
to the accounts at The Depository Trust Company designated by the
Representatives, certificates for the Option Shares shall be delivered to the
Representatives in definitive form registered in such names and in such
denominations as the Representatives shall specify. For the purpose of
expediting the checking of the certificates for the Option Shares by the
Representatives, the Company agrees to make such certificates available to the
Representatives for such purpose at least one full business day preceding the
relevant Date of Delivery.
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2A. QUALIFIED INDEPENDENT UNDERWRITER.
The Company hereby confirms its engagement of Xxxxxx, Xxxxxxxx
& Company, Incorporated ("Stifel") as, and Stifel hereby confirms its agreement
with the Company to render services as a "qualified independent underwriter"
within the meaning of Rule 2720 of the NASD's Conduct Rules with respect to the
offering of the Shares. Stifel, solely in its capacity as a qualified
independent underwriter and not otherwise, is referred to herein as the "QIU."
As compensation for the services of the QIU hereunder, the Company agrees to pay
the QIU a fee in the amount of $25,000 on the Closing Date. The Company and
Friedman, Billings, Xxxxxx & Co., Inc. ("FBR") will indemnify and hold harmless
the QIU as set forth in Section 9A of this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Underwriters that:
(a) the Company has an authorized capitalization as set
forth in the Prospectus under the caption
"Capitalization;" the outstanding shares of capital
stock of the Company and its subsidiaries have been
duly and validly authorized and issued and are fully
paid and non-assessable, and all of the outstanding
shares of capital stock of the subsidiaries are
directly or indirectly owned of record and
beneficially by the Company;
(b) each of the Company, each Subsidiary of the Company
set forth on Schedule I hereto (each a "Subsidiary"
and, collectively, the "Subsidiaries") and FBR has
been duly incorporated and is validly existing as a
corporation and in good standing under the laws of
its respective jurisdiction of incorporation with all
requisite corporate power and authority to own, lease
and operate its respective properties and to conduct
its respective business as now conducted and as
proposed to be conducted as described in the
Registration Statement and Prospectus and, in the
case of the Company and FBR, to authorize, execute
and deliver this Agreement and to consummate the
transactions contemplated hereby;
(c) the Company and the Subsidiaries are duly qualified
or registered to transact business in each
jurisdiction in which they conduct their respective
businesses as now conducted and as proposed to be
conducted as described in the Registration Statement
and the Prospectus, except where the failure,
individually or in the aggregate, to be so qualified
or registered could not reasonably be expected to
have a material adverse effect on the assets,
business, results of operations, earnings, prospects,
properties or condition (financial or otherwise) of
the Company and the Subsidiaries taken as a whole (a
"Material Adverse Effect"); and the Company and the
Subsidiaries are duly qualified and in good standing
in each jurisdiction in which they own or lease real
property or maintain an office or in which the nature
or conduct of their respective businesses as
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now conducted or proposed to be conducted as
described in the Registration Statement and the
Prospectus requires such qualification, except
where the failure to be so qualified and in good
standing would not have a Material Adverse Effect;
(d) the Company and the Subsidiaries are in compliance
with all applicable laws, rules, regulations, orders,
decrees and judgments, including without limitation
those relating to transactions with affiliates,
except where any noncompliance would not have a
Material Adverse Effect;
(e) neither the Company nor any of the Subsidiaries is in
breach of, or in default under (nor has any event
occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), its
respective charter or by-laws, or in the performance
or observance of any obligation, agreement, covenant
or condition contained in any license, indenture,
mortgage, deed of trust, loan or credit agreement or
other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which any of
them or their respective properties is bound, except
for such breaches or defaults which would not have a
Material Adverse Effect, and the issuance, sale and
delivery by the Company of the Shares, the execution,
delivery and performance of this Agreement by the
Company, and consummation of the transactions
contemplated hereby will not conflict with, or result
in any breach of, or constitute a default under (nor
constitute any event which with notice, lapse of
time, or both would constitute a breach of, or
default under), (i) any provision of the articles of
incorporation or charter or by-laws of the Company or
any of the Subsidiaries, (ii) any provision of any
license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to
which the Company or any of the Subsidiaries is a
party or by which any of them or their respective
properties may be bound or affected, or (iii) any
federal, state, local or foreign law, regulation or
rule or any decree, judgment or order the Company or
any of the Subsidiaries, except in the case of
clauses (ii) and (iii) for such breaches or defaults
which would not have a Material Adverse Effect or
result in the creation or imposition of any material
lien, charge, claim or encumbrance upon any property
or asset of the Company or the Subsidiaries;
(f) the Company has full legal right, power and authority
to enter into and perform this Agreement and to
consummate the transactions contemplated hereby; this
Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal,
valid and binding agreement of the Company
enforceable in accordance with its terms, except as
may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general
principles of equity, and except to the extent that
the indemnification and contribution
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provisions of Section 9 hereof may be limited by
federal or state securities laws and public policy
considerations in respect thereof;
(g) the issuance and sale of the Shares to the
Underwriters hereunder have been duly authorized by
the Company; when issued and delivered against
payment therefor as provided in this Agreement, the
Shares will be validly issued, fully paid and
non-assessable and the issuance of the Shares will
not be subject to any preemptive or similar rights;
except as contemplated herein, no person or entity
holds a right to require or participate in the
registration under the Securities Act of the Shares
pursuant to the Registration Statement; no person or
entity has a right of participation or first refusal
with respect to the sale of the Shares by the
Company; except as set forth in the Prospectus, there
are no contracts, agreements or understandings
between the Company and any person or entity granting
such person or entity the right to require the
Company to file a registration statement under the
Securities Act with respect to any securities of the
Company or to require the Company to include such
securities with the Shares registered pursuant to the
Registration Statement; the form of certificates
evidencing the Shares complies with all applicable
legal requirements and, in all material respects,
with all applicable requirements of the charter and
bylaws of the Company and the requirements of the
American Stock Exchange;
(h) no approval, authorization, consent or order of or
filing with any federal, state or local governmental
or regulatory commission, board, body, authority or
agency is required in connection with the execution,
delivery and performance by the Company of this
Agreement, the consummation of the transactions
contemplated hereby, and the sale and delivery of the
Shares, other than (x) such as have been obtained, or
will have been obtained at the Closing Time or the
relevant Date of Delivery, as the case may be, under
the Securities Act or the Securities Exchange Act of
1934 as amended (the "Exchange Act"), (y) such
approvals as have been obtained in connection with
the approval of the listing of the Shares on the
American Stock Exchange and (z) any necessary
qualification under the securities or blue sky laws
of the various jurisdictions in which the Shares are
being offered by the Underwriters;
(i) each of the Company and the Subsidiaries has all
necessary licenses, authorizations, consents and
approvals and has made all necessary filings required
under any federal, state or local law, regulation or
rule, and has obtained all necessary authorizations,
consents and approvals from other persons required in
order to conduct their respective businesses as
described in the Registration Statement and
Prospectus, except to the extent that any failure to
have any such licenses, authorizations, consents or
approvals, to make any such filings or to obtain any
such
