INTERVEST BANCSHARES CORPORATION
00 Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
________, 1997
Sage, Xxxxx & Co., Inc.
000 Xxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Dear Sirs:
Intervest Bancshares Corporation, a Delaware corporation (the
"Company"), hereby confirms its agreement with you (sometimes herein called the
"Underwriter") as follows:
1. Introductory
The Company proposes to issue and offer, through the Underwriter acting
as agent for the Company, up to 400,000 Units, each unit consisting of one share
of Class A Common Stock of the Company and one Warrant to purchase one share of
Class A Common Stock of the Company (the "Units"). If at least $4,200,000 of
Units are not sold within 75 days after the date the Registration Statement (as
defined below) is declared effective by the Securities and Exchange Commission,
all subscription documents and funds (together with any net interest thereon)
will be returned to subscribers and the offering will terminate. The Units will
be sold at a purchase price of $15.00 per Unit and are more fully described in
the Prospectus referred to below. The Company hereby appoints the Underwriter as
its exclusive agent to sell the Units, subject to the terms and provisions of
this Agreement, on a "best efforts" basis with at least $4,200,000 of the Units
required to be sold within 75 days after the date the Registration Statement (as
defined below) is declared effective by the Securities and Exchange Commission
(the "Termination Date"). If at least $4,200,000 of the Units are sold prior to
the Termination Date, any remaining Units may continue to be sold until 150 days
after the First Closing Date, as herein defined. The Underwriter acknowledges
that, simultaneously with the offering of Units, the Company will be making an
exchange offer to certain shareholders of the Company's subsidiary and the
Underwriter understands and agrees that it is not being retained to render
services in connection with that discrete offering and will receive no
compensation in connection therewith.
2. Representations and Warranties of the Company
The Company hereby represents and warrants to, and agrees with, the
Underwriter as follows:
(a) A registration statement on Form SB-2 (File No. 333-_____)
(the "Registration Statement") with respect to the Units, including the related
Prospectus (the "Prospectus"), and any amendments thereto, copies of which have
heretofore been delivered by the Company to you, has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act") and the published rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission") under
the Act, and has been filed with the Commission under the Act. The Company may
file on or prior to the Effective Date (as defined in Section 3(a)) additional
amendments to said Registration Statement, including the final Prospectus.
(b) The Registration Statement and the Prospectus (other than
the financial statements and other financial data and schedules which are or
should be contained therein) conform as to form in all material respects to the
requirements of the Act and the Rules and Regulations and do not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and no event has
occurred which should have been set forth in the Registration Statement or the
Prospectus which has not been so set forth therein; provided, however, the
Company makes no representation or warranty as to statements or omissions made
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Underwriter expressly for use in the Registration
Statement, the Prospectus, or any amendment or supplement thereto.
(c) Neither the Commission nor the "blue sky" or state
securities authority of any jurisdiction has issued an order (a "Stop Order")
suspending the effectiveness of the Registration Statement, preventing or
suspending the use of the Prospectus, the Registration Statement or any
amendment or supplement thereto, refusing to permit the effectiveness of the
Registration Statement or suspending the registration of the Units, nor have any
of such authorities instituted or threatened to institute any proceedings with
respect to a Stop Order.
(d) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
Intervest Bank (the "Subsidiary") is a state-chartered bank duly organized,
validly existing and in good standing under the laws of the State of Florida.
Each has full power and authority to conduct its own business and own or lease
its properties as described in the Prospectus, and is duly qualified and in good
standing as a foreign corporation in each jurisdiction where the conduct of its
business or its ownership or leasing of property requires it to be qualified,
except where the failure so to qualify would not have a material adverse effect
on the Company or the Subsidiary.
(e) The authorized capital stock of the Company is set forth
in the Prospectus under the caption "Capitalization." All of the outstanding
shares of Class A and Class B Common Stock of the Company have been duly
authorized and are validly issued, fully paid and nonassessable. The Company
owns approximately 96% of the outstanding shares of the Subsidiary, free and
clear of any liens or encumbrances and all such shares are duly authorized,
validly issued, fully paid and nonassessable.
(f) The financial statements of the Company together with
related schedules and notes as set forth in the Registration Statement and the
Prospectus fairly present the financial condition of the Company and the results
of its operations and the changes in its financial position as of the dates and
for the periods therein specified and such financial statements have been
prepared in conformity with generally accepted accounting principles
consistently applied throughout the periods involved.
(g) Except as reflected in or contemplated by the Registration
Statement or the Prospectus, since the date as of which information is given in
the Registration Statement or the Prospectus, there has not been any material
adverse change in the condition, financial or otherwise, of the Company or the
Subsidiary. Since the date as of which information is given in the Registration
Statement or the Prospectus, neither the Company nor the Subsidiary have entered
into any transaction, other than transactions in the ordinary course of
business.
