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FIRST SIERRA FINANCIAL, INC.
2,000,000 SHARES1
COMMON STOCK
UNDERWRITING AGREEMENT
________, 1997
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
Potomac Tower
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
As Representative of the Several Underwriters
Dear Sirs:
First Sierra Financial, Inc., a Delaware corporation (the "Company")
hereby confirms its agreement with the several underwriters named in Schedule 1
hereto (the "Underwriters"), for whom you have been duly authorized to act as
representative (in such capacity, the "Representative"), as set forth below.
If you are the only Underwriter, all references herein to the Representative
shall be deemed to be to the Underwriters.
The Company has agreed to acquire Heritage Credit Services, Inc.
("Heritage"). The closing of such acquisition (the "Heritage Acquisition") is
expected to occur concurrently with the closing of the transactions
contemplated herein.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the several Underwriters
an aggregate of 2,000,000 shares (the "Firm Securities") of the Company's
Common Stock, $0.01 par value per share (the "Common Stock"). The Company also
proposes to issue and sell to the several Underwriters not more than 300,000
additional shares of Common Stock if requested by the Representative as
provided in Section 3 of this Agreement. Any and all shares of Common Stock to
be purchased by the Underwriters pursuant to such option are referred to herein
as the "Option Securities." The Firm Securities and any Option Securities are
collectively referred to herein as the "Securities."
__________________________________
1 Plus an option to purchase from First Sierra Financial, Inc. up to 300,000
additional shares to cover over-allotments.
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2. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees
with, each of the several Underwriters that:
(i) A registration statement on Form S-1
(File No. 333 - 22629 with respect to the Securities, including a
prospectus subject to completion, has been filed by the Company with
the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), and one or more
amendments to such registration statement may have been so filed.
After the execution of this Agreement, the Company will file with the
Commission either (i) if such registration statement, as it may have
been amended, has been declared by the Commission to be effective
under the Act, either (A) if the Company relies on Rule 434 under the
Act, a Term Sheet (as hereinafter defined) relating to the Securities,
that shall identify the Preliminary Prospectus (as hereinafter
defined) that it supplements containing such information as is
required or permitted by Rules 434, 430A and 424(b) under the Act or
(B) if the Company does not rely on Rule 434 under the Act, a
prospectus in the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have been
filed, in such registration statement), with such changes or
insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act, and in the case of either clause (i)(A) or
(i)(B) of this sentence, as have been provided to and approved by the
Representative prior to the execution of this Agreement, or (ii) if
such registration statement, as it may have been amended, has not been
declared by the Commission to be effective under the Act, an amendment
to such registration statement, including a form of prospectus, a copy
of which amendment has been furnished to and approved by the
Representative prior to the execution of this Agreement. The Company
may also file a related registration statement with the Commission
pursuant to Rule 462(b) under the Act for the purpose of registering
certain additional Securities, which registration statement shall be
effective upon filing with the Commission. As used in this Agreement,
the term "Original Registration Statement" means the registration
statement initially filed with the Commission relating to the
Securities, as amended at the time when it was or is declared
effective, including any financial schedules and all exhibits thereto
and including any information omitted therefrom pursuant to Rule 430A
under the Act and included in the Prospectus (as hereinafter defined).
The term "Rule 462(b) Registration Statement" means any registration
statement filed with the Commission pursuant to Rule 462(b) under the
Act (including the Original Registration Statement
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and any Preliminary Prospectus or Prospectus incorporated therein at
the time such registration statement becomes effective). The term
"Registration Statement" includes both the Original Registration
Statement and any Rule 462(b) registration statement. The term
"Preliminary Prospectus" means each prospectus subject to completion
filed with any Registration Statement or any amendment thereto
(including the prospectus subject to completion, if any, included in
the Registration Statement or any amendment thereto at the time it was
or is declared effective). The term "Prospectus" means: (A) if the
Company relies on Rule 434 under the Act, the Term Sheet relating to
the Securities that is first filed with the Commission pursuant to
Rule 424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements; (B) if the
Company does not rely on Rule 434 under the Act, the prospectus first
filed with the Commission pursuant to Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the
Act, the prospectus included in the Registration Statement. The term
"Term Sheet" means any term sheet that satisfies the requirements of
Rule 434 under the Act. Any reference herein to the "date" of a
Prospectus that includes a Term Sheet shall mean the date of such Term
Sheet.
(ii) The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus.
When the Preliminary Prospectus included in the Registration Statement
at the time it was or is declared effective was filed with the
Commission it (A) contained all statements required to be stated
therein in accordance with, and complied in all material respects with
the requirements of, the Act and the rules and regulations of the
Commission thereunder and (B) did not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. When the Registration
Statement or any amendment thereto was or is declared effective, it
(A) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (B) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading.
When the Prospectus or any Term Sheet that is a part thereof or any
amendment or supplement to the Prospectus is filed with the Commission
pursuant to Rule 424(b) (or, if the Prospectus or any Term Sheet that
is a part thereof or such amendment or supplement is not required to
be so filed,
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when the Registration Statement or the amendment thereto containing
such amendment or supplement to the Prospectus was or is declared
effective) and on the Firm Closing Date and any Option Closing Date
(both as hereinafter defined), the Prospectus, as amended or
supplemented at any such time, (A) contained or will contain all
statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements
of, the Act and the rules and regulations of the Commission thereunder
and (B) did not or will not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing provisions of this paragraph
(ii) do not apply to statements or omissions made in any Preliminary
Prospectus, the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter through the Representative specifically for use therein.
