1,500,000 SHARES
RESOURCE AMERICA, INC.
COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT
________, 1998
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXX XXXXXXXXXX XXXXX INC.
As Representatives of the Several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
Potomac Tower
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Resource America, Inc., a Delaware corporation (the "Company")
confirms its agreement with the several underwriters named in Schedule A
annexed hereto (the "Underwriters", which term shall also include any
underwriter substituted as hereinafter in Section 9 provided), for whom you
are acting as representatives (in such capacities, the "Representatives"),
whereby the Company proposes to issue and sell 1,500,000 shares of its
authorized but unissued Common Stock, $.01 par value per share (the "Common
Stock"). Said 1,500,000 shares are herein called the "Firm Common Shares." In
addition, the Company proposes to grant to the Underwriters an option to
purchase up to 225,000 additional shares of Common Stock (the "Optional Common
Shares"), as provided in Section 1 hereof. The Firm Common Shares and, to the
extent such option is exercised, the Optional Common Shares are hereinafter
collectively referred to as the "Common Shares."
You have advised the Company that the Underwriters propose to make a
public offering of their respective portions of the Common Shares on the
effective date of the registration statement hereinafter referred to, or as
soon thereafter as in your judgment is advisable (the "Offering").
The Company hereby confirms its agreement with respect to the
purchase of the Common Shares by you and the Underwriters, as the case may be,
as follows:
SECTION 1. Purchase, Sale and Delivery of Common Shares. On the basis
of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, (i) the Company agrees
to issue and sell to you and the Underwriters, as the case may be, all of the
Firm Common Shares, and (ii) you and the Underwriters agree, severally and not
jointly, to purchase from the Company such Firm Common Shares. The purchase
price per share to be paid by the Underwriters to the Company shall be $____
per share.
Delivery of the Firm Common Shares to be purchased by you or the
Underwriters and payment therefor shall be made at the offices of Friedman,
Billings, Xxxxxx & Co., Inc., Xxxxxxx Xxxxx, 00xx Xxxxx, 0000 Xxxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx (or such other place as may be agreed upon
by the Company and the Representatives) on the third (or, if the purchase set
forth in the above paragraph is determined after 4:30 p.m., Washington, D.C.
time, the fourth) business day following the first date that any of the Common
Shares are released by you for sale to the public (the "First Closing Date");
provided, however, that if the Prospectus is at any time prior to the First
Closing Date recirculated to the public, the First Closing Date shall occur
upon the later of the third full business day following the first date that
any of the Common Shares are released by you for sale to the public or the
date that is 48 hours after the date that the Prospectus has been so
recirculated.
Delivery of certificates for the Firm Common Shares shall be made by
or on behalf of the Company to you, for your account or for the respective
accounts of the Underwriters, as the case may be, against payment by you for
your account or for the accounts of the several Underwriters, as the case may
be, of the purchase price therefor by wire transfer or certified or official
bank checks payable in next day funds to the order of the Company. The
certificates for the Firm Common Shares shall be registered in such names and
denominations as you shall have requested at least two full business days
prior to the First Closing Date, and shall be made available for checking and
packaging on the business day preceding the First Closing Date at a location
in Arlington, Virginia, as may be designated by you. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to your obligation or the obligations of the Underwriters,
as the case may be.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Company hereby grants an option to you or to the several
Underwriters, as the case may be, to purchase, severally and not jointly, up
to an aggregate of 225,000 Optional Common Shares at the purchase price per
share to be paid for the Firm Common Shares, for use solely in covering any
over-allotments made by you for your account or the account of the
Underwriters, as the case may be, in the sale and distribution of the Firm
Common Shares. The option granted hereunder may be exercised at any time (but
not more than once) within 30 days after the first date that any of the Common
Shares are released by you for sale to the public, upon notice by you to the
Company setting forth the aggregate number of Optional Common Shares as to
which you or the Underwriters, as the case may be, are exercising the option,
the names and denominations in which the certificates for such shares are to
be registered and the time and place at which such certificates will be
delivered. Such
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time of delivery (which may not be earlier than the First Closing Date), being
herein referred to as the "Second Closing Date," shall be determined by you,
but if at any time other than the First Closing Date shall not be earlier than
three nor later than five full business days after delivery of such notice of
exercise. The First Closing Date and the Second Closing Date, if any, are
collectively herein referred to as a "Closing Date". The number of Optional
Common Shares to be purchased by each Underwriter shall be determined by
multiplying the number of Optional Common Shares to be sold by the Company
pursuant to such notice of exercise by a fraction, the numerator of which is
the number of Firm Common Shares to be purchased by such Underwriter as set
forth opposite its name in Schedule A and the denominator of which is
1,500,000 (subject to such adjustments to eliminate any fractional share
purchases as you in your discretion may make). Certificates for the Optional
Common Shares will be made available for checking and packaging on the
business day preceding the Second Closing Date at a location in Arlington,
Virginia, as may be designated by you. The manner of payment for and delivery
of the Optional Common Shares shall be the same as for the Firm Common Shares
purchased from the Company as specified in the two preceding paragraphs. At
any time before lapse of the option, you may cancel such option by giving
written notice of such cancellation to the Company.
If applicable, you have advised the Company that each Underwriter has
authorized you to accept delivery of its Common Shares, to make payment and
receipt therefor. If applicable, you, individually and not as the
Representatives of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by you by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
Subject to the terms and conditions hereof, you or the Underwriters,
as the case may be, agree to make a public offering of the Common Shares as
soon after the effective date of the Registration Statement (as hereafter
defined) as in your judgment is advisable and at the public offering price set
forth on the cover page of and on the terms set forth in the Prospectus.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-47393) with respect to the Common Shares has been prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") thereunder, and has been filed with the
Commission. The Company has prepared and has filed or proposes to
file prior to the effective date of such registration statement an
amendment or amendments to such registration statement, which
amendment or amendments have been or will be similarly prepared.
There has been delivered to you one signed copy of such registration
statement and amendments, together with two copies of each exhibit
3
filed therewith. Conformed copies of such registration statement and
amendments (but without exhibits) and of the related Preliminary
Prospectus (as defined below) have been delivered to you in such
reasonable quantities as you have requested. The Company will next
file with the Commission one of the following: (i) prior to
effectiveness of such registration statement, a further amendment
thereto, including the form of final prospectus, or (ii) a final
prospectus in accordance with Rules 430A and 424(b) of the Rules and
Regulations. As filed, such amendment and form of final prospectus,
or such final prospectus, shall include all Rule 430A Information (as
defined below) and, except to the extent that you shall agree to a
modification, shall be in all substantive respects in the form
furnished to you prior to the date and time that this Agreement was
executed and delivered by the parties hereto, or, to the extent not
completed at such date and time, shall contain only such specific
additional information and other changes (beyond that contained in
the latest Preliminary Prospectus) as the Company shall have
previously advised you in writing would be included or made therein.
The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration
statement becomes effective and, in the event any post-effective
amendment thereto becomes effective prior to the First Closing Date,
shall also mean such registration statement as so amended; provided,
however, that such term shall also include all Rule 430A Information
deemed to be included in such registration statement at the time such
registration statement becomes effective as provided by Rule 430A of
the Rules and Regulations. The term "Registration Statement" as used
in this Agreement shall also include any registration statement filed
pursuant to Rule 462(B) of the Rules and Regulations. The term
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in the preceding paragraph and any preliminary prospectus
included in the Registration Statement at the time it becomes
effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean the prospectus relating to the
Common Shares in the form in which it is first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations or,
if no filing pursuant to Rule 424(b) of the Rules and Regulations is
required, shall mean the form of final prospectus included in the
Registration Statement at the time such registration statement
becomes effective. The term "Rule 430A Information" means information
with respect to the Common Shares and the offering thereof permitted
to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the Rules and Regulations.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and the most recent
Preliminary Prospectus has conformed in all material respects to the
requirements of the Act and the Rules and Regulations and, as of its
date, has not included any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in
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the light of the circumstances under which they were made, not
misleading; and at the time the Registration Statement becomes
effective, and at all times subsequent thereto up to and including
each Closing Date, the Registration Statement and the Prospectus, and
any amendments or supplements thereto, (including, without
limitation, all documents incorporated or deemed to be incorporated
by reference in either the Registration Statement or Prospectus at
the time they were filed or hereafter are filed with the Commission),
will contain all material statements and information required to be
included therein by the Act and the Rules and Regulations and will in
all material respects conform to the requirements of the Act and the
Rules and Regulations, and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, (including,
without limitation, all documents incorporated or deemed to be
incorporated by reference in either the Registration Statement or
Prospectus at the time they were filed or hereafter are filed with
the Commission), will include any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, no representation or warranty contained in this subsection
2(b) shall be applicable to information contained in or omitted from
any Preliminary Prospectus, the Registration Statement, the
Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by or
on behalf of you or any Underwriter specifically for use in the
preparation thereof.
(c) The Prospectus delivered to the Underwriters for use in
connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(d) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware
with full power and authority (corporate and other) to own, lease and
operate its properties, to conduct its business as described in the
Prospectus and to execute, deliver and perform its obligations under
this Agreement.