(h) There are no actions, suits or proceedings pending, or to
the knowledge of the Company threatened, against or with respect to the Company
or its business or assets, or the Subsidiary, or its business or assets, at law
or in equity, or before or by any federal or state commission, regulatory body
or administrative agency or other governmental body, domestic or foreign, in
which an adverse decision might have a material adverse effect on the business
or assets of the Company or the business or assets of the Subsidiary.
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(i) The Company and the Subsidiary have good title to all
properties and assets which the Prospectus indicates are owned by them, free and
clear of all liens, security interests, pledges, charges, encumbrances and
mortgages (except as may be described in the Prospectus or such as in the
aggregate will not have a material adverse effect upon the business or assets of
the Company or the Subsidiary).
(j) The Company and the Subsidiary are not in default in any
material respect under, and no event has occurred which, with the passage of
time or the giving of notice, or both, would constitute a material default
under, any contract, agreement, instrument, lease or license to which the
Company or the Subsidiary is a party or by which any of them are bound, except
as may be properly described in the Prospectus or such as in the aggregate will
not have a material adverse effect on the business or assets of the Company or
on the business or assets of the Subsidiary. The Company and the Subsidiary are
not in violation of their certificates of incorporation or bylaws.
(k) The Company has all requisite power and authority to
execute, deliver and carry out the terms and provisions of this Agreement and to
issue, sell and deliver the Units in accordance with and upon the terms and
conditions set forth in this Agreement. All necessary corporate proceedings of
the Company have been duly taken to authorize the execution, delivery and
performance by the Company of this Agreement and the issuance, sale and delivery
of the Units. This Agreement has been duly authorized, executed and delivered by
the Company, is the legal, valid and binding obligation of the Company, and is
enforceable as to the Company in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws, court decisions or public policy. The Units have been duly
authorized by the Company and, when sold and delivered against payment therefor
in accordance with this Agreement, will be validly issued, fully-paid and
nonassessable. The enforceability of this Agreement is subject to (i) applicable
bankruptcy, moratorium, insolvency, reorganization and similar laws relating to
or affecting creditors' rights generally and (ii) general principles of equity
(regardless of whether such principles are considered in a proceeding in equity
or at law).
(l) No consent, authorization, approval, order, license,
certificate or permit of or from, or declaration or filing with, any federal,
state, local or other governmental authority or any court or other tribunal is
required for the execution, delivery or performance by the Company of this
Agreement or the issuance, sale or delivery of the Units (except (i)
registration under the Act and (ii) registration or qualification under "blue
sky" or state securities laws).
(m) No consent of any party to any contract, agreement,
instrument, lease or license to which the Company or its Subsidiary is a party,
or to which any of the Company's or its Subsidiary's properties or assets are
subject, is required for the execution, delivery or performance of this
Agreement, or the issuance, sale and delivery of the Units; and the execution,
delivery and performance of this Agreement and the issuance, sale and delivery
of the Units, will not violate, result in a material breach of, conflict with or
(with or without o the giving of notice or the passage of time or both) result
in a default under any such contract, agreement, instrument, lease or license,
or violate the certificate of incorporation or bylaws of the Company or the
Subsidiary, or violate or conflict with any law, rule, regulation, order,
judgment or decree binding on the Company or its Subsidiary or to which any of
the Company's or the Subsidiary's properties or assets are subject or result in
the creation or imposition of any lien, charge or encumbrance upon any assets of
the Company or its Subsidiary pursuant to the terms of any contract, agreement,
instrument, lease or license to which the Company or its Subsidiary is a party
or to which any of their properties or assets are subject.
(n) The Company knows of no outstanding claims for services in
the nature of a finder's fee or origination fee with respect to the sale of the
Units hereunder resulting from its acts for which the Underwriter may be
responsible.
(o) The Company and the Subsidiary have filed all federal and
state tax returns which were required to be filed by them and have paid all
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taxes shown on such returns and all assessments received by them, to the extent
such taxes or returns have become due (after giving effect to applicable grace
periods or extensions, if any).
3. Employment of Underwriter
(a) Subject to the terms and conditions herein set forth, the
effective date of this Agreement commences on the effective date under the Act
of the Registration Statement (the "Effective Date"), and the Company hereby
appoints the Underwriter as its exclusive agent as of the Effective Date, for
the purpose of offering the Units as provided in this Agreement on a "best
efforts" basis with at least $4,200,000 of the Units required to be sold within
75 days after the Effective Date if any Units are sold. The Underwriter agrees
to use its best efforts to sell the Units as agent for the Company. It is
understood and agreed that there is no firm commitment on the part of the
Underwriter to purchase any of the Units.
