ATLAS AMERICA, INC.
2,645,000 Shares of Common Stock
UNDERWRITING AGREEMENT
________________, 2004
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
McDONALD INVESTMENTS, INC.
as Representatives of the several Underwriters
c/o Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Atlas America, Inc., a Delaware corporation (the "Company"), confirms its
agreement with each of the Underwriters listed on Schedule II hereto
(collectively, the "Underwriters"), for whom Friedman, Billings, ▇▇▇▇▇▇ & Co.,
Inc. and McDonald Investments are acting as representatives (in such capacity,
the "Representatives"), with respect to (i) the sale by the Company of 2,300,000
shares (the "Initial Shares") of Common Stock, par value $0.01 per share, of the
Company ("Common Stock") in the respective numbers of shares set forth opposite
the name of the Company in Schedule I hereto, and the purchase by the
Underwriters, acting severally and not jointly, of the respective number of
shares of Common Stock set forth opposite the names of the Underwriters in
Schedule II hereto, and (ii) the grant of the option described in Section 1(b)
hereof to purchase all or any part of 345,000 additional shares of Common Stock
to cover over-allotments (the "Option Shares"), if any, from the Company in the
number of shares of Common Stock set forth opposite the name of the Company in
Schedule I hereto, to the Underwriters, acting severally and not jointly, in the
respective numbers of shares of Common Stock set forth opposite the names of the
Underwriters in Schedule II hereto. The 2,300,000 shares of Common Stock to be
purchased by the Underwriters and all or any part of the 345,000 shares of
Common Stock subject to the option described in Section l(b) hereof are
hereinafter called, collectively, the "Shares."
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Underwriters deem advisable after this
agreement ("Agreement") has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
Commission"), a registration statement on Form S-1 (No. 333-112653) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations thereunder (the "Securities Act Regulations"). The Company has
prepared and filed such amendments thereto, if any, and such amended preliminary
prospectuses, if any, as may have been required to the date hereof, and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been declared effective
under the Securities Act by the Commission. The registration statement as
amended at the time it became effective (including all information deemed
(whether by incorporation by reference or otherwise) to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
of the Securities Act Regulations) is hereinafter called the "Registration
Statement," except that, if the Company files a post-effective amendment to such
registration statement which becomes effective prior to the Closing Time (as
defined below), "Registration Statement" shall refer to such registration
statement as so amended. Any registration statement filed pursuant to Rule
462(b) of the Securities Act Regulations is hereinafter called the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the 462(b) Registration Statement. Each prospectus included in the
Registration Statement, or amendments thereof or supplements thereto, before it
became effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant to Rule
424(a) of the Securities Act Regulations is hereinafter called the "Preliminary
Prospectus." The term "`Prospectus" means the final prospectus, as first filed
with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Securities Act Regulations, and any amendments thereof or supplements thereto.
The Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, at the purchase price per share
of $ , the Company agrees to sell to the Underwriters the number of Initial
Shares set forth in Schedule I opposite its name, and each Underwriter agrees,
severally and not jointly, to purchase from the Company the number of Initial
Shares set forth in Schedule II opposite such Underwriter's name, plus any
additional number of Initial Shares which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 8 hereof, subject in each
case, to such adjustments among the Underwriters as the Representatives in their
sole discretion shall make to eliminate any sales or purchases of fractional
shares.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per share set forth in paragraph (a), the Company hereby grants an option
to the Underwriters, acting severally and not jointly, to purchase from the
Company in Schedule I hereto, all or any part of the Option Shares, plus any
additional number of Option Shares which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 8 hereof. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Shares upon notice by the Representatives to the Company setting forth
the number of Option Shares as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Shares. Any such time and date of delivery (a "Date of Delivery") shall
be determined by the Representatives, but shall not be later than three full
business days (or earlier, without the consent of the Company, than two full
business days) after the exercise of such option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the Option Shares, the Company will sell that proportion of the
total number of Option Shares then being purchased which the number of Initial
Shares set forth in Schedule I opposite the name of the Company bears to the
total number of Initial Shares, and each of the Underwriters, acting severally
and not jointly, will purchase that proportion of the total number of Option
Shares then being purchased which the number of Initial Shares set forth in
Schedule II opposite the name of such Underwriter bears to the total number of
Initial Shares, subject in each case to such adjustments among the Underwriters
as the Representatives in their sole discretion shall make to eliminate any
sales or purchases of fractional shares.
2. Payment and Delivery:
(a) Initial Shares. The Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representatives, including, at the option of the
Representatives, through the facilities of The Depository Trust Company ("DTC")
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Representatives by the Company
upon at least forty-eight hours' prior notice. The Company will cause the
certificates representing the Initial Shares to be made available for checking
and packaging at least twenty-four hours prior to the Closing Time (as defined
below) with respect thereto at the office of the Representatives, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at the office of DTC or its
designated custodian, as the case may be (the "Designated Office"). The time and
date of such delivery and payment shall be 9:30 a.m., New York City time, on the
third (fourth, if pricing occurs after 4:30 p.m., New York City time) business
day after the date hereof (unless another time and date shall be agreed to by
the Representatives and the Company). The time at which such payment and
delivery are actually made is hereinafter sometimes called the "Closing Time"
and the date of delivery of both Initial Shares and Option Shares is hereinafter
sometimes called the "Date of Delivery."