(e) The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
its subsidiaries, Resource Properties, Inc., Resource Energy, Inc.,
Resource Leasing, Inc. and Fidelity Mortgage Funding, Inc. ("FMF"),
and its subsidiaries' wholly owned subsidiaries, (collectively
referred to herein as the "Subsidiaries"). Neither the Company nor
the Subsidiaries own any equity interests in any other entities
except as disclosed in the Prospectus. The Subsidiaries have been
duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation, with full power and authority (corporate and other)
5
to own and lease their properties and conduct their respective
businesses as described in the Prospectus; the Company owns directly
or indirectly of record and beneficially all of the outstanding
capital stock of the Subsidiaries, free and clear of all claims,
liens, charges and encumbrances, except as disclosed in the
Prospectus.
(f) The Company has, and upon consummation of the Offering,
will have, authorized and outstanding capital stock as set forth
under the heading "Description of Capital Stock" in the Prospectus;
the issued and outstanding shares of the Company's capital stock have
been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase
securities (except as may be disclosed in the Prospectus), and
conform in all material respects to the description thereof contained
in the Prospectus. The issued and outstanding Common Stock (except
for shares issued in connection with the acquisition of Bryn Mawr
Resources, Inc., which are restricted shares) is duly listed on the
Nasdaq Stock Market. All issued and outstanding shares of capital
stock of the Subsidiaries have been duly authorized and validly
issued and are fully paid and nonassessable. Except as disclosed in
or contemplated by the Prospectus and the financial statements of the
Company, and the related notes thereto, included in the Prospectus,
neither the Company nor the Subsidiaries have outstanding any options
to purchase, or any preemptive rights or other rights to subscribe
for or to purchase, any securities or obligations convertible into,
or any contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock option and other
stock plans or arrangements, and the options or other rights granted
and exercised thereunder, set forth in the Prospectus accurately and
fairly presents the information required to be shown with respect to
such plans, arrangements, options and rights.
(g) The Common Shares to be sold by the Company hereunder
have been duly authorized and, when issued, delivered and paid for in
the manner set forth in this Agreement, will be validly issued, fully
paid and nonassessable, free from all liens, encumbrances, and
defects, and will conform to the description thereof contained in the
Prospectus. No preemptive rights or other rights to subscribe for or
purchase exist with respect to the sale of the Common Shares by the
Company pursuant to this Agreement. The certificates used to evidence
shares of Common Stock are in due and proper form.
(h) The Company and the Subsidiaries are duly qualified in
or licensed to (to the extent required) transact business by, and are
in good standing in, each jurisdiction in which they own or lease
real property, maintain an office or conduct their respective
businesses and in which the failure, individually or in the aggregate
6
with all other failures, to be so licensed or qualified or to be in
good standing would reasonably be expected to have a material adverse
effect on the financial condition, properties, assets, business,
results of operations or prospects of the Company and the
Subsidiaries taken as a whole (a "Material Adverse Effect") and the
Company has no knowledge that any proceeding has been instituted in
any such jurisdiction, revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such power and authority or
qualification.
(i) No approval, consent or authority of the stockholders of
the Company or the Board of Directors of the Company or any
governmental agency or any other third party will be required for the
issuance and sale of the Common Shares to be sold by the Company as
contemplated herein, except such as have been obtained.
(j) The Company has full legal right, power and authority to
enter into this Agreement and to perform the transactions
contemplated hereby. This Agreement has been duly and validly
authorized by the Company and upon due execution and delivery by the
Company and the other parties thereto will constitute the valid and
binding obligations of the Company, enforceable against the Company
in accordance with their terms, subject to limitations imposed by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity) and
subject to any bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other laws, now or hereafter in effect,
relating to or limiting creditors' rights generally and general
principles of equity and except to the extent that the
indemnification provisions of Section 8 hereof may be limited by
federal or state securities laws and public policy considerations in
respect thereof. The making and performance of this Agreement by the
Company and the consummation of the transactions herein contemplated
will not violate any provisions of the certificate of incorporation
or bylaws, or other organizational documents of the Company or the
Subsidiaries and will not conflict with, result in the breach or
violation of, or constitute, either by itself or upon notice or the
passage of time or both, a default under any agreement, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other
instrument to which the Company or any of the Subsidiaries is a party
or by which the Company or the Subsidiaries or any of their
respective properties may be bound or affected, any statute or any
authorization, judgment, decree, order, rule or regulation of any
court or any regulatory body, administrative agency or other
governmental body applicable to the Company or any of the
Subsidiaries or any of their respective properties, except where any
violation, conflict, breach or default, whether individually or in
the aggregate, would not have a Material Adverse Effect. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for compliance with the Act,
the Blue Sky laws (including the
7
securities laws in Austria, France, Germany, Italy, Switzerland, the
United Kingdom and the Canadian provinces of Alberta, British
Columbia, Ontario and Quebec) applicable to the public offering of
the Common Shares by you or the Underwriters, the clearance of such
offering with the National Association of Securities Dealers, Inc.
(the "NASD"), and the listing of the Common Shares to be sold by the
Company on the Nasdaq Stock Market.
(k) Xxxxx Xxxxxxxx, LLP, who has expressed their opinion
with respect to the financial statements and schedules filed with the
Commission as a part of the Registration Statement and included in
the Prospectus and in the Registration Statement, is an independent
accountant as required by the Act and the Rules and Regulations.
(l) The consolidated financial statements and schedules of
the Company and the Subsidiaries, and the related notes thereto,
included in the Registration Statement and the Prospectus present
fairly the financial position of the Company and the Subsidiaries as
of the respective dates of such financial statements and schedules,
and the consolidated results of operations and changes in cash flows
of the Company for the respective periods covered thereby. Such
statements, schedules and related notes have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis as certified by the independent accountants named in
subsection 2(k). No other financial statements or schedules are
required to be included in the Registration Statement. The other
financial, statistical and pro forma information and related notes
included in the Registration Statement and the Prospectus (i) present
fairly the information shown therein on a basis consistent (except as
otherwise noted therein) with the audited financial statements of the
Company included therein; and (ii) are in compliance in all material
respects with the requirements of the Act.
(m) Neither the Company nor any of the Subsidiaries (A) is
in breach of, or in default in (nor has any event occurred which with
notice, lapse of time, or both, would constitute a breach of, or
default in) the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, bank loan or credit agreement,
note, lease or other agreement or instrument to which it is a party
or by which it may be bound or to which any of its properties may be
subject (collectively, the "Agreements and Instruments"), except for
any such breaches or defaults which, individually or in the aggregate
with all other breaches or defaults, would not have a Material
Adverse Effect or have an adverse effect on the legality, validity or
enforceability of this Agreement, or (B) is in breach of, or in
default under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under) their
respective certificate of incorporation or by-laws. The issuance,
sale and delivery of the Common Shares by the Company, the execution,
8
delivery and performance by the Company of this Agreement, the
consummation by the Company of the transactions contemplated hereby
and thereby, compliance by the Company with the terms of the
foregoing and the application of the proceeds from the sale of the
Common Shares as contemplated by the Prospectus (A) have been duly
authorized by all necessary corporate action on the part of the
Company (B) do not and will not conflict with or result in any breach
of or constitute a default under (nor constitute any event which with
notice, lapse of time, or both would constitute a breach of, or
default under) any provision of the certificate of incorporation or
by-laws of the Company or the Subsidiaries (C) do not and will not
conflict with or result in any breach of or constitute a default
under (nor constitute any event which with notice, lapse of time, or
both would constitute a breach of, or default under) any of the terms
or provisions of, or give rise to any right to accelerate the
maturity or require the prepayment of any indebtedness under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, or the
Subsidiaries under any such Agreement or Instrument (except, with
respect to this clause (C), for such conflicts, breaches, defaults,
accelerations, prepayments or liens, charges or encumbrances, which,
individually or in the aggregate with all other conflicts, breaches,
defaults, accelerations, prepayments or liens, charges or
encumbrances, would not have a Material Adverse Effect) and (D) do
not and will not conflict with, or result in any breach of or
constitute a default under (nor constitute any event which with
notice, lapse of time, or both would constitute a breach of, or
default under), any federal, state or local law, regulation or rule
or any decree, judgment or order applicable to the Company or the
Subsidiaries.
(n) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to
the Registration Statement by the Act or by the Rules and Regulations
which have not been described or filed as required. The contracts so
described in the Prospectus are in full force and effect on the date
hereof; the descriptions thereof or references thereto are correct in
all material respects; and neither the Company nor any of the
Subsidiaries, nor, to the knowledge of the Company, any other party
is in breach of or default under any of such contracts.