(b) The Company hereby grants an option to the Underwriter to
offer and sell up to 60,000 additional Units, on the same terms and conditions
as the other Units to be offered hereunder, however, such option may be
exercised only for the purpose of covering any over-allotment or
oversubscription in the sale of the Units. The option is exercisable at any time
and from time to time before the expiration of 150 days after the First Closing
Date, by written notice to the Company specifying the number of Units as to
which the option is being exercised.
(c) The Underwriter will offer the Units hereunder at a price
of $15.00 per Unit. The Underwriter will be entitled to a commission of seven
percent (7%) of the purchase price on each Unit sold in the offering by the
Underwriter or any of its selected dealers. In addition, the Company will pay
the Underwriter a fee in an amount equal to two percent (2%) of the aggregate
gross amount of Units sold in the offering, such fee to be paid upon completion
of the offering. The Underwriter shall have the right to associate with other
dealers selected by the Underwriter who are members of the National Association
of Securities Dealers, Inc., pursuant to a written Selected Dealer Agreement,
and to offer a part of the Units to such selected dealers for sale by them at
the offering price. In no event shall sales be made to accounts over which the
Underwriter or any dealer may exercise discretionary authority without the
written approval of the customer and the Underwriter prior to the execution of
any order, and the Selected Dealer Agreement will include provisions so as to
assure compliance with this restriction. The Selected Dealer Agreement will
provide that if a Unit is sold through any such selected dealer, the Underwriter
will allow to such selected dealer the entire commission paid by the Company for
such Unit. If a Unit is sold directly by the Underwriter, the Underwriter will
retain the entire commission paid by the Company for such Unit. The Underwriter
shall take such steps as it deems appropriate to assure that purchasers of Units
meet the suitability standards set forth in the Prospectus or otherwise imposed
by the Company and will maintain for a period of at least four (4) years a
record of the information obtained to indicate that such standards have been
met.
(d) The Company will issue to the Underwriter one Warrant for
the purchase of one share of Class A Common Stock of the Company for each ten
(10) Units sold in the Offering and will issue to the Underwriter and each
selected dealer one Warrant for the purchase of one share of Class A Common
Stock of the Company for each ten (10) Units sold by the Underwriter or selected
dealer. The Warrants issued hereunder shall be on the same terms as those
included in the Units (except as may otherwise by required by applicable law,
regulation or directives) and the Underwriter and/or selected dealer receiving
Warrants agree that it will not, for a period of twelve (12) months from the
effective date of the Registration Statement, sell or transfer any of these
Warrants or underlying securities, except to its officers, directors or
employees. All of the Warrants issuable hereunder shall be issued pursuant to
the directions of the Underwriter after the final closing contemplated
hereunder. The Underwriter represents and warrants that any directions delivered
to the Company with respect to the registration and delivery of these Warrants
shall comply, in all respect, with all applicable laws and regulations.
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(e) The obligation of the Underwriter to offer the Units is
subject to receipt by the Underwriter of a copy of written advice from the
Commission that the Registration Statement is effective. It is also subject to
the Units being qualified for offering under applicable state securities laws.
(f) (i) A special interest-bearing account (the "Escrow
Account"') will be opened and maintained at Manufacturers and Traders Trust
Company (the "Bank") in Rochester, New York, for the purpose of holding
subscription funds in escrow until the First Closing Date (as hereinafter
defined). The title of the Escrow Account will be "Intervest Bancshares
Corporation Escrow Account". All subscription funds shall be in the form of wire
transfers of immediately available funds, or checks, and all checks should be
made payable to "M&T Bank, as Escrow Agent for Intervest Bancshares
Corporation." After the First Closing Date all checks for subscriptions of
Debentures shall be made payable to "Intervest Bancshares Corporation", the
Company. The Company, the Underwriter and the Bank will, prior to the beginning
of the offering of the Units, enter into an escrow agreement with respect to the
Escrow Account in form satisfactory to the parties. The parties hereto agree to
faithfully perform their obligations under such escrow agreement. Except to the
extent that interest earned on the funds in the Escrow Account may be applied to
pay escrow expenses in the event the offering is terminated prior to the First
Closing Date, all costs, expenses, and charges incurred in connection with the
Escrow Account shall be paid by the Company.
(ii) Until the First Closing Date all funds received
from subscribers by any selected dealer shall be promptly transmitted to the
Bank (for deposit in the Escrow Account), but in any event such funds shall be
so transmitted by noon of the next business day following the day such funds are
received from the subscriber by the selected dealer. The Underwriter shall
promptly transmit to the Bank all funds received by it from subscribers for
deposit in the Escrow Account in accordance with Rule 15c2-4 under the
Securities Exchange Act of 1934, as amended, but in any event such funds shall
be so transmitted for deposit by noon of the next business day following the day
such funds are received. After the First Closing Date all funds received from
subscribers by any selected dealer shall be promptly transmitted to the
Underwriter for distribution to the Company, but in any event such funds shall
be transmitted by noon of the next business day following the day such funds are
received by the selected dealer.
