EXHIBIT 1.1
3,000,000 SHARES
HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED AUGUST ___, 2003
JMP SECURITIES LLC
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
3,000,000 SHARES OF COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
August __, 2003
JMP SECURITIES LLC
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
As Representatives of the Several Underwriters
c/o JMP SECURITIES LLC
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. Hanover Capital Mortgage Holdings, Inc., a Maryland
corporation (the "COMPANY), proposes to issue and sell to the several
underwriters named in Schedule A (the "List of Underwriters") attached hereto
(collectively, the "UNDERWRITERS") an aggregate of 3,000,000 shares (the "FIRM
OFFERED SHARES") of its Common Stock, par value $.01 per share (the "COMMON
STOCK") in accordance with the terms and conditions set forth in this
Underwriting Agreement (the "AGREEMENT"). In addition, the Company has granted
to the Underwriters an option to purchase up to an additional 450,000 shares
(the "OPTIONAL OFFERED SHARES") of Common Stock, as provided in Section 2
("Purchase, Sale, and Delivery of the Offered Shares"). The Firm Offered Shares
and, if and to the extent such option is exercised, the Optional Offered Shares
are collectively called the "OFFERED SHARES." JMP Securities LLC ("JMP") and
Xxxxxx, Xxxxxxxx & Company, Incorporated have agreed to act as representatives
of the several Underwriters (in such capacity, the "REPRESENTATIVES") in
connection with the offering and sale of the Offered Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-2 (File No.
333-[___]), which contains a form of prospectus to be used in connection with
the public offering and sale of the Offered Shares. Such registration statement,
as amended, including the financial statements, exhibits, and schedules thereto,
in the form in which it was declared effective by the Commission under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the "SECURITIES ACT"), including all documents
incorporated by reference therein and any information deemed to be a part
thereof at the time of effectiveness pursuant to Rule 430A or Rule 434 under the
Securities Act or the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder (the "EXCHANGE ACT"), is called the
"REGISTRATION STATEMENT." Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the "RULE 462(b)
REGISTRATION STATEMENT," and from and after the date and time of filing of the
Rule 462(b) Registration Statement, the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. Such prospectus, in the form
first used by the Underwriters to confirm sales of the Offered Shares, is called
the "PROSPECTUS;" provided, however, if the Company has, with the consent of
JMP, elected to rely upon Rule 434 under the Securities Act, the term
"PROSPECTUS" shall include the Company's prospectus subject to completion dated
July ___, 2003 (each, a "PRELIMINARY PROSPECTUS"), together with the applicable
term sheet (the
"TERM SHEET") prepared and filed by the Company with the Commission under Rules
434 and 424(b) under the Securities Act and all references in this Agreement to
the date of the Prospectus shall mean the date of the Term Sheet. All references
in this Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, a preliminary prospectus, the Prospectus or the Term Sheet, or any
amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX"). All references in this Agreement to
financial statements and schedules and other information which is "contained,"
"included," or "stated" in the Registration Statement or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement or the Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the Exchange Act which is incorporated by reference
in the Registration Statement or the Prospectus, as the case may be.
The Company hereby confirms its agreements with the Underwriters as
follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents, warrants, and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements.
The Registration Statement and any Rule 462(b) Registration Statement
have been declared effective by the Commission under the Securities
Act. The Company has complied to the Commission's satisfaction with all
requests of the Commission for additional or supplemental information.
No stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement is in effect and no
proceedings for such purpose have been instituted or are pending or, to
the best knowledge of the Company, are contemplated or threatened by
the Commission. No order preventing or suspending the use of any
preliminary prospectus or the Prospectus has been issued by the
Commission and no proceedings for such purpose have been instituted or
are pending or, to the best knowledge of the Company, are contemplated
or threatened by the Commission.
Each preliminary prospectus and the Prospectus, when
filed, complied in all material respects with the Securities Act and,
if filed by electronic transmission pursuant to XXXXX (except as may be
permitted by Regulation S-T under the Securities Act), was identical to
the copy thereof delivered to the Underwriters for use in connection
with the offer and sale of the Offered Shares. Each of the Registration
Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and
at all subsequent times, complied and will comply in all material
respects with the Securities Act and did not and will not contain 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 not misleading. Each preliminary prospectus, as of its date and
at all subsequent times, and the Prospectus, as amended or
supplemented, as of its date and at all subsequent times, did not and
will not contain 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 light of the circumstances under which
they were made, not misleading. The representations and warranties set
forth in the two immediately preceding sentences do not apply to
statements in or omissions from the Registration Statement, any Rule
462(b) Registration Statement, or any post-effective amendment thereto,
the preliminary prospectus, the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with
information relating to the Underwriters furnished to the Company in
writing by the Representatives expressly for use therein. There are no
contracts or other documents
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required to be described in the Prospectus or to be filed as exhibits
to the Registration Statement that have not been described or filed
as required.
(b) Offering Materials Furnished to the
Underwriters. The Company has delivered to the Representatives one
complete manually signed copy of the Registration Statement and of each
consent and certificate of experts filed as a part thereof, conformed
copies of the Registration Statement (without exhibits), preliminary
prospectuses, and the Prospectus, as amended or supplemented, in such
quantities and at such places as the Representatives have requested.
(c) Distribution of Offering Material by the
Company. The Company has not distributed and will not distribute, prior
to the later of the Second Closing Date (as hereinafter defined) or the
completion of the Underwriters' distribution of the Offered Shares, any
offering material in connection with the offering and sale of the
Offered Shares other than a preliminary prospectus, the Prospectus, or
the Registration Statement.
(d) The Underwriting Agreement. This Agreement
has been duly authorized, executed, and delivered by, and is a valid
and binding agreement of, the Company, enforceable in accordance with
its terms, except as (i) rights to indemnification hereunder may be
limited by applicable law and (ii) the enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, or other
similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(e) Authorization of the Offered Shares. The
Offered Shares to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company pursuant to
this Agreement, will be validly issued, fully paid, and non-assessable.
(f) No Applicable Registration or Other Similar
Rights. There are no persons with registration or other similar rights
to have any equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as have been duly waived.
(g) No Material Adverse Change. Subsequent to
the respective dates as of which information is given in the
Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the
earnings, business, operations, or prospects, whether or not arising
from transactions in the ordinary course of business, of the Company
and its subsidiaries, considered as one entity (any such change is
called a "MATERIAL ADVERSE CHANGE"); (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material
liability or obligation, indirect, direct, or contingent, not in the
ordinary course of business nor entered into any material transaction
or agreement not in the ordinary course of business; and (iii) there
has been no dividend or distribution of any kind declared, paid, or
made by the Company or, except for dividends paid to the Company or its
other subsidiaries, any of its subsidiaries on any class of capital
stock, or repurchase or redemption by the Company or any of its
subsidiaries of any class of capital stock.
(h) Independent Accountants. Deloitte & Touche
LLP ("DELOITTE"), who have expressed their opinion with respect to the
financial statements (which term as used in this Agreement includes the
related notes thereto) filed with the Commission as a part of the
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Registration Statement and included in the Prospectus, are independent
public or certified public accountants as required by the Securities
Act.
(i) Preparation of the Financial Statements. The
financial statements filed with the Commission as a part of the
Registration Statement and included in the Prospectus present fairly
(i) the consolidated financial position of the Company and its
consolidated subsidiaries and (ii) the consolidated financial position
of each of the Company's unconsolidated subsidiaries and their
respective subsidiaries, in each case as of and at the dates indicated
and the results of their operations and cash flows for the periods
specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles, as applied in the United
States, ("GAAP") applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The financial
data set forth in the Prospectus under the captions "Prospectus
Summary-Summary Historical Financial Data," "Pro Forma Financial Data,"
"Capitalization" "Selected Financial Data" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" fairly
present the information set forth therein on a basis consistent with
that of the audited and unaudited financial statements contained in the
Registration Statement.
(j) Organization and Good Standing of the
Company and Its Subsidiaries. Each of the Company and its subsidiaries
has been duly organized and is validly existing as a corporation,
limited partnership or limited liability company, as applicable, in
good standing under the laws of the jurisdiction of its organization
and has full power and authority to own, lease, and operate its
properties and to conduct its business as described in the Prospectus
and, in the case of the Company, to enter into and perform its
obligations under this Agreement. Each of the Company and each
subsidiary is duly qualified as a foreign entity to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material
Adverse Change. Except as disclosed in the Prospectus, all of the
issued and outstanding capital stock, partnership interests or
membership interests, as applicable, of each subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and
are owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, or
claim.
(k) Subsidiaries of the Company The Company does
not own or control, directly or indirectly, any corporation,
association, or other entity other than the subsidiaries listed in
Exhibit 21 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2002.
(l) No Prohibition on Subsidiaries from Paying
Dividends or Making Other Distributions. No subsidiary of the Company
is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any
of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by
the Prospectus.
(m) Capitalization and Other Capital Stock
Matters. The authorized, issued, and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization" (other than for subsequent issuances, if any, pursuant
to employee benefit plans described in the Prospectus or upon exercise
of outstanding options described in the Prospectus).