(o) Except as disclosed in the Prospectus, there are no
legal or governmental actions, suits or proceedings pending or, to
the knowledge of the Company or any of the Subsidiaries threatened to
which the Company or any of the Subsidiaries are or may be a party or
of which property owned or leased by the Company is or may be the
subject, or related to environmental, discrimination or regulatory
matters, which actions, suits or proceedings might, individually or
in the aggregate, prevent or adversely affect the transactions
contemplated by this Agreement or are likely to result in a Material
Adverse Effect and no labor disturbance by the employees of the
Company or the Subsidiaries exists or is
9
imminent which would be expected to affect adversely such condition,
properties, business, results of operations or prospects of the
Company, and the Subsidiaries, taken as a whole. Except as disclosed
in the Prospectus, no enforcement proceeding, whether formal or
informal, has been commenced against the Company or any of the
Subsidiaries, to the Company's and the Subsidiaries' knowledge, by
any governmental authority, nor have any such proceedings been
instituted, threatened or recommended. Except as disclosed in the
Prospectus, neither the Company, nor any of the Subsidiaries, nor any
of their respective officers, employees or directors is a party or
subject to the provisions of any regulatory action, injunction,
judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body affecting the
business of the Company or any of the Subsidiaries.
(p) The Company and each of the Subsidiaries have good and
marketable title to all their respective properties and assets, free
and clear of all liens, charges, encumbrances or restrictions, except
such as do not materially adversely affect the value of such
properties and assets and do not interfere with the use made of such
properties and assets by the Company and the Subsidiaries as the case
may be and except as may be otherwise disclosed in the Prospectus;
all of the leases and subleases material to the business of the
Company or the Subsidiaries or under which the Company or the
Subsidiaries holds properties described in the Prospectus are in full
force and effect; and the Company or the Subsidiaries have no notice
of any material claim of any sort which has been asserted by anyone
adverse to the rights of the Company or the Subsidiaries as owner or
as lessee or sublessee under any of the leases or subleases mentioned
above, or materially affecting or questioning the rights of the
Company or the Subsidiaries to the continued possession of the leased
or subleased premises under any such lease or sublease. Except as
disclosed in the Prospectus and other than such leases and properties
as are immaterial in the aggregate, the Company or the Subsidiaries
own or lease all such properties as are necessary to their operations
as now conducted.
(q) The Company and the Subsidiaries have all necessary
licenses, authorizations, consents and approvals and have made all
necessary filings required under any federal, state, local or foreign
law, regulation or rule, and have obtained all necessary
authorizations, consents and approvals from other persons, in order
to conduct their respective businesses, except where any failures to
obtain any such licenses, authorizations, consents or approvals, or
to make any such filings, would not, individually or in the aggregate
with all other such failures, have a Material Adverse Effect; neither
the Company nor the Subsidiaries are in violation of, or in default
under, any such license, authorization, consent or approval or any
federal, state, local or foreign law, regulation or rule or any
decree, order or judgment applicable to the Company or the
Subsidiaries the effect of which, individually or
10
in the aggregate with all other violations and defaults, would have a
Material Adverse Effect.
(r) The Company 1. makes and keeps accurate books and
records and 2. maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and
(D) the reported accountability for its assets is compared with
existing assets at reasonable intervals;
(s) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of
toxic wastes, medical wastes, hazardous wastes or hazardous
substances by the Company or any of its Subsidiaries (or, to the
knowledge of the Company, any of their predecessors in interest) at,
upon or from any of the properties now or previously owned or leased
by the Company or its Subsidiaries in violation of any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit
or which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit,
except for any violation or remedial action which would not have, or
could not be reasonably likely to have, alone or in the aggregate
with all such violations and remedial actions, a Material Adverse
Effect; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic
wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its Subsidiaries
or with respect to which the Company or any of its Subsidiaries have
knowledge, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not have or would
not be reasonably likely to have, alone or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a Material Adverse Effect; and the terms
"hazardous wastes," "toxic wastes," "hazardous substances" and
"medical wastes" shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with respect to
environmental protection;
(t) Since the respective dates as of which information is
given in the Prospectus, and except as described in or specifically
contemplated by the Prospectus: (i) the Company and the Subsidiaries
have not incurred any material liabilities or obligations, indirect,
direct or contingent, or entered into any material verbal or written
agreement or other transaction whether or not arising in the ordinary
course of business or which would result in a material reduction in
the future earnings of the Company and the Subsidiaries (taken as a
whole); (ii) there has not been any material increase in the
long-term debt of the Company and the
11
Subsidiaries (taken as a whole); (iii) there has been no material
adverse change in the Company's and the Subsidiaries relationship
with its insurance carriers, including, without limitation,
cancellation or other termination of the Company's or the
Subsidiaries' fidelity bond or any other type of insurance coverage;
(iv) except as disclosed in the Prospectus there has been no material
change in management of the Company or the Subsidiaries; (v) the
Company and the Subsidiaries have not sustained any material loss or
interference with their respective business or properties from fire,
flood, windstorm, earthquake, accident or other calamity, whether or
not covered by insurance; (vi) the Company and the Subsidiaries have
not paid or declared any dividends (except for regularly scheduled
dividends) or other distributions with respect to its capital stock
and the Company and the Subsidiaries are not in default in the
payment of principal or interest on any outstanding debt obligations;
(vii) there has not been any change in the capital stock of the
Company; and (viii) there has not been any material adverse change in
the condition (financial or otherwise), business, properties, results
of operations or prospects of the Company and the Subsidiaries, taken
as a whole.
(u) Except as disclosed in or specifically contemplated by
the Prospectus, the Company and the Subsidiaries have sufficient
trademarks, trade names, patent rights, copyrights, licenses,
approvals and governmental authorizations to conduct their businesses
as now conducted; the expiration of any trademarks, trade names,
patent rights, copyrights, licenses, approvals or governmental
authorizations would not have a Material Adverse Effect; and the
Company and the Subsidiaries have no knowledge of any material
infringement by it of trademark, trade name rights, patent rights,
copyrights, licenses, trade secret or other similar rights of others,
and, to the Company's and the Subsidiaries knowledge, there is no
claim being made against the Company or any of the Subsidiaries
regarding trademark, trade name, patent, copyright, license, trade
secret or other infringement which could have a Material Adverse
Effect.
(v) The Company has not been advised, and has no reason to
believe, that either it or any Subsidiaries is not conducting
business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business,
including, without limitation, all applicable local, state and
federal corporate and environmental laws and regulations; except
where failure to be so in compliance would not have a Material
Adverse Effect.
(w) The Company and the Subsidiaries have filed or caused to
be filed all material federal, state and foreign income and franchise
tax returns which, through the date hereof, have been required to be
filed (or obtained appropriate extensions of the filing dates, which
such extensions continue in effect as of the date hereof) and have
paid all taxes shown as due thereon; and the Company and the
Subsidiaries have no knowledge of any tax deficiency which has been
or might be
12
asserted or threatened against the Company or the Subsidiaries which
would have a Material Adverse Effect.
(x) The Company maintains insurance of the types and in the
amounts generally deemed adequate for its businesses, including, but
not limited to, general liability insurance, fidelity bond insurance
and insurance covering real and personal property owned or leased by
the Company against theft, forgery, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of
which insurance is in full force and effect.
(y) All material transactions between the Company and the
officers, directors and major stockholders of the Company that are
required to be disclosed under the Exchange Act and the Rules and
Regulations have been accurately disclosed in the Prospectus; and the
terms of each such transaction are fair to the Company and no less
favorable to the Company than the terms that could have been obtained
from unrelated parties, except as disclosed in the Prospectus.
(z) Neither the Company nor any of the Subsidiaries is, nor
after giving effect to the consummation of the transactions
contemplated herein, will be, and the Company is not directly or
indirectly controlled by, or acting on behalf of any person which is,
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended (the "1940 Act").
(aa) Except as set forth in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file
a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person.
(bb) The Company has not distributed any offering material
in connection with the offering and sale of the Common Shares other
than the Preliminary Prospectus, the Prospectus, the Registration
Statement and the other materials permitted by the Act.
(cc) Except as disclosed in the Prospectus, the Company has
not: (i) placed any securities within the last 18 months (except for
notes to evidence other bank loans and reverse repurchase agreements,
securities issuable under existing benefit plans of the Company and
securities issued as part of certain acquisitions (including the
merger of Bryn Mawr Resources and certain other similar transactions
the effect of which have been reflected in the financial statements
included in the Prospectus); (ii) had any material dealings with any
member of the NASD or any person related to or associated with such
member, other than discussions and meetings relating to the proposed
Offering and routine purchases and sales of U.S.
13
Government and agency securities and other assets; (iii) entered into
a financial or management consulting agreement except as contemplated
hereunder and except for engagement letters with Friedman, Billings,
Xxxxxx & Co., Inc., including the letter dated March 5, 1998; or
(iv) engaged any intermediary between the Representatives and the
Company in connection with the Offering, and no person is being
compensated in any manner for such service.
(dd) The Company has not taken directly or indirectly, any
action designed to cause or result in, or which has constituted or
which reasonably might be expected to constitute, the stabilization
or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Common Stock.
(ee) Except as otherwise described in the Registration
Statement, and except for shares of Common Stock issued pursuant to
the exercise of outstanding options held by officers and directors,
the Company has not sold or issued any shares of Common Stock during
the six-month period preceding the date of the Prospectus, including
any sales pursuant to Rule 144A under, or Regulation D or S of, the
Securities Act.
(ff) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating
to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida Statutes and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(gg) The Company has not relied upon the Representatives or
legal counsel for the Representatives for any legal, tax or
accounting advice in connection with the Offering.