(iii) If the Company has elected to rely on Rule
462(b) and the Rule 462(b) Registration Statement has not been
declared effective (i) the Company will prepare and file with the
Commission a Rule 462(b) Registration Statement in compliance with,
and that is effective upon filing pursuant to, Rule 462(b) and (ii)
the Company has paid or will give irrevocable instructions for
transmission of the applicable filing fee in connection with the
filing of the Rule 462(b) Registration Statement, in compliance with
Rule 111 promulgated under the Act.
(iv) The Company does not own or control, directly
or indirectly, any corporation, association or other entity other than
the subsidiaries listed in Exhibit 21.1 to the Registration Statement.
The Company and each of its subsidiaries, and to the Company's
knowledge Heritage, have been duly incorporated and are validly
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing
under the laws of all other jurisdictions where the ownership or
leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the
failure to be so qualified would not result in a material adverse
change in the financial condition, business, net worth or results of
operations of the Company, its subsidiaries and Heritage, considered
as one enterprise (a "Material Adverse Effect").
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(v) The Company and each of its subsidiaries,
and to the Company's knowledge Heritage, have full power (corporate
and other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement
and the Prospectus, and the Company has corporate power to enter into
this Agreement and to carry out all the terms and provisions hereof to
be carried out by it.
(vi) The issued shares of capital stock of each
of the Company's subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and are, and the issued
shares of capital stock of Heritage will be upon closing of the
Heritage Acquisition, owned beneficially by the Company free and clear
of any security interests, liens, encumbrances, equities or claims.
(vii) The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus. All of the
issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable.
The Firm Securities and the Option Securities have been duly
authorized and at the Firm Closing Date or the Option Closing Date (as
the case may be), after payment therefor in accordance herewith, will
be validly issued, fully paid and nonassessable. At the Firm Closing
Date or the Option Closing Date, no holders of outstanding shares of
capital stock of the Company will be entitled as such to any
preemptive or other rights to subscribe for any Common Stock, and no
holder of securities of the Company has any right which has not been
fully exercised or waived to require the Company to register the offer
or sale of any securities owned by such holder under the Act in the
public offering contemplated by this Agreement.
(viii) The capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus.
(ix) Except as disclosed in the Prospectus, there
are no outstanding (A) 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, (B) 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 (C) obligations of the
Company or any such subsidiary to issue any shares of capital stock,
any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options.
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(x) The consolidated financial statements and
schedules of the Company and the financial statements of Heritage and
Corporate Capital Leasing Group, Inc. ("CCL") included in the
Registration Statement and the Prospectus fairly present the financial
position of the Company and its consolidated subsidiaries and, to the
Company's knowledge, Heritage and CCL, respectively, and the results
of operations and cash flows of the Company and its consolidated
subsidiaries and, to the Company's knowledge, Heritage and CCL as of
the dates and periods therein specified. Such financial statements
and schedules of the Company, and to the Company's knowledge, such
financial statements of Heritage and CCL, have been prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout the periods involved (except as
otherwise noted therein). The selected financial data set forth under
the captions "Capitalization" and "Selected Consolidated Financial
Data" in the Prospectus fairly present, in accordance with GAAP on the
basis stated in the Prospectus (or such Preliminary Prospectus), the
information included therein.
(xi) Xxxxxx Xxxxxxxx, L.L.P., BDO Xxxxxxx, LLP
and MacDade Xxxxxx LLP, who have audited certain financial statements
of the Company and its consolidated subsidiaries and Heritage and CCL,
respectively, and delivered their reports with respect to the audited
consolidated financial statements included in the Registration
Statement and the Prospectus, are independent public accountants as
required by the Act and the applicable rules and regulations
thereunder.
(xii) The execution and delivery of this Agreement
have been duly authorized by the Company and this Agreement has been
duly executed and delivered by the Company.
(xiii) No legal or governmental proceedings are
pending to which the Company or any of its subsidiaries or to the
Company's knowledge Heritage is a party or to which the property of
the Company or any of its subsidiaries or to the Company's knowledge,
Heritage is subject that are required to be described in the
Registration Statement or the Prospectus and are not described
therein, and to the Company's knowledge, no such proceedings have been
threatened against the Company, any of its subsidiaries or Heritage or
with respect to any of their respective properties; and no contract or
other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or filed as
required.
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(xiv) The issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance by the Company with the other provisions of
this Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained, such as may be required under state
securities or blue sky laws, such as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") and, if the
Registration Statement filed with respect to the Securities (as
amended) is not effective under the Act as of the time of execution
hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Act, or (B) conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties are bound, or the
charter documents or bylaws of the Company or any of its subsidiaries,
or any statute or any judgment, decree, order, rule or regulation of
any court or other governmental authority or any arbitrator applicable
to the Company or any of its subsidiaries.
(xv) Subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, neither the Company, nor any of its subsidiaries, nor to
the Company's knowledge, Heritage, has sustained any loss or
interference with its business or properties which is reasonably
likely to have or result in a Material Adverse Effect from fire,
flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental
proceeding and there has not been any event, circumstance, or
development that results in, or that the Company believes is
reasonably likely to result in, a Material Adverse Effect, except in
each case as described in or contemplated by the Prospectus.
(xvi) The Company has not, directly or indirectly
(except for the sale of Securities under this Agreement) (i) taken any
action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities, or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid
or agreed to pay to any person any
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compensation for soliciting another to purchase any other securities
of the Company.