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The Common Stock (including the Offered Shares) conforms in all
material respects to the description thereof contained in the
Prospectus. All of the issued and outstanding shares of Common Stock
have been duly authorized and validly issued, are fully paid and
non-assessable and have been issued in compliance with federal and
state securities laws. None of the outstanding shares of Common Stock
were issued in violation of any preemptive rights, rights of first
refusal, or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal, or other
rights to purchase, or equity or debt securities convertible into,
exchangeable or exercisable for, any capital stock of the Company or
any of its subsidiaries other than those accurately described in the
Prospectus. The description of the Company's stock option, stock bonus,
and other stock plans or arrangements, and the options or other rights
granted thereunder, set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such
plans, arrangements, options, and rights.
(n) Lock-up Agreements. Each director and
officer of the Company has agreed to sign an agreement (the "LOCK-UP
AGREEMENT") substantially in the form attached hereto as Exhibit B (the
"Form of Lock-up Agreement"). The Company has provided to counsel for
the Underwriters true, accurate, and complete copies of all of the
lock-up agreements presently in effect or effected hereby, including
the Lock-Up Agreements. The Company hereby represents and warrants that
it will not release any of its officers, directors, or other
stockholders from any lock-up agreements currently existing or
hereafter effected without the prior written consent of JMP.
(o) Stock Exchange Listing. The Offered Shares
have been approved for listing on the American Stock Exchange (the
"AMEX"), subject only to official notice of issuance.
(p) Non-Contravention of Existing Instruments;
No Further Authorizations or Approvals Required. Neither the Company
nor any of its subsidiaries is in violation of its charter, bylaws or
other organizational documents or is in default (or, with the giving of
notice or lapse of time, would be in default) ("DEFAULT") under any
indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound or
to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an "EXISTING INSTRUMENT"), except for
such Defaults as would not, individually or in the aggregate, result in
a Material Adverse Change. The Company's execution, delivery, and
performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus (i) have been duly authorized
by all necessary corporate action and will not result in any violation
of the provisions of the charter, bylaws or other organizational
documents of the Company or any subsidiary, (ii) will not conflict with
or constitute a breach of, or Default or a Debt Repayment Triggering
Event (as hereinafter defined) under, or result in the creation or
imposition of any lien, charge, or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, or
require the consent of any other party to, any Existing Instrument,
except for such conflicts, breaches, Defaults, liens, charges, or
encumbrances as would not, individually or in the aggregate, result in
a Material Adverse Change, and (iii) will not result in any violation
of any law, administrative regulation, or administrative or court
decree applicable to the Company or any subsidiary. No consent,
approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or
agency, is required for the Company's execution, delivery, and
performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been
obtained or made by the Company and are in full force and effect under
the Securities
5
Act, applicable state securities or blue sky laws and from the
National Association of Securities Dealers, Inc. (the "NASD"). As
used herein, a "DEBT REPAYMENT TRIGGERING EVENT" means any event or
condition which gives, or with the giving of notice or lapse of time
would give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of its
subsidiaries.
(q) No Material Actions or Proceedings. There is
no legal or governmental action, suit or proceeding pending or, to the
best knowledge of the Company, threatened (i) against or affecting the
Company or any of its subsidiaries, (ii) which has as the subject
thereof any officer or director of, or property owned or leased by, the
Company or any of its subsidiaries, (iii) relating to environmental or
discrimination matters, or (iv) that could reasonably be expected to
result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated hereby or presents a
reasonable possibility that such action, suit, or proceeding might be
determined adversely to the Company or such subsidiary.
(r) Labor Matters. No material labor dispute
with the employees of the Company or any of its subsidiaries exists or,
to the best knowledge of the Company, is threatened or imminent. The
Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers that might be expected
to result in a Material Adverse Change.
(s) Intellectual Property Rights. The Company
and its subsidiaries own or possess sufficient trademarks, trade names,
patent rights, patents, know-how, collaborative research agreements,
inventions, servicemarks, copyrights, licenses, approvals, trade
secrets, and other similar rights (collectively, "INTELLECTUAL PROPERTY
RIGHTS") necessary to conduct their businesses as now conducted or as
proposed to be conducted, as described in the Registration Statement,
the Prospectus, and any respective amendments or supplements thereto.
The expiration of any of such Intellectual Property Rights would not
result in a Material Adverse Change. Neither the Company nor any of its
subsidiaries has received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of the Company by
others with respect to any Intellectual Property Rights. There is no
claim being made against the Company or any of its subsidiaries
regarding any kind of Intellectual Property Right. The Company and its
subsidiaries do not, in the conduct of their business as now or
proposed to be conducted as described in the Prospectus, infringe or
conflict with any right or patent of any third party, or any discovery,
invention, product, or process which is the subject of a patent
application filed by any third party, known to the Company or any of
its subsidiaries, which such infringement or conflict is reasonably
likely to result in a Material Adverse Change.
(t) All Necessary Permits, etc. The Company and
its subsidiaries possess such valid and current licenses, certificates,
authorizations, or permits issued by the appropriate state, federal, or
foreign regulatory agencies or bodies necessary to conduct their
respective businesses, and neither the Company nor any subsidiary has
received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such license, certificate,
authorization or permit.
(u) Title to Properties. The Company and each of
its subsidiaries has good and marketable title to all the properties
and assets reflected as owned in the financial statements referred to
in Section 1(i) above (or elsewhere in the Prospectus), in each case
free and clear of any security interests, mortgages, liens,
encumbrances, equities, claims, and other defects. The real property,
improvements, equipment, and personal property held under lease by the
Company
6
or any subsidiary are held under valid and enforceable leases, with
such exceptions as are not material and do not materially interfere
with the use made or proposed to be made of such real property,
improvements, equipment, or personal property by the Company or such
subsidiary.
(v) Tax Law Compliance. The Company and its
consolidated subsidiaries have filed all necessary federal, state, and
foreign income and franchise tax returns or have properly requested
extensions thereof and have paid all taxes required to be paid by any
of them and, if due and payable, any related or similar assessment,
fine, or penalty levied against any of them. The Company has made
adequate charges, accruals, and reserves in the applicable financial
statements referred to in Section 1(i) above in respect of all federal,
state, and foreign income and franchise taxes for all periods as to
which the tax liability of the Company or any of its consolidated
subsidiaries has not been finally determined. The Company's
unconsolidated subsidiaries have filed all necessary federal, state,
and foreign income and franchise tax returns or have properly requested
extensions thereof and have paid all taxes required to be paid by any
of them and, if due and payable, any related or similar assessment,
fine, or penalty levied against any of them. The Company's
unconsolidated subsidiaries have made adequate charges, accruals, and
reserves in the applicable financial statements referred to in Section
1(i) above in respect of all federal, state, and foreign income and
franchise taxes for all periods as to which the tax liability of such
unconsolidated subsidiaries has not been finally determined. The
Company is not aware of any tax deficiency that has been or might be
asserted or threatened against the Company or any of its subsidiaries.
(w) No Transfer Taxes or Other Fees. There are
no transfer taxes or other similar fees or charges under federal law or
the laws of any state, or any political subdivision thereof, required
to be paid in connection with the execution and delivery of this
Agreement or the issuance and sale by the Company of the Offered
Shares.
(x) Company Not an "Investment Company" The
Company has been advised of the rules and requirements under the
Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder (the "INVESTMENT COMPANY ACT"). The
Company is not, and after receipt of payment for the Offered Shares and
application of the net proceeds therefrom will not be, an "investment
company," or an entity "controlled" by an "investment company," within
the meaning of Investment Company Act and will conduct its business in
a manner so that it will not become subject to the Investment Company
Act.
(y) Exchange Act Compliance. The documents
incorporated by reference in the Prospectus, at the time they were
filed with the Commission, complied and will comply in all material
respects with the requirements of the Exchange Act, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement and any amendments thereto become effective, at
the First Closing Date, and at the Second Closing Date, as the case may
be, will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(z) Insurance. Each of the Company and its
subsidiaries are insured by recognized, financially sound, and
reputable institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed adequate
and customary for their businesses including, but not limited to,
policies covering real and personal property owned or leased by the
Company and its subsidiaries against theft, damage, destruction, acts
of vandalism, earthquakes, general liability, and Directors and
Officers liability. The Company and
7
each of its subsidiaries will be able (i) to renew its existing
insurance coverage as and when such policies expire, or (ii) to obtain
comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change. Neither of the Company
nor any subsidiary has been denied any insurance coverage which it has
sought or for which it has applied. The Company shall (i) obtain
Directors and Officers liability insurance in the minimum amount of
$10,000,000 which shall apply to the offering contemplated hereby, (ii)
cause the Underwriters to be added to such policy such that up to
$500,000 of its expenses pursuant to Section 11 ("Termination of this
Agreement") shall be paid directly by such insurer, and (iii) shall
cause the Underwriters to be added as additional insureds to such
policy in respect of the offering contemplated hereby.