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authorizations, consents or approvals would not,
individually or in the aggregate, have a Material
Adverse Effect; neither the Company nor any of the
Subsidiaries is required by any applicable law to
obtain accreditation or certification from any
governmental agency or authority or self-regulatory
organization in order to provide the products or
services that it currently provides or which it
proposes to provide, as set forth in the Prospectus;
neither the Company nor any of the Subsidiaries is in
violation of, in default under, or has received any
notice regarding a possible violation, default or
revocation of any such license, authorization,
consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order
or judgment applicable to the Company or any of the
Subsidiaries, other than any such violation, default
or revocation, that would not have a Material Adverse
Effect; and no such license, authorization, consent
or approval contains a materially burdensome
restriction that is not adequately disclosed in the
Registration Statement and the Prospectus;
(j) each of the Registration Statement and any Rule
462(b) Registration Statement has become effective
under the Securities Act and no stop order suspending
the effectiveness of the Registration Statement or
any Rule 462(b) Registration Statement has been
issued under the Securities Act and no proceedings
for that purpose have been instituted or are pending
or, to the knowledge of the Company, are threatened
by the Commission, and the Company has complied with
any request on the part of the Commission for
additional information;
(k) the Company and the transactions contemplated by this
Agreement meet the requirements and conditions for
using a registration statement on Form S-11 under the
Securities Act, as set forth in the General
Instructions to Form S-11; the Registration Statement
complies, and the Prospectus and any further
amendments or supplements thereto will comply, when
they have become effective or are filed with the
Commission, as the case may be, in all material
respects with the requirements of the Securities Act
and the Securities Act Regulations and, in each case,
present, or will present, fairly the information
required to be shown; the Registration Statement did
not, and any amendment thereto will not, in each case
as of the applicable effective date, contain an
untrue statement of a material fact or omit to state
a material fact required to be stated therein or
necessary to make the statements therein not
misleading; and the Prospectus or any amendment or
supplement thereto will not, as of the applicable
filing date and at the Closing Time and on each Date
of Delivery (if any), contain any untrue statement of
a material fact or omit to state a material fact
required to be stated therein or necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not
misleading; provided, however, that the Company makes
no warranty or representation
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with respect to Underwriters' Information (as
defined in Section 9(a) of this Agreement);
(l) the Preliminary Prospectus and the Prospectus in
paper format delivered to the Underwriters for use in
connection with this offering will be identical in
all material respects to the versions of the
Preliminary Prospectus and Prospectus created to be
transmitted to the Commission for filing via the
Electronic Data Gathering Analysis and Retrieval
System ("XXXXX"), except to the extent permitted by
Regulation S-T of the Securities Act Regulations;
(m) all legal or governmental proceedings, contracts or
documents that are material and of a character
required to be filed as exhibits to the Registration
Statement or to be summarized or described in the
Prospectus have been so filed, summarized or
described as required;
(n) there are no actions, suits, proceedings, inquiries
or investigations pending or, to the Company's
knowledge, threatened against the Company or any of
the Subsidiaries or any of their respective officers
and directors or to which the properties, assets or
rights of any such entity is subject, at law or in
equity, before or by any federal, state, local or
foreign governmental or regulatory commission, board,
body, authority, arbitral panel or agency which could
result in a judgment, decree, award or order that
could have a Material Adverse Effect, or which could
adversely affect the consummation of the transactions
contemplated by this Agreement in any material
respect;
(o) the financial statements, including the notes
thereto, included in the Registration Statement and
the Prospectus present fairly the financial position
of the Company as of the dates indicated and the
statements of income and changes in shareholders'
equity and cash flows of the Company for the periods
specified; such financial statements have been
prepared in conformity with generally accepted
accounting principles as applied in the United States
and on a consistent basis during the periods involved
(except as indicated in the notes thereto) and in
accordance with Regulation S-X promulgated by the
Commission; the financial statement schedules, if
any, included in the Registration Statement and the
Prospectus fairly present the information required to
be shown therein; no other financial statements or
schedules are required by Form S-11 or otherwise to
be included in the Registration Statement or
Prospectus;
(p) the Company has filed in a timely manner all reports
required to be filed pursuant to sections 13, 14,
15(d) of the Exchange Act during the preceding twelve
calendar months and if during such period the Company
has relied on Rule 12b-25(b) under the Exchange Act
("Rule 12b-25(b)")
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with respect to a report or a portion of a report,
that report or portion of a report has actually
been filed within the time period prescribed by
Rule 12b-25(b);
(q) Xxxxxx Xxxxxxxx LLP, whose reports on the audited
financial statements of the Company are included as
part of the Registration Statement and Prospectus are
and at all times during the periods covered by their
reports were independent public accountants as
required by the Securities Act and the Securities Act
Regulations;
(r) subsequent to the respective dates as of which
information is given in the Registration Statement
and the Prospectus, and except as may be otherwise
stated in the Registration Statement or Prospectus,
there has not been (i) any material adverse change in
the assets, liabilities, business, results of
operations, earnings, prospects, properties or
condition (financial or otherwise), present or
prospective, of the Company and the Subsidiaries
taken as a whole, whether or not arising in the
ordinary course of business, (ii) any transaction,
which is material to the Company and the Subsidiaries
taken as a whole, contemplated, planned or entered
into by the Company or any of the Subsidiaries, (iii)
any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any of the
Subsidiaries, which is material to the Company and
the Subsidiaries taken as a whole or (iv) any
dividend or distribution of any kind declared, paid
or made by the Company with respect to any class of
its capital stock;
(s) the Shares conform in all material respects to the
description thereof contained in the Registration
Statement and the Prospectus;
(t) except as disclosed in the Prospectus, there are no
outstanding (i) securities or obligations of the
Company or any of its Subsidiaries convertible into
or exchangeable for any capital stock of the Company
or any such Subsidiary, (ii) warrants, rights or
options to subscribe for or purchase from the Company
or any such Subsidiary any such capital stock or any
such convertible or exchangeable securities or
obligations, or (iii) obligations of the Company or
any such Subsidiary to issue any shares of capital
stock, any such convertible or exchangeable
securities or obligation, or any such warrants,
rights or options;
(u) each of the Company and the Subsidiaries and each of
their respective officers, directors and controlling
persons has not taken, directly or indirectly, any
action which is designed to or which has constituted
or which might reasonably be expected to cause or
result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale
or resale of the Shares, except for repurchases of
the Company's
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Common Shares effected pursuant to the Company's
authorized repurchase program in compliance with
applicable securities laws;
(v) the Company (i) is not required to register as a
"broker" or "dealer" in accordance with the
provisions of the Exchange Act or the rules and
regulations thereunder, and (ii) other than Arlington
Capital, Inc., a Delaware corporation ("Arlington
Capital"), directly, or indirectly through one or
more intermediaries, does not control any member firm
of the National Association of Securities Dealers,
Inc. (the "NASD");
(w) the Company has not relied upon the Representatives
or legal counsel for the Representatives for any
legal, tax or accounting advice in connection with