All representations and warranties given in this Section 2 shall be
true and correct on each Closing Date and at the time of delivery of any
Common Shares. Any certificate signed by any officer of the Company and
delivered to you or to your counsel shall be deemed a representation and
warranty by the Company to you as to the matters covered thereby. Any
certificate delivered by the Company to its counsel for purposes of enabling
such counsel to render the opinions referred to in Section 7(c) will also be
furnished to the Underwriters and their counsel and shall be deemed to be
additional representations and warranties by the Company to the Underwriters
as to the matters covered thereby and the Underwriters and their counsel are
entitled to rely thereon.
SECTION 3. Representations and Warranties of the Underwriters. You,
for yourselves or on behalf of the Underwriters, as the case may be, represent
and warrant to the Company that the information set forth in the Prospectus
(i) on the cover page of the Prospectus with respect to price, underwriting
discounts and commissions and terms of offering, (ii) on the inside cover page
14
with respect to stabilization and (iii) under the caption "Underwriting" in
the Prospectus was furnished to the Company by and on behalf of the
Underwriters for use in connection with the preparation of the Registration
Statement and the Prospectus and is complete and correct in all material
respects. If applicable, the Representatives represent and warrant that they
have been authorized by each of the other Underwriters as the Representatives
to enter into this Agreement on its behalf and to act for it in the manner
herein provided.
SECTION 4. Covenants of the Company. The Company covenants and agrees
that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by
the parties hereto, to become effective. If the Registration
Statement has become or becomes effective pursuant to Rule 430A of
the Rules and Regulations, or the filing of the Prospectus is
otherwise required under Rule 424(b) of the Rules and Regulations,
the Company will file the Prospectus, properly completed, pursuant to
the applicable paragraph of Rule 424(b) of the Rules and Regulations
within the time period prescribed and will provide evidence
satisfactory to you of such timely filing. The Company will promptly
advise you in writing (i) of the receipt of any comments of the
Commission, (ii) of any request of the Commission for amendment of or
supplement to the Registration Statement (either before or after it
becomes effective), any Preliminary Prospectus or the Prospectus or
for additional information, (iii) when the Registration Statement
shall have become effective and (iv) of the issuance by the
Commission or any other government agency or authority of any stop
order suspending the effectiveness of the Registration Statement or
of the institution of any proceedings for that purpose. If the
Commission shall enter any such stop order at any time, the Company
will use its best efforts to obtain the lifting of such order at the
earliest possible moment. The Company will not file any amendment or
supplement to the Registration Statement (either before or after it
becomes effective), any Preliminary Prospectus or the Prospectus of
which you have not been furnished with a copy a reasonable time prior
to such filing or to which you reasonably object or which is not in
compliance with the Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the
Registration Statement or the Prospectus which in your reasonable
judgment may be necessary or advisable to enable the Underwriter to
continue the distribution of the Common Shares and will use its best
efforts to cause the same to become effective as promptly as
possible. The Company will fully and completely comply with the
provisions of Rule 430A of the Rules and Regulations with respect to
information omitted from the Registration Statement in reliance upon
such Rule.
15
(c) If at any time during which a prospectus relating to the
Common Shares is required to be delivered under the Act or the Rules
and Regulations any event occurs, as a result of which the
Prospectus, including any amendments or supplements, would include an
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 then existing, not
misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements, to comply with
the Act or the Rules and Regulations, the Company will promptly
advise you thereof and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or an amendment or supplement
which will effect such compliance and will use its best efforts to
cause the same to become effective as soon as possible.
(d) As soon as practicable, but not later than 45 days after
the end of the first quarter ending after one year following the
"effective date of the Registration Statement" (as defined in Rule
158(c) of the Rules and Regulations), the Company will make generally
available to its security holders an earnings statement (which need
not be audited) covering a period of 12 consecutive months beginning
after the effective date of the Registration Statement which will
satisfy the provisions of the last paragraph of Section 11(a) of the
Act.
(e) During such period as a Prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer,
the Company, at its expense, will furnish to you or mail to your
order copies of the Registration Statement, the Prospectus, the
Preliminary Prospectus and all amendments and supplements to any such
documents in each case as soon as available and in such quantities as
you may request, for the purposes contemplated by the Act. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to
the extent permitted by Regulation S-T.
(f) The Company shall cooperate with you and your counsel in
order to qualify or register the Common Shares for sale under (or
obtain exemptions from the application of) the Blue Sky laws of such
jurisdictions as you designate, will comply with such laws and will
continue such qualifications, registrations and exemptions in effect
so long as reasonably required for the distribution of the Common
Shares. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation. The Company
will advise you promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares
for offering, sale or trading in any jurisdiction or any
16
initiation or threat of any proceeding for any such purpose, and in
the event of the issuance of any order suspending such qualification,
registration or exemption, the Company, with your cooperation, will
use its best efforts to obtain the withdrawal thereof.
(g) The Company shall promptly prepare and file with the
Commission, from time to time, such reports as may be required to be
filed by the Act and the Exchange Act including, without limitation,
reports with respect to the sale of the Common Shares and the
application of the proceeds thereof as may be required in accordance
with Rule 463 under the Act.
(h) During the period of five years hereafter, the Company
will furnish to you: (i) at the same time as such are furnished to
its Stockholders generally, copies of the Annual Report of the
Company containing the consolidated balance sheet of the Company and
the Subsidiaries as of the close of such fiscal year and consolidated
statements of income, stockholders' equity and cash flows for the
year then ended and the opinion thereon of the Company's independent
public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
report filed by the Company with the Commission, the NASD or any
securities exchange; (iii) as soon as available, copies of any report
or communication of the Company mailed generally to holders of its
Common Stock; (iv) as soon as practicable after the filing thereof,
of each non-confidential report or other statement or document filed
by the Company with the Commission, or with any national securities
exchange or quotation system on which any securities of the Company
may be listed or quoted; and (v) from time to time, such other
non-confidential information concerning the Company as you may
reasonably request.
(i) The Company will use its best efforts to effect and
maintain the quotation of the Common Shares on the Nasdaq Stock
Market and to file with the Nasdaq Stock Market all documents and
notices required by the Nasdaq Stock Market of companies that have
securities that are traded in the over-the-counter market and
quotations for which are reported by the Nasdaq Stock Market.
(j) The Company will refrain during a period of 120 days
after the date of the Prospectus, without the prior written consent
of Friedman, Billings, Xxxxxx & Co., Inc. ("FBR"), from (i) offering,
pledging, selling, contracting to sell, or selling any option,
warrant, or contract to purchase, purchasing any option, warrant, or
contract to sell, granting any option for the sale of, or otherwise
disposing of or transferring, directly or indirectly, any Common
Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or filing any registration statement
under the Securities Act with respect to any of the
17
foregoing or (ii) entering into any swap or any other agreement or
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock
or any security convertible into or exchangeable for Common Stock,
whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The Company shall also cause each
executive officer and director of the Company (including Xxxxxx X.
Xxxxx) to furnish to the Representatives, on or prior to the date
hereof, a letter or letters, in form and substance satisfactory to
counsel for the Representatives, pursuant to which each such person
or entity shall agree to abide by the aforementioned restrictions,
unless they have received prior written consent from FBR, for a
period of 120 days from the date of the Prospectus. The foregoing
sentence shall not apply to (A) the Common Shares to be sold
hereunder; (B) any shares of Common Stock issued by the Company upon
the exercise of an option outstanding on the date hereof and referred
to in the Prospectus; or (C) any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock issued in connection with a merger, acquisition of another
entity, acquisition of assets or any other similar transaction.
(k) The Company will apply the net proceeds of the sale of
the Common Shares sold by it substantially in accordance with its
statements under the caption "Use of Proceeds" in the Prospectus.
(l) The Company will not distribute prior to the First
Closing Date any offering material in connection with the offering
and sale of the Common Shares other than the Preliminary Prospectus,
the Prospectus, the Registration Statement and the other materials
permitted by the Act.
(m) The Company will not take, directly or indirectly, any
action designed to cause or result in, or which has constituted or
which reasonably might be expected to constitute, the stabilization
or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Common Shares.
(n) The Company shall pay all expenses, fees, and taxes
(other than any transfer taxes and the fees and disbursements of
counsel for the Underwriters, except as set forth under Section 5
hereof and clauses (iii) and (iv) below) in connection with (i) the
preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or
supplements thereto, and the printing and furnishing of copies of
each thereof to the Underwriters and to dealers (including costs of
mailing and shipment), (ii) the preparation, issuance, and delivery
of the certificates for the Common Shares to the Underwriters,
including any stock or other transfer taxes or duties payable upon
the sale of the Common Shares to the Underwriters, (iii) the word
processing
18
and/or printing of this Agreement and any dealer agreements, and the
reproduction and/or printing and furnishing of copies thereof to the
Underwriters and to dealers (including costs of mailing and
shipment), (iv) filing fees for the qualification of the Common
Shares for offering and sale under state laws and the determination
of their eligibility for investment under state law as aforesaid and
the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v) any
filing for review of the public offering of the Common Shares by the
NASD, (vi) the fees and expenses of any transfer agent or registrar
for the Common Shares, (vii) the fees and expenses incurred in
connection with the inclusion of the Common Shares in the Nasdaq
Stock Market, and (viii) the performance of the Company's other
obligations hereunder
(o) The Company will not rely upon the Representatives or
legal counsel for the Representatives for any legal, tax or
accounting advice in connection with the Offering.