(aa) No Price Stabilization or Manipulation. The
Company has not taken and will not take, directly or indirectly, any
action which was designed to, or that might be expected to cause or
result in, stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Offered Shares. The
Company has not taken, directly or indirectly, any action that
stabilized or manipulated the price of any security of the Company.
(bb) Related Party Transactions. There are no
business relationships or related-party transactions involving the
Company or any subsidiary or any other person required to be described
in the Prospectus which have not been described as required. Except as
disclosed in the Prospectus, there are no other material outstanding
loans or advances or material guarantees of indebtedness by the Company
to or for the benefit of any of the officers or directors of the
Company or any of the members of the families of any of them, which are
required to be disclosed in the Prospectus.
(cc) Company's Accounting System. The Company and
each of its subsidiaries maintain a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets, (iii) access to assets is permitted
only in accordance with management's general or specific authorization,
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(dd) Management Agreement. To the knowledge of
the Company, the Company is not in breach of, or default under (nor has
any event occurred which with notice, lapse of time, or both would
constitute a breach of, or default under), the Management Agreement
dated January 1, 1998 (the "Management Agreement") by and between the
Company and Hanover Capital Partners Ltd., except where such breaches
or defaults that are not reasonably likely to result in a Material
Adverse Change.
(ee) No Reliance on Underwriters. The Company has
not relied upon the Underwriters or counsel for the Underwriters for
any legal, tax or accounting advice in connection with the offering and
sale of the Offered Shares other than with respect to the NASD and the
blue sky laws;
(ff) REIT Status. Commencing with its taxable
year ended December 31, 1997, the Company has been organized and
operated in conformity with the requirements for qualification as a
real estate investment trust under Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the
Company's proposed method of
8
operation will enable it to satisfy the requirements for qualification
as a real estate investment trust under the Code.
(gg) No Unlawful Contributions or Other Payments.
Neither the Company nor any of its subsidiaries nor, to the best
knowledge of the Company, any employee or agent of the Company or any
subsidiary, has made any contribution or other payment to any official
of, or candidate for, any federal, state, or foreign office in
violation of any law or of the character required to be disclosed in
the Prospectus.
(hh) Compliance with Environmental Laws. Except
as otherwise disclosed in the Prospectus or as would not, individually
or in the aggregate, result in a Material Adverse Change (i) the
Company and its subsidiaries are in compliance with all federal, state,
local, or foreign law or regulation relating to pollution or protection
of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum, and petroleum products
(collectively, the "MATERIALS OF ENVIRONMENTAL CONCERN"), or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of Materials of Environmental
Concern (collectively, the "ENVIRONMENTAL LAWS"), which includes, but
is not limited to, compliance with any permits or other governmental
authorizations required for the operation of the business of the
Company or its subsidiaries under applicable Environmental Laws, or
compliance with the terms and conditions thereof, and neither the
Company nor any of its subsidiaries has received any written
communication, whether from a governmental authority, citizens group,
employee, or otherwise, that alleges that the Company or any of its
subsidiaries is in violation of any Environmental Law; (ii) there is no
claim, action, or cause of action filed with a court or governmental
authority, no investigation with respect to which the Company has
received written notice, and no written notice by any person or entity
alleging potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property
damages, personal injuries, attorneys' fees, or penalties arising out
of, based on or resulting from the presence, or release into the
environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company or any of its subsidiaries,
now or in the past (collectively, the "ENVIRONMENTAL CLAIMS"), pending
or threatened against the Company or any of its subsidiaries or any
person or entity whose liability for any Environmental Claim the
Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law; and (iii) there are no past or
present actions, activities, circumstances, conditions, events, or
incidents, including, without limitation, the release, emission,
discharge, presence, or disposal of any Material of Environmental
Concern, that reasonably could result in a violation of any
Environmental Law or form the basis of a potential Environmental Claim
against the Company or any of its subsidiaries or against any person or
entity whose liability for any Environmental Claim the Company or any
of its subsidiaries has retained or assumed either contractually or by
operation of law. The Company is not currently aware that it will be
required to make future material capital expenditures to comply with
Environmental Laws.
(ii) Periodic Review of Costs of Environmental
Compliance. In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations, and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties, or compliance with Environmental Laws or any permit,
license or approval, any related constraints
9
on operating activities and any potential liabilities to third
parties). On the basis of such review and the amount of its established
reserves, the Company has concluded that such associated costs and
liabilities would not, individually or in the aggregate, result in a
Material Adverse Change.
(jj) ERISA Compliance. Except as otherwise
disclosed in the Prospectus, the Company and its subsidiaries and any
"employee benefit plan" (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, and the regulations
and published interpretations thereunder (collectively, "ERISA"))
established or maintained by the Company, its subsidiaries, or their
"ERISA AFFILIATES" (as hereinafter defined) are in compliance in all
respects with ERISA (including, but not limited to, the fiduciary duty
provisions of Section 404 of ERISA and the prohibited transaction
provisions of Section 406 of ERISA), the Internal Revenue Code of 1986,
as amended, and the regulations and published interpretations
thereunder (collectively the "CODE"), the Securities Act and the
Exchange Act. "ERISA Affiliate" means, with respect to the Company or a
subsidiary, any member of any group of organizations described in
Sections 414(b), (c), (m) or (o) of the Code, of which the Company or
such subsidiary is a member. No "reportable event" (as defined in
Section 4043 of ERISA) has occurred or is expected to occur with
respect to any "employee benefit plan" established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates. No
"employee benefit plan" established or maintained by the Company, its
subsidiaries, or any of their ERISA Affiliates, if such "employee
benefit plan" were terminated, would have any "amount of unfunded
benefit liabilities" (as defined in Section 4001(a)(18) of ERISA).
Neither the Company, its subsidiaries, nor any of their ERISA
Affiliates has incurred or expects to incur any liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from,
any "employee benefit plan" or (ii) Sections 412, 4971, 4975, or 4980B
of the Code. Each "employee benefit plan" established or maintained by
the Company, its subsidiaries, or any of their ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or failure to
act, which would cause the loss of such qualification. There is no lien
nor is there expected to be a lien under Code Section 412(n). There is
no pending or threatened litigation (other than routine claims for
benefits) or government audit with respect to any "employee benefit
plan."
(kk) Xxxxxxxx-Xxxxx Compliance. The Company is in
compliance with all applicable provisions of the Xxxxxxxx-Xxxxx Act of
2002, and the rules and regulations promulgated thereunder, including
the rules promulgated by AMEX pursuant thereto.
Any certificate signed by an officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the matters
set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE OFFERED SHARES.
(a) The Firm Offered Shares. The Company agrees
to issue and sell to the Underwriters the Firm Offered Shares upon the
terms herein set forth. On the basis of the representations,
warranties, and agreements herein contained, and upon the terms but
subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company the Firm
Offered Shares set forth opposite their names on Schedule A attached
hereto. The purchase price per Firm Offered Share to be paid by the
Underwriters to the Company shall be $___ per share.
(b) The First Closing Date. Delivery of
certificates for the Firm Offered Shares to be purchased by the
Underwriters and payment therefor shall be made at the offices of
10
JMP Securities LLC, Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 (or such other place as may be agreed to by the
Company and the Representatives) at 7:00 a.m. San Francisco time, on
August _____, 2003, or such other time and date as the Representatives
shall designate by notice to the Company (the time and date of such
closing are called the "FIRST CLOSING DATE"); provided, however, that
if the Company has not made available to the Representatives copies of
the Prospectus within the time provided in Section 2(e) ("Payment for
the Offered Shares") and Section 3(d) ("Copies of Any Amendments and
Supplements to the Prospectus") hereof, the Representatives may, in
their sole discretion, postpone the First Closing Date until no later
that two (2) full business days following delivery of copies of the
Prospectus to the Representatives. The Company hereby acknowledges that
circumstances under which the Representatives may provide notice to
postpone the First Closing Date as originally scheduled include, but
are in no way limited to, any determination by the Company or the
Representatives to recirculate to the public copies of an amended or
supplemented Prospectus or a delay as contemplated by the provisions of
Section 10 ("Default of an Underwriter").
(c) The Optional Offered Shares; the Second
Closing Date. In addition, on the basis of the representations,
warranties, and agreements herein contained, and upon the terms but
subject to the conditions herein set forth, the Company hereby grants
an option to the Underwriters to purchase, severally and not jointly,
up to an aggregate of 450,000 Optional Offered Shares from the Company
at the purchase price per share to be paid by the Underwriters for the
Firm Offered Shares. The option granted hereunder is for use by the
Underwriters solely in covering any over-allotments in connection with
the sale and distribution of the Firm Offered Shares. The option
granted hereunder may be exercised at any time (but not more than once)
upon notice by the Representatives to the Company, which notice may be
given at any time within thirty (30) days from the date of this
Agreement. Such notice shall set forth (i) the aggregate number of
Optional Offered Shares as to which the Underwriters are exercising the
option, (ii) the names and denominations in which the certificates for
the Optional Offered Shares are to be registered, and (iii) the time,
date, and place at which such certificates will be delivered (which
time and date may be simultaneous with, but not earlier than, the First
Closing Date, and in such case the term "First Closing Date" shall
refer to the time and date of delivery of certificates for the Firm
Offered Shares and the Optional Offered Shares). Such time and date of
delivery of the Optional Offered Shares, if subsequent to the First
Closing Date, is called the "SECOND CLOSING DATE" and shall be
determined by the Representatives and shall not be earlier than three
(3) nor later than five (5) full business days after delivery of such
notice of exercise. If any Optional Offered Shares are to be purchased,
each Underwriter agrees, severally and not jointly, to purchase the
number of Optional Offered Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that
bears the same proportion to the total number of Optional Offered
Shares to be purchased as the number of Firm Offered Shares set forth
on Schedule A attached hereto opposite the name of such Underwriter
bears to the total number of Firm Offered Shares. The Representatives
may cancel the option at any time prior to its expiration by giving
written notice of such cancellation to the Company.