the offering and sale of the Shares;
(x) any certificate signed by any officer of the Company
or any Subsidiary delivered to the Representatives or
to counsel for the Representatives pursuant to or in
connection with this Agreement shall be deemed a
representation and warranty by the Company to each
Underwriter as to the matters covered thereby;
(y) the form of certificate used to evidence the Common
Stock complies in all material respects with all
applicable statutory requirements, with any
applicable requirements of the articles of
incorporation and by-laws of the Company and the
requirements of the American Stock Exchange;
(z) there are no statutes or regulations applicable to
the Company or any of the Subsidiaries or
certificates, permits or other authorizations from
governmental regulatory officials or bodies required
to be obtained or maintained by the Company or any of
the Subsidiaries of a character required to be
disclosed in the Registration Statement or the
Prospectus which have not been so disclosed and
properly described;
(aa) all agreements between the Company or any of the
Subsidiaries and third parties expressly referenced
in the Prospectus are legal, valid and binding
obligations of the Company or one or more of the
Subsidiaries, enforceable in accordance with their
respective terms, except to the extent enforceability
may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles
of equity;
(bb) no relationship, direct or indirect, exists between
or among the Company or any of the Subsidiaries, on
the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company,
the Subsidiary or FBR, on the other hand, which is
required by the Securities Act to be
10
described in the Registration Statement and the
Prospectus that is not so described;
(cc) the Company and the Subsidiaries have good and
marketable title in fee simple to all real property,
if any, and good title to all personal property owned
by them, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances,
mortgages and defects, except such as are disclosed
in the Prospectus or such as do not materially and
adversely affect the value of such property and do
not interfere with the use made or proposed to be
made of such property by the Company and the
Subsidiaries; and any real property and buildings
held under lease by the Company or any Subsidiary are
held under valid, existing and enforceable leases,
with such exceptions as are disclosed in the
Prospectus or are not material and do not interfere
with the use made or proposed to be made of such
property and buildings by the Company or such
Subsidiary;
(dd) the Company and each Subsidiary owns or possesses
adequate license or other rights to use all patents,
trademarks, service marks, trade names, copyrights,
software and design licenses, trade secrets,
manufacturing processes, other intangible property
rights and know-how (collectively "Intangibles")
necessary to entitle the Company and each Subsidiary
to conduct its business as described in the
Prospectus, and neither the Company, nor any
Subsidiary, has received notice of infringement of or
conflict with (and the Company does not know of any
such infringement of or conflict with) asserted
rights of others with respect to any Intangibles
which could have a Material Adverse Effect;
(ee) the Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions
are executed in accordance with management's general
or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of
financial statements in conformity with generally
accepted accounting principles as applied in the
United States and to maintain asset accountability;
(iii) access to assets is permitted only in
accordance with management's general or specific
authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken
with respect to any differences;
(ff) each of the Company and the Subsidiaries have filed
on a timely basis all necessary federal, state, local
and foreign income and franchise tax returns required
to be filed through the date hereof and have paid all
taxes shown as due thereon; and no tax deficiency has
been asserted against any such entity, nor does any
such entity know of any tax deficiency which is
likely to be asserted against any such entity which
if, determined adversely to
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any such entity, would materially adversely affect
the business, prospects, properties, assets,
results of operations or condition (financial or
otherwise) of any such entity, respectively; all
tax liabilities are adequately provided for on the
respective books of such entities;
(gg) neither the Company nor any of the Subsidiaries nor
any officer or director purporting to act on behalf
of the Company or any of the Subsidiaries has at any
time; (i) made any contributions to any candidate for
political office, or failed to disclose fully any
such contributions, in violation of law, (ii) made
any payment to any state, federal or foreign
governmental officer or official, or other person
charged with similar public or quasi-public duties,
other than payments required or allowed by applicable
law, (iii) made any payment outside the ordinary
course of business to any investment officer or loan
broker or person charged with similar duties of any
entity to which the Company or any of the
Subsidiaries sells or from which the Company or any
of the Subsidiaries buys loans or servicing
arrangements for the purpose of influencing such
agent, officer, broker or person to buy loans or
servicing arrangements from or sell loans to the
Company or any of the Subsidiaries, or (iv) engaged
in any transactions, maintained any bank account or
used any corporate funds except for transactions,
bank accounts and funds which have been and are
reflected in the normally maintained books and
records of the Company and the Subsidiaries;
(hh) except as otherwise disclosed in the Prospectus,
there are no material outstanding loans or advances
or material guarantees of indebtedness by the Company
or any of the Subsidiaries to or for the benefit of
any of the officers or directors of the Company or
any of the Subsidiaries or any of the members of the
families of any of them;
(ii) neither the Company nor any of the Subsidiaries nor,
to the Company's knowledge, any agent of the Company
or any of the Subsidiaries, has made any payment of
funds of the Company or of any Subsidiary or received
or retained any funds in violation of any law, rule
or regulation or of a character required to be
disclosed in the Prospectus;
(jj) all securities issued by the Company and any of its
Subsidiaries have been issued and sold in compliance
with all applicable federal and state securities
laws;
(kk) (i) the Company is organized in conformity with the
requirements for qualification as a real estate
investment trust ("REIT") under Sections 856 and 857
of the Internal Revenue Code of 1986, as amended (the
"Code"), (ii) the Company qualified as a REIT for all
taxable years prior to 2001, and (iii) the Company's
method of operation will enable it to meet the
12
requirements for taxation as a REIT under the Code
for 2001 and all subsequent taxable years, and the
Company intends to qualify as a REIT for all such
years;
(ll) Arlington Capital is registered as a broker-dealer
with the Commission and is a member of the NASD and
the Securities Investor Protection Corporation
("SIPC") and applicable state and other regulatory
authorities and is in compliance in all material
respects with all applicable laws, rules,
regulations, orders, and similar requirements in
connection therewith;
(mm) the Shares have been approved for listing, upon
official notice of issuance, on the American Stock
Exchange;
(nn) in connection with this offering, the Company has not
offered and will not offer its Common Shares or any
other securities convertible into or exchangeable or
exercisable for Common Shares in a manner in
violation of the Securities Act or the Securities Act
Regulations; the Company has not distributed and will
not distribute any Prospectus or other offering
material in connection with the offer and sale of the
Shares;
(oo) neither the Company nor any of the Subsidiaries or
their respective affiliates does business with the
government of Cuba or with any person or affiliate
located in Cuba;
(pp) there are no existing or, to the knowledge of the
Company, threatened labor disputes with the employees
of the Company or any of its Subsidiaries which are
likely to have individually or in the aggregate a
Material Adverse Effect;
(qq) neither the Company nor any of the Subsidiaries is,
or solely as a result of transactions contemplated
hereby and the application of the proceeds from the
sale of the Shares, will become, an "investment
company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company
Act of 1940, as amended (the "1940 Act");
(rr) the Company has not incurred any liability for any
finder's fees or similar payments in connection with
the transactions herein contemplated;
(ss) each of the Company and its Subsidiaries maintain
insurance (issued by insurers of recognized financial
responsibility) of the types and in the amounts
generally deemed adequate for their respective