(xvii) Neither the Company nor any of its
subsidiaries nor any employee of the Company or its subsidiaries has
made any payment of funds of the Company or its subsidiaries
prohibited by law and no funds of the Company or its subsidiaries have
been set aside to be used for any payment prohibited by law.
(xviii) (a) The Company and its subsidiaries possess
all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses except where the failure to possess any
such item is not reasonably likely to have a Material Adverse Effect,
and (b) neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, is reasonably likely to have a Material Adverse Effect,
except as described in or contemplated by the Prospectus.
(xix) The Company is not an investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"),
and this transaction will not cause the Company to become an
investment company subject to registration under the 1940 Act.
(xx) The Company and each of its subsidiaries has
filed all foreign, federal, state and local tax returns that are
required to be filed or has requested extensions thereof (except in
any case in which the failure so to file is not reasonably likely to
have a Material Adverse Effect) and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being
contested in good faith or as described in or contemplated by the
Prospectus and which would not result in a Material Adverse Effect.
(xxi) To the Company's knowledge, Heritage does not
own any shares of stock or any other equity securities of any
corporation or have any equity interest in any firm, partnership,
association or other entity.
(xxii) The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient
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to provide reasonable assurance that (A) transactions are executed in
accordance with management's general or specific authorizations; (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability; (C) access to assets is permitted only in accordance
with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxiii) Except as described in the Registration
Statement and the Prospectus, no default exists, and no event has
occurred that, with notice or lapse of time or both, is reasonably
likely to constitute a default, in the due performance and observance
of any term, covenant or condition of any indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company, any of its
subsidiaries or any of their respective properties is bound or may be
affected, in any respect that would have a Material Adverse Effect.
(xxiv) The Company has not distributed and, prior to
the later of (A)the Firm Closing Date or any Option Closing Date and
(B) the completion of the distribution of the Securities, will not
distribute any offering material in connection with the offering and
sale of the Securities other than the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus or Term
Sheet or any amendment or supplement thereto, or other materials, if
any, permitted by the Act.
(xxv) Neither the Company, nor any of its
subsidiaries, nor to the Company's knowledge Heritage owns any items
of real property, and each of them has marketable title to all
personal property owned by it, in each case free and clear of any
security interests, liens, encumbrances, equities, claims and other
defects, except as shown on the financial statements set forth in the
Registration Statement and which do not interfere with the use made or
proposed to be made of such property by the Company, such subsidiary
or Heritage, and any real property and buildings held under lease by
the Company, any such subsidiary or to the Company's knowledge
Heritage are held under valid, subsisting and enforceable leases, with
such exceptions as are not material and do not interfere with the use
made or proposed to be made of such property and buildings by the
Company, such subsidiary or Heritage, in each case except as described
in or contemplated by the Prospectus.
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(xxvi) No labor dispute with the employees of the
Company, any of its subsidiaries or to the Company's knowledge
Heritage exists or, to the Company's knowledge, is threatened or
imminent that is reasonably likely to result in a Material Adverse
Effect, except as described in or contemplated by the Prospectus.
(xxvii) The Company, its subsidiaries and to the
Company's knowledge Heritage own or possess, or can acquire on
reasonable terms, all material trademarks, service marks, trade names,
licenses, copyrights and proprietary or other confidential information
currently employed by them in connection with their respective
businesses, and neither the Company, nor any such subsidiary nor to
the Company's knowledge Heritage has received any notice of
infringement of or conflict with asserted rights of any third party
with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling, or
finding, is reasonably likely to have a Material Adverse Effect,
except as described in or contemplated by the Prospectus.
(xxviii) The Company, each of its
subsidiaries and to the Company's knowledge Heritage are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; and neither the Company, nor any
such subsidiary nor to the Company's knowledge Heritage has any reason
to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that is not reasonably likely to have a Material
Adverse Effect, except as described in or contemplated by the
Prospectus.
(xxix) Neither the Company nor any of its
Subsidiaries nor to the Company's knowledge Heritage has violated any
foreign, Federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants, 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 laws, nor any provisions of the Employee Retirement
Income Security Act or the rules and regulations promulgated
thereunder except where any such violations would not, singly or in
the aggregate, have a Material Adverse Effect.
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(xxx) subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, (A) neither the Company, nor any of its Subsidiaries nor
to the Company's knowledge Heritage has incurred any material
liability or obligation, direct or contingent, or entered into any
material transaction not in the ordinary course of business; and (B)
the Company has not purchased any of its outstanding capital stock,
nor declared, paid or otherwise made any dividend or distribution of
any kind on its capital stock, except in each case as described in or
contemplated by the Prospectus;
(b) Any certificate signed by any officer of the Company
and delivered to the Representative or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter, as to
the matters covered thereby.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell to each of the
Underwriters, and each of the Underwriters, severally and not jointly, agrees
to purchase from the Company, at a purchase price of $[_____________] per
share, the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule 1 hereto. One or more certificates in definitive form
for the Firm Securities that the several Underwriters have agreed to purchase
hereunder, and in such denomination or denominations and registered in such
name or names as the Representative requests upon notice to the Company at
least 48 hours prior to the Firm Closing Date, shall be delivered by or on
behalf of the Company to the Representative for the respective accounts of the
Underwriters, against payment by or on behalf of the Underwriters of the
aggregate purchase price therefor by wire transfer in same day funds (the
"Wired Funds") to an account specified by the Company. Documents required to
be delivered pursuant to this Agreement in connection with such delivery of and
payment for the Firm Securities shall be made at the offices of Xxxxxx & Xxxxxx
L.L.P., 2300 First City Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000-0000 at 9:00
a.m., Central time, on April [____], 1997, or at such other place, time or date
as the Representative and the Company may agree upon or as the Representative
may determine pursuant to Section 9 hereof, such time and date of delivery
against payment being herein referred to as the "Firm Closing Date." The
Company will make such certificate or certificates for the Firm Securities
available for checking and packaging by the Representative at the location in
New York, New York specified by the Representative at least 24 hours prior to
the Firm Closing Date.