(d) Public Offering of the Offered Shares. The
Representatives hereby advise the Company that they intend to offer for
sale to the public, as described in the Prospectus the Offered Shares
as soon after this Agreement has been executed and the Registration
Statement has been declared effective as the Representatives, in their
sole judgment, have determined is advisable and practicable.
(e) Payment for the Offered Shares. Payment for
the Offered Shares shall be made at the First Closing Date (and, if
applicable, at the Second Closing Date) by wire transfer of immediately
available funds to the order of the Company.
11
It is understood that the Representatives have been
authorized, for their own accounts and the accounts of the several
Underwriters, to accept delivery of and receipt for, and make payment
of the purchase price for, the Firm Offered Shares and any Optional
Offered Shares that the Underwriters have agreed to purchase. JMP,
individually and not as the Representative of the Underwriters, may
(but shall not be obligated to) make payment for any Offered Shares to
be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter,
but any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
(f) Delivery of the Offered Shares. The Company
shall deliver, or cause to be delivered, a credit representing the Firm
Offered Shares to an account or accounts at The Depository Trust
Company as designated by the Representatives for the accounts of the
Representatives and the several Underwriters at the First Closing Date,
against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The
Company shall also deliver, or cause to be delivered, a credit
representing the Optional Offered Shares that the Representatives and
the several Underwriters have agreed to purchase to an account or
accounts at The Depository Trust Company as designated by the
Representatives for the accounts of the Representatives and the several
Underwriters, at the Second Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. Notwithstanding the foregoing,
to the extent the Representatives so elect at least three (3) full
business days prior to the First Closing Date or the Second Closing
Date, as the case may be, the Company shall deliver, or cause to be
delivered, to the Representatives for the account of the several
Underwriters, certificates for the Firm Offered Shares and the Optional
Offered Shares the Underwriters have agreed to purchase from the
Company at the First Closing Date or the Second Closing Date, as the
case may be. In such case, the certificates for the Offered Shares
shall be in definitive form and registered in such names and
denominations as the Representatives shall have requested at least two
(2) full business days prior to the First Closing Date (or the Second
Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the
Second Closing Date, as the case may be) at a location in San Francisco
as the Representatives may designate.
(g) Delivery of Prospectus to the Underwriters.
Not later than 12:00 p.m. on the second business day following the date
that the Offered Shares are first released by the Underwriters for sale
to the public, the Company shall deliver or cause to be delivered,
copies of the Prospectus in such quantities and at such places as the
Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY. The Company further
covenants and agrees with each Underwriter as follows:
(a) Representatives' Review of Proposed
Amendments and Supplements. During such period beginning on the date
hereof and ending on the later of the First Closing Date or such date,
as in the opinion of counsel for the Underwriters, the Prospectus is no
longer required by law to be delivered in connection with sales by an
Underwriter or dealer (the "PROSPECTUS DELIVERY PERIOD"), prior to
amending or supplementing the Registration Statement (including any
registration statement filed under Rule 462(b) under the Securities
Act) or the Prospectus, the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or
supplement, and the Company shall not file any such proposed amendment
or supplement to which the Representatives object.
12
(b) Securities Act Compliance. After the date of
this Agreement, the Company shall promptly advise the Representatives
in writing of (i) the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (ii) the
time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) the time and date that
any post-effective amendment to the Registration Statement becomes
effective, and (iv) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or
of any proceedings to remove, suspend, or terminate from listing or
quotation the Common Stock from any securities exchange upon which it
is listed for trading or included or designated for quotation, or of
the threat or initiation of any proceedings for any of such purposes.
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. Additionally, the Company agrees that
it shall comply with the provisions of Rules 424(b), 430A, and 434, as
applicable, under the Securities Act and will use its best efforts to
confirm that any filings made by the Company under such Rule 424(b)
were received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus
and Other Securities Act Matters. If, during the Prospectus Delivery
Period, any event shall occur or condition exist as a result of which
it is necessary to amend or supplement the Prospectus in order to make
the statements therein, in light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if in the
opinion of the Representatives or counsel for the Underwriters, it is
otherwise necessary to amend or supplement the Prospectus to comply
with the law, the Company agrees to promptly prepare (subject to
Section 3(a) ("Representatives' Review of Proposed Amendments and
Supplements")), file with the Commission and furnish at its own expense
to the Underwriters and to dealers, amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) Copies of any Amendments and Supplements to
the Prospectus. The Company agrees to furnish the Representatives,
without charge, during the Prospectus Delivery Period, as many copies
of the Prospectus and any amendments and supplements thereto (including
any documents incorporated by reference therein) as the Representatives
may request.
(e) Blue Sky Compliance. The Company shall
cooperate with the Representatives and counsel for the Underwriters to
qualify or register the Offered Shares for sale under (or obtain
exemptions from the application of) the state securities or blue sky
laws, Canadian provincial securities laws, or the securities laws of
those jurisdictions designated by the Representatives, and will make
such applications, file such documents, and furnish such information as
may be required for that purpose. The Company shall comply with such
laws and shall continue such qualifications, registrations, and
exemptions in effect so long as required to continue such
qualifications for so long a period as the Representatives may request
for the distribution of the Offered Shares. The Company shall not be
required to qualify as a foreign corporation or to take any action that
would subject it to general service of process in any such jurisdiction
where it is not presently qualified or where it is not presently
subject to taxation as a foreign corporation. The Company will advise
the Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Offered Shares
for offering, sale, or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose. In the event of the
issuance of any order suspending such qualification,
13
registration, or exemption, the Company shall use its best efforts to
obtain the withdrawal thereof at the earliest possible moment.
(f) Notice of Subsequent Events Affecting the
Market Price of the Common Stock or Offered Shares. If at any time
during the ninety (90) day period after the Registration Statement
becomes effective, any rumor, publication, or event relating to or
affecting the Company shall occur, as a result of which, in the sole
opinion of the Representatives in their sole discretion, the market
price of the Offered Shares or Common Stock has been or is likely to be
adversely affected (regardless of whether such rumor, publication, or
event necessitates a supplement to or amendment of the Prospectus), the
Company will, after written notice from the Representatives advising
the Company to the effect set forth above, forthwith prepare, consult
with the Representatives concerning the substance of and disseminate a
press release, or other public statement, satisfactory to the
Representatives, responding to or commenting on such rumor,
publication, or event.
(g) Use of Proceeds. The Company shall apply the
net proceeds from the sale of the Offered Shares sold by it in the
manner described under the caption "Use of Proceeds" in the Prospectus.
(h) Transfer Agent. The Company shall continue
to engage and maintain, at its expense, a registrar and transfer agent
for the Common Stock.
(i) Earnings Statement. As soon as practicable,
the Company will make generally available to its securityholders and to
the Representatives an earnings statement (which need not be audited)
covering the twelve (12)-month period ending on the final day of the
quarter that includes the one year anniversary of the "effective date
of the Registration Statement" (as defined in Rule 158(c) under the
Securities Act), in satisfaction of Section 11(a) of the Securities
Act.
(j) Periodic Reporting Obligations. During the
Prospectus Delivery Period, the Company shall file, on a timely basis,
with the Commission and the AMEX all reports and documents required to
be filed under the Exchange Act.
(k) Agreement Not to Offer or Sell Additional
Securities. During the period of ninety (90) days following the date of
the Prospectus (the "LOCK-UP PERIOD"), the Company will not, without
the prior written consent of JMP (which consent may be withheld in its
sole discretion), directly or indirectly, sell, offer, contract, or
grant any option to sell, pledge, transfer, or establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, otherwise dispose of, transfer, or enter into any
transaction which is designed to, or could be expected to, result in
the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise by the Company or any
affiliate of the Company or any person in privity with the Company or
any affiliate of the Company), or otherwise dispose of any Securities
(as defined in Exhibit B (the "LOCK-UP AGREEMENT") attached hereto) or
any securities that relates to or derives any significant part of its
value from the Securities; provided, however, that the Company may
issue (i) options to purchase its Common Stock pursuant to any stock
option plan, stock bonus, or other stock plan or arrangement approved
by the Board of Directors of the Company and described in the
Prospectus, or (ii) Common Stock upon the exercise of such options
described in clause (i), but only if the holders of such shares,
options, or shares issued upon exercise of such options, agree in
writing not to sell, offer, dispose of or otherwise transfer any such
shares or options during the
14
Lock-up Period without the prior written consent of JMP (which consent
may be withheld in its sole discretion).