(iii) The first closing of the offering will take
place at the offices of counsel to the Company on a date (the "First Closing
Date") which is within ten business days after the date on which acceptable
subscriptions have been received in cleared, collected funds for at least
$4,200,000 of Units.
(iv) On the First Closing Date the Underwriter will
cause the Bank to distribute the funds on deposit in the Escrow Account to the
Company, selected dealers and the Underwriter, as their interests may appear.
The Underwriter will be entitled to cause the Bank to distribute to the
Underwriter from the Escrow Account an amount sufficient to pay all of the
commissions on the Units sold to which the Underwriter and selected dealers are
entitled under the provisions of Section 3(c) hereof. Units may continue to be
offered and sold for up to 150 days after the First Closing Date. After the
First Closing Date, the Underwriter will distribute the checks for subscriptions
of Units directly to the Company within one business day of receipt by the
Underwriter. The Company shall, not less frequently than twice in each calendar
month, remit to the Underwriter commissions on the Units sold to which the
Underwriter and selected dealers are entitled under the provisions of Section
3(c) hereof.
(v) In the event the offering pursuant to the
Prospectus is terminated prior to the First Closing Date for any reason
whatsoever, the Underwriter shall promptly cause the Bank to refund to the
subscribers of the Units all funds which have been received from them by the
Underwriter. Interest earned on funds in the Escrow Account shall be applied to
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pay escrow expenses, with the balance of interest, if any, to be paid to
subscribers in proportion to the amount of funds paid by each subscriber on
subscription and without regard to the date when such subscription funds were
paid by the subscriber.
(g) In the event the offering is terminated prior to the First
Closing Date, this Agreement shall terminate, and upon the payments and refunds
to subscribers being made as provided in Section 3(f)(v), neither party hereto
shall have any further liability to the other xxxxxxxxx.Xx such event, the
Underwriter shall not be entitled to any fees or commissions hereunder and none
of the Warrants described in Section 3(d) will be delivered or deliverable.
(h) The Company shall pay all costs and expenses incident to
the performance of the obligations of the Company hereunder, including the fees
and expenses of the Company's counsel and accountants, registration fees, the
costs and expenses incident to the preparation, printing and shipping of the
Registration Statement, each preliminary prospectus, if any, the final
Prospectus and all amendments and supplements thereto and this Agreement and
related documents, filing fees required to be paid to the National Association
of Securities Dealers, Inc., the costs incurred in connection with the
qualification of the Units under applicable state securities laws and the fee of
Underwriter's legal counsel. The Underwriter shall pay all other costs incurred
or to be incurred by it, or by its personnel, in connection with the offering of
the Units.
4. Covenants of the Company
(a) The Company will furnish to the Underwriter, without
charge, as soon as the Registration Statement or any amendment thereto becomes
effective or a supplement is filed, two signed copies of the Registration
Statement and each amendment thereto, including all financial statements and
exhibits, and two copies of any supplement thereto. The Company will also
furnish to the Underwriter such number of conformed copies of the Registration
Statement and of each amendment thereto, including all financial statements but
excluding exhibits, and of each supplement thereto, as the Underwriter may
reasonably request.
(b) The Company will furnish to the Underwriter as soon as
possible after the Effective Date and thereafter during the period required by
law for the Prospectus to be delivered in connection with sales of the Units, as
many copies of the Prospectus (and of any amended or supplemented Prospectus) as
the Underwriter may reasonably request. If during such period any event occurs
as a result of which the Registration Statement or the Prospectus, as then
amended or supplemented, would include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made, in
the light of the circumstances in which they were made, not misleading, or it
shall be necessary to amend or supplement the Registration Statement or the
Prospectus to comply with the Act or the Rules and Regulations, the Company will
forthwith notify the Underwriter thereof and prepare and furnish to the
Underwriter and dealers selected by the Underwriter, in such quantity as the
Underwriter and such dealers may reasonably request, an amendment or supplement
which will correct such statement or omission or cause the Registration
Statement and the Prospectus to comply with the Act and the Rules and
Regulations. The Company will not at any time prior to the expiration of such
period, whether before or after the Effective Date, file any amendment to the
Registration Statement of which the Underwriter will not have been advised and
furnished with a copy, or which is not in compliance with the Act and the Rules
and Regulations.