businesses and consistent with insurance coverage
maintained by similar companies in similar
businesses, including, but not limited to, insurance
covering real and personal property owned or leased
by the Company and its Subsidiaries against theft,
damage, destruction, acts of vandalism and all
13
other risks customarily insured against, all of
which insurance is in full force and effect; and
(tt) neither the Company nor any of its Subsidiaries has
violated, or received notice of any violation with
respect to, any applicable environmental, safety or
similar law applicable to the business of the Company
or any of its Subsidiaries, nor any federal or state
law relating to discrimination in the hiring,
promotion or pay of employees, nor any applicable
federal or state wages and hours law, nor any
provisions of the Employee Retirement Income Security
Act or the rules and regulations promulgated
thereunder, nor any state law precluding the denial
of credit due to the neighborhood in which a property
is situated, the violation of any of which could have
a Material Adverse Effect.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby
covenants and agrees with the Underwriters:
(a) to furnish such information as may be requested and
otherwise to cooperate in qualifying the Shares for
offering and sale under the securities or blue sky
laws of such states as the Representatives may
designate and to maintain such qualifications in
effect as long as requested by the Representatives
for the distribution of the Shares, provided that the
Company shall not be required to maintain such
qualification for more than 90 days from the date
hereof (except that, upon the written request of the
Representatives and at the expense of the
Underwriters, the Company shall maintain such
qualification for an additional period, not to exceed
180 days), or to qualify as a foreign corporation or
to consent to the service of process under the laws
of any such state (except service of process with
respect to the offering and sale of the Shares);
(b) if, at the time this Agreement is executed and
delivered, it is necessary for a post-effective
amendment to the Registration Statement to be
declared effective before the offering of the Shares
may commence, the Company will endeavor to cause such
post-effective amendment to become effective as soon
as possible and will advise the Representatives
promptly and, if requested by the Representatives,
will confirm such advice in writing, when such
post-effective amendment has become effective;
(c) to prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus (or a
terms sheet as permitted by Rule 434) with the
Commission pursuant to Rule 424(b) not later than
10:00 a.m. (New York City time), on the day following
the execution and delivery of this Agreement, and to
furnish promptly (and with respect to the initial
delivery of the prospectus, not later than 10:00 a.m.
(New York City time) on the day following the
execution and delivery of this Agreement) to the
14
Underwriters as many copies of the Prospectus (or of
the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements
thereto after the effective date of the Registration
Statement) in such quantities and at such locations
as the Underwriters may reasonably request for the
purposes contemplated by the Securities Act
Regulations, which Prospectus and any amendments or
supplements thereto furnished to the Underwriters
will be materially identical to the version created
to be transmitted to the Commission for filing via
XXXXX, except to the extent permitted by Regulation
S-T of the Securities Act Regulations;
(d) to advise the Representatives promptly and (if
requested by the Representatives) to confirm such
advice in writing, when the Registration Statement
has become effective and when any post-effective
amendment to the Registration Statement becomes
effective under the Securities Act Regulations;
(e) to advise the Representatives immediately, confirming
such advice in writing, of (i) the receipt of any
comments from, or any request by, the Commission for
amendments or supplements to the Registration
Statement or Prospectus or for additional information
with respect thereto, or (ii) the issuance by the
Commission of any stop order suspending the
effectiveness of the Registration Statement or of any
order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of the
suspension of the qualification of the Shares for
offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any
of such purposes and, if the Commission or any other
government agency or authority should issue any such
order, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible;
to advise the Representatives promptly of any
proposal to amend or supplement the Registration
Statement or Prospectus and to file no such amendment
or supplement to which the Representatives shall
reasonably object in writing;
(f) before amending or supplementing the Registration
Statement or the Prospectus, or, during any period of
time in which a Prospectus relating to the Shares is
required to be delivered under the Securities Act
Regulations, to furnish to the Representatives a copy
of each such proposed amendment or supplement before
filing any such amendment or supplement with the
Commission;
(g) to furnish to the Underwriters, for a period of three
years from the date of this Agreement and only to the
extent unavailable through XXXXX (i) as soon as
available, copies of all annual, quarterly and
current reports or other communications supplied to
holders of Common Shares, (ii) as soon
15
as practicable after the filing thereof, copies of
all reports filed by the Company with the
Commission, the NASD, American Stock Exchange or
any securities exchange or the Nasdaq National
Market and (iii) such other information as the
Underwriters may reasonably request regarding the
Company and its Subsidiaries;
(h) to advise the Underwriters promptly of the happening
of any event known to the Company within the time
during which a prospectus relating to the Shares is
required to be delivered under the Securities Act
Regulations which, in the judgment of the Company,
would require the making of any change in the
Prospectus then being used so that the Prospectus
would not include any untrue statement of a material
fact or omit to state a material fact required to be
stated therein or necessary to make the statements
therein, in the light of the circumstances under
which they were made, not misleading, and, during
such time, promptly to prepare and furnish, at the
Company's expense, to the Underwriters promptly such
copies of the proposed amendments or supplements to
the Prospectus as may be necessary to reflect any
such change before filing any such amendment or
supplement with the Commission, and thereafter
promptly to furnish at the Company's own expense to
the Underwriters, copies in such quantities and at
such locations as the Underwriters may from time to
time reasonably request;
(i) to furnish promptly to the Representatives a signed
copy of the Registration Statement, as initially
filed with the Commission, and of all amendments or
supplements thereto (including all exhibits filed
therewith or incorporated therein) and such number of
conformed copies of the foregoing as the
Representatives may reasonably request;
(j) to furnish to each Representative, not less than two
business days before filing with the Commission
subsequent to the effective date of the Prospectus
and during the period referred to in paragraph (h)
above, a copy of any document proposed to be filed
with the Commission pursuant to Section 13, 14, or
15(d) of the Exchange Act and during such period to
file all such documents in a manner and within the
time periods required by the Exchange Act and the
Exchange Act Regulations;
(k) to apply the net proceeds of the sale of the Shares
in accordance with the statements under the caption
"Use of Proceeds" in the Prospectus;
(l) to make generally available to its security holders
and to deliver to the Representatives as soon as
practicable, but in any event not later than the end
of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration
Statement, an earnings statement complying with the
provisions of Section 11(a) of the Securities Act (in
16
form, at the option of the Company, complying with
the provisions of Rule 158 of the Securities Act
Regulations) covering a period of 12 months beginning
on the effective date of the Registration Statement;
(m) to use its best efforts to effect and maintain the
listing, quotation or inclusion of the Shares on the
American Stock Exchange or the New York Stock
Exchange, or in the Nasdaq National Market (each an
"Exchange") and to file with such Exchange all
documents and notices required by the Exchange of
companies that have securities that are listed on or
included in such Exchange;
(n) to refrain during a period of 90 days from the date
of the Prospectus, without the prior written consent
of the Representatives, from (i) offering, pledging,
selling, contracting to sell, selling any option or
contract to purchase, purchasing any option or
contract to sell, granting any option for the sale