(l) Future Reports to the Representatives.
During the period of five (5) years hereafter, the Company will furnish
to the Representatives c/o JMP Securities LLC, Xxx Xxxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxx:
(i) as soon as practicable after the end of each fiscal year, copies of
the Annual Report of the Company containing the balance sheet of the
Company as of the close of such fiscal year and statements of income,
stockholders' equity, and cash flows for the year then ended and the
opinion thereon of the Company's independent public or certified public
accountants, (ii) as soon as practicable after the filing thereof,
copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K, or other report filed
by the Company with the Commission, the NASD, or any securities
exchange, and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital
stock.
(m) Exchange Act Compliance. The Company will
file all documents required to be filed with the Commission pursuant to
Section 13, 14, or 15 of the Exchange Act in the manner and within the
time periods required by the Exchange Act.
JMP, on behalf of the Underwriters, may, in its 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 4. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase and pay for the Offered Shares as
provided herein on the First Closing Date and, with respect to the Optional
Offered Shares, the Second Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in Section 1
("Representations and Warranties of the Company") hereof as of the date hereof
and as of the First Closing Date as though then made and, with respect to the
Optional Offered Shares, as of the Second Closing Date as though then made, to
the timely performance by the Company of its covenants and other obligations
hereunder, and to each of the following additional conditions:
(a) Accountants' Original Comfort Letter. On the
date hereof, the Representatives shall have received from Deloitte,
independent public or certified public accountants for the Company, a
letter dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Representatives (the "ORIGINAL LETTER").
The Original Letter shall (i) represent, to the extent true, that they
independent certified public accountants with respect to the Company
within the meaning of the Securities Act, (ii) set forth their opinion
with respect to their examination of (x) the consolidated balance
sheets of the Company as of December 31, 2001 and December 31, 2002 and
related consolidated statements of operations, shareholders' equity,
and cash flows for the three years ended December 31, 2002, (y) the
consolidated balance sheet of each of Hanover Capital Partners Ltd. and
Hanovertrade, Inc. as of December 31, 2001 and December 31, 2002 and
related consolidated statements of operations, shareholders' equity,
and cash flows for the three years ended December 31, 2002, and (z) any
prospective financial statements and/or pro forma financial information
examined (iii) state that Deloitte has performed the procedures set out
in Statement on Auditing Standards ("SAS") No. 71 for a review of
interim financial information and providing the report of Deloitte as
described in SAS No. 71 on the financial statements for each of the
quarters ended March 31, 2002 and March 31, 2003 (the "QUARTERLY
FINANCIAL STATEMENTS"), (iv) state that in the course of such review,
nothing came to their attention that leads them to believe that any
material modifications
15
need to be made to any of the Quarterly Financial Statements in order
for them to be in compliance with GAAP consistently applied across the
periods presented (v) state that Deloitte has performed the procedures
set forth in Statement on Standards for Attestation Engagements No. 8
on the information included in the Prospectus under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and describe or attach their report thereon (as
described by SAS No. 86), and (vi) address other matters agreed upon by
Deloitte and the Underwriters. In addition, the Underwriters shall have
received from Deloitte a letter addressed to the Company and made
available to the Underwriters for their use stating that Deloitte's
review of the Company's system of internal accounting controls, to the
extent they deemed necessary in establishing the scope of their
examination of the Company's consolidated financial statements as of
December 31, 2002, did not disclose any weaknesses in internal controls
that they considered to be material weaknesses.
(b) Accountants' Bring-down Comfort Letter. The
Representatives shall have received on the First Closing Date and on
the Second Closing Date, as the case may be, a letter from Deloitte
addressed to the Underwriters, dated the First Closing Date or the
Second Closing Date, as the case may be, confirming that they are
independent certified public accountants with respect to the Company
within the meaning of the Securities Act and based upon the procedures
described in the Original Letter, but carried out to a date not more
than three (3) business days prior to the First Closing Date or the
Second Closing Date, as the case may be, (i) confirming, to the extent
true, that the statements and conclusions set forth in the Original
Letter are accurate as of the First Closing Date or the Second Closing
Date, as the case may be, and (ii) setting forth any revisions and
additions to the statements and conclusions set forth in the Original
Letter which are necessary to reflect any changes in the facts
described in the Original Letter since the date of such letter, or to
reflect the availability of more recent financial statements, data, or
information.
If the letter shall disclose any change in
the condition (financial or otherwise), earnings, operations, business,
or business prospects of the Company and its subsidiaries, considered
as one entity, from that set forth in the Registration Statement or
Prospectus, which, in the sole judgment of the Representatives, is
material and adverse and that makes it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with the
public offering of the Offered Shares as contemplated by the
Prospectus, then this condition in this Section 4(b) shall be deemed
not satisfied, and the Representatives may terminate this Agreement in
accordance with the last paragraph of this Section 4.
(c) Compliance with Registration Requirements;
No Stop Order; No Objection from the NASD. For the period from and
after effectiveness of this Agreement and prior to the First Closing
Date and, with respect to the Optional Offered Shares, prior to the
Second Closing Date:
(i) the Company shall have filed the
Prospectus with the Commission (including the
information required by Rule 430A under the
Securities Act) in the manner and within the time
period required by Rule 424(b) under the Securities
Act; or the Company shall have filed a post-effective
amendment to the Registration Statement containing
the information required by such Rule 430A, and such
post-effective amendment shall have become effective;
or, if the Company elected to rely upon Rule 434
under the Securities Act and obtained the
Representatives' consent thereto, the Company shall
have filed a Term Sheet with the Commission in the
manner and within the time period required by such
Rule 424(b);
16
(ii) no stop order suspending the
effectiveness of the Registration Statement, any Rule
462(b) Registration Statement, or any post-effective
amendment to the Registration Statement, shall be in
effect and no proceedings for such purpose shall have
been instituted or are pending, contemplated, or
threatened by the Commission;
(iii) any request of the Commission for
additional information (to be included in the
Registration Statement or the Prospectus or any
incorporated document or otherwise) shall have been
complied with to the satisfaction of Underwriters'
counsel; and
(iv) the NASD shall have raised no
objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(d) No Material Adverse Change. For the period
from and after the date of this Agreement and prior to the First
Closing Date and, with respect to the Optional Offered Shares, prior to
the Second Closing Date, in the judgment of the Representatives, there
shall not have occurred any Material Adverse Change, or any development
that could reasonably be expected to result in a Material Adverse
Change, from that set forth in the Registration Statement or
Prospectus, which, in the sole judgment of the Representatives, is
material and adverse and that makes it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with the
public offering of the Offered Shares as contemplated by the
Prospectus.
(e) Opinion of Counsel to the Company. On each
of the First Closing Date and the Second Closing Date, the
Representatives shall have received the favorable opinion of Xxxxx
Xxxxxxx LLP, counsel for the Company, dated as of such Closing Date,
the form of which is attached hereto as Exhibit A ("Form of Legal
Opinion of Counsel for the Company").
(f) Opinion of Counsel for the Underwriters. On
each of the First Closing Date and the Second Closing Date, the
Representatives shall have received the favorable opinion of Xxxxxx &
Bird LLP, counsel for the Underwriters, dated as of such Closing Date,
in form and substance satisfactory to the Representatives. The Company
shall have furnished to such counsel such documents as such may have
requested for the purpose of enabling them to pass upon such matters.
(g) Officers' Certificate. On each of the First
Closing Date and the Second Closing Date, the Representatives shall
have received a written certificate executed by the Chairman of the
Board, Chief Executive Officer or President of the Company and the
Chief Financial Officer or Chief Accounting Officer of the Company,
dated as of such Closing Date, to the effect set forth in subsection
(c) ("Compliance with Registration Requirements; No Stop Order; No
Objection from NASD") and subsection (d) ("No Material Adverse Change")
of this Section 4, and further to the effect that:
(i) Subsequent to the respective dates
as of which information is given in the Registration
Statement and Prospectus, there has not been (a) any
Material Adverse Change, (b) any transaction that is
material to the Company and its subsidiaries,
considered as one entity, except transactions entered
into in the ordinary course of business, (c) any
obligation, direct or contingent, that is material to
the Company and its subsidiaries, considered as one
entity, incurred by the Company or its subsidiaries,
except obligations incurred in the ordinary course of
business, (d) any change in the capital stock or
outstanding
17
indebtedness that is material to the Company and its
subsidiaries, considered as one entity, (e) any
dividend or distribution of any kind declared, paid,
or made on the capital stock of the Company or any of
its subsidiaries, or (f) any loss or damage (whether
or not insured) to the property of the Company or any
of its subsidiaries which has been sustained or will
have been sustained which has a material adverse
effect on the condition (financial or otherwise),
earnings, operations, business, or business prospects
of the Company and its subsidiaries, considered as
one entity;
(ii) When the Registration Statement
became effective and at all times subsequent thereto
up to the delivery of such certificate, (a) the
Registration Statement and the Prospectus, and any
amendments or supplements thereto and the
incorporated documents, when such incorporated
documents became effective or were filed with the
Commission, contained all material information
required to be included therein by the Securities Act
or the Exchange Act, as the case may be, and in all
material respects conformed to the requirements of
the Securities Act or the Exchange Act, as the case
may be; (b) the Registration Statement and any
amendments or supplements thereto, did not and does
not include any untrue statement of a material fact
or omit to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading; (c) the Prospectus and any
amendments or supplements thereto, did not and does
not include any untrue statement of a material fact
or omit to state a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading; and (d) since the
effective date of the Registration Statement, there
has occurred no event required to be set forth in an
amended or supplemented Prospectus which has not been
so set forth;
(iii) the representations, warranties,
and covenants of the Company in this Agreement are
true and correct with the same force and effect as
though expressly made on and as of such Closing Date;
and
(iv) the Company has complied with all
the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(h) Lock-Up Agreement from Certain Stockholders
of the Company. On the date hereof, the Company shall have furnished to
the Representatives an agreement in the form of Exhibit B (the "LOCK-UP
AGREEMENT") attached hereto from each officer and director of the
Company. Such Lock-up Agreements shall be in full force and effect on
each of the First Closing Date and the Second Closing Date.