(b) Option Shares. Any Option Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representatives, including, at the option of the
Representatives, through the facilities of DTC for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified to the Representatives by the Company upon at least forty-eight hours'
prior notice. The Company will cause the certificates representing the Option
Shares to be made available for checking and packaging at least twenty-four
hours prior to the Date of Delivery with respect thereto at the Designated
Office. The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on the date specified by the Representatives in the notice given
by the Representatives to the Company of the Underwriters' election to purchase
such Option Shares or on such other time and date as the Company and the
Representatives may agree upon in writing.
(c) Directed Shares. It is understood that approximately shares of the
Initial Shares ("Directed Shares") initially will be reserved by the
Underwriters for offer and sale to employees and persons having business
relationships with the Company ("Directed Share Participants") upon the terms
and conditions set forth in the Prospectus and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. (the
"Directed Share Program"). Under no circumstances will the Representatives or
any Underwriter be liable to the Company or to any Directed Share Participant
for any action taken or omitted to be taken in good faith in connection with
such Directed Share Program. To the extent that any Directed Shares are not
affirmatively reconfirmed for purchase by any Directed Share Participant on or
immediately after the date of this Agreement, such Directed Shares may be
offered to the public as part of the public offering contemplated herein.
3. Representations and Warranties of the Company:
The Company represents and warrants to the Underwriters that:
(a) the Company has an authorized capitalization as set forth in the
Prospectus; the outstanding shares of capital stock, partnership interests and
membership interests as applicable (collectively, "equity interests") of the
Company and each subsidiary (within the meaning of Rule 405 of the Securities
Act Regulations) of the Company (each, a "Subsidiary") have been duly and
validly authorized and issued and are fully paid and non-assessable (or all
capital contributions required to be made in connection therewith as of the date
hereof have been so made), and except as disclosed in the Prospectus with
respect to Atlas Pipeline Partners, L.P. ("APL") all of the outstanding equity
interests of the Subsidiaries are directly or indirectly owned of record and
beneficially by the Company; except as disclosed in the Prospectus under the
caption "Relationship with Resource America", there are no outstanding (i)
securities or obligations of the Company or any of the Subsidiaries convertible
into or exchangeable for any equity interest of the Company or any such
Subsidiary, (ii) warrants, rights or options to subscribe for or purchase from
the Company or any such Subsidiary any such equity interest or any such
convertible or exchangeable securities or obligations, or (iii) obligations of
the Company or any such Subsidiary to issue any equity interest, any such
convertible or exchangeable securities or obligation, or any such warrants,
rights or options;
(b) each of the Company and the Subsidiaries (all of which are named in
Exhibit 21 to the Registration Statement) has been duly organized or formed and
is validly existing as a corporation, limited partnership or limited liability
company in good standing under the laws of its respective jurisdiction of
organization or formation with full corporate, partnership or limited liability
company, as applicable, power and authority to own its respective properties and
to conduct its respective businesses as described in the Registration Statement
and Prospectus and, in the case of the Company, to execute and deliver this
Agreement and to consummate the transactions contemplated herein;
(c) the Company and all of the Subsidiaries are duly qualified or
licensed and are in good standing in each jurisdiction in which they conduct
their respective businesses or in which they own or lease real property or
otherwise maintain an office and in which the failure, individually or in the
aggregate, to be so qualified or licensed could have a material adverse effect
on the assets, business, operations, earnings, prospects, properties or
condition (financial or otherwise), present or prospective, of the Company and
the Subsidiaries taken as a whole, (any such effect or change, where the context
so requires, is hereinafter called a "Material Adverse Effect" or "Material
Adverse Change"); except as disclosed in the Prospectus under "Business - Credit
Facility" with respect to limitations under the Company's credit facility, no
Subsidiary is prohibited or restricted, directly or indirectly, from paying
dividends to the Company, or from making any other distribution with respect to
such Subsidiary's capital stock or from repaying to the Company or any other
Subsidiary any amounts which may from time to time become due under any loans or
advances to such Subsidiary from the Company or such other Subsidiary, or from
transferring any such Subsidiary's property or assets to the Company or to any
other Subsidiary; other than as disclosed in the Prospectus, the Company does
not own, directly or indirectly, any capital stock or other equity securities of
any other corporation or any ownership interest in any partnership, joint
venture or other association;
(d) the Company and the Subsidiaries are in compliance in all material
respects with all applicable laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with affiliates;
(e) neither the Company nor any Subsidiary is in breach of or in default
under (nor has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), its respective organizational
documents, or in the performance or observance of any obligation, agreement,
covenant or condition contained in any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or their respective
properties is bound, except for such breaches or defaults which could not have a
Material Adverse Effect;
(f) the execution, delivery and performance of this Agreement, and
consummation of the transactions contemplated herein and in the agreements
described in the Prospectus under the caption "Relationship with Resource
America" (the "Separation Agreements") will not (A) conflict with, or result in
any breach of, or constitute a default under (nor constitute any event which
with notice, lapse of time, or both would constitute a breach of, or default
under), (i) any provision of the organizational documents of the Company or any
Subsidiary, or (ii) any provision of any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or their respective
properties may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or any Subsidiary, except in the case of this clause (ii) for such
breaches or defaults which could not have a Material Adverse Effect; or (B)
result in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company or any Subsidiary;
(g) this Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general equitable principles, and except to
the extent that the indemnification and contribution provisions of Section 9
hereof may be limited by federal or state securities laws and public policy
considerations in respect thereof, and as of the first Date of Delivery, each of