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(b) For the sole purpose of covering any over-allotments
in connection with the distribution and sale of the Firm Securities as
contemplated by the Prospectus, the Company hereby grants to the several
Underwriters an option to purchase, severally and not jointly, the Option
Securities. The purchase price to be paid for any Option Securities shall be
the same price per share as the price per share for the Firm Securities set
forth above in paragraph (a) of this Section 3. The option granted hereby may
be exercised as to all or any part of the Option Securities from time to time
within thirty days after the date of the Prospectus (or, if such 30th day shall
be a Saturday or Sunday or a holiday, on the next business day thereafter when
the Nasdaq National Market is open for trading). The Underwriters shall not be
under any obligation to purchase any of the Option Securities prior to the
exercise of such option. The Representative may from time to time exercise the
option granted hereby by giving notice in writing or by telephone (confirmed
within 24 hours in writing) to the Company setting forth the aggregate number
of Option Securities as to which the several Underwriters are then exercising
the option and the date and time for delivery of and payment for such Option
Securities. Any such date of delivery shall be determined by the
Representative but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representative and the
Company may agree upon or as the Representative may determine pursuant to
Section 9 hereof, is herein called the "Option Closing Date" with respect to
such Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the several Underwriters,
and, subject to the terms and conditions herein set forth, each of the
Underwriters (severally and not jointly) shall become obligated to purchase
from the Company, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the option
as such Underwriter is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representative in such manner as it deems
advisable to avoid fractional shares. If the option is exercised as to all or
any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on
the related Option Closing Date in the manner, and upon the terms and
conditions, set forth in paragraph (a) of this Section 3, except that reference
therein to the Firm Securities and the Firm Closing Date shall be deemed, for
purposes of this paragraph 3(b), to refer to such Option Securities and Option
Closing Date, respectively.
(c) It is understood that you, individually and not as
the Representative, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the
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Securities to be purchased by such Underwriter or Underwriters. No such
payment shall relieve such Underwriter or Underwriters from any of its or their
obligations hereunder.
(d) The Company hereby acknowledges that the wire
transfer by or on behalf of the Underwriters of the purchase price for any
Securities does not constitute closing of a purchase and sale of the
Securities. Only execution and delivery of a receipt (by facsimile or
otherwise) for the Securities by the Underwriters indicates completion of the
closing of a purchase of the Securities from the Company. Furthermore, in the
event that the Underwriters wire funds to the Company prior to the completion
of the closing of a purchase of Securities, the Company hereby acknowledges
that until the Underwriters execute and deliver a receipt for the Securities,
by facsimile or otherwise, the Company will not be entitled to the wired funds
and shall return the wired funds to the Underwriters as soon as practicable (by
wire transfer of same-day funds) upon demand. In the event that the closing of
a purchase of Securities is not completed and the wire funds are not returned
by the Company to the Underwriters on the same day the wired funds were
received by the Company, the Company agrees to pay to the Underwriters, in
respect of each day the wire funds are not returned by it, in same-day funds,
interest at the Prime Rate as stated in the Wall Street Journal on the date
hereof on the amount of such wired funds.
4. Offering by the Underwriters. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
5. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, to become effective as promptly as possible. If required, the
Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the
Act. During any time when a prospectus relating to the Securities is required
to be delivered under the Act, the Company (i) will comply with all
requirements imposed upon it by the Act and the rules and regulations of the
Commission thereunder to the extent necessary to permit the continuance of
sales of or dealings in the Securities in accordance with the provisions hereof
and of the Prospectus, as then amended or supplemented, and (ii) will not file
with the Commission the Prospectus, Term Sheet or the amendment referred to in
the second sentence of Section 2(a) hereof, any amendment or
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supplement to such Prospectus, Term Sheet or any amendment to the Registration
Statement of which the Representative shall not previously have been advised
and furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Representative shall reasonably object. The
Company will prepare and file with the Commission, in accordance with the rules
and regulations of the Commission, promptly upon request by the Representative
or counsel for the Underwriters, any amendments to the Registration Statement
or amendments or supplements to the Prospectus that may be necessary or
advisable in connection with the distribution of the Securities by the several
Underwriters, and will use its best efforts to cause any such amendment to the
Registration Statement to be declared effective by the Commission as promptly
as possible. The Company will advise the Representative, promptly after
receiving notice thereof, of the time when the Registration Statement or any
amendment thereto has been filed or declared effective or the Prospectus or any
amendment or supplement thereto has been filed and will provide to the
Representative copies of each such filing.
(b) The Company will advise the Representative, promptly
after receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (ii) the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, (iii) the institution, threatening or
contemplation of any proceeding for any such purpose, or (iv) any request made
by the Commission for amending the Registration Statement, for amending or
supplementing the Prospectus or for additional information. The Company will
use its best efforts to prevent the issuance of any such stop order and, if any
such stop order is issued, to obtain the withdrawal thereof as promptly as
possible.