of, or otherwise disposing of or transferring,
directly or indirectly, any Common Shares or any
securities convertible into or exercisable or
exchangeable for Common Shares, or filing any
registration statement under the Securities Act with
respect to any of the foregoing or (ii) entering into
any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of
the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is
to be settled by delivery of Common Shares or such
other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Shares to be sold
hereunder, (B) any Common Shares issued by the
Company upon the exercise of an options outstanding
on the date hereof and referred to in the Prospectus;
(o) to not, and to use its best efforts to cause its
officers, directors and affiliates (including without
limitation, FBR) not to, (i) take, directly or
indirectly prior to termination of the underwriting
syndicate contemplated by this Agreement, any action
designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result
in, or which might in the future reasonably be
expected to cause or result in, the stabilization or
manipulation of the price of any security of the
Company, to facilitate the sale or resale of any
security of the Company, (ii) sell, bid for, purchase
or pay anyone any compensation for soliciting
purchases of the Shares other than pursuant to this
Agreement or (iii) pay or agree to pay to any person
any compensation for soliciting any order to purchase
any other securities of the Company;
(p) the Company will maintain, at the Company's expense,
a registrar and transfer agent for the Common Shares;
17
(q) the Company will use its best efforts to continue to
qualify as a REIT under the Code and to cause
Arlington Capital to continue to be registered as a
broker-dealer with the Commission, the NASD, the SIPC
and other applicable state and other regulatory
authorities;
(r) the Company will comply with all of the provisions of
any undertakings in the Registration Statement;
(s) the Company and the Subsidiaries will conduct their
affairs in such a manner so as to ensure that neither
the Company nor any Subsidiary will be an "investment
company" or an entity subject to regulation as an
investment company within the meaning of the 1940
Act;
(t) if at any time during the 30-day period after the
Registration Statement becomes effective, any rumor,
publication or event relating to or affecting the
Company shall occur as a result of which in the
Representatives' reasonable opinion the market price
of the Common Shares has been or is likely to be
materially affected (regardless of whether such
rumor, publication or event necessitates a supplement
to or amendment of the Prospectus) and after written
notice from the Representatives advising the Company
to the effect set forth above, to forthwith prepare,
consult with the Representatives concerning the
substance of, and disseminate a press release or
other public statement, reasonably satisfactory to
the Representatives, responding to or commenting on
such rumor, publication or event;
(u) to maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with
management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit
preparation of financial statements in conformity
with generally accepted accounting principles as
applied in the United States and to maintain asset
accountability; (iii) access to assets is permitted
only in accordance with management's general or
specific authorization; and (iv) the recorded
accountability for assets is compared with the
existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences;
(v) not to invest in futures contracts, options on
futures contracts or options on commodities unless
the Company is exempt from the registration
requirements of the Commodity Exchange Act of 1978,
as amended (the "CEA"), or otherwise complies with
the CEA. In addition, the Company will not engage in
any activities which might be subject to the CEA,
unless such activities are exempt from that Act or
otherwise comply with that Act or with an applicable
no-action letter to the Company from the Commodities
Futures Trading Commission; and
18
(w) to file timely and accurate reports with the
Commission in accordance with Rule 463 of the
Securities Act Regulations or any successor
provision.
5. PAYMENT OF EXPENSES.
(a) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the preparation,
issuance and delivery of the certificates for the Shares to the Underwriters,
including any stock or other transfer taxes or duties payable upon the sale of
the Shares to the Underwriters, (iii) the printing of this Agreement and any
dealer agreements and furnishing of copies of each to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state laws that the Company and the
Representatives have mutually agreed are appropriate and the determination of
their eligibility for investment under state law as aforesaid (including the
legal fees and filing fees and other disbursements of counsel for the
Underwriters relating thereto and the printing and furnishing of copies of any
blue sky surveys or legal investment surveys to the Underwriters and to dealers,
(v) filing for review of the public offering of the Shares by the NASD
(including the legal fees and filing fees and other disbursements of counsel for
the Underwriters relating thereto), (vi) the fees and expenses of any transfer
agent or registrar for the Shares and miscellaneous expenses referred to in the
Registration Statement, (vii) the fees and expenses incurred in connection with
the listing of the Shares on the American Stock Exchange, (viii) making road
show presentations with respect to the offering of the Shares, (ix) preparing
and distributing bound volumes of transaction documents for the Representatives
and their legal counsel and (x) the performance of the Company's other
obligations hereunder (including, without limitation, costs incurred in closing
the purchase of the Option Shares, if any). Upon the request of the
Representatives, the Company will provide funds in advance for filing fees.
(b) The Company agrees to reimburse the Representatives for their
reasonable out-of-pocket expenses in connection with the performance of their
activities under this Agreement, including, but not limited to, costs such as
printing, facsimile, courier service, direct computer expenses, accommodations
and travel, and the fees and expenses of the Representatives' outside legal
counsel and any other advisors, accountants, appraisers, etc., but only if the
Initial Shares are purchased by the Underwriters as provided in Section 2(a) of
this Agreement.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder are subject to (i) the accuracy of the representations
and warranties on the part of the Company in all material respects on the date
hereof and at the Closing Time and on each Date of Delivery, as applicable (ii)
the performance by the Company of its obligations hereunder, and (iii) the
satisfaction of the following further conditions:
19
(a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become effective not later than 5:30 p.m.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by the Representatives.
(b) The Company shall furnish to the Underwriters at the Closing Time
and on each Date of Delivery an opinion of Hunton & Xxxxxxxx, counsel for the
Company, addressed to the Underwriters and dated the Closing Time and each Date
of Delivery, in substantially the form of Annex A.
In addition, Hunton & Xxxxxxxx shall state that they have
participated in conferences with officers and other representatives of the
Company, independent public accountants of the Company and Underwriters at which
the contents of the Registration Statement and Prospectus were discussed and,
although such counsel is not passing upon and does not assume responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus, nothing has caused them to believe that
the Registration Statement, the Prospectus, as of their respective effective or
issue dates and as of the date of such counsel's opinion, contained or contains
any untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading (it
being understood that, in each case, such counsel need express no view with
respect to the financial statements and other financial and statistical data
included in the Registration Statement or Prospectus). In rendering their
opinion, Hunton & Xxxxxxxx may rely with respect to matters of compliance with
NASD Conduct Rules and with respect to matters over which the NASD has authority
to exercise regulatory oversight upon the opinion of Sidley Xxxxxx Xxxxx & Xxxx
("SAB&W").
(c) The Company shall furnish to the Underwriters at the Closing Time
and on each Date of Delivery an opinion of SAB&W, special counsel for the
Company, addressed to the Underwriters and dated the Closing Time and each Date
of Delivery and in form and substance satisfactory to the Underwriters, covering
matters of compliance with the Conduct Rules of the NASD, in the form of Annex
B. Such opinion shall state that Hunton & Xxxxxxxx, counsel to the Company and
Xxxxx Xxxx LLP, counsel to the underwriters, may rely on such opinion.