the Separation Agreements will have been duly authorized, executed and delivered
by the Company and will be a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general equitable principles;
(h) no approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the Company's execution,
delivery and performance of this Agreement or the Separation Agreements, its
consummation of the transactions contemplated herein and therein, and its sale
and delivery of the Shares, other than (A) such as have been obtained, or will
have been obtained at the Closing Time or the relevant Date of Delivery, as the
case may be, under the Securities Act and the Securities Exchange Act of 1934
(the "Exchange Act"), (B) such approvals as have been obtained in connection
with the approval of the quotation of the Shares on The NASDAQ National Market
and (C) any necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the Underwriters;
(i) each of the Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state or local law, regulation or rule, and has
obtained all necessary authorizations, consents and approvals from other
persons, required in order to conduct their respective businesses as described
in the Prospectus, except to the extent that any failure to have any such
licenses, authorizations, consents or approvals, to make any such filings or to
obtain any such authorizations, consents or approvals could not, individually or
in the aggregate, have a Material Adverse Effect; neither the Company nor any of
the Subsidiaries is required by any applicable law to obtain accreditation or
certification from any governmental agency or authority in order to provide the
products and services which it currently provides or which it proposes to
provide as set forth in the Prospectus; neither the Company nor any of the
Subsidiaries is in violation of, in default under, or has received any notice
regarding a possible violation, default or revocation of any such license,
authorization, consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the Company or
any of the Subsidiaries the effect of which could result in a Material Adverse
Change; and no such license, authorization, consent or approval contains a
materially burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectus;
(j) each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are threatened by the Commission, and the Company has
complied to the Commission's satisfaction with any request on the part of the
Commission for additional information;
(k) the Preliminary Prospectus and the Registration Statement comply, and
the Prospectus and any further amendments or supplements thereto will, when they
have become effective or are filed with the Commission, as the case may be,
comply, in all material respects with the requirements of the Securities Act and
the Securities Act Regulations; the Registration Statement did not, and any
amendment thereto will not, in each case as of the applicable effective date,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
the Preliminary Prospectus does not, and the Prospectus or any amendment or
supplement thereto will not, as of the applicable filing date and at the Closing
Time and on each Date of Delivery (if any), contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
makes no warranty or representation with respect to any statement contained in
the Registration Statement or the Prospectus in reliance upon and in conformity
with the information concerning the Underwriters and furnished in writing by or
on behalf of the Underwriters through the Representatives to the Company
expressly for use in the Registration Statement or the Prospectus (that
information being limited to that described in the penultimate sentence of the
first paragraph of Section 9(c) hereof);
(l) the statistical and market-related data included in the Prospectus
and the Registration Statement are based on or derived from sources that the
Company believes to be reliable and accurate;
(m) the Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical to the
versions of the Preliminary Prospectus and Prospectus created to be transmitted
to the Commission for filing via the Electronic Data Gathering Analysis and
Retrieval System ("▇▇▇▇▇"), except to the extent permitted by Regulation S-T;
(n) there are no actions, suits, proceedings, inquiries or investigations
pending or, to the knowledge of the Company, threatened against the Company or
any Subsidiary or any of their respective officers and directors or to which the
properties, assets or rights of any such entity are subject, at law or in
equity, before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority, arbitral panel or agency which
could result in a judgment, decree, award or order having a Material Adverse
Effect;
(o) the financial statements, including the notes thereto, included in
the Registration Statement and the Prospectus present fairly the consolidated
financial position of the entities to which such financial statements relate
(the "Covered Entities") as of the dates indicated and the consolidated results
of operations and changes in financial position and cash flows of the Covered
Entities for the periods specified; such financial statements have been prepared
in conformity with generally accepted accounting principles as applied in the
United States and on a consistent basis during the periods involved and in
accordance with Regulation S-X promulgated by the Commission; the financial
statement schedules included in the Registration Statement and the amounts in
the Prospectus under the captions "Summary - Summary Financial Information,"
"Capitalization" and "Selected Consolidated Financial Data" fairly present the
information shown therein and have been compiled on a basis consistent with the
financial statements included in the Registration Statement and the Prospectus;
no other financial statements or supporting schedules are required to be
included in the Registration Statement; the other financial information included
in the Registration Statement and the Prospectus has been derived from the
accounting records of the Company and its Subsidiaries and present fairly, in
all material respects, the information shown thereby;
(p) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, whose reports on the consolidated financial
statements of the Company and the Subsidiaries are filed with the Commission as
part of the Registration Statement and Prospectus and any other accounting firm
that has certified Company financial statements and delivered its reports with
respect thereto, are, and were during the periods covered by their reports,
independent public accountants as required by the Securities Act and the
Securities Act Regulations and, to the Company's knowledge, is not in violation
of the auditor independence requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as
amended, and the rules and regulations promulgated by the Commission thereunder
(the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act");
(q) subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or Prospectus, there has not been (A) any
Material Adverse Change or any development that could reasonably be expected to
result in a Material Adverse Change, whether or not arising in the ordinary
course of business, (B) any transaction that is material to the Company and the
Subsidiaries taken as a whole, contemplated or entered into by the Company or