(c) If, at any time prior to the later of (i) the final
date when a prospectus relating to the Securities is required to be delivered
under the Act or (ii) the Option Closing Date, any event occurs as a result of
which the Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if for any other reason it is
necessary at any time to amend or supplement the Prospectus to comply with the
Act or the rules or regulations of the Commission thereunder, the Company will
promptly notify the Representative thereof and, subject to Section 5(a) hereof,
will prepare and file with the Commission, at the Company's expense, an
amendment to the
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Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide (i) to the
Representative and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) and any Rule 462(b)
Registration Statement, (ii) to each other Underwriter, a conformed copy of
such registration statement and any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as
a prospectus relating to the Securities is required to be delivered under the
Act, as many copies of each Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as the Representative may reasonably request;
without limiting the application of clause (iii) of this sentence, the Company,
not later than _______ P.M., Eastern Time, on the business day following the
date of determination of the public offering price, will deliver to the
Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Representative may reasonably request
for purposes of confirming orders that are expected to settle on the Firm
Closing Date. The Company will provide or cause to be provided to the
Representative a copy of each report on Form SR filed by the Company as
required by Rule 463 under the Act.
(e) If the Company elects to rely on Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay or make arrangements for the
payment of the applicable fees in accordance with Rule 111 promulgated under
the Act not later than 10:00 P.M., Eastern Time on the date of this Agreement.
(f) The Company, as soon as practicable, will make
generally available to its securityholders and to the Representative a
consolidated earnings statement of the Company and its subsidiaries that
satisfies the provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale
of the Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without
the prior written consent of the Representative, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of any option to purchase or other sale
or
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disposition) of any shares of Common Stock or any securities convertible into,
or exchangeable or exercisable for, shares of Common Stock for a period of 180
days after the date hereof, except shares issued pursuant to this Agreement,
shares issued pursuant to the exercise of conversion rights, warrants, or
employee stock options outstanding on the date hereof and shares issued in
connection with any acquisition described in the Prospectus.
(i) The Company will not, directly or indirectly, (i)
take any action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities or (ii)(A) sell, bid for, purchase, or pay anyone
any compensation for soliciting purchases of, the Securities or (B) pay or
agree to pay to any person any compensation for soliciting another to purchase
any other securities of the Company.
(j) The Company will obtain the lockup agreements
described in Section 7(e) hereof prior to the Firm Closing Date.
(k) The Company will, for a period of five (5) years from
the date hereof, deliver to the Underwriters copies of annual reports and all
other documents, reports and information furnished by the Company to its
securityholders or filed with any securities exchange or automated quotation
system pursuant to the requirements of such exchange or automated quotation
system or filed with the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Company will deliver to the
Underwriters similar reports with respect to "significant subsidiaries," as
that term is defined in the rules and regulations of the Commission, which are
not consolidated in the Company's financial statements.
(l) The Company will cause the Securities to be duly
included for quotation on the Nasdaq National Market prior to the Firm Closing
Date. The Company will use its best efforts to ensure that the Securities
remain included for quotation on the Nasdaq National Market following the Firm
Closing Date.
6. Expenses. The Company will pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect to
the transactions, including any costs of printing the Registration Statement
originally filed with respect to the Securities and any amendment thereto, any
Rule 462(b) Registration Statement, any Preliminary Prospectus and the
Prospectus and any amendment or
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supplement thereto, this Agreement and any blue sky memoranda, (ii) all
arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (iv) the
filing of the Registration Statement with the Commission, including filing fees
and other fees and expenses incident thereto, (v) preparation, issuance and
delivery to the Underwriters of any certificates evidencing the Securities,
including transfer agent's and registrar's fees, (vi) the qualification of the
Securities under state securities and blue sky laws, including filing fees and
fees and disbursements of counsel for the Underwriters relating thereto, (vii)
the filing of the Registration Statement and Prospectus with the National
Association of Securities Dealers, Inc. relating to the Securities, including
the fees and disbursements of counsel for the Underwriters relating to such
filing, and (viii) the quotation of the Securities on the Nasdaq National
Market. If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 11(a) or 11(a)(i) hereof or because of any failure, refusal
or inability on the part of the Company to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Representative upon demand for all reasonable out-of-pocket expenses (including
counsel fees and disbursements) that shall have been incurred by it in
connection with the proposed purchase and sale of the Securities. The Company
shall not in any event be liable to any of the Underwriters for the loss of
anticipated profits from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations
of the several Underwriters to purchase and pay for the Firm Securities shall
be subject to the accuracy of the representations and warranties of the Company
contained herein as of the date hereof, and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, the accuracy of the statements of the
Company's officers made pursuant to the provisions hereof, the performance by
the Company of its covenants and agreements hereunder and the following
additional conditions:
(a) If the Original Registration Statement has not been
declared effective as of the time of execution hereof, the Original
Registration Statement shall have been declared effective not later than 11:00
A.M., Eastern Time, on the business day after the date hereof, or such later
time and date as shall have been consented to by the Representative; if
required, the Prospectus or any Term Sheet that constitutes a part thereof and
any amendment or supplement thereto shall have been filed with the Commission
in the
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manner and within the time period required by Rules 434 and 424(b) under the
Act; no stop order suspending the effectiveness of the Registration Statement
or any amendment thereto shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of the
Company or the Representative, shall be contemplated by the Commission; and the
Company shall have complied with any request of the Commission for additional
information to be included in the Registration Statement or the Prospectus or
otherwise.