(i) Additional Documents. On or before each of
the First Closing Date and the Second Closing Date, the Representatives
and counsel for the Underwriters shall have received such information,
documents, and opinions as they may require for the purposes of
enabling them to pass upon the issuance and sale of the Offered Shares
as contemplated herein, or in order to evidence the accuracy of any of
the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained.
If any condition specified in this Section 4 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time
18
on or prior to the First Closing Date and, with respect to the Optional Offered
Shares, at any time prior to the Second Closing Date, which termination shall be
without liability on the part of any party to any other party, except that
Section 5 ("Payment of Expenses"), Section 6 ("Reimbursement of Underwriters'
Expenses"), Section 8 ("Indemnification"), Section 9 ("Contribution"), and
Section 12 ("Representations and Indemnities to Survive Delivery") shall at all
times be effective and shall survive such termination.
SECTION 5. PAYMENT OF EXPENSES. The Company agrees to pay all costs,
fees, and expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance
and delivery of the Offered 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 Offered Shares to the Underwriters, (iv) all
fees and expenses of the Company's counsel, independent public or certified
public accountants, and other advisors, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping, and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents, and certificates of experts), each preliminary prospectus and the
Prospectus, and all amendments and supplements thereto, and this Agreement, (vi)
all filing fees, attorneys' fees, and expenses 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
Offered Shares for offer and sale under the state securities or blue sky laws,
and, if requested by the Representatives, preparing and printing a "Blue Sky
Survey" or other memorandum, and any supplements thereto, advising the
Underwriters of such qualifications, registrations and exemptions, (vii) the
filing fees incident to, and the fees and expenses of counsel for the
Underwriters in connection with, the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Offered
Shares, (viii) the fees and expenses associated with listing including the
Offered Shares on the AMEX, (ix) all costs and expenses incident to the travel
and accommodation of the Company's employees on the "roadshow," and (x) all
other fees, costs, and expenses referred to in Item 14 of Part II of the
Registration Statement. Except as provided in this Section 5 ("Payment of
Expenses"), Section 6 ("Reimbursement of Underwriters' Expenses"), Section 8
("Indemnification"), and Section 9 ("Contribution") hereof, the Underwriters
shall pay their own expenses.
SECTION 6. REIMBURSEMENT OF THE UNDERWRITERS' EXPENSES.
(a) Completion of Offering. If the Firm Offered
Shares are sold to the Underwriters as contemplated by Section 2(a),
the Company shall (i) reimburse the Representatives upon request for
its reasonable out-of-pocket expenses incurred in connection with its
services under this Agreement, up to a maximum amount of $25,000, and
(ii) reimburse the Representatives for the fees and expenses of its
legal counsel, up to a maximum of $75,000.
(b) Termination by the Company. If this
Agreement is terminated by the Company, the Company shall (i) reimburse
the Representatives upon request for its reasonable out-of-pocket
expenses incurred in connection with its services under this Agreement,
up to a maximum amount of $12,500, and (ii) reimburse the
Representatives for the fees and expenses of its legal counsel, up to a
maximum of $37,500.
(c) Termination by the Underwriters. If this
Agreement is terminated by the Representatives pursuant to Section 4
("Conditions of the Obligations of the Underwriters"), the Company
shall (i) reimburse the Representatives upon request for its reasonable
out-of-pocket expenses incurred in connection with its services under
this Agreement, up to a maximum amount of $12,500, and (ii) reimburse
the Representatives for the fees and expenses of its legal counsel, up
to a maximum of $37,500.
19
(d) JMP will provide receipts for all amounts
greater than $500, and all expenses of JMP and JMP's legal counsel will
be passed on to the Company at cost.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall not
become effective until the later of (i) the execution of this Agreement by the
parties hereto, and (ii) effectiveness of the Registration Statement under the
Securities Act. If this Agreement is executed but does not become effective, the
terms of engagement letter by and between the Company and JMP, dated July [9],
2003, shall remain in full force and effect notwithstanding Section 1.3 thereof.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. The
Company agrees to indemnify and hold harmless each Underwriter, its
officers and employees, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act and the Exchange
Act against any Loss (as hereinafter defined) to which such Underwriter
or such controlling person may become subject, under the Securities
Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent
of the Company, which consent shall not be unreasonably withheld),
insofar as such Loss (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A or Rule
434 under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; or (iii) in whole or in part
upon any inaccuracy in the representations and warranties of the
Company contained herein; or (iv) in whole or in part upon any
failure of the Company to perform its obligations hereunder or under
law; or (v) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials provided by
the Company or based upon written information furnished by or on
behalf of the Company including, without limitation, slides, videos,
films or tape recordings, used in connection with the marketing of
the Offered Shares, and including, without limitation, statements
communicated to securities analysts employed by the Underwriters; or
(vi) any act or failure to act or any alleged act or failure to act
by any Underwriter in connection with, or relating in any manner to,
the Common Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon any matter covered
by clause (i), (ii), (iii), (iv), or (v) above, provided, however,
that the Company shall not be liable under this clause (vi) to the
extent that a court of competent jurisdiction shall have determined
by a final judgment that Loss resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter
through its bad faith or willful misconduct; and to reimburse each
Underwriter and each such controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by JMP) as
such expenses are incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling,
compromising, or paying any such Loss; provided, further, that the
foregoing indemnity agreement shall not apply to any Loss to the
extent, but only to the extent that such Loss arises out of or is
based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity
with written information furnished to the Company by the
Representatives expressly for use in the Registration Statement, any
preliminary
20
prospectus, or the Prospectus (or any amendment or supplement
thereto); provided, further, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the
benefit of any Underwriter from whom the person asserting any Loss
purchased Offered Shares, or any person controlling such Underwriter,
if copies of the Prospectus were timely delivered to the Underwriter
pursuant to Section 2 ("Purchase, Sale, and Delivery of the Offered
Shares") and a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Offered Shares to such person, and if the Prospectus (as so amended
or supplemented) would have cured the defect giving rise to such
Loss. "LOSS" shall be defined as any loss, claim, damage, liability,
expense, or action, as incurred, suffered by the specified person
(collectively, the "LOSSES"). The indemnity agreement set forth in
this Section 8(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) Indemnification of the Company, Its
Directors and Officers. Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act, against any Loss to which the
Company, or any such director, officer or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal
or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such
Loss (or actions in respect thereof as contemplated below) arises out
of or is based upon (i) any untrue or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
or supplement thereto), or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading or (ii) any untrue or alleged untrue statement of a material
fact contained in the any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or arises out of or is based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any
preliminary prospectus, the Prospectus (or any amendment or supplement
thereto), in reliance upon and in conformity with written information
furnished to the Company by the Representatives expressly for use
therein; and to reimburse the Company, or any such director, officer or
controlling person for any legal and other expense reasonably incurred
by the Company, or any such director, officer or controlling person in
connection with investigating, defending, settling, compromising, or
paying any such Loss. The indemnity agreement set forth in this Section
8(b) shall be in addition to any liabilities that each Underwriter may
otherwise have.
(c) Notifications and Other Indemnification
Procedures. Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability
hereunder to the extent it is not materially prejudiced as a proximate
result of such failure and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity
agreement. In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent
21
that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have
reasonably concluded that a conflict may arise between the positions of
the indemnifying party and the indemnified party in conducting the
defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in
the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such
indemnified party of such indemnifying party's election so to assume
the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 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 separate
counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel (together
with local counsel), approved by the indemnifying party (JMP in the
case of Section 8(b) and Section 9 ("Contribution")), representing the
indemnified parties who are parties to such action), (ii) the
indemnifying party shall not have employed counsel 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, or (iii) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of
the indemnifying party, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under
this Section 8 shall not be liable for any settlement of any proceeding
effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent or if there be
a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any Loss by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 8(d) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered
into more than thirty (30) days after receipt by such indemnifying
party of the aforesaid request, and (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party,
effect any settlement, compromise, or consent to the entry of judgment
in any pending or threatened action, suit, or proceeding in respect of
which any indemnified party is or could have been a party and indemnity
was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise, or consent (i) includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such action, suit, or proceeding,
and (ii) does not include a statement as to or an admission of fault,
culpability, or a failure to act by or on behalf of any indemnified
party.