any of the Subsidiaries, (C) any obligation, contingent or otherwise, directly
or indirectly incurred by the Company or any Subsidiary that is material to the
Company and Subsidiaries taken as a whole or (D) any dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock;
(r) the Shares conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus;
(s) there are no persons with registration or other similar rights to
have any equity or debt securities, including securities which are convertible
into or exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act, except for Resource America, Inc. ("RAI"), as described in the
Prospectus;
(t) the Shares have been duly authorized and, when issued and duly
delivered against payment therefor as contemplated by this Agreement, will be
validly issued, fully paid and non-assessable, free and clear of any pledge,
lien, encumbrance, security interest or other claim, and the issuance and sale
of the Shares by the Company is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of the
Company or under any agreement to which the Company or any Subsidiary is a party
or otherwise;
(u) the Shares have been registered pursuant to Section 12(g) of the
Exchange Act and approved for listing under the symbol "ATLS" on The NASDAQ
National Market, subject to official notice of issuance;
(v) the Company has not taken, and will not take, directly or indirectly,
any action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Shares;
(w) except for Anthem Securities, Inc., neither the Company nor any of
its affiliates (i) is required to register as a "broker" or "dealer" in
accordance with the provisions of the Exchange Act, or the rules and regulations
thereunder (the "Exchange Act Regulations"), or (ii) directly, or indirectly
through one or more intermediaries, controls or has any other association with
(within the meaning of Article I of the By-laws of the National Association of
Securities Dealers, Inc. (the "NASD")) any member firm of the NASD;
(x) the Company has not relied upon the Representatives or legal counsel
for the Representatives for any legal, tax or accounting advice in connection
with the offering and sale of the Shares;
(y) any certificate signed by any officer of the Company or any
Subsidiary delivered to the Representatives or to counsel for the Underwriters
pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby;
(z) the form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements, with any
applicable requirements of the organizational documents of the Company and the
requirements of The NASDAQ National Market;
(aa) the Company and the Subsidiaries have good and marketable title in
fee simple to all real property, if any, and good title to all personal property
owned by them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects, except such as are
disclosed in the Prospectus or such as do not materially and adversely affect
the value of such property and do not interfere with the use made or proposed to
be made of such property by the Company and the Subsidiaries; any real property
and buildings held under lease by the Company or any Subsidiary are held under
valid, existing and enforceable leases, with such exceptions as are disclosed in
the Prospectus or are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company or such
Subsidiary; and all of the leases and subleases material to the business of the
Company and its Subsidiaries, taken as a whole, and under which the Company or
any Subsidiary holds properties described in the Prospectus, are in full force
and effect, except where such would not have a Material Adverse Effect, and the
Company and its Subsidiaries have not received any written notice of any
material claims of any sort that has been asserted by anyone adverse to the
rights of the Company or any Subsidiary under any such leases or subleases, or
affecting or questioning the rights of the Company or such Subsidiary to the
continued possession of the leased or subleased premises under any such lease or
sublease, except where such could not have a Material Adverse Effect;
(bb) the descriptions in the Registration Statement and the Prospectus of
the legal or governmental proceedings, contracts, leases and other legal
documents therein described present fairly the information required to be shown,
and there are no legal or governmental proceedings, contracts, leases, or other
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement which
are not described or filed as required; all agreements between the Company or
any of the Subsidiaries and third parties expressly referenced in the Prospectus
(including without limitation the Separation Agreements) are legal, valid and
binding obligations of the Company or one or more of the Subsidiaries,
enforceable in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
equitable principles;
(cc) the Company and each Subsidiary owns or possesses adequate licenses
or other rights to use all patents, trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how (collectively
"Intangibles") necessary to entitle the Company and each Subsidiary to conduct
its business as described in the Prospectus, and neither the Company nor any
Subsidiary has received notice of infringement of or conflict with (and neither
the Company nor any Subsidiary knows of any such infringement of or conflict
with) asserted rights of others with respect to any Intangibles which could have
a Material Adverse Effect;
(dd) all derivative financial instruments, contracts or arrangements were
entered into in the ordinary course of business and in accordance with
commercially reasonable business practices and applicable rules, regulations and
policies of any entity or organization regulating such transactions, with
counterparties believed to be financially responsible at the time and are legal,
valid and binding obligations of the Company or applicable Subsidiary, and are
in full force and effect, and the Company and its Subsidiaries, as applicable,
have performed their respective obligations thereunder required to be performed
as of the date hereof, in all material respects;
(ee) the Company and each of the Subsidiaries makes and keeps books,
records and accounts which, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of assets, and maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences;
(ff) the Company and each of the Subsidiaries has filed on a timely basis
all necessary federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes shown as
due thereon; and no tax deficiency has been asserted against any such entity,
nor does any such entity know of any tax deficiency which is likely to be
asserted against any such entity which, if determined adversely to any such
entity, could have a Material Adverse Effect; all tax liabilities are adequately
provided for on the respective books of such entities;
(gg) the Company and each of the Subsidiaries maintains insurance (issued
by insurers of recognized financial responsibility) of the types and in the
amounts generally deemed adequate for their respective businesses and consistent
with insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and the Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect;
(hh) neither the Company nor any of the Subsidiaries is in violation, or
has received notice of any violation with respect to, any applicable
environmental, safety or similar law applicable to the business of the Company
or any of the Subsidiaries; the Company and the Subsidiaries have received all