(b) The Representative shall have received an opinion,
dated the Firm Closing Date, of Xxxxxx & Xxxxxx L.L.P., counsel for the
Company, to the effect that:
(i) the Company and each of its subsidiaries
(the "Subsidiaries") have been duly incorporated and are validly
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing
under the laws of all other jurisdictions where the ownership or
leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the
failure to be so qualified is not reasonably likely to have a Material
Adverse Effect;
(ii) the Company and each of the Subsidiaries
have the corporate power to own or lease their respective properties
and conduct their respective businesses as described in the
Registration Statement and the Prospectus, and the Company has the
corporate power to enter into this Agreement and to carry out all the
terms and provisions hereof to be carried out by it;
(iii) the issued and outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and are owned by the
Company free and clear of any security interests, liens, encumbrances
or claims;
(iv) the Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus; all of the
issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable,
and, to the knowledge of such counsel, were not issued in violation of
or subject to any preemptive rights or other rights to subscribe for
or purchase securities; the Firm Securities have been duly authorized
by all necessary corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this
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Agreement, will be validly issued, fully paid and nonassessable; to
the knowledge of such counsel, no holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or
other rights to subscribe for any of the Securities; and, to the
knowledge of such counsel, no holders of securities of the Company
have any rights which have not been fully exercised or waived to have
such securities registered under the Registration Statement;
(v) the statements set forth under the headings
"Management - Stock Option Plan," and "Description of Capital Stock"
in the Prospectus, insofar as such statements purport to summarize
certain documents or matters of law, are accurate in all material
respects;
(vi) the execution and delivery of this
Agreement have been duly authorized by all necessary corporate action
of the Company and this Agreement has been duly executed and delivered
by the Company;
(vii) to the knowledge of such counsel, (A) no
legal or governmental proceedings are pending to which the Company or
any of the Subsidiaries is a party or to which the property of the
Company or any of the Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
described therein and no such proceedings have been threatened against
the Company or any of the Subsidiaries or with respect to any of their
respective properties and (B) no contract or other document is
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein or filed as required;
(viii) the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance by the Company with the other provisions of
this Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained and such as may be required under
state securities or blue sky laws and by the NASD, or (B) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, lease or other agreement or instrument known to such
counsel to which the Company or any of the Subsidiaries is a party or
by which the Company or any of the Subsidiaries or any of their
respective properties are bound, or the charter documents or bylaws of
the Company or any of the Subsidiaries, or, so far as it is known to
such
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counsel, any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator having jurisdiction over the Company or any of the
Subsidiaries, except, in each case, where such conflict, breach,
violation or default is not reasonably likely to have a Material
Adverse Effect other than Federal or state securities or blue sky
laws, as to which such counsel need not express an opinion in this
paragraph;
(ix) the Registration Statement is effective
under the Act; any required filing of the Prospectus, or any Term
Sheet that constitutes a part thereof, pursuant to Rules 434 and
424(b) has been made in the manner and within the time period required
by Rules 434 and 424(b); and no stop order suspending the
effectiveness of the Registration Statement or any amendment thereto
has been issued, and no proceedings for that purpose have been
instituted or threatened or are contemplated by the Commission;
(x) the Company is not, and the transactions
contemplated by this Agreement will not cause the Company to become,
an investment company subject to registration under the 1940 Act; and
(xi) the specimen stock certificate of the Company
filed as an exhibit to the Registration Statement is in due and proper
form to evidence shares of Common Stock, has been duly authorized and
approved by the Board of Directors of the Company and complies with
all legal requirements applicable under the Delaware General
Corporation Law.
In addition, such counsel shall state that such counsel is of the
opinion that the Registration Statement and the Prospectus (except the
financial statements and notes thereto, supporting schedules and other
information of a financial or statistical nature included therein, as to which
such counsel need not express any opinion) comply as to form in all material
respects with the requirements of the Act and the applicable rules and
regulations thereunder. In passing upon the form of the Registration Statement
and the Prospectus, such counsel has necessarily assumed the correctness and
completeness of the statements made therein. Such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (except to the extent set forth in subparagraph (v) above), and such
counsel has not independently verified the accuracy, completeness or fairness
of such statements (except as aforesaid). Without limiting the foregoing, such
counsel assumes no responsibility for and has not independently verified the
accuracy, completeness or fairness of the financial statements and notes
thereto and other
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financial and statistical data included in the Registration Statement and has
not examined the financial records from which such statements and data are
derived. Such counsel notes that, although certain portions of the
Registration Statement have been included therein on the authority of "experts"
within the meaning of the Act, such counsel is not an expert with respect to
any portion of the Registration Statement. However, such counsel shall state
that such counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent accountants
of the Company, and with the underwriters' representatives and counsel, at
which the contents of the Registration Statement and Prospectus and related
matters were discussed. Such counsel has also reviewed certain corporate
documents furnished to them by the Company. Based on such participation and
review (relying as to materiality to a certain extent upon the officers and the
other representatives of the Company), and subject to the limitations described
above, such counsel shall state that no information has come to such counsel's
attention that causes them to believe that the Registration Statement, at the
time it became effective or as of the Closing Date, contained or contains an
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
no misleading, or that the Prospectus, as of its date or as of the Closing
Date, included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
The opinions of such counsel relate solely to, are based solely upon
and are limited exclusively to the laws of the State of Delaware and the
federal laws of the United States of America, to the extent applicable.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem(s) proper, on certificates of responsible
officers of the Company and public officials and opinions of such other counsel
as are reasonably acceptable to the Representative.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) The Representative shall have received from Xxxxxx
Xxxxxxxx LLP, BDO Xxxxxxx, LLP and MacDade Xxxxxx LLP a letter or letters
dated, respectively, the date hereof and the Firm Closing Date, in form and
substance reasonably satisfactory to the Representative.