(c) The Company will use its best efforts to cause the
Registration Statement to become effective and will promptly advise the
Underwriter and will confirm such advice in writing, of the following: (i) when
the Registration Statement or any post-effective amendment thereto shall have
become effective, and when any amendment of or supplement to the Prospectus is
6
filed with the Commission; (i i) when the Commission shall make a request or
suggestion for any amendment to the Registration Statement or the Prospectus or
for additional information and the nature and substance thereof; and (iii) the
issuance by the Commission of a stop order suspending the effectiveness of the
Registration Statement or the suspension of the qualification of the Units for
sale in any jurisdiction, or of the initiation of any proceeding for that
purpose. After the last closing contemplated hereunder, the Company shall only
be obligated to furnish to the Underwriter such number of copies of any final
prospectus included in any post-effective amendment to the Registration
Statement (or a Registration Statement which also serves as a post-effective
amendment to the Registration Statement) as the Underwriter may reasonably
request in connection with the exercise of Warrants included in the Units.
(d) The Company will take all action necessary to permit the
offering of the Units as contemplated hereby under the "blue sky" or securities
laws of the states in which it determines that Units shall be sold; provided,
however, that the Company shall not be required to qualify as a foreign
corporation or to file a consent to service of process in any state in any
action other than one arising out of the offering or sale of the Units. The
Company shall furnish the Underwriter with written notice as to the states in
which the Units are to be offered, together with such reasonable documentation
as may be requested by the Underwriter to establish that the Units have been
duly registered for offer and sale in those states or are exempt from the
registration requirements of such states, including, among other things, "blue
sky" memoranda or surveys prepared by the Company's counsel with respect to
those states in which the Company has determined that the Units are to be
offered. Notwithstanding the foregoing, nothing in this agreement shall be
construed as obligating the Underwriter or any selected dealers engaged in the
offering of the Units to offer Units in any states in which the Underwriter or
selected dealer, as the case may be, is not registered as a broker-dealer.
(e) The Company will make generally available (within the
meaning of Section 11(a) of the Act and the Rules and Regulations) to its
security holders, within 120 days of the first day of the fiscal year of the
Company, an earnings statement of the Company (which will be in reasonable
detail and will comply with the requirements of Section 11 (a) of the Act, but
need not be audited) covering the prior fiscal year of the Company, commencing
with the fiscal year of the Company during which this Agreement is executed.
(f) For a period of five years after the termination of the
Offering, the Company will furnish the Underwriter without charge, within 90
days after the end of each fiscal year, a copy of its financial statements
certified by independent certified public accountants.
(g) The Company will apply the net proceeds received by it
from the offering in the manner set forth under "Use of Proceeds" in the
Prospectus.
(h) The Company will furnish to the Underwriter as early as
practicable prior to the First Closing Date, but no less than two full business
days prior thereto, a copy of the latest available unaudited interim financial
statements of the Company which have been read by the Company's independent
certified public accountants, as stated in their letters to be furnished
pursuant to Section 5(f).
(i) The Company will comply with all registration, filing, and
reporting requirements of the Securities Exchange Act of 1934, which may from
time to time be applicable to the Company, and, for a period of three years
after the termination of the Offering, the Company will furnish the Underwriter,
without charge, with copies of all filings made with the Commission pursuant to
the Securities Exchange Act of 1934.
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(j) The Company will comply with all provisions of all
undertakings contained in the Registration Statement.
(k) Offers and sales of Units by the Company shall only be
made by persons who meet the safe harbor provisions of Rule 3a4-1 under the
Securities Exchange Act of 1934.
5. Conditions of Underwriter's Obligations
The obligations of the Underwriter as provided herein shall be subject
to the continuing accuracy of the representations and warranties of the Company
herein contained as of the date hereof and through and including the date of
termination of the offering, to the performance by the Company of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Registration Statement shall have become effective at
the time of any sale of Debentures hereunder, no Stop Order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission or be pending.
(b) The Company shall not have sustained after the date hereof
any material loss or interference with its business from any calamity, whether
or not covered by insurance, which in your reasonable judgment makes it
impracticable or inadvisable to sell the Units as contemplated hereby.
(c) All corporate proceedings and related matters in
connection with the organization of the Company and the Subsidiary, and the
registration, authorization, issuance, sale and delivery of the Units, and in
connection with this Agreement, shall be reasonably satisfactory to you and you
shall have been furnished with such papers and information as you may reasonably
have requested in this connection.
(d) Between the date hereof and the First Closing Date, there
shall have been no litigation instituted or threatened against the Company or
the Subsidiary and there shall have been no proceeding instituted or threatened
against the Company or the Subsidiary before or by any federal or state
commission, regulatory body or administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding would
materially adversely affect the business, operations or financial condition or
income of the Company or the Subsidiary.
(e) At the time of the execution of this Agreement, and at the
First Closing Date, counsel for the Company shall provide to the Underwriter its
written opinion, in form and substance satisfactory to counsel for the
Underwriter, with respect to the following matters:
(i) The matters set forth in Paragraph 2(d).