permits, licenses or other approvals required of them under applicable federal
and state occupational safety and health and environmental laws and regulations
to conduct their respective businesses, and the Company and the Subsidiaries are
in compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which could not,
individually or in the aggregate, result in a Material Adverse Change;
(ii) neither the Company nor any Subsidiary is in violation of or has
received notice of any violation with respect to any federal or state law
relating to discrimination in the hiring, promotion or pay of employees, nor any
applicable federal or state wages and hours law, nor any state law precluding
the denial of credit due to the neighborhood in which a property is situated,
the violation of any of which could have a Material Adverse Effect;
(jj) the Company and each of the Subsidiaries are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any of the Subsidiaries would have any
liability; the Company and each of the Subsidiaries have not incurred and do not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Section 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder ("Code"); and each "pension plan" for
which the Company and each of its Subsidiaries would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification;
(kk) neither the Company nor any of the Subsidiaries nor any officer or
director purporting to act on behalf of the Company or any of the Subsidiaries
has at any time (i) made any contributions to any candidate for political
office, or failed to disclose fully any such contributions, in violation of law,
(ii) made any payment to any state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or allowed by applicable law, (iii) made any
payment outside the ordinary course of business to any investment officer or
loan broker or person charged with similar duties of any entity to which the
Company or any of the Subsidiaries sells or from which the Company or any of the
Subsidiaries buys loans or servicing arrangements for the purpose of influencing
such agent, officer, broker or person to buy loans or servicing arrangements
from or sell loans to the Company or any of the Subsidiaries, or (iv) engaged in
any transactions, maintained any bank account or used any corporate funds except
for transactions, bank accounts and funds which have been and are reflected in
the normally maintained books and records of the Company and the Subsidiaries;
(ll) there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company or any of the Subsidiaries to or for
the benefit of any of the officers or directors of the Company or any of the
Subsidiaries or any of the members of the families of any of them;
(mm) neither the Company nor any of the Subsidiaries nor, to the
knowledge of the Company, any employee or agent of the Company or any of the
Subsidiaries, has made any payment of funds of the Company or of any Subsidiary
or received or retained any funds in violation of any law, rule or regulation or
of a character required to be disclosed in the Prospectus;
(nn) all securities issued by the Company, any of the Subsidiaries or any
partnerships or other entities established or sponsored by the Company or any
Subsidiary, have been issued and sold in compliance with (i) all applicable
federal and state securities laws, (ii) the laws of the applicable jurisdiction
of organization or formation of the issuing entity and, (iii) with respect to
the securities of APL, the requirements of the American Stock Exchange;
(oo) the participation, joint development, joint operating, farm-out and
other agreements relating to rights of the Company and its Subsidiaries with
respect to the ownership, lease or operation of oil and gas properties, the
acquisition of interests in oil and gas properties or the exploration for,
development of or production of oil and gas reserves thereon, constitute valid
and binding agreements of the Company and its Subsidiaries that are parties
thereto and, to the best knowledge of the Company, of the other parties thereto,
enforceable in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general equitable principles;
(pp) except as otherwise disclosed in the Prospectus, (i) neither the
Company nor any of the Subsidiaries nor, to the best knowledge of the Company,
any other owners of the property at any time or any other party has at any time,
handled, stored, treated, transported, manufactured, spilled, leaked, or
discharged, dumped, transferred or otherwise disposed of or dealt with,
Hazardous Materials (as hereinafter defined) on, to or from the Company's or any
Subsidiary's properties, other than by any such action taken in compliance with
all applicable Environmental Statutes, (ii) the Company and its Subsidiaries do
not intend to use any properties for the purpose of handling, storing, treating,
transporting, manufacturing, spilling, leaking, discharging, dumping,
transferring or otherwise disposing of or dealing with Hazardous Materials other
than by any such action taken in compliance with all applicable Environmental
Statutes, (iii) neither the Company nor any of the Subsidiaries knows of any
seepage, leak, discharge, release, emission, spill, or dumping of Hazardous
Materials into waters on or adjacent to any real property owned or occupied by
any such party, or onto lands from which Hazardous Materials might seep, flow or
drain into such waters; (iv) neither the Company nor any of the Subsidiaries has
received any notice of, or has any knowledge of any occurrence or circumstance
which, with notice or passage of time or both, would give rise to a claim under
or pursuant to any federal, state or local environmental statute or regulation
or under common law, pertaining to Hazardous Materials on or originating from
any assets described in the Prospectus or any real property owned or occupied by
any such party or arising out of the conduct of any such party, including
without limitation a claim under or pursuant to any Environmental Statute
(hereinafter defined); (v) no real property owned or operated by the Company or
any of the Subsidiaries is included or, to the best of the Company's knowledge,
proposed for inclusion on the National Priorities List issued pursuant to CERCLA
(as hereinafter defined) by the United States Environmental Protection Agency
(the "EPA") or, to the best of the Company's knowledge, proposed for inclusion
on any similar list or inventory issued pursuant to any other Environmental
Statute or issued by any other Governmental Authority (as hereinafter defined);
As used herein, "Hazardous Material" shall include, without limitation
any flammable explosives, radioactive materials, hazardous materials, hazardous
wastes, toxic substances, or related materials, asbestos or any hazardous
material as defined by any federal, state or local environmental law, ordinance,
rule or regulation including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Sections 9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Sections 1801-1819, the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. Sections 6901-6992K, the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001-11050, the Toxic
Substances Control Act, 15 U.S.C. Sections 2601-2671, the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Sections 136-136y, the Clean Air Act, 42
U.S.C. Sections 7401-7642, the Clean Water Act (Federal Water Pollution Control
Act), 33 U.S.C. Sections 1251-1387, the Safe Drinking Water Act, 42 U.S.C.