SECTION 9. CONTRIBUTION. If the indemnification provided for in Section
8 ("Indemnification") is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any Loss
referred to therein, then each indemnifying party shall contribute to the
aggregate
22
amount paid or payable by such indemnified party, as incurred, as a result of
any Loss referred to therein (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, from the offering of the Offered Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, in connection with the statements, omissions, or inaccuracies
in the representations and warranties herein which resulted in such Loss, 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, in connection with the offering of the Offered Shares pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Offered Shares pursuant to this Agreement
(before deducting expenses) received by the Company, and the total underwriting
discount received by the Underwriters, in each case as set forth on the front
cover page of the Prospectus (or, if Rule 434 under the Securities Act is used,
the corresponding location on the Term Sheet) bear to the aggregate initial
public offering price of the Offered Shares as set forth on such cover. The
relative fault of the Company, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement or omission.
The amount paid or payable by an indemnified party as a result of the
Losses referred to above shall be deemed to include, subject to the limitations
set forth in Section 8(d) ("Notifications and Other Indemnification
Procedures"), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in Section 8(d) with respect to notice of commencement of
any action shall apply if a claim for contribution is to be made under this
Section 9; provided, however, that no additional notice shall be required with
respect to any action for which notice has been given under Section 8(d) for
purposes of indemnification.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 9.
The Underwriters' obligations to contribute pursuant to this Section 9
are several, and not joint, in proportion to their respective underwriting
commitments as set forth opposite their names in Schedule A attached hereto.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting commission
received by such Underwriter in connection with the Offered Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, each officer and
employee of an Underwriter and each person, if any, who controls an Underwriter
within the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company with the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as the
Company.
Any Loss for which an indemnified party is entitled to indemnification
or contribution under this Section 9 shall be paid by the indemnifying party to
the indemnified party as such Loss is incurred, but in all cases, no later than
forty-five (45) days of invoice to the indemnifying party.
23
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Offered
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Offered Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed ten
percent (10%) of the aggregate number of the Offered Shares to be purchased on
such date, the other Underwriters shall be obligated, severally, in the
proportions that the number of Firm Offered Shares set forth opposite their
respective names on Schedule A (the "List of Underwriters") attached hereto
bears to the aggregate number of Firm Offered Shares set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as
may be specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Offered Shares which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase on such date. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the Underwriters shall fail or refuse to purchase Offered Shares and
the aggregate number of Offered Shares with respect to which such default occurs
exceeds ten percent (10%) of the aggregate number of Offered Shares to be
purchased on such date, and arrangements satisfactory to the Representatives and
the Company for the purchase of such Offered Shares are not made within
forty-eight (48) hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of
Section 5 (the "Payment of Expenses"), Section 6 (the "Reimbursement of
Underwriters' Expenses"), Section 8 ("Indemnification"), and Section 9
("Contribution") shall at all times be effective and shall survive such
termination. In any such case, either the Representatives or the Company shall
have the right to postpone the First Closing Date or the Second Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be
deemed to include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date, this Agreement may be terminated by the Representatives by notice given to
the Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
AMEX, or trading in securities generally on either the Nasdaq Stock Market, the
New York Stock Exchange or the AMEX shall have been suspended or limited, or
minimum or maximum prices shall have been generally established on any of such
stock exchanges by the Commission or the NASD; (ii) a general banking moratorium
shall have been declared by any of federal, New York, New Jersey or California
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United
States' or international political, financial, or economic conditions, as in the
judgment of the Representatives is material and adverse and makes it
impracticable to market the Offered Shares in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
(iv) in the judgment of the Representatives there shall have occurred any
Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident, or other calamity of such character
as in the sole judgment of the Representatives may interfere materially with the
conduct of the business and operations of the Company regardless of whether or
not such loss shall have been insured. Any termination pursuant to this Section
11 shall be without liability on the part of (a) the Company to any Underwriter,
except that the Company shall be obligated to reimburse the expenses of the
Representatives pursuant to Section 5 ("Payment of Expenses") and Section 6
("Reimbursement of Underwriters' Expenses") hereof, (b) any Underwriter to the
Company, or (c) of any party hereto to any other party
24
except that the provisions of Section 8 ("Indemnification") and Section 9
("Contribution") shall at all times be effective and shall survive such
termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the Underwriters 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 any Underwriter or 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 Offered Shares sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
JMP Securities LLC
Xxxxxx, Xxxxxxxx & Company, Incorporated
c/o JMP Securities LLC
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx
with a copy to:
Xxxxxx & Bird LLP
000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx Xxxxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx
If to the Company
Hanover Capital Mortgage Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
with a copy to:
Xxxxx Xxxxxxx LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: X.X. Xxxxx, Xx.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
25
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriter
pursuant to Section 10 ("Default of an Underwriter"), and to the benefit of the
employees, officers and directors and controlling persons referred to in Section
8 ("Indemnification") and Section 9 ("Contribution"), and in each case their
respective successors, and no other person will have any right or obligation
hereunder. The term "successors" shall not include any purchaser of the Offered
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. GOVERNING LAW PROVISIONS.
(a) Choice of Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN
SUCH STATE.
(b) Consent to Jurisdiction. Any legal suit,
action, or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby ("RELATED PROCEEDINGS") may be
instituted in the federal courts of the United States of America
located in the City and County of San Francisco or the courts of the
State of California in each case located in the City and County of San
Francisco (collectively, the "SPECIFIED COURTS"), and each party
irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of
any such court (a "RELATED JUDGMENT"), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action, or proceeding.
Service of any process, summons, notice, or document by mail to such
party's address set forth above shall be effective service of process
for any suit, action, or other proceeding brought in any such court.
The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action, or other proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree
not to plead or claim in any such court that any such suit, action, or
other proceeding brought in any such court has been brought in an
inconvenient forum.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings, and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 ("Indemnification") and the contribution
provisions of Section 9 ("Contribution"), and is fully informed regarding said
provisions. Each of the parties hereto further acknowledges that the provisions
of Sections 8 and 9 hereto fairly allocate the risks in light of the ability of
the parties to investigate the Company, its affairs, and its business in order
to
26
assure that adequate disclosure has been made in the Registration Statement,
any preliminary prospectus, and the Prospectus (and any amendments and
supplements thereto), as required by the Securities Act and the Exchange Act.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
By:________________________________________________
Xxxx X. Xxxxxxxx
Chairman, President and Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Representatives in San Francisco, California as of the date first above
written.
JMP SECURITIES LLC
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
By: JMP SECURITIES LLC
By: _________________________________________
Name:
Title:
27
SCHEDULE A
LIST OF THE UNDERWRITERS
Number of Firm Offered Shares to
Underwriters be Purchased
-------------------------------------------------------------------------------- --------------------------------
JMP Securities LLC..............................................................
Xxxxxx, Xxxxxxxx & Company, Incorporated........................................
Total.................................................................. 3,000,000
Schedule B-1
EXHIBIT A
FORM OF LEGAL OPINION OF COUNSEL TO THE COMPANY
This is the form of opinion of counsel for the Company to be delivered
pursuant to Section 4(d) ("Conditions of the Obligations of the Underwriters")
of the Underwriting Agreement. References to the Prospectus in this Exhibit A
include any supplements thereto at the Closing Date. Capitalized terms herein
shall, unless the context indicates otherwise, have the same meanings as in the
Agreement. Any reference in one section hereof to another section or a schedule
attached to the Agreement shall be deemed to incorporate the matters addressed
in such referenced section or schedule.
(i) The Company and each subsidiary (as defined in Rule
405 under the Securities Act) has been duly organized and is validly
existing as a corporation, limited partnership or limited liability
company, as applicable, in good standing under the laws of the
jurisdiction of its organization.
(ii) The Company and each subsidiary has the full power
and authority to own, lease, operate its properties, and conduct its
business as described in the Prospectus.
(iii) The Company and each subsidiary is duly qualified as
a foreign entity to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except for such jurisdictions where the failure to so qualify or to be
in good standing would not, individually or in the aggregate, result in
a Material Adverse Change.
(iv) The Company and its subsidiaries possess such valid
and current licenses, certificates, authorizations, or permits issued
by the appropriate state, federal, or foreign regulatory agencies or
bodies necessary to conduct their respective businesses, and neither
the Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with,
any such license, certificate, authorization or permit.
(v) Commencing with its taxable year ended December 31,
1997, the Company has been organized and has operated in conformity
with the requirements for qualification as a real estate investment
trust under Sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the "Code"), and the Company's current and proposed
method of operation will enable it to satisfy the requirements for
qualification as a real estate investment trust under the Code.