(ii) The matters set forth in Paragraph 2(e).
(iii) The matters set forth in Paragraph 2(k).
(iv) To the best of counsel's knowledge, the matters
set forth in Paragraphs 2(l) and (m).
(v) To the best of counsel's knowledge, the matters
set forth in paragraph 2(h).
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(vi) That the Registration Statement has become
effective and to the best of counsel's knowledge, the matters set forth
in Paragraph 2(c).
(vii) The matters set forth in paragraph 2(b).
(viii) To the best of counsel's knowledge, there are
no contracts, agreements, or other understandings required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not so described or
filed.
(f) At the First Closing Date, Hacker, Johnson, Xxxxx & Xxxxx
shall have furnished a letter addressed to you and dated as of the date it is
required to be delivered in form and substance reasonably satisfactory to you,
to the effect that: (i) with respect to the Company they are, and during the
period covered by their reports included in the Registration Statement and the
Prospectus they were, independent public accountants within the meaning of the
Act and the Rules and Regulations, and the response to Item 509 of Regulation
S-K as reflected by the Registration Statement is correct insofar as it relates
to them; (ii) in their opinion, the financial statements of the Company examined
by them at all dates and for all periods referred to in their opinion and
included in the Registration Statement and Prospectus, comply in all material
respects with the applicable accounting requirements of the Act and Rules and
Regulations; (iii) on the basis of certain indicated procedures (but not an
examination in accordance with generally accepted accounting principles),
including, but not limited to, a reading of the latest available interim
unaudited financial statements of the Company, whether or not appearing in the
Prospectus, inquiries of the officers of the Company or other persons
responsible for its financial and accounting matters and a reading of the minute
book of the Company, nothing has come to their attention which would cause them
to believe that (A) there has been any change in the capital stock or other
securities of the Company or any payment or declaration of any dividend or other
distribution in respect thereof or exchange therefor from that shown on its
audited balance sheets or a change in the debt of the Company from that shown or
contemplated under "Capitalization" in the Registration Statement other than as
set forth in or contemplated by the Registration Statement, (B) there has been
any material adverse change in the financial condition of the Company except as
set forth in or contemplated by the Registration Statement, or (C) the unaudited
financial statements and schedules of the Company included in the Registration
Statement and Prospectus do not comply in form in all material respects with the
applicable accounting requirements of the Act and Rules and Regulations, or are
not fairly presented in conformity with generally accepted accounting principles
applied on a consistent basis; and (iv) they have compared specific numerical
data and financial information pertaining to the Company set forth in the
Registration Statement and Prospectus, which have been specified by the
Underwriter prior to the date of this Agreement, to the extent that such data
and information may be derived from the general accounting records of the
Company, and found them to be in agreement.
(g) The Company shall have furnished or caused to be furnished
to you a certificate by the President of the Company, dated as of the First
Closing Date and at the termination of the offering, to the effect that (i) the
representations and warranties of the Company herein are true and correct as of
each such date, and the Company has complied with all the agreements and has
satisfied all the conditions on its part to be performed or satisfied at or
prior to each such date; (ii) the Registration Statement has become effective
and no order suspending the effectiveness of the Registration Statement has been
issued and to the best knowledge of the signer, no proceeding for that purpose
has been initiated or threatened by the Commission; and (iii) except as set
forth in the Registration Statement and Prospectus, since the respective dates
as of which and the periods for which information is given in the Registration
Statement and Prospectus and prior to the date of such certificate (A) there has
not been any substantial adverse change, financial or otherwise, in the affairs
or condition of the Company or the Subsidiary and (B) neither the Company nor
the Subsidiary have incurred any liabilities, direct or contingent, or entered
into any transactions, otherwise than in the ordinary course of business.
9
6. Indemnification
(a) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless you and each person, if any, who controls
you within the meaning of Section 15 of the Act, against any and all loss,
liability, claim, damage and expense whatsoever (including, but not limited to,
any and all expense and counsel fees reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever), and any and all amounts paid in settlement of any claim or
litigation, arising out of, based upon or in connection with (i) any untrue or
alleged untrue statement of a material fact contained in (A) any preliminary
prospectus, the Registration Statement or the Prospectus (as from time to time
amended and supplemented) or (B) any application or other document (in this
Section 6(a) called "application") executed by or on behalf of the Company or
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Units under the "blue sky" or
securities laws thereof; (ii) the omission or alleged omission from any
preliminary prospectus, the Registration Statement, the Prospectus (as from time
to time amended and supplemented) or any application of a material fact required
to be stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company with respect to you by or on
behalf of you expressly for use in any preliminary prospectus, the Registration
Statement or Prospectus or any amendment or supplement thereof or in any
application, as the case may be; or (iii) any breach of any representation,
warranty, covenant, or agreement of the Company contained in this Agreement.