You may, in your sole discretion, waive in writing the performance by
the Company of any one or more of the foregoing covenants or extend the time
for their performance.
SECTION 5. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective or
is terminated, the Company agrees to pay all costs, fees and expenses incurred
in connection with the performance of its obligations hereunder and in
connection with the transactions contemplated hereby, including without
limiting the generality of the foregoing, (i) all expenses incident to the
issuance and delivery of the Common Shares (including all printing and
engraving costs), (ii) all fees and expenses of the registrar and transfer
agent of the Common Stock, (iii) all necessary issue, transfer and other stamp
taxes in connection with the issuance and sale of the Common Shares to you and
the Underwriters, (iv) all fees and expenses of the Company's counsel and the
Company's independent accountants, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution
of the Registration Statement, each Preliminary Prospectus and the Prospectus
(including all exhibits and financial statements) and all amendments and
supplements provided for herein, (vi) all filing fees incurred by the Company
or the Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Common Shares for offer and sale under the Blue Sky laws, (vii) the filing fee
of the National Association of Securities Dealers, Inc., (viii) all the costs
and expenses incurred by the Company in making road show presentations with
respect to the Offering, (ix) all costs of preparing, printing and
distribution of bound volumes of the transaction documents for you and your
counsel, and (x) all other fees, costs and expenses referred to in Item 14 of
the Registration Statement (except as otherwise set forth in this Agreement).
SECTION 6. Conditions to the Obligations of You and the Underwriters.
The obligations of you and the Underwriters to purchase and pay for the Firm
Common Shares on the First Closing Date and the Optional Common Shares on the
Second Closing Date shall be subject to the
19
accuracy in all material respects of the representations and warranties on the
part of the Company herein set forth as of the date hereof and as of the First
Closing Date or the Second Closing Date, as the case may be, to the accuracy
in all material respects of the statements of Company officers made pursuant
to the provisions hereof, to the performance in all material respects by the
Company of its obligations hereunder, and to the following additional
conditions:
(a) The Registration Statement shall have become effective
not later than 5:00 P.M., Washington, D.C. Time, on the date of this
Agreement, or at such later time as shall have been consented to by
you; if the filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b) of the Rules and Regulations, the
Prospectus shall have been filed in the manner and within the time
period required by Rule 424(b) of the Rules and Regulations; and
prior to such Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
and no proceedings for that purpose shall have been instituted or
shall be pending or, to the knowledge of the Company or you, shall be
contemplated by the Commission and no suspension of the qualification
of the Common Shares for offering or sale in any jurisdiction, or the
initiation of any proceedings for any of such purposes, shall have
occurred or be threatened; and any request of the Commission for
inclusion of additional information in the Registration Statement, or
otherwise, shall have been complied with to your reasonable
satisfaction. The Registration Statement and all amendments thereto,
or modifications thereof, if any, and the Prospectus and all
amendments or supplements thereto, or modifications thereof, if any,
shall not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they are made, not misleading and no amendment or supplement to
the Registration Statement or Prospectus shall have been filed to
which the Underwriters shall have objected in writing.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration
Statement and Prospectus, (i) there shall not have been any change in
the capital stock of the Company or the Subsidiaries or any material
change in the indebtedness (other than in the ordinary course of
business) of the Company or the Subsidiaries, (ii) except as set
forth or contemplated by the Registration Statement or the
Prospectus, no material verbal or written agreement or other
transaction shall have been entered into by the Company or the
Subsidiaries, which is not in the ordinary course of business and
which could result in a material reduction in the future earnings of
the Company and the Subsidiaries, taken as a whole, (iii) no loss or
damage (whether or not insured) to the property of the Company or the
Subsidiaries shall have been sustained which materially and adversely
affects the condition (financial or otherwise), business, results of
operations or prospects of the Company and the Subsidiaries, taken as
a whole, (iv) no legal or governmental action, suit or
20
proceeding affecting the Company or the Subsidiaries which is
material to the Company and the Subsidiaries, taken as a whole, or
which affects or may affect the transactions contemplated by this
Agreement shall have been instituted or threatened, (v) no
enforcement proceeding, whether formal or informal, shall have been
commenced against the Company or the Bank by any governmental agency
nor shall any such proceeding have been instituted, threatened or
recommended, and (vi) there shall not have been any material change
in the condition (financial or otherwise), business, management,
results of operations or prospects of the Company and the
Subsidiaries, taken as a whole, which makes it impractical or
inadvisable in your judgment to proceed with the public offering or
purchase the Common Shares as contemplated hereby.
(c) There shall have been furnished to you, individually or
as Representatives of the Underwriters, as the case may be, on each
Closing Date, in form and substance reasonably satisfactory to you,
except as otherwise expressly provided below:
(i) An opinion of Ledgewood Law Firm, P.C., counsel
for the Company, addressed to you, or you as Representatives
of the Underwriters, as the case may be, and dated the First
Closing Date, or the Second Closing Date, as the case may
be, in the form of Exhibit A to this Agreement.
(ii) Such opinion or opinions of Silver, Xxxxxxxx
& Taff, L.L.P., counsel for the Underwriters dated the First
Closing Date or the Second Closing Date, as the case may be,
with respect to the incorporation of the Company, the
sufficiency of all corporate proceedings and other legal
matters relating to this Agreement, the validity of the
Common Shares, the Registration Statement and the Prospectus
and other related matters as you may reasonably require, and
such counsel shall have received such documents and shall
have exhibited to them such papers and records as they may
reasonably request for the purpose of enabling them to pass
upon such matters. In connection with such opinions, such
counsel may rely on the opinion of Ledgewood Law Firm, P.C.
and representations or certificates of officers of the
Company and governmental officials.
(iii) A certificate of the Company executed by the
Chairman of the Board or President and the Chief Financial
or Accounting Officer, dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
21
(1) The representations and warranties of
the Company set forth in Section 2 of this
Agreement are true and correct in all material
respects as of the date of this Agreement and as of
the First Closing Date or the Second Closing Date,
as the case may be, and the Company has complied in
all material respects with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied on or prior to such Closing
Date;
(2) The Commission has not issued any
order preventing or suspending the use of the
Prospectus or any Preliminary Prospectus filed as a
part of the Registration Statement or any amendment
thereto; no stop order suspending the effectiveness
of the Registration Statement has been issued; and
to the best of the knowledge of the respective
signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the
Act;
(3) Neither the Registration Statement nor
the Prospectus nor any amendment or supplement
thereto includes any untrue statement of a material
fact or omits to state any material fact required
to be stated therein, or necessary to make the
statements therein, in the light of the
circumstances under which they were made, not
misleading;
(4) Since the initial date on which the
Registration Statement was filed with the
Commission, no agreement, written or oral,
transaction or event has occurred which should have
been set forth in an amendment to the Registration
Statement or in a supplement to or amendment of any
prospectus which has not been disclosed in such a
supplement or amendment;
(5) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus and except as disclosed in or
contemplated by the Prospectus, (i) no material
adverse change in the business, properties,
prospects, results of operations, or condition
(financial or otherwise) of the Company and its
Subsidiaries taken as a whole shall have occurred
or become known, (ii) no transaction which is
material and unfavorable to the Company shall have
been entered into by the Company or
22
any of its Subsidiaries, and (iii) the Company and
the Subsidiaries, taken as a whole, have not
sustained a material loss or damage by strike,
fire, flood, windstorm, accident or other calamity
(whether or not insured).