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In the event that the letters referred to above set forth any such
changes, decreases or increases which, in the reasonable discretion of the
Representative, are reasonably likely to result in a Material Adverse Effect,
it shall be a further condition to the obligations of the Underwriters that
such letters shall be accompanied by a written explanation of the Company as to
the significance thereof, unless the Representative deems such explanation
unnecessary.
References to the Registration Statement and the Prospectus in this
paragraph (c) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(d) The Representative shall have received a certificate,
dated the Firm Closing Date, of Xxxxxx X. Xxxxxxx and Xxxxx X. Xx in their
capacities as the principal executive officer and the principal financial
officer, respectively, of the Company to the effect that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all material
respects as if made on and as of the Firm Closing Date; the
Registration Statement, as amended as of the Firm Closing Date, does
not include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented as of the
Firm Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and the Company has performed all covenants
and agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the
effectiveness of the Registration Statement or any amendment thereto
has been issued, and no proceedings for that purpose have been
instituted or threatened or, to the best of the Company's knowledge,
are contemplated by the Commission;
(iii) subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries has
sustained any loss or interference with their respective businesses or
properties reasonably likely to have or result in a Material Adverse
Effect from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or
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governmental proceeding, and there has not been any event,
circumstance, or development that has resulted in, or that the Company
believes is reasonably likely to result in, a Material Adverse Effect,
except in each case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto); and
(iv) subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, (A) neither the Company, nor any of its Subsidiaries nor
to the Company's knowledge Heritage has incurred any material
liability or obligation, direct or contingent, or entered into any
material transaction not in the ordinary course of business; and (B)
the Company has not purchased any of its outstanding capital stock,
nor declared, paid or otherwise made any dividend or distribution of
any kind on its capital stock, except in each case as described in or
contemplated by the Prospectus.
(e) The Representative shall have received from each
person who is a director or officer of the Company or who owns more than 2,000
shares of Common Stock or convertible Preferred Stock (as calculated on the
Firm Closing Date) an agreement to the effect that such person will not
directly or indirectly, without the prior written consent of the
Representative, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge,grant of an option to purchase or other
sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock
for a period of 180 days after the date of this Agreement.
(f) On or before the Firm Closing Date, the
Representative and counsel for the Underwriters shall have received such
further certificates, documents or other information as they may have
reasonably requested from the Company.
(g) Prior to the commencement of the offering of the
Securities, the Securities shall have been included for trading on the Nasdaq
National Market.
(h) The Representative shall have received an opinion,
dated the Firm Closing Date, of XxXxxxxxx, Will & Xxxxx, counsel for the
Underwriters, with respect to the issuance and sale of the Firm Securities, the
Registration Statement and Prospectus, and such other related matters as the
Representative may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
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All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representative and
counsel for the Underwriters. The Company shall furnish to the Representative
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representative and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities to which such Underwriter or such
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto or the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and the Company will reimburse, as incurred, each Underwriter and
each such controlling person for any legal or other expenses reasonably
incurred by such Underwriter or such controlling person in connection with
investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representative specifically for use
therein; and provided, further that with respect to any untrue statement or
omission or alleged
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untrue statement or omission made in any Preliminary Prospectus the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of any
such indemnified Underwriter or its respective officers, shareholders,
employees, directors and agents, and the Company shall not be liable to any
such indemnified Underwriter or its respective officers, shareholders,
employees, directors and agents, from whom the person asserting any such
losses, claims, expense, damage or liabilities purchased the Securities
concerned, to the extent that any such loss, claim, expense, damage or
liability of such indemnified Underwriter or its respective officers,
shareholders, employees, directors and agents results from the fact that there
was not sent or given to such person at or prior to the written confirmation of
the sale of such securities to such person, a copy of the Prospectus, as the
same may be amended or supplemented, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact in such Preliminary Prospectus was corrected in such Prospectus
and the Company had previously furnished copies thereof to such indemnified
Underwriter on a timely basis to permit the Prospectus (as the same may be
amended or supplemented) to be sent or given. This indemnity agreement will be
in addition to any liability that the Company may otherwise have. The Company
will not, without the prior written consent of the Representative, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not any Underwriter or any person who controls any
Underwriter within the meaning of Section 15 of the 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 an unconditional release of all of
the Underwriters and such controlling persons from all liability arising out of
such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will
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 Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer of the Company, or controlling person
of the Company may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any
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Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application, or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representative specifically for
use therein; and, subject to the limitation set forth immediately preceding
this clause, will reimburse, as incurred, any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or any action in respect thereof. This indemnity agreement
will be in addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded or
shall have been advised by its counsel that there may be one or more legal
defenses available to it and/or other indemnified parties that conflict with
those available to the indemnifying party, the indemnifying party shall not
have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that in connection with such action the
indemnifying party shall not be
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liable for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Representative in the case of paragraph (a) of this Section
8, representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not
be liable for the costs and expenses of any settlement of such action effected
by such indemnified party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
(i) the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party on the other hand from the offering of the
Securities or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other hand in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand shall be deemed
to be in the same proportion as the total proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault of
the parties shall be determined by reference to, among, other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters, the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Underwriters agree that it would not be
equitable if the amount of such contribution were
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determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total amount of underwriting commissions received by
such Underwriter in connection with the Securities underwritten by it and
distributed to the public, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11 (f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Representative's Agreement Among Underwriters. For the purposes of this
paragraph 8(d), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company.