This indemnity shall not apply to amounts paid in settlement of any such
litigation if such settlement is effected without the consent of the Company.
If any action is brought against you or any of your officers,
directors, partners, employees, agents or counsel, or any controlling persons of
you (an "indemnified party") in respect of which indemnity may be sought against
the Company pursuant to the foregoing paragraph, such indemnified party or
parties shall promptly notify the Company in writing of the institution of such
action (but the failure so to notify shall not relieve the Company from any
liability it may have other than pursuant to this Section 6(a)) and the Company
shall promptly assume the defense of such action, including the employment of
counsel (reasonably satisfactory to such indemnified party or parties) and
payment of expenses. Such indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such indemnified party or parties unless
the employment of such counsel shall have been authorized in writing by the
Company in connection with the defense of such action or the Company shall not
have promptly employed counsel reasonably satisfactory to such indemnified party
or parties to have charge of the defense of such action, in either of which
events such fees and expenses shall be borne by the Company and the Company
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties. Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent. The Company agrees
promptly to notify you of the commencement of any litigation or proceedings
against the Company or any of its officers or directors in connection with the
sale of the Units, any preliminary prospectus, the Registration Statement, the
Prospectus, any amendment or supplement thereto or any application. With respect
to any untrue statement or alleged untrue statement made in, or omission or
alleged omission from, any preliminary prospectus or the Prospectus, the
indemnity agreement contained in this Section 6(a) with respect to such
preliminary prospectus or Prospectus, to the extent it is based on the claim of
a person who purchased Units directly from you, shall not inure to your benefit
(or, to the benefit of any of your officers, directors, partners, employees,
agents or counsel, or any person controlling you), if the Prospectus (or the
Prospectus as amended or supplemented if the Company shall have filed with the
Commission any amendment or supplement thereto) which shall have been furnished
to you prior to the time you sent written confirmation of such sale to such
person does not contain such statement, alleged statement, omission or alleged
omission and a copy of the Prospectus (or the Prospectus as amended or
supplemented if the Company shall have filed with the Commission any amendment
10
or supplement thereto) shall not have been sent or given to such person and such
person shall not otherwise have received a copy thereof at or prior to the time
of the written confirmation of such sale to such person.
(b) You agree to indemnify and hold harmless the Company and
each of the officers and directors of the Company and each other person, if any,
who controls the Company within the meaning of Section 15 of the Act against any
and all such losses, liabilities, claims, damages and expenses as are
indemnified by the Company under Section 6(a) above, provided, however, that
such indemnification by you hereunder shall only be with respect to statements
or omissions, if any, made in any preliminary prospectus, the Registration
Statement, the Prospectus, any amendment or supplement thereof or any
application, in reliance upon, and in conformity with, written information
furnished by or on behalf of you expressly for use in any preliminary
prospectus, the Registration Statement, the Prospectus, any amendment or
supplement thereof or in any of said applications. In case any action shall be
brought against the Company or any other person so indemnified based on any
preliminary prospectus, the Registration Statement, the Prospectus, any
amendment or supplement thereof or any such application and in respect of which
indemnity may be sought against you, you shall have the rights and duties given
to the Company, and the Company and each other person so indemnified shall have
the rights and duties given to you by the provisions of Section 6(a) above.
7. Underwriter's Representations and Warranties
(a) The Underwriter represents and warrants to and agrees with
the Company that: (i) the Underwriter is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York; (ii) it
is duly authorized to execute this Agreement and to perform its duties
hereunder, and the execution and delivery by it of this Agreement and the
consummation of the transactions herein contemplated will not result in any
violation of, be in conflict with or constitute a default under, any agreement
or instrument to which the Underwriter is a party or by which it is bound, or
any judgment, decree, order, or, to its knowledge, any statute, rule or
regulation applicable to it; (iii) the Underwriter is registered as a
broker/dealer with the Commission and is registered as a broker/dealer in all
states in which it conducts business and is a member in good standing of the
National Association of Securities Dealers, Inc.; and (iv) there is not now
pending or threatened against the Underwriter any action or proceeding of which
it has been advised, in any court of competent jurisdiction or before the
Commission or any state securities commission concerning its activities as a
broker/dealer, which would materially impair the Underwriter's ability to act as
such pursuant to this Agreement.
(b) The Underwriter will deliver a certificate dated as of the
First Closing Date and at the termination of the offering, and signed by the
president of the Underwriter stating that the representations of the Underwriter
set forth herein are true and correct in all material respects as of each such
date.
(c) The Underwriter covenants that promptly after the First
Closing Date, and until such time as the earlier of: $6,000,000 in Units are
sold ($6,900,000 if the over-allotment option is exercised) or the offering is
terminated pursuant to Section 8 hereof, it will supply the Company with such
information as the Company may reasonably request to be supplied to the
securities commissions of such states in which the Debentures have been
qualified for sale.