(iv) On the date before this Agreement is executed
and also on the First Closing Date and the Second Closing
Date a letter addressed to you or to you as Representatives
of the Underwriters, as the case may be, from Xxxxx Xxxxxxxx
LLP, independent accountants, the first one to be dated the
day before the date of this Agreement, the second one to be
dated the First Closing Date and the third one (in the event
of a Second Closing) to be dated the Second Closing Date, in
form and substance reasonably satisfactory to you to the
effect that:
(1) They are independent accountants within
the meaning of the Act and the applicable
published rules and regulations
thereunder;
(2) In their opinion, the consolidated
financial statements of the Company and
its subsidiaries audited by them and
included in the Registration Statement
comply as to form in all material respects
with the applicable accounting
requirements of the Act and the published
rules and regulations thereunder with
respect to registration statements on Form
S-3;
(3) On the basis of procedures (but not an
audit in accordance with generally
accepted auditing standards) consisting
of:
(a) Reading the minutes of meetings of
the stockholders and the Board of
Directors of the Company and its
consolidated subsidiaries since
September 30, 1997 as set forth in
the minute books through a
specified date not more than five
business days prior to the date of
delivery of any such letter;
(b) Performing the procedures
specified by the American
Institute of Certified Public
Accountants for a review of
interim financial information as
described in SAS No. 71,
23
interim Financial Information, on
the unaudited condensed interim
financial statements of the
Company and its consolidated
subsidiaries included in the
Registration Statement under the
caption "Summary of Recent
Developments" and reading the
unaudited interim financial data
for the period from the date of
the latest audited balance sheet
included in the Registration
Statement to the date of the
latest available interim financial
data; and
(c) Making inquires of certain
officials of the Company who have
responsibility for financial and
accounting matters regarding the
specific items for which
representations are requested
below;
nothing has come to their attention as a
result of the foregoing procedures that
caused them to believe that:
(i) the unaudited condensed
interim financial
statements, included in
the Registration
Statement or incorporated
by reference into the
Registration Statement,
do not comply as to form
in all material respects
with the applicable
accounting requirements
of the Act and the
published rules and
regulations thereunder;
(ii) any material
modifications should be
made to the unaudited
condensed interim
financial statements,
included in the
Registration Statement or
incorporated by reference
into the Registration
Statement, for them to be
in conformity with
generally accepted
accounting principles;
24
(iii) (i) at the date of the
latest available interim
financial data and at a
specified date not more
than five business days
prior to the date of
delivery of such letter,
there was any change in
the capital stock,
increase in long-term
debt or any decreases in
consolidated net current
assets (working capital)
or stockholders' equity
of the Company and
subsidiaries consolidated
as compared with amounts
shown in the latest
balance sheet included in
the Registration
Statement or (ii) for the
period from the date of
the latest available
financial data to a
specified date not more
than five business days
prior to delivery of such
letter, there were any
decreases, as compared
with the corresponding
period in the preceding
year, in consolidated net
income or in the total or
per share amounts of net
income, except in all
instances for changes or
decreases which the
Registration Statement
discloses have occurred
or may occur, or they
shall state any specific
changes or decreases.
(4) The letter shall also state that they have:
(a) Read the dollar amounts and percentages
and other financial information of the
Company contained in the Registration
Statement or incorporated by reference
therein and agreed such dollar amounts and
percentages respectively to appropriate
accounts in the Company's accounting
records subject to its system of internal
accounting controls and to schedules
prepared by the Company therefrom;
(b) Read the dollar amounts listed as
outstanding under "Capitalization" and
agreed such amounts or totals
25
thereof to the Company's accounting
records subject to its system of internal
accounting controls; and
(c) Read the dollar and per share amounts
listed under "Summary Consolidated
Financial Data" and "Selected Consolidated
Financial Data" and agreed such amounts to
audited financial statements, unaudited
condensed interim financial statements, or
schedules prepared by the Company from its
accounting records subject to its system
of internal accounting controls.
(v) The NASD shall not have raised any objection
with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(vi) The Representatives shall have received
evidence reasonably satisfactory to them that the executive
officers and directors of the Company (including Xxxxxx X.
Xxxxx) shall have agreed to refrain, during a period of 120
days after the date of the Prospectus, without the prior
written consent of FBR and (ii) Xxxxxxxx, Xxxxxxxx Xxxxxx
Investment Management, Inc. ("Investment") shall have agreed
to refrain, during the period described below, without the
prior written consent of the Company, from (A) offering,
pledging, selling, or contracting to sell any option,
warrant, or contract to purchase, purchasing any option,
warrant, or contract to sell, granting any option for the
sale of, or otherwise disposing of or transferring, directly
or indirectly, any Common Stock or any securities
convertible into or exercisable or exchangeable for Common
Stock, or requesting that the Company file a registration
statement under the Securities Act with respect to any of
the foregoing, or (B) entering into any swap or any other
agreement or transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of
ownership of the Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock,
whether any such swap or transaction described in clause (A)
or (B) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise.
(vii) The Company shall have furnished to the
Underwriters such other documents and certificates as to the
accuracy and completeness of any statement in the
Registration Statement and the
26
Prospectus or any amendment or supplement thereto, as of the
Closing Date, as the Underwriters may reasonably request.
(viii) The Company shall have performed such
obligations under this Agreement as are to be performed by
the terms hereof at or before the Closing Date.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Silver, Xxxxxxxx & Taff, L.L.P., counsel for the Underwriters.
The Company shall furnish you with such manually signed or conformed copies of
such opinions, certificates, letters and documents as you reasonably request.
The letter described in subparagraph (c)(v) above may be an original or
facsimile of the original.
If any condition to you or the Underwriters' obligations hereunder to
be satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon written notification by you as
Representatives to the Company without liability on the part of any
Underwriter or the Company, except for the expenses to be paid or reimbursed
by the Company pursuant to Section 5 hereof and except to the extent provided
in Section 9 hereof.
SECTION 7. Effectiveness of Registration Statement. Each party to
this Agreement will use its best efforts to cause the Registration Statement
to become effective, to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement and, if such stop order be issued,
to obtain as soon as possible the lifting thereof.
SECTION 8. Indemnification.
(a) The Company agrees to indemnify, defend and hold
harmless each Underwriter and each person, if any, who controls an
Underwriter, as the case may be, within the meaning of the Act
against any losses, claims, damages, liabilities or expenses, joint
or several, to which an Underwriter or such controlling person may
become subject, under the Act, the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or other federal or state statutory
law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the
written consent of the Company), insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or based upon
written information supplied by the Company filed in any state or
jurisdiction to register or qualify any or all of the Common Shares
or to claim an exemption therefrom, or provided to any state or
jurisdiction to exempt the Company as a broker-dealer or its
officers, directors and employees
27
as broker-dealers or agents, under the securities laws thereof
(collectively, the "Blue Sky Application") or arise out of or are
based upon the omission or alleged omission to state in any of them a
material fact required to be stated therein or necessary to make the
statements in any of them not misleading, or arise from any theory of
liability whatsoever relating to or arising from or based upon the
Registration Statement, any Preliminary Prospectus, the Prospectus,
or any amendment or supplement thereto, or arise out of or are based
in whole or in part on any inaccuracy in the representations and
warranties of the Company contained herein or any failure of the
Company to perform its obligations hereunder or under law; and
subject to paragraph 8(c) will reimburse each Underwriter and each
such controlling person for any legal and other expenses as such
expenses are reasonably incurred by such Underwriter or such
controlling person in connection with investi gating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with the information furnished to the
Company pursuant to Section 3 hereof; provided, further, that the
foregoing indemnity with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter from whom the person
asserting any such loss, claim, damage or liability purchased the
Common Shares that are the subject thereof if such person did not
receive a copy of the Prospectus (or the Prospectus as supplemented)
at or prior to the confirmation of the sale to such person in any
case where such delivery is required by the Act and the untrue
statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as supplemented).
(b) You or each Underwriter, as the case may be, will
severally indemnify, defend, 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 the Act, against any losses, claims, damages,
liabilities or expenses to which the Company or any such director,
officer, or controlling person may become subject, under the Act, the
Exchange Act, or other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent
of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon any untrue or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus,
or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material
fact required to
28
be stated therein or necessary to make the statements therein not
misleading, in each such case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registra tion Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 3 hereof;
and will reimburse the Company or any such director, officer, or
controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer, or
controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action. In addition to the other obligations
under this Section 8(b), you or each Underwriter, as the case may be,
severally agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising
out of or based upon any statement or omission, or any alleged
statement or omission, described in this Section 8(b) which relates
to information furnished to the Company pursuant to Section 3 hereof,
it will reimburse the Company (and, to the extent applicable, each
officer, director, controlling person) on a quarterly basis for all
reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of your
or the Underwriters' obligation to reimburse the Company (and, to the
extent applicable, each officer, director, controlling person) for
such expenses and the possibility that such payments might later be
held to have been improper by a court of competent jurisdiction. To
the extent that any such interim reimbursement payment is so held to
have been improper, the Company (and, to the extent applicable, each
officer, director or controlling person) shall promptly return it to
the Underwriters together with interest, compounded daily, determined
on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made to the Company within 30 days of a
request for reimbursement, shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in
addition to any liability which you or such Underwriter, as the case
may be, may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section, notify the
indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party for
indemnity, contribution or otherwise except to the extent the
indemnifying party is prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled
to participate in, and,
29
to the extent that it may wish, jointly with all other indemnifying
parties similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may
be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the
right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with
the defense thereof unless (i) the indemnified party shall have
employed such counsel in connection with the assumption of legal
defenses in accordance with the proviso to the next preceding
sentence or (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party
(it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel
representing the indemnified parties who are parties to such action;
provided, however, if an indemnified party in any such action shall
have concluded that there may be legal defenses or rights available
to it which are different from, in actual or potential conflict with,
or additional to those available to other indemnified parties, such
party shall have the right to select an additional law firm to act as
its separate counsel at its own expense).