Sections 300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C.
Sections 651-678, as any of the above statutes may be amended from time to time,
and in the regulations promulgated pursuant to each of the foregoing
(individually, an "Environmental Statute") or by any federal, state or local
governmental authority having or claiming jurisdiction over the properties and
assets described in the Prospectus (a "Governmental Authority");
(qq) in connection with this offering, the Company has not offered and
will not offer its Common Stock or any other securities convertible into or
exchangeable or exercisable for Common Stock in a manner in violation of the
Securities Act. The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offer and sale of
the Shares;
(rr) the Company has complied and will comply with all the provisions of
Florida Statutes, Section 517.075 (Chapter 92-198, Laws of Florida); and neither
the Company nor any of the Subsidiaries or affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba;
(ss) the Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated;
(tt) no relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of the Subsidiaries
on the other hand, which is required by the Securities Act and the Securities
Act Regulations to be described in the Registration Statement and the Prospectus
and which is not so described;
(uu) neither the Company nor any of the Subsidiaries is and, after giving
effect to the offering and sale of the Shares, will be (i) an "investment
company" or an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act"), (ii) a "public utility company," "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" thereof under
PUHCA, or (iii) subject to rates or terms of service regulation under federal or
state law;
(vv) there are no existing or, to the knowledge of the Company,
threatened labor disputes with the employees of the Company or any of the
Subsidiaries which are likely to have individually or in the aggregate a
Material Adverse Effect;
(ww) ▇▇▇▇▇▇ & Company, whose report is referenced in the Prospectus, was,
as of the date of such report, and is, as of the date hereof, an independent
petroleum engineer with respect to the Company and its Subsidiaries; and the
information underlying the estimates of reserves of the Company and its
Subsidiaries which was supplied by the Company to ▇▇▇▇▇▇ & Company for purposes
of auditing the reserve reports and estimates of the Company and its
Subsidiaries, including, without limitation, production, costs of operation and
development, current prices for production, agreements relating to current and
future operations and sales of production, was true and correct in all material
respects on the dates such estimates were made and such information was supplied
and was prepared in accordance with customary industry practices; other than
normal production of the reserves and intervening spot market product price
fluctuations described in the Prospectus, the Company is not aware of any facts
or circumstances that would result in an adverse change in the reserves, or the
present value of future net cash flows therefrom, as described in the
Prospectus, that could result in a Material Adverse Effect; estimates of such
reserves and present values as described in the Prospectus comply in all
material respects with the applicable requirements of Regulation S-X and
Industry Guide 2 under the Securities Act.
(xx) the consummation of the transactions contemplated by the Separation
Agreements and each of the documents, agreements and instruments to be executed
and delivered in connection therewith have been duly authorized by all necessary
corporate action, including, but not limited to, any vote of the stockholders of
the Company which may be required by applicable state law or the requirements of
The NASDAQ National Market; the Separation Agreements are, or at the Closing
Time will be, in full force and effect, and neither the Company nor any of the
other parties thereto is in breach or default of its obligations thereunder (nor
has any event occurred which with notice, lapse of time, or both would
constitute a breach of, or default thereunder); and
(yy) no consent, approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any jurisdiction where
the Directed Shares are being offered; the Company has not offered, or caused
the Representatives to offer, Shares to any person pursuant to the Directed
Share Program with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
4. Certain Covenants:
The Company hereby agrees with each Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such jurisdictions (both domestic and foreign) as the
Representatives may designate and to maintain such qualifications in effect as
long as requested by the Representatives for the distribution of the Shares,
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares);
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible and will advise the Representatives promptly and, if requested by
the Representatives, will confirm such advice in writing, when such
post-effective amendment has become effective;
(c) to prepare the Prospectus in a form approved by the Underwriters and
file such Prospectus (or a term sheet as permitted by Rule 434) with the
Commission pursuant to Rule 424(b) under the Securities Act not later than 10:00
a.m. (New York City time), on the day following the execution and delivery of
this Agreement or on such other day as the parties may mutually agree and to
furnish promptly (and with respect to the initial delivery of such Prospectus,
not later than 10:00 a.m. (New York City time) on the day following the
execution and delivery of this Agreement or on such other day as the parties may
mutually agree to the Underwriters copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the Registration
Statement) in such quantities and at such locations as the Underwriters may
reasonably request for the purposes contemplated by the Securities Act
Regulations, which Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the version created to be
transmitted to the Commission for filing via ▇▇▇▇▇, except to the extent
permitted by Regulation S-T;
(d) to advise the Representatives promptly and (if requested by the
Representatives) to confirm such advice in writing, when any post-effective
amendment to the Registration Statement becomes effective under the Securities
Act Regulations;
(e) to advise the Representatives immediately, confirming such advice in
writing, of (i) the receipt of any comments from, or any request by, the
Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes and, if
the Commission or any other government agency or authority should issue any such
order, to make every reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or Prospectus and to
file no such amendment or supplement to which the Representatives shall
reasonably object in writing;
(f) to furnish to the Underwriters for a period of five years from the
date of this Agreement (i) as soon as available, copies of all annual, quarterly
and current reports or other communications supplied to holders of shares of
Common Stock, (ii) as soon as practicable after the filing thereof, copies of
all reports filed by the Company with the Commission, the NASD or any securities
exchange and (iii) such other information as the Underwriters may reasonably
request regarding the Company and the Subsidiaries;
(g) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to the
Shares is required to be delivered under the Securities Act Regulations which,
in the judgment of the Company or in the reasonable opinion of the
Representatives or counsel for the Underwriters, would require the making of any
change in the Prospectus then being used so that the Prospectus would not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to amend or supplement the Prospectus to comply with