(d) The Representatives shall have received from Xxxxxx Xxxxxxxx LLP,
"comfort letters" dated, respectively, as of the date of this Agreement, the
Closing Time and each Date of Delivery, as the case may be, addressed to the
Representatives, in form and substance satisfactory to the Representatives,
confirming that they are independent public accountants with respect to Company
(which shall be inclusive of its subsidiaries for purposes of this Section
6(g)), within the meaning of the Securities Act and the Securities Act
Regulations, and stating that:
20
(i) In their opinion, the consolidated financial
statements of the Company audited by them and included in the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Securities Act, the
Securities Act Regulations, the Exchange Act and the Exchange Act
Regulations.
(ii) On the basis of the procedures specified by the
American Institute of Certified Public Accountants as described in SAS
No. 71, "Interim Financial Information," inquiries of officials of the
Company responsible for financial and accounting matters, and such
other inquiries and procedures as may be specified in such letter,
which procedures do not constitute an audit in accordance with
generally accepted auditing standards as applied in the United States,
nothing came to their attention that caused them to believe that, if
applicable, the unaudited interim consolidated financial statements of
the Company included in the Registration Statement do not comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act, Securities Act Regulations,
Exchange Act and Exchange Act Regulations, including without
limitation, Regulation S-K, or are not in conformity with generally
accepted accounting principles as applied in the United States applied
on a basis substantially consistent, except as noted in the
Registration Statement, with the basis for the audited consolidated
financial statements of the Company included in the Registration
Statement.
(iii) On the basis of limited procedures, not
constituting an audit in accordance with generally accepted auditing
standards as applied in the United States, consisting of a reading of
the unaudited interim financial statements and other information
referred to below, a reading of the latest available unaudited
condensed consolidated financial statements of the Company, inspection
of the minute books of the Company since the date of the latest audited
financial statements of the Company included or incorporated by
reference in the Registration Statement, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) as of a specified date not more than
five days prior to the date of such letter, there have been
any changes in the consolidated capital stock of the Company,
any increase in the total liabilities of the Company, any
decreases in total assets or shareholders' equity of the
Company, or any changes, decreases or increases in other items
specified by the Representatives, in each case as compared
with amounts shown in the latest unaudited interim
consolidated statement of financial condition of the Company
included in the Registration Statement except in each case for
changes, increases or decreases which the Registration
Statement specifically discloses, have occurred or may occur
or which are described in such letter; and
21
(B) for the period from the date of the
latest unaudited interim consolidated financial statements of
the Company included in the Registration Statement to the
specified date referred to in clause (iii)(A), there were any
decreases in the consolidated interest income, net interest
income, or net income of the Company or in the per share
amount of net income of the Company, or any changes, decreases
or increases in any other items specified by the
Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Representatives, except
in each case for increases or decreases which the Registration
Statement discloses have occurred or may occur, or which are
described in such letter.
(iv) In addition to the audit referred to in their
report included in the Registration Statement and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (ii) and (iii) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards as applied in the United
States, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from the
general accounting records and consolidated financial statements of the
Company which appear in the Registration Statement, and have compared
such amounts, percentages and financial information with the accounting
records and the material derived from such records and consolidated
financial statements of the Company have found them to be in agreement.
In the event that the letters to be delivered referred to
above set forth any such changes, decreases or increases as specified in clauses
(iii)(A) or (iii)(B) above, or any exceptions from such agreement specified in
clause (iv) above, it shall be a further condition to the obligations of the
Underwriters that the Representatives shall have determined, after discussions
with officers of the Company responsible for financial and accounting matters,
that such changes, decreases, increases or exceptions as are set forth in such
letters do not (x) reflect a material adverse change in the items specified in
clause (iii)(A) above as compared with the amounts shown in the latest unaudited
consolidated statement of financial condition of the Company included in the
Registration Statement, (y) reflect a material adverse change in the items
specified in clause (iii)(B) above as compared with the corresponding periods of
the prior year or other period specified by the Representatives, or (z) reflect
a material change in items specified in clause (iv) above from the amounts shown
in the Preliminary Prospectus distributed by the Underwriters in connection with
the offering contemplated hereby or from the amounts shown in the Prospectus.
(e) The Representatives shall have received at the Closing Time and on
each Date of Delivery the favorable opinion of Xxxxx Xxxx LLP, dated the Closing
Time or such Date of Delivery, addressed to the Representatives and in form and
substance satisfactory to the Representatives.
22
(f) No amendment or supplement to the Registration Statement or
Prospectus shall have been filed to which the Underwriters shall have objected
in writing.
(g) Prior to the Closing Time and each Date of Delivery (i) no stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto, and no order directed at any document
incorporated by reference therein and no order preventing or suspending the use
of any Preliminary Prospectus or Prospectus has been issued by the Commission,
and no suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes, has occurred; and (ii) the Registration Statement and the
Prospectus shall not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) Between the time of execution of this Agreement and the Closing
Time or the relevant Date of Delivery (i) no material and unfavorable change in
the assets, business, results of operations, earnings, prospects, properties or
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole shall occur or become known (whether or not arising in the ordinary
course of business), or (ii) no transaction which is material and unfavorable to
the Company shall have been entered into by the Company or any of the
Subsidiaries.
(i) At the Closing Time, the NASD shall not have raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(j) At the Closing Time, the Shares shall have been approved for
listing on the American Stock Exchange.
(k) The Representatives shall have received letters (each, a "Lock-up
Agreement") from each person listed on Schedule II hereto, in form and substance
satisfactory to the Representatives, confirming that for a period of 90 days
after the Closing Time (the "Lock-Up Period"), such persons will not directly or
indirectly (i) offer, pledge to secure any obligation due on or within the
Lock-Up Period, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option for the sale of, or
otherwise dispose of or transfer, directly or indirectly, any Common Shares
(other than by participating as selling shareholders in a registered offering of
Common Shares offered by the Company with the consent of the Representatives) or
any securities convertible into or exercisable or exchangeable for Common Shares
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Shares, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Shares or such other securities, in cash or otherwise, without the prior written
consent of Stifel, which consent may be withheld in its sole discretion. The
forgoing restrictions shall not apply to securities disposed of privately
through bona fide gifts or to others approved by Stifel, so long as the
recipients first agree in writing to be bound by the same restrictions set forth
above during the Lock-Up Period.
23
(l) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Representatives a certificate of its Chief Executive Officer and
its Chief Financial Officer, to the effect that, to each of such officer's
knowledge, the representations and warranties of the Company set forth in this
Agreement are true and correct and the conditions set forth in this Section 6
have been met, and are true and correct as of such date.
(m) The Company shall have furnished to the Representatives such other
documents and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Prospectus, the representations,
warranties and statements of the Company contained herein, and the performance
by the Company of its covenants contained herein, and the fulfillment of any
conditions contained herein, as of the Closing Time or any Date of Delivery as
the Representatives may reasonably request.
(n) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the Closing Date shall have been made
within the applicable time period prescribed for such filing by such Rule.
(o) FBR shall furnish to the Underwriters at the Closing Time and on
each Date of Delivery an opinion of counsel for FBR, addressed to the
Underwriters and dated the Closing Time and each Date of Delivery, in the form
of Annex C.