(d) If the indemnification provided for in this Section 8 is
required by its terms but is for any reason held to be unavailable to
or otherwise insufficient to hold harmless an indemnified party under
subsections (a), (b) or (c) of this Section 8 in respect of any
losses, claims, damages, liabilities or expenses referred to herein,
then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of any
losses, claims, damages, liabilities or expenses referred to herein
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and you or the Underwriters, as the
case may be, from the offering of the Common Shares or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and you or the Underwriters, as the
case may be, in connection with the statements or omissions or
inaccuracies in
30
the representations and warranties herein which resulted in such
losses, claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriters, on
the other hand, shall be deemed to be in the same respective
proportions as the total proceeds (net of underwriting discounts and
commissions, but before deducting expenses) from the offering of the
Common Stock received by the Company and the total underwriting
commissions received by the Underwriters bear to the aggregate public
offering price of the Common Stock. The relative fault of the Company
and the Underwriters 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 or
the inaccurate or the alleged inaccurate representation and/or
warranty relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue
statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the
limitations set forth in subsection (c) of this Section 8, any legal
or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The
provisions set forth in subsection (c) of this Section 8 with respect
to notice of commencement of any action shall apply if a claim for
contribution is to be made under this subsection (d); provided,
however, that no additional notice shall be required with respect to
any action for which notice has been given under subsection (c) for
purposes of indemnification. The Company and you or the Underwriters,
as the case may be, agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined solely by pro
rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in this
paragraph. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of
the amount of the total underwriting discounts and commissions
received by such Underwriter in connection with the Common Shares
underwritten by it and distributed to the public. 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.
(e) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in
Sections 8(a) and 8(b) hereof, including the amounts of any requested
reimbursement payments and the method of determining such amounts,
shall be settled by a judge in a court of law, with both parties
hereby expressly waiving a trial by jury.
31
SECTION 9. Default of Underwriters. It shall be a condition to this
Agreement and the obligation of the Company to sell and deliver the Common
Shares hereunder, and a condition of your obligations or the obligation of
each Underwriter, as the case may be, to purchase the Common Shares in the
manner as described herein, that, except as hereinafter in this paragraph
provided, each of you or the Underwriters, as the case may be, shall purchase
and pay for all the Common Shares agreed to be purchased by you or such
Underwriter hereunder upon tender to you individually or as the
Representatives of the Underwriters, of all such shares in accordance with the
terms hereof. If any Underwriter or Underwriters default in your or their
obligations to purchase Common Shares hereunder on either the First or Second
Closing Date and the aggregate number of Common Shares which such defaulting
Underwriter or Underwriters agreed but failed to purchase on such Closing Date
does not exceed 10% of the total number of Common Shares which the
Underwriters are obligated to purchase on such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Common Shares which
such defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate number
of Common Shares with respect to which such default occurs is more than the
above percentage and arrangements satisfactory to the Representatives and the
Company for the purchase of such Common Shares by other persons are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company except
for the expenses to be paid by the Company pursuant to Section 5 hereof and
except to the extent provided in Section 9 hereof.
If applicable, in the event that Common Shares to which a default
relates are to be purchased by the nondefaulting entities or by another party
or parties, you or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five business days
in order that the necessary changes in the Registration Statement, Prospectus
and any other documents, as well as any other arrangements, may be effected.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve
you or a defaulting Underwriter from liability for its default.
SECTION 10. Effective Date. This Agreement shall become effective
immediately as to Sections 5, 8, 11 and 12 and, as to all other provisions,
(i) if at the time of execution of this Agreement the Registration Statement
has not become effective, at 5:00 P.M., New York time, on the first full
business day following the effectiveness of the Registration Statement, or
(ii) if at the time of execution of this Agreement the Registration Statement
has been declared effective, at 9:00 A.M., New York time, on the first full
business day following the date of execution of this Agreement; but this
Agreement shall nevertheless become effective at such earlier time after the
Registration Statement becomes effective as you may determine on and by notice
to the Company or by release of any of the Common Shares for sale to the
public. For the purposes of this Section 10, the Common Shares shall be deemed
to have been so released upon the release for publication of any newspaper
advertisement relating to the Common Shares or upon the release by you of
telegrams (i) advising the Underwriters that the Common Shares are released
for public offering or (ii) offering the Common Shares for sale to securities
dealers, whichever may occur first.
32
SECTION 11. Termination. The obligations of the several Underwriters
hereunder shall be subject to termination in the absolute discretion of the
Representatives, at any time prior to the Closing Date, (i) if any of the
conditions specified in Section 6 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, or (ii) if there has been since
the respective dates as of which information is given in the Registration
Statement, any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business, prospects,
management, properties, assets, results of operations or condition (financial
or otherwise) of the Company, whether or not arising in the ordinary course of
business, or (iii) if there has occurred any outbreak or escalation of
hostilities or other national or international calamity or crisis or change in
economic, political or other conditions the effect of which on the financial
markets of the United States is such as to make it, in the judgment of the
Representatives, impracticable to market the Common Shares or enforce
contracts for the sale of the Common Shares, or (iv) if trading in any
securities of the Company has been suspended by the Commission or by Nasdaq or
if trading generally on the New York Stock Exchange or in the Nasdaq
over-the-counter market has been suspended (including automatic halt in
trading pursuant to market-decline triggers other than those in which solely
program trading is temporarily halted), or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been
fixed, or maximum ranges for prices for securities have been required, by such
exchange or the NASD or Nasdaq or by order of the Commission or any other
governmental authority, or (v) if there has been any downgrading in the rating
of any of the Company's debt securities or preferred stock by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Securities Act), or (vi) any federal or state statute,
regulation, rule or order of any court or other governmental authority has
been enacted, published, decreed or otherwise promulgated which in the
reasonable opinion of the Representatives materially adversely affects or will
materially adversely affect the business or operations of the Company, or
(viii) any action has been taken by any federal, state or local government or
agency in respect of its monetary or fiscal affairs which in the reasonable
opinion of the Representatives has a material adverse effect on the securities
markets in the United States.
If the Representatives elect to terminate this Agreement as provided
in this Section 11, the Company and the Underwriters shall be notified
promptly by telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Common Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply in all material respects with any of the
terms of this Agreement, the Company shall not be under any obligation or
liability under this Agreement (except to the extent provided in Sections 5
and 9 hereof) and the Underwriters shall be under no obligation or liability
to the Company under this Agreement (except to the extent provided in Section
9 hereof) or to one another hereunder.
SECTION 12. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the parties hereto and
33
of their respective officers set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by
or on behalf of the Underwriters, the Company or any of its or their partners,
officers or directors or any controlling person, as the case may be, and will
survive delivery of and payment for the Common Shares sold hereunder and any
termination of this Agreement.
SECTION 13. Notices. All communications hereunder shall be in writing
and, if sent to the Representatives shall be mailed, delivered or telegraphed
and confirmed to you at Friedman, Billings, Xxxxxx & Co., Inc., 0000
Xxxxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 Attention: Compliance
Department, with a copy to Silver, Xxxxxxxx & Taff, L.L.P., 0000 Xxx Xxxx
Xxxxxx, X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X.
Xxxxxxxxxx, P.C.; and if sent to the Company shall be mailed, delivered or
telegraphed and confirmed to the Company Resource America, Inc., 0000 Xxxxxx
Xxxxxx, Xxxxxx Xxxxx, Xxxxxxxxxxxx, XX 00000, with a copy to Ledgewood Law
Firm, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX; Attention: X. Xxxx Xxxxxxxxxx,
Esq. The Company or you may change the address for receipt of communications
hereunder by giving notice to the others.
SECTION 14. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, and to the benefit of the officers and
directors and controlling persons referred to in Section 9, and in each case
their respective successors, personal representatives and assigns, and no
other person will have any right or obligation hereunder. Notwithstanding the
foregoing, this Agreement shall not be assignable by the parties. The term
"successors" shall not include any purchaser of the Common Shares as such from
the Underwriters merely by reason of such purchase.
SECTION 15. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes) as
are necessary to make it valid and enforceable.
SECTION 16. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of Virginia.
SECTION 17. General. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. This Agreement may be executed in
several counterparts, each one of which shall be an original, and all of which
shall constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the
34
parties only and will not affect the construction or interpretation of this
Agreement. This Agreement may be amended or modified, and the observance of
any term of this Agreement may be waived, only by a writing signed by the
Company and you.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon
it will become a binding agreement between the Company and the Underwriters,
all in accordance with its terms.
Very truly yours,
RESOURCE AMERICA, INC.
By: ____________________________________
Name: Xxxxxx X. Xxxxx
Title: Chairman of the Board of
Directors and President
The foregoing Underwriting Agreement is hereby confirmed and accepted by us in
Arlington, Virginia as of the date first above written.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXX XXXXXXXXXX XXXXX INC.
BY: FRIEDMAN, BILLINGS, XXXXXX &
CO., INC.
By: _____________________________
Name: Xxxxx Xxxxxxxxx
Title: Managing Director
For itself and as Representative
of the Several Underwriters in the
attached Schedule A.
35
SCHEDULE A
----------
NAME OF UNDERWRITER NUMBER OF SHARES
OF
COMMON STOCK
Friedman, Billings, Xxxxxx & Co., Inc...........................
BancAmerica Xxxxxxxxx Xxxxxxxx..................................
Xxxxxx Xxxxxxxxxx Xxxxx Inc.....................................
[Other Underwriters]............................................