any law and, during such time, to promptly prepare and furnish to the
Underwriters copies of the proposed amendment or supplement before filing any
such amendment or supplement with the Commission and thereafter promptly furnish
at the Company's own expense to the Underwriters and to dealers, copies in such
quantities and at such locations as the Representatives may from time to time
reasonably request of an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with the law;
(h) to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(i) prior to filing with the Commission any amendment to the Registration
Statement or supplement to the Prospectus or any Prospectus pursuant to Rule 424
under the Securities Act, to furnish a copy thereof to the Representatives and
counsel for the Underwriters and obtain the consent of the Representatives to
the filing;
(j) to furnish promptly to each Representative a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith or
incorporated by reference therein) and such number of conformed copies of the
foregoing as the Representatives may reasonably request;
(k) to furnish to each Representative, not less than two business days
before filing with the Commission subsequent to the effective date of the
Prospectus and during the period referred to in paragraph (f) above, a copy of
any document proposed to be filed with the Commission pursuant to Section 13,
14, or 15(d) of the Exchange Act and during such period to file all such
documents in the manner and within the time periods required by the Exchange
Act, the Exchange Act Regulations and the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act;
(l) to apply the net proceeds of the sale of the Shares in accordance
with its statements under the caption "Use of Proceeds" in the Prospectus;
(m) to make generally available to its security holders and to deliver to
the Representatives as soon as practicable, but in any event not later than the
end of the fiscal quarter first occurring after the first anniversary of the
effective date of the Registration Statement an earnings statement complying
with the provisions of Section 11(a) of the Securities Act (in form, at the
option of the Company, complying with the provisions of Rule 158 of the
Securities Act Regulations,) covering a period of 12 months beginning after the
effective date of the Registration Statement;
(n) to use its best efforts to maintain the quotation of the Shares on
The NASDAQ National Market and to file with The NASDAQ National Market all
documents and notices required in connection therewith;
(o) to engage and maintain, at its expense, a registrar and transfer
agent for the Shares;
(p) to refrain during a period of 180 days from the date of the
Prospectus, without the prior written consent of the Representatives, from,
directly or indirectly, (i) offering, pledging, selling, contracting to sell,
selling any option or contract to purchase, purchasing any option or contract to
sell, granting any option for the sale of, or otherwise disposing of or
transferring, (or entering into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any time in
the future of), any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or filing any registration
statement under the Securities Act with respect to any of the foregoing, or (ii)
entering into any swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic consequence of
ownership of the Common Stock, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, or (B) any shares of Common Stock issued
by the Company upon the exercise of an option outstanding on the date hereof and
referred to in the Prospectus;
(q) not to, and to use its best efforts to cause its officers, directors
and affiliates not to, (i) take, directly or indirectly prior to termination of
the underwriting syndicate contemplated by this Agreement, any action designed
to stabilize or manipulate the price of any security of the Company, or which
may cause or result in, or which might in the future reasonably be expected to
cause or result in, the stabilization or manipulation of the price of any
security of the Company, to facilitate the sale or resale of any of the Shares,
(ii) sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of the Shares or (iii) pay or agree to pay to any person any
compensation for soliciting any order to purchase any other securities of the
Company;
(r) to cause each 1% or greater stockholder, officer and director of the
Company to furnish to the Representatives, prior to the first Date of Delivery,
a letter or letters, substantially in the form of Exhibit B hereto, pursuant to
which each such person shall agree not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 180 days from the date of the
Prospectus, without the prior written consent of the Representatives on behalf
of the Underwriters;
(s) [Intentionally omitted];
(t) [Intentionally omitted];
(u) if at any time during the 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 reasonable
opinion of the Representatives, the market price of the Common Stock has been or
is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus) and after written notice from the Representatives advising the
Company to the effect set forth above, to forthwith prepare, consult with the
Representatives concerning the substance of, and disseminate a press release or
other public statement, reasonably satisfactory to the Representatives,
responding to or commenting on such rumor, publication or event;
(v) that the Company will comply with all of the provisions of any
undertakings in the Registration Statement;
(w) [Intentionally omitted];
(x) that the Company (i) will comply with all applicable securities and
other applicable laws, rules and regulations, including without limitation, the
rules and regulations of the NASD, in each jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program and (ii) will
pay all reasonable fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program and any stamp duties,
similar taxes or duties or other taxes, if any, incurred by the Underwriters in
connection with the Directed Share Program.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the preparation,
issuance and delivery of the certificates for the Shares to the Underwriters,
including any stock or other transfer taxes or duties payable upon the sale of
the Shares to the Underwriters, (iii) the printing of this Agreement and any
dealer agreements and furnishing of copies of each to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state laws that the Company and the
Representatives have mutually agreed are appropriate and the determination of
their eligibility for investment under state law as aforesaid (including the
legal fees and filing fees and other disbursements of counsel for the
Underwriters and the printing and furnishing of copies of any blue sky surveys
or legal investment surveys to the Underwriters and to dealers, (v) filing for
review of the public offering of the Shares by the NASD (including the legal
fees and filing fees and other disbursements of counsel for the Underwriters
relating thereto), (vi) the fees and expenses of any transfer agent or registrar
for the Shares and miscellaneous expenses referred to in the Registration
Statement, (vii) the fees and expenses incurred in connection with the inclusion
of the Shares in The NASDAQ National Market, (viii) making road show
presentations with respect to the offering of the Shares, including
accommodations, transportation and other expenses incurred by or on behalf of
the Underwriters, (ix) preparing and distributing bound volumes of transaction
documents for the Representatives and its legal counsel and (x) the performance
of the Company's other obligations hereunder. Upon the request of the
Representatives, the Company will provide funds in advance for filing fees.