(p) The Company shall perform such of its obligations under this
Agreement as are to be performed by the terms hereof and thereof at or before
the Closing Time or the relevant Date of Delivery.
7. TERMINATION. The obligations of the Underwriters hereunder shall be
subject to termination in the absolute discretion of the Representatives, at any
time prior to the Closing Time or any Date of Delivery, (i) if any of the
conditions specified in Section 6 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, or (ii) if there has been since the
respective dates as of which information is given in the Registration Statement,
any material adverse change, or any development involving a prospective material
adverse change, in or affecting the assets, business, results of operations,
earnings, prospects, properties or condition (financial or otherwise) of the
Company, whether or not arising in the ordinary course of business, or (iii) if
there has occurred outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic, political or other
conditions the effect of which on the financial markets of the United States is
such as to make it, in the judgment of the Representatives, impracticable to
market or deliver the Shares or enforce contracts for the sale of the Shares, or
(iv) if trading in any securities of the Company has been suspended by the
Commission or by an Exchange or if trading generally on or in an applicable
Exchange has been suspended (including automatic halt in trading pursuant to
market-decline triggers other than those in which solely program trading is
temporarily halted), or limitations on prices for trading (other than
limitations on hours or numbers of days of trading) have been fixed, or maximum
ranges for prices for securities have been required, by such Exchange or the
NASD or by order of the Commission or any other governmental authority, or (v)
if there has been any downgrading in
24
the rating of any of the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act), or (vi) any federal or
state statute, regulation, rule or order of any court or other governmental
authority has been enacted, published, decreed or otherwise promulgated which
in the reasonable opinion of the Representatives has or will have a Material
Adverse Effect, (vii) any action has been taken by any federal, state or
local government or agency in respect of its monetary or fiscal affairs which
in the reasonable opinion of the Representatives has a material adverse
effect on the securities markets in the United States.
If the Representatives elect to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. UNDERWRITER DEFAULT. If any Underwriter shall default at the Closing
Time or on a Date of Delivery in its obligation to take up and pay for the
Shares to be purchased by it under this Agreement, on such date the
Representatives shall have the right, within 36 hours after such default, to
make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Shares which
such Underwriter shall have agreed but failed to take up and pay for (the
"Defaulted Shares"). Absent the completion of such arrangements within such 36
hour period, (i) if the total number of Defaulted Shares does not exceed 10% of
the total number of Shares to be purchased on such date, each non-defaulting
Underwriter shall take up and pay for (in addition to the number of Shares which
it is otherwise obligated to purchase on such date pursuant to this Agreement)
the portion of the total number of Shares agreed to be purchased by the
defaulting Underwriter on such date in the proportion that its underwriting
obligations hereunder bears to the underwriting obligations of all
non-defaulting Underwriters; and (ii) if the total number of Defaulted Shares
exceeds 10% of such total, the Representative may terminate this Agreement by
notice to the Company, without liability to any non-defaulting Underwriter.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by the Representatives with the approval of
the Company or selected by the Company with the approval of the
Representatives).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall
25
have the right to postpone the Closing Time or the relevant Date of Delivery
for a period not exceeding five business days in order that any necessary
changes in the Registration Statement and Prospectus and other documents may
be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with the like effect as
if such substituted Underwriter had originally been named in this Agreement.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and FBR jointly and severally agree to
indemnify and hold harmless each Underwriter, each of its directors, officers
and agents, and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and attorneys' fees and expenses),
joint or several, arising out of or based upon: (i) any untrue statement,
alleged untrue statement or breach or alleged breach of any warranty or covenant
of the Company contained in this Agreement; (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
in the Registration Statement as amended by any post-effective amendment thereof
by the Company); (iii) any omission or alleged omission to state a material fact
in the registration statement as originally filed or the Registration Statement,
the Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, required to be stated therein or necessary to make the statements
therein not misleading; (iv) any untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus or the Prospectus, or in
any amendment or supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; or (v) the enforcement of this indemnification provision
or the contribution provisions herein; and shall reimburse each such indemnified
party for any legal or other expenses as incurred, but in no event less
frequently than 30 days after each invoice is submitted, incurred by them in
connection with investigating or defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action,
notwithstanding the possibility that payments for such expenses might later be
held to be improper, in which case such payments shall be promptly refunded;
PROVIDED, HOWEVER, that the Company and FBR shall not be liable in any such case
to the extent, but only to the extent, that any such losses, claims, damages,
liabilities and expenses arise out of or are based upon any untrue statement or
omission or allegation thereof that has been made therein or omitted therefrom
in reliance upon and in conformity with the information provided by the
Underwriters (other than by FBR) in writing expressly for use in the
Registration Statement ("Underwriters' Information"); PROVIDED, that the
indemnification contained in this paragraph with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or of any person
controlling any Underwriter) to the extent any such losses, claims, damages,
liabilities or expenses directly results from the fact that such Underwriter
sold Shares to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus (as amended or
supplemented if any amendments or supplements
26
thereto shall have been furnished to you in sufficient time to distribute
same with or prior to the written confirmation of the sale involved), if
required by law, and if such loss, claim, damage, liability or expense would
not have arisen but for the failure to give or send such person such
document. The foregoing indemnity agreement is in addition to any liability
the Company or FBR may otherwise have to any such indemnified party.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, to the same extent as required by the foregoing
indemnity from the Company to each Underwriter, but only with respect to the
Underwriters' Information that was provided by that Underwriter to the
Representatives. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to any such indemnified
party.
(c) If any action or claim shall be brought or asserted
against any indemnified party or any person controlling an indemnified party in
respect of which indemnity may be sought from the indemnifying party, such
indemnified party or controlling person shall promptly notify the indemnifying
party in writing, and the indemnifying party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all expenses; PROVIDED, HOWEVER, that the failure so to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under such paragraph, and
further, shall only relieve it from liability under such paragraph to the extent
prejudiced thereby. Any indemnified party or any such controlling person shall
have the right to employ separate counsel in any such action and to participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or such controlling person unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) the indemnifying party has failed to assume the defense or to
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
such indemnified party or such controlling person and the indemnifying party and
such indemnified party or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it that
are different from or in addition to those available to the indemnifying party
(in which case, if such indemnified party or controlling person notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party
or such controlling person) it being understood, however, that the indemnifying
party shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys at any time and for all
such indemnified parties and controlling persons, which firm shall be designated
in writing by the indemnified party(ies) (and, if such indemnified parties are
the Underwriters, by Stifel). Each indemnified party and each controlling
person, as a condition of such indemnity, shall use reasonable efforts to
cooperate
27
with the indemnifying party in the defense of any such action or claim. The
indemnifying party shall not be liable for any settlement of any such action
effected without its written consent, but if there be a final judgment for
the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party and any such controlling person from
and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
An indemnifying party shall not, without the prior written
consent of each indemnified party, settle, compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnity may be sought hereunder (whether or not such
indemnified party or any person who controls such indemnified party within the
meaning of the Section 15 of the Securities Act or Section 20 of the Exchange
Act is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes a release of each such indemnified
party reasonably satisfactory to each such indemnified party and each such
controlling person from all liability arising out of such claim, action, suit or
proceeding or unless the indemnifying party shall confirm in a written agreement
with each indemnified party, that notwithstanding any federal, state or common
law, such settlement, compromise or consent shall not alter the right of any
indemnified party or controlling person to indemnification or contribution as
provided in this Agreement.