36
EXHIBIT A
The Company shall have furnished to the Underwriters, at the Closing
Date, an opinion of the Ledgewood Law Firm P.C., counsel for the Company,
addressed to the Representative and dated each Closing Date, in form and
substance satisfactory to Silver, Xxxxxxxx & Taff, LLP, counsel for the
Underwriters, stating that:
(A) Each of the Company and its subsidiaries (the "Subsidiaries") has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of their respective jurisdictions of incorporation and
each is duly qualified to do business as a foreign corporation and is in good
standing in all other jurisdictions where the ownership or leasing of
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a Material Adverse Effect
on the Company and Subsidiaries, taken as a whole, and the Company and the
Subsidiaries have all necessary corporate power and authority to own their
properties and conduct their business as described in the Registration
Statement and Prospectus;
(B) The authorized, issued and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the Prospectus
at the dates indicated therein; the outstanding shares of the Company's
capital stock conform in all material respects to the description thereof
contained in the Prospectus; the shares of capital stock outstanding prior to
the issuance of the Common Shares have been duly and validly issued and are
fully paid and nonassessable and were not issued in violation of any
preemptive rights of any other stockholders of the Company; the Common Shares
have been duly authorized and, when issued and delivered in accordance with
the terms of the Underwriting Agreement, will be duly and validly issued and
outstanding, fully paid and non-assessable and conform in all material
respects to the description thereof in the Registration Statement and
Prospectus; the Common Shares will not be issued in violation of or subject to
any statutory preemptive rights or any preemptive rights set forth in the
Certificate of Incorporation or Bylaws of the Company or, to the best of such
counsel's knowledge, other rights to subscribe for or purchase any securities;
without limiting the foregoing, there are no statutory preemptive or any
preemptive rights set forth in the Certificate of Incorporation or Bylaws of
the Company or, to the best of our knowledge, other rights to subscribe for or
purchase any of the Common Shares;
(C) All of the issued and outstanding shares of capital stock of the
Subsidiaries have been duly and validly authorized and issued and are fully
paid and nonassessable and are owned of record, and, to the best of our
knowledge, beneficially, by the Company. To the best of our knowledge, all
such shares of capital stock of the Subsidiaries are so owned free and clear
of all perfected and other liens, encumbrances, equities, claims, security
interests, voting trusts or other defects of title whatsoever and, except as
disclosed in the Prospectus, neither the Company nor the Subsidiaries own any
equity interest in any other entity;
(D) To the best of our knowledge, except as disclosed in or
specifically contemplated by, the Prospectus, there are no outstanding
options, warrants or other rights calling for the issuance of, and no
commitments, plans or arrangements to issue, any shares of capital stock of
the Company or any securities convertible into or exchangeable for capital
stock of the Company and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to
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convert any obligations into shares of capital stock or ownership interests in
the Subsidiaries are outstanding;
(E)(1) The Registration Statement and the Rule 462(b) Registration
Statement, if any, have become effective under the Act, and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement or preventing the use of the Prospectus has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated by the Commission; any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) of the Rules and Regulations has
been made in the manner and within the time period required by such Rule
424(b);
(2) The Registration Statement, the Prospectus and each amendment or
supplement thereto (except for the financial statements, schedules and other
financial or statistical information contained or included therein as to which
we need express no opinion) comply as to form in all material respects with
the requirements of the Act and the Rules and Regulations;
(3) To the best of such counsel's knowledge, there are no franchises,
leases, contracts, agreements or documents of a character required to be
disclosed in the Registration Statement on Form S-3 or the Prospectus or to be
filed as exhibits to the Registration Statement or to the Company's Annual
Report on Form 10-K which are not disclosed or filed, as required;
(4) To the best our knowledge, there are no legal or governmental
actions, suits or proceedings pending or threatened against the Company or any
of its Subsidiaries or any of their respective properties, at law or in equity
or before or by any court, governmental authority or administrative or
regulatory authority, which are required to be summarized or described in the
Prospectus which are not summarized or described as required;
(5) To the best of our knowledge, the Company and the Subsidiaries
have obtained all material licenses, permits and other governmental
authorizations currently required for the conduct of their business except
where the failure to obtain the same would not have a Material Adverse Effect
on the Company; and all material licenses, permits and other governmental
authorizations, leases and subleases known to us are in full force and effect
and, to the best of such counsel's knowledge, the Company is in all material
respects complying therewith.
(6) Such counsel does not know of any statutes or regulations
required to be described in the Prospectus which are not so described. To the
best of our knowledge, except as disclosed in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
Subsidiary is a party or as to which any property of the Company or any
Subsidiary is the subject which, if determined adversely to the Company or any
such Subsidiary, would individually or in the aggregate have a Material
Adverse Effect on the Company; and, except as disclosed in the Prospectus, to
our knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(F) The Company has all necessary corporate power and authority to
enter into the Underwriting Agreement and to sell and deliver the Common
Shares to be sold by it to you and the Underwriters, as the case may be; the
Underwriting Agreement has been duly and validly authorized by all necessary
corporate action of the Company, has been duly and validly executed and
delivered
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by and on behalf of the Company, and is a valid and binding agreement of the
Company enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, receivership, conservatorship or other similar laws,
regulations or procedures of general applicability relating to or effecting
enforcement of the rights of creditors of the Company, or by general equity
principles and the discretion of the court before which any proceeding is
brought (regardless of whether enforceability is considered in a proceeding in
equity or at law) and, with respect to the Underwriting Agreement, except as
to those provisions relating to indemnity or contribution for liabilities
arising under the Act as to which no opinion need be expressed; and no
approval, authorization, order, consent registration, filing, qualification,
license or permit of or with any court, regulatory, administrative or other
governmental body is required for the execution and delivery of the
Underwriting Agreement by the Company or the consummation of the transactions
contemplated by the Underwriting Agreement, except such as have been obtained
and are in full force and effect under the Act and such as may be required
under applicable blue sky laws in connection with the purchase and
distribution of the Common Shares by the Underwriters, the clearance of such
offering with the NASD, and the listing of the Common Shares by the Nasdaq
Stock Market.
(G) The execution and performance of the Underwriting Agreement and
the consummation of the transactions therein contemplated, and the application
of the proceeds from the sale of the Common Shares as contemplated by the
Registration Statement will not conflict with, result in the breach of, or
constitute, either by themselves or upon notice or the passage of time or
both, a default, or give rise to any right to accelerate the maturity of or
require the prepayment of any indebtedness, or a violation under any
agreement, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument known to us 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 its or their property may be bound or affected or, violate any statute,
judgment, decree, order, rule or regulation known to us of any court or
governmental body having jurisdiction over the Company or the Subsidiaries or
any of its or their property; which conflict, breach, default, right to
accelerate, or violation would have a Material Adverse Effect on the Company
and the Subsidiaries, taken as a whole, or violate any of the provisions of
the Certificate of Incorporation or Bylaws of the Company or any of the
Subsidiaries, or result in the creation or imposition of any material lien,
charge, or encumbrance upon or with respect to any of the properties now owned
or hereafter acquired by the Company or any of its Subsidiaries;
(H) Neither the Company nor any Subsidiary is in violation nor will
the Company's performance of its obligations under this Agreement result in a
violation of their respective Certificates of Incorporation or Bylaws, be in
breach of or default with respect to any provision of any agreement, mortgage,
deed of trust, lease franchise, license, indenture, permit or other instrument
filed as an exhibit to the Registration Statement to which the Company or any
of the Subsidiaries is a party or by which it or any of its properties may be
bound or affected, except where such breach or default would not have a
Material Adverse Effect on the Company and the Subsidiaries, taken as a whole;
and, to the best of such counsel's knowledge, the Company and the Subsidiaries
are in compliance with all laws, rules, regulations, judgments, decrees, order
and statutes of any court or jurisdiction to which they are subject, except
where noncompliance would not have a Material Adverse Effect on the Company
and the Subsidiaries, taken as a whole;
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(I) Except as set forth in the Prospectus under the caption "Shares
Eligible for Future Sale" and except for certain residual "piggy-back" and
demand registration rights attaching to 983,150 shares, the registration of
which is referred to therein, to the best of our knowledge no holders of
securities of the Company have rights which have not lapsed or been waived to
the registration of shares of Common Stock or other securities of the Company,
because of the filing of the Registration Statement by the Company or the
offering contemplated hereby;
(J) The form of certificate used to evidence the Company's Common
Stock complies in all material respects with all applicable statutory
requirements, any applicable requirements of the Certificate of Incorporation
and Bylaws of the Company.
(K) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
Such counsel shall also state that it has been advised by the NASD
that the Company's Common Stock, including the Common Shares, have been
approved for quotation on the Nasdaq National Market upon notice of issuance.
In addition, such counsel shall state that they have participated in
conferences with the officers and other representatives of the Company,
representatives of the independent certified public accountants of the
Company, and representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus were discussed and, although such
counsel is not passing upon and does not assume responsibility for the
accuracy, completeness, or fairness of the statements contained in the
Registration Statement or Prospectus (except as and to the extent stated in
subparagraphs B, D, E and J above), on the basis of the foregoing nothing has
come to the attention of such counsel that causes them to believe either that
the Registration Statement or any amendment thereto, at the time such
Registration Statement or amendment became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or that the
Prospectus contains an untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading (it being
understood that, in each case, such counsel need express no view with respect
to the financial statements and other financial and statistical data included
in the Registration Statement or Prospectus).
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