8. Effectiveness and Termination
(a) This Agreement shall become effective at 9:00 A.M. on the
first full business day after the Effective Date unless prior to such time you
shall have received notice from the Company that it elects that this Agreement
shall not become effective.
11
(b) This Agreement may be terminated by you by written notice
to the Company in the event that the Company shall have failed or been unable to
comply with any of the terms, conditions or provisions of this Agreement on the
part of the Company to be performed, complied with or fulfilled within the
respective times herein provided for, unless compliance therewith or performance
or satisfaction thereof shall have been expressly waived by you in writing.
(c) This Agreement may be terminated by you by written notice
to the Company if you believe in your reasonable judgment that a material
adverse change has occurred in the management of the Company, that a material
adverse change has occurred in the financial condition or obligations of the
Company, or if the Company shall have sustained a loss by strike, fire, flood,
accident or other calamity of such a character as, in your reasonable judgment,
may interfere materially with the conduct of the Company's business and
operations regardless of whether or not such loss shall have been insured.
(d) This Agreement may be terminated by you by written notice
to the Company at any time if, in your reasonable judgment, the payment for and
delivery of the Units is rendered impracticable or inadvisable because (i)
additional material governmental restrictions not in force and effect on the
date hereof shall have been imposed upon the registration and/or sale of
securities generally, or (ii) there shall be a material outbreak of hostilities
or a material escalation of existing hostilities between the United States and
any foreign power or a formal declaration of war by the United States shall have
occurred, or (iii) substantial and material changes in the condition of the
market (either generally or with reference to the sale of the Units to be
offered hereby) beyond normal fluctuations are such that it would be
undesirable, impracticable or inadvisable in your reasonable judgment to proceed
with this Agreement or with the offering of the Units.
(e) This Agreement may be terminated by either party by
written notice to the other at any time before it becomes effective as
hereinabove provided.
(f) In the event, at any time prior to the First Closing Date,
any action or proceeding shall be instituted or threatened against you in any
court of competent jurisdiction, before the Commission or any state securities
commission or in any court pursuant to any federal, state, local or municipal
statute, concerning your activities as a broker or dealer that would materially
impair your ability to act as Underwriter pursuant to this Agreement, or a
petition in bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of your assets is filed or if you make a
assignment for the benefit of creditors, the Company shall have the right on
three days' written notice to you to terminate this Agreement without any
liability to you of any kind.
(g) This Agreement shall terminate if at least $4,200,000 of
the Units are not sold within 75 days after the date the Registration Statement
is declared effective by the Commission.
(h) Any termination of this Agreement pursuant to this Section
8 shall be without liability (including, but not limited to, loss of anticipated
profits or consequential damages) on the part of any party hereto, except that
the Company shall nevertheless be obligated to pay to the Underwriter its
accountable out-of-pocket expenses pursuant to Paragraph 3(f), unless the
Agreement is terminated pursuant to Section 8(f), and further provided that
Paragraph 9(b) shall survive the termination of this Agreement.
9. Miscellaneous
(a) Whenever notice is required by the provisions of this
Agreement to be given to the parties hereto, such notice shall be in writing and
shall be sent by certified or registered mail, return receipt requested, postage
prepaid, and shall be deemed delivered two days after mailing, and shall be
12
addressed to the party to whom such notice is directed at the address set forth
above or at such other address as a party has designated by like notice.
(b) The respective indemnities, agreements, representations,
warranties and other statements of you and the Company hereunder, as set forth
in this Agreement or made pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation made by or on behalf of you, the
Company, or any officers, directors or controlling person of you or the Company,
and shall survive delivery ofo and payment for the Units.
(c) This Agreement shall be binding upon and inure solely to
the benefit of you and the Company and, to the extent provided in Section 6
hereof, the officers and directors of the Company and any person who controls
you, the Company and their respective successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Units shall be construed a successor or assign by reason
merely of such purchase.
(d) This Agreement shall be construed and governed by the laws
of the State of New York. This Agreement cannot be changed or terminated orally.
(e) This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of which together
will constitute one and the same instrument.
Please confirm that the foregoing sets forth the Agreement between you
and the Company by signing and returning to us the enclosed copy of this letter.
Very truly yours,
INTERVEST BANCSHARES CORPORATION
By: ______________________________________
Name:
Title:
WE HEREBY CONFIRM AS OF THE DATE HEREOF
THAT THE ABOVE LETTER SETS FORTH THE
AGREEMENT BETWEEN THE COMPANY AND
UNDERSIGNED.
SAGE, XXXXX & CO., INC.
By: ___________________________________
Name:
Title:
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