(vi) To the best knowledge of such counsel, the Company
does not own or control, directly or indirectly, any corporation,
association, or other entity other than the subsidiaries listed in
Exhibit 21 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2002.
(vii) All of the issued and outstanding capital stock,
partnership interests or membership interests, as applicable, of each
such subsidiary of the Company has been duly authorized and validly
issued, is fully paid and non-assessable, and have not been issued in
violation of or subject to any preemptive right arising under the
certificate of incorporation or Maryland General Corporation Law, or
any co-sale right, right of first refusal or other similar right, and
is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, or
any pending or threatened claim.
Exhibit A-1
(viii) The authorized, issued, and outstanding capital stock
of the Company (including the Common Stock) conform to the descriptions
thereof set forth in the Prospectus. All of the outstanding shares of
Common Stock have been duly authorized and validly issued, are fully
paid and non-assessable, and will not have been issued in violation of
or subject to any preemptive right arising under the charter or
Maryland General Corporation Law, or any co-sale right, right of first
refusal, or other similar right. Furthermore, such shares of Common
Stock have been issued in compliance with the registration and
qualification requirements of federal and state securities laws. The
form of certificate used to evidence the Common Stock is in due and
proper form and complies with all applicable requirements of the
charter and bylaws of the Company and Maryland General Corporation Law.
(ix) The description of the Company's stock option, stock
bonus, 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.
(x) No stockholder of the Company or any other person has
any preemptive right, right of first refusal, or other similar right to
subscribe for or purchase securities of the Company arising (i) by
operation of the charter or bylaws of the Company or Maryland General
Corporation Law or (ii) otherwise.
(xi) The Underwriting Agreement has been duly authorized,
executed, and delivered by, and is a valid and binding agreement of,
the Company, enforceable in accordance with its terms, except as rights
to indemnification thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws relating
to or affecting creditors' rights generally or by general equitable
principles.
(xii) The Offered Shares to be purchased by the
Underwriters from the Company have been duly authorized for issuance
and sale pursuant to the Underwriting Agreement and, when issued and
delivered by the Company pursuant to the Underwriting Agreement against
payment of the consideration set forth therein, will be validly issued,
fully paid, and non-assessable, and will not have been issued in
violation of or subject to any preemptive right arising under the
charter or Maryland General Corporation Law, or any co-sale right,
right of first refusal, or other similar right.
(xiii) The Registration Statement has become effective under
the Securities Act and the offer and sale of the Offered Shares have
been registered under the Securities Act and, to such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Securities Act.
(xiv) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus including any document
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and the Prospectus including any document
incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and supporting
schedules included or incorporated by reference therein or in exhibits
to or excluded from the Registration Statement, as to which no opinion
need be rendered) comply as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act.
Exhibit A-2
(xv) The Offered Shares have been approved for listing on
the AMEX.
(xvi) The statements (i) in the Prospectus under the
captions "Risk Factors--Risks Related to Our Status as REIT and Our
Investment Company Act Exemption," "Risk Factors - Risks Related to
this Offering and Our Corporate Structure," "Management's Discussion
and Analysis and Results of Operations - Liquidity," "Our Company -
Legal Proceedings" "Federal Income Tax Considerations," "Description of
Our Capital Stock; Selected Provisions of Maryland Law and Our Charter
and By-laws" and "Underwriting" and (ii) in Item 15 of the Registration
Statement, insofar as such statements constitute matters of law,
summaries of legal matters, the Company's charter or bylaw provisions,
documents or legal proceedings, or legal conclusions, has been reviewed
by such counsel and fairly present and summarize, in all material
respects, the matters referred to therein.
(xvii) Each document filed pursuant to the Exchange Act
(other than the financial statements and supporting schedules included
therein, as to which no opinion need be rendered) and incorporated or
deemed to be incorporated by reference in the Prospectus complied when
so filed as to form in all material respects with the Exchange Act.
(xviii) There are no legal or governmental actions, suits, or
proceedings pending or threatened against the Company or any of its
subsidiaries which are required to be disclosed in the Registration
Statement or the Prospectus or any incorporated document by the
Securities Act or by the Exchange Act other than those disclosed
therein.
(xix) There are no Existing Instruments required to be
described or referred to in the Registration Statement or to be filed
as exhibits thereto other than those described or referred to therein
or filed or incorporated by reference as exhibits thereto, and the
descriptions thereof and references thereto are correct in all material
respects.
(xx) No consent, approval, authorization, or other order
of, or registration or filing with, any court or other governmental
authority or agency, is required for the Company's execution, delivery,
and performance of the Underwriting Agreement and consummation of the
transactions contemplated thereby and by the Prospectus, except as
required under the Securities Act, applicable state securities or blue
sky laws, applicable federal or provincial laws of Canada, and by the
NASD.
(xxi) The execution and delivery of the Underwriting
Agreement by the Company, the performance by the Company of its
obligations thereunder (other than performance by the Company of its
obligations under the indemnification section of the Underwriting
Agreement, as to which no opinion need be rendered), and the
consummation of the transactions herein contemplated (i) have been duly
authorized by all necessary corporate action on the part of the
Company; (ii) will not result in any violation of the provisions of the
charter or bylaws of the Company or any of its subsidiaries; (iii) will
not constitute a breach of, or Default or a Debt Repayment Triggering
Event under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, any evidence of indebtedness of the
Company or its subsidiaries, or any lease, contract, indenture,
instrument to which the Company or any of its subsidiaries is a party
or by which their respective properties are bound, or (B) any other
material Existing Instrument; or (iv) will not result in any violation
of any law, administrative regulation, or administrative or court
decree applicable to the Company or any of its subsidiaries.
Exhibit A-3
(xxii) The Company is not, and after receipt of payment for
the Offered Shares will not be, an "investment company" within the
meaning of Investment Company Act.
(xxiii) Except as disclosed in the Prospectus, there are no
persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or
included in the offering contemplated by the Underwriting Agreement,
except for such rights as have been duly waived.
(xxiv) Neither the Company nor any of its subsidiaries is
(i) in violation of its charter or bylaws or any law, administrative
regulation, or administrative or court decree applicable to the Company
or any of its subsidiaries or (ii) in Default in the performance or
observance of any obligation, agreement, covenant, or condition
contained in any material Existing Instrument, except in each such case
for such violations or Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company, and with the Underwriters at which the contents of the Registration
Statement and the Prospectus, and any supplements or amendments thereto, and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness, or
fairness of the statements contained in the Registration Statement or the
Prospectus (other than as specified above), and any supplements or amendments
thereto, on the basis of the foregoing, nothing has come to their attention
which would lead them to believe that (i) the Registration Statement or any
amendments thereto, at the time the Registration Statement or such amendments
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 not misleading or (ii) the Prospectus, and any amendment or
supplement thereto, as of its date or at the First Closing Date or the Second
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. We express no belief as to the
financial statements or schedules or other financial or statistical data derived
therefrom, included or incorporated by reference in the Registration Statement
or the Prospectus or any amendments or supplements thereto.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials.
Exhibit A-4
EXHIBIT B
FORM OF LOCK-UP AGREEMENT
____________, 2003
JMP Securities LLC
Xxxxxx, Xxxxxxxx & Company, Incorporated
As Representatives of the Several Underwriters
c/o JMP Securities LLC
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: Hanover Capital Mortgage Holdings, Inc. (the "COMPANY")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("COMMON STOCK") or securities convertible into,
exchangeable, or exercisable for Common Stock ("SECURITIES"). The Company
proposes to carry out a public offering of Common Stock (the "OFFERING") for
which you will act as underwriters. The undersigned recognizes that the Offering
will be of benefit to the undersigned and will benefit the Company by, among
other things, raising additional capital for its operations. The undersigned
acknowledges that you are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of JMP Securities LLC
(which consent may be withheld in its sole discretion), directly or indirectly,
sell, offer, contract, or grant any option to sell (including without limitation
any short sale), pledge, transfer, establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder (collectively,
the "EXCHANGE ACT") or otherwise dispose of any shares (collectively, a
"DISPOSITION") of Securities currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Exchange Act) by the
undersigned, or publicly announce the undersigned's intention to do any of the
foregoing, for a period commencing on the date hereof and continuing through the
close of trading on the date ninety (90) days after the date of the Prospectus
(the "LOCK-UP PERIOD"). The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company's transfer agent and registrar
against the transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
The foregoing restriction has been expressly agreed to preclude the holder of
the Securities from engaging in any hedging or other transaction which is
designed to or reasonably expected to lead to or result in a Disposition of
Securities during the Lock-up Period, even if such Securities would be disposed
of by someone other than such holder. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale, or grant of any right (including,
without limitation, any put or call option) with respect to any Securities or
with respect to any security (other than a broad-based market basket or index)
that included, relates to, or derives any significant part of its value from
Securities. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of shares of
Exhibit B-1
Common Stock or Securities held by the undersigned except in compliance with the
foregoing restrictions.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, of any Common Stock owned
either of record or beneficially by the undersigned, including any rights to
receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
_____________________________________
Printed Name of Holder
By:__________________________________
Signature
_____________________________________
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
Exhibit B-2