(d) If the indemnification provided for herein is unavailable
or insufficient to hold harmless an indemnified party under paragraphs (a), (b)
or (c) hereof in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and FBR on the one hand and the
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and FBR on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Shares (before deducting expenses) received by the Company bear to the
total underwriting discounts, commissions and compensation received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and/or FBR on the one hand and of
the Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company, FBR and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this paragraph
(d) were determined by pro
28
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in the first sentence of this paragraph
(d) shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this paragraph (d), no Underwriter in its
capacity as an Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Initial Shares
underwritten by such Underwriter and distributed to the public were offered
to the public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
For purposes of this paragraph (d), each person who controls
an Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, each officer
and trustee of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company subject in each case to the preceding sentence. The obligations of the
Company and FBR under this paragraph (d) shall be in addition to any liability
which the Company and FBR may otherwise have, and the obligations of the
Underwriters under this paragraph (d) shall be in addition to any liability that
the Underwriters may otherwise have.
(e) The indemnity and contribution agreements contained herein
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter (or any person controlling
an Underwriter) or by or on behalf of the Company, or such directors, trustees
or officers (or any person controlling the Company), (ii) acceptance of any
Shares and payment therefor under the Agreement and (iii) any termination of the
Agreement. A successor of any Underwriter or of the Company, such directors,
trustees or officers (or of any person controlling an Underwriter or the
Company) shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained herein.
9A. INDEMNIFICATION OF QUALIFIED INDEPENDENT UNDERWRITER.
(a) The Company and FBR agree jointly and severally to indemnify and
hold harmless, Stifel, in its capacity as QIU, and each person, if any, who
controls the QIU within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation
and attorneys' fees and expenses), joint or several, arising out of or based
upon the QIU's action or alleged failure to act in the capacity as a QIU and to
reimburse the QIU for any reasonable costs of investigation and attorneys' fees
and expenses incurred by the
29
QIU in connection with investigating or defending any such loss, claim,
damage, liability or action as such costs or expenses are incurred.
(b) If the indemnification provided for in this Section 9A is
unavailable to Stifel, in its capacity as QIU, in respect of any losses, claims,
damages, liabilities or expenses, then each of Company and FBR, in lieu of
indemnifying the QIU, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities and
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and FBR on the one hand and the QIU on the
other from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and FBR on the one hand and the
QIU on the other in connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and FBR on the one hand and the QIU on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Shares
(before deducting expenses) received by the Company and FBR bear to the total
underwriting discounts, commissions and compensation received by the QIU. The
relative fault of the Company and/or FBR on the one hand and of the Underwriters
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, FBR or by the QIU and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The Company, FBR and the QIU agree that it would not be just and
equitable if contribution pursuant to this paragraph (c) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in the first sentence of this paragraph (c)
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. 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.
10. SURVIVAL. The indemnity and contribution agreements contained in
Sections 9 and 9A and the covenants, warranties and representations of the
Company, the Subsidiaries and FBR contained in Sections 3, 4 and 5 of this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the Underwriters, or any person who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, or by or on behalf of the Company, the Subsidiaries, FBR or
the directors and officers or any of them or any person who controls the
Company, any Subsidiary or FBR within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the sale and delivery of the Shares. The
Company and each Underwriter agree promptly to notify the others of the
commencement of any litigation or proceeding against it and, in the case of the
Company and FBR, against any of the officers and
30
directors of either of them, in connection with the sale and delivery of the
Shares, or in connection with the Registration Statement or Prospectus.
11. MERGER. This Agreement constitutes the entire agreement between the
Company, FBR, the Underwriters and the QIU and supersedes and cancels any and
all prior discussions, negotiations, undertakings, agreements in principle or
other oral or written agreements between the parties relating to the subject
matter hereof, including the offering of Shares hereby and the engagement and
indemnification of Stifel as a qualified independent underwriter.
12. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered to Friedman,
Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered to the Company at the offices of the Company at Potomac
Tower, 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
13. GOVERNING LAW; CONSENT TO JURISDICTION; HEADINGS. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The
section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
14. PARTIES IN INTEREST. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company and the controlling
persons, directors and officers referred to in Sections 9 and 10 hereof, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be signed
by the parties in counterparts which together shall constitute one and the same
agreement among the parties. A facsimile signature shall constitute an original
signature for all purposes.
[The remainder of this page has been left blank intentionally]
31
If the foregoing correctly sets forth the understanding among the
Company, FBR and the Underwriters, please so indicate in the space provided
below for the purpose, whereupon this Agreement shall constitute a binding
agreement among the Company, FBR and the Underwriters.
Very truly yours,
FBR ASSET INVESTMENT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Operating Officer
FRIEDMAN, BILLINGS, XXXXXX & CO., INC., as FBR and for its
individual obligations herein
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director, Syndicate
Accepted and agreed to as of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.,
Acting for itself and on behalf of the several Underwriters
listed in Schedule I hereto
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director, Syndicate
Accepted and agreed to as of the date first above written:
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED,
Acting solely in its capacity as QIU
By: /s/ Xxxxxxx Xxxxxx
------------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: First Vice President
SCHEDULE I
UNDERWRITER NUMBER OF INITIAL SHARES
----------- ------------------------
Friedman, Billings, Xxxxxx & Co., Inc. 2,720,000
Xxxxxx, Xxxxxxxx & Company, Incorporated 680,000
Advest Inc. 110,000
BB&T Capital Markets, a division of Xxxxx & Xxxxxxxxxxxx, Inc. 110,000
Xxxxxxxxxx & Co. Inc. 110,000
J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc. 110,000
Xxxx Xxxxxx Investment Inc. 110,000
Xxxxxx Xxxxxxxxxx Xxxxx LLC 110,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated 110,000
Xxxxxxxx Inc. 110,000
Xxxxxx Xxxxxxx Incorporated 110,000
Wedbush Xxxxxx Securities 110,000
---------
4,500,000
SCHEDULE II
PERSONS FROM WHOM THE UNDERWRITERS HAVE RECEIVED LOCK-UP AGREEMENTS
OFFICERS OF THE COMPANY TITLES
Xxxx X. Xxxxxxxx Chairman and Chief Executive Officer
Xxxx X. Xxxxxxxxxx Chief Financial Officer and Treasurer
DIRECTORS OF THE COMPANY
Xxxxxxx X. Xxxxxxxx
Xxxxx X Xxxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
AFFILIATED SHAREHOLDERS OF THE COMPANY
Friedman, Billings, Xxxxxx Group, Inc.
FBR Weston, Limited Partnership
Friedman, Billings, Xxxxxx Investment Management, Inc.
EXHIBIT A
SUBSIDIARIES OF THE COMPANY
Arlington Capital, Inc.