9. Default of Underwriters. If one or more Underwriters default
in their obligations to purchase Firm Securities or Option Securities hereunder
and the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, then the other Underwriters may
make arrangements satisfactory to the Representative for the purchase of such
Securities by other persons (who may include one or more of the nondefaulting
Underwriters, including the Representative), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or
Option Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase. If one or more Underwriters so default with respect to an
aggregate number of Securities that is more than ten percent of the aggregate
number of Firm Securities or Option Securities, as the case may be, to be
purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representative are not made within 36 hours
after such default for the purchase by other persons (who
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may include one or more of the nondefaulting Underwriters, including the
Representative) of the Securities with respect to which such default occurs,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company other than as provided in Section 10
hereof. In the event of any default by one or more Underwriters as described
in this Section 9, the Representative shall have the right to postpone the Firm
Closing Date or the Option Closing Date, as the case may be, established as
provided in Section 3 hereof for not more than seven business days in order
that any necessary changes may be made in the arrangements or documents for the
purchase and delivery of the Firm Securities or Option Securities, as the case
may be. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 9. Nothing herein shall
relieve any defaulting Underwriter from liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the several Underwriters set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement shall remain in
full force and effect, regardless of (i) any investigation made by or on behalf
of the Company, any of its officers or directors, any Underwriter or any
controlling person referred to in Section 8 hereof and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 6 and 8 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination.
(a) This Agreement may be terminated with respect to the
Firm Securities or any Option Securities in the sole discretion of the
Representative by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder at or
prior thereto or, if at or prior to the Firm Closing Date or such Option
Closing Date, respectively,
(i) the Company, any of its subsidiaries or
Heritage shall have, in the sole judgment of the Representative,
sustained any loss or interference with their respective businesses or
properties having or resulting in a Material Adverse Effect from fire,
flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any event, circumstance of
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development that results in, or that the Company believes would result
in, a Material Adverse Effect, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or
supplement thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or trading
in securities generally on the New York Stock Exchange or Nasdaq
National Market shall have been suspended or minimum or maximum prices
shall have been established on either such exchange or market system;
(iii) a banking moratorium shall have been declared
by New York or United States authorities; or
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or
armed conflict involving the United States or (C) any other calamity
or crisis or material adverse change in general economic, political or
financial conditions having an effect on the U.S. financial markets
that, in the sole judgment of the Representative, makes it impractical
or inadvisable to proceed with the public offering or the delivery of
the Securities as contemplated by the Registration Statement, as
amended as of the date hereof.
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other party except as
provided in Section 10 hereof.
12. Information Supplied by Underwriters. The statements set
forth in (i) the last paragraph on the front cover page, (ii) under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus and (iii) on
page 2 in any Preliminary Prospectus or the Prospectus pertaining to
stabilization (to the extent such statements relate to the Underwriters)
constitute the only information furnished by any Underwriter through the
Representative to the Company for the purposes of Sections 2(b) and 8 hereof.
The Underwriters confirm that such statements (to such extent) are correct.
13. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to Friedman, Billings,
Xxxxxx & Co., Inc., Potomac Tower, 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxx Xxxxxxxxx; and if sent to the Company, shall
be delivered or sent by mail, telex or facsimile, transmission and confirmed in
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writing to the Company at Texas Commerce Tower, Suite 7050, 000 Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxxxxx.
14. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of
this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of the Company contained in Section 8 of this
Agreement shall also be for the benefit of any person or persons who control
any Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and (ii) the indemnities of the Underwriters contained in
Section 8 of this Agreement shall also be for the benefit of the directors of
the Company, the officers of the Company who have signed the Registration
Statement and any person or persons who control the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of
Securities from any Underwriter shall be deemed a successor because of such
purchase.
15. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the Commonwealth of Virginia,
without giving effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the Commonwealth of
Virginia, and by execution and delivery of this Agreement, the Company accepts
for itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
waives any defense of forum non conveniens and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Agreement. The
Company designates and appoints Xxxxxx X. Xxxxxxx and such other persons as may
hereafter be selected by the Company irrevocably agreeing in writing to so
serve, as its agent to receive on its behalf service of all process in any such
proceedings in any such court, such service being hereby acknowledged by the
Company to be effective and binding service in every respect. A copy of any
such process so served shall be mailed by registered mail to the Company at its
address provided in Section 13 hereof, provided, however, that, unless
otherwise provided by applicable law, any failure to mail such copy shall not
affect the validity of service of such process. If any agent
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appointed by the Company refuses to accept service, the Company hereby agrees
that service of process sufficient for personal jurisdiction in any action
against the Company in the Commonwealth of Virginia may be made by registered
or certified mail, return receipt requested, to the Company at its address
provided in Section 13 hereof, and the Company hereby acknowledges that such
service shall be effective and binding in every respect. Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of any Underwriter to bring proceedings against the Company in
the courts of any other jurisdiction.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and
each of the several Underwriters.
Very truly yours,
FIRST SIERRA FINANCIAL, INC.
By:___________________________________
Xxxxxx X. Xxxxxxx
President and Chief Executive
Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By:
By:_________________________________
Name:
Title:
For itself and as the Representative.
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Schedule 1
UNDERWRITERS
Number of Firm
Underwriting Securities to be Purchased
------------ --------------------------
Friedman, Billings, Xxxxxx & Co., Inc. ------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
============
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