(b) If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (such as printing, facsimile, courier service, direct
computer expenses, accommodations, travel and the fees and disbursements of
Underwriters' counsel) and any other advisors, accountants, appraisers, etc.
reasonably incurred by such Underwriters in connection with this Agreement or
the transactions contemplated herein.
6. Conditions of the Underwriters' Obligations:
(a) The obligations of the Underwriters hereunder to purchase Shares at
the Closing Time or on each Date of Delivery, as applicable, are subject to the
accuracy of the representations and warranties on the part of the Company
hereunder on the date hereof and at the Closing Time and on each Date of
Delivery, as applicable, the performance by the Company of its obligations
hereunder and to the satisfaction of the following further conditions at the
Closing Time or on each Date of Delivery, as applicable:
(b) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of Ledgewood Law Firm, P.C., counsel for the
Company and the Subsidiaries, addressed to the Underwriters and dated the
Closing Time and each Date of Delivery and in form and substance satisfactory to
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, stating
that:
(i) the Company has an authorized capitalization as set forth or
described in the Prospectus; the outstanding equity interests, as
applicable, of the Company and the Subsidiaries have been duly and
validly authorized and issued and are fully paid and non-assessable (or
all capital contributions required to be made on the date hereof in
connection therewith have been so made), and except as disclosed in the
Prospectus with respect to APL, all of the outstanding equity securities
of the Subsidiaries are directly or indirectly owned of record and
beneficially by the Company; except as disclosed in the Prospectus, there
are no outstanding (i) securities or obligations of the Company or any of
the Subsidiaries convertible into or exchangeable for any equity
securities of the Company or any such Subsidiary, (ii) warrants, rights
or options to subscribe for or purchase from the Company or any such
Subsidiary any such equity securities or any such convertible or
exchangeable securities or obligations, or (iii) obligations of the
Company or any such Subsidiary to issue any equity securities, any such
convertible or exchangeable securities or obligation, or any such
warrants, rights or options;
(ii) each of the Company and the Subsidiaries (all of which are
named in an exhibit to the Registration Statement) has been duly
organized or formed and is validly existing as a corporation, limited
partnership or limited liability company, as applicable, in good standing
under the laws of its respective jurisdiction of organization or
formation, with full corporate, partnership or limited liability company,
as applicable, power and authority to own its respective properties and
to conduct its respective businesses as described in the Registration
Statement and Prospectus and, in the case of the Company, to execute and
deliver this Agreement and to consummate the transactions described in
this Agreement;
(iii) the Company and the Subsidiaries are duly qualified or
licensed by each jurisdiction in which they conduct their respective
businesses and in which the failure, individually or in the aggregate, to
be so licensed could have a Material Adverse Effect, and the Company and
the Subsidiaries are duly qualified, and are in good standing, in each
jurisdiction in which they own or lease real property or maintain an
office and in which such qualification is necessary except where the
failure to be so qualified and in good standing could not have a Material
Adverse Effect; except as disclosed in the Prospectus, no Subsidiary is
prohibited or restricted, directly or indirectly, from paying dividends
to the Company, or from making any other distribution with respect to
such Subsidiary's equity securities or from repaying to the Company or
any other Subsidiary any amounts which may from time to time become due
under any loans or advances to such Subsidiary from the Company or such
other Subsidiary, or from transferring any such Subsidiary's property or
assets to the Company or to any other Subsidiary; other than as disclosed
in the Prospectus, the Company does not own, directly or indirectly, any
equity securities of any other corporation or any ownership interest in
any partnership, limited liability company, joint venture or other
association;
(iv) to the best of such counsel's knowledge, the Company and the
Subsidiaries are in compliance in all material respects with all
applicable laws, orders, rules, regulations and orders, including those
relating to transactions with affiliates;
(v) to the best of such counsel's knowledge, neither the Company
nor any of the Subsidiaries is in violation of any term or provision of
its organizational documents, is in breach of, or in default under (nor
has any event occurred which with notice, lapse of time, or both would
constitute a breach of, or default under), any license, indenture,
mortgage, deed of trust, loan or credit agreement or any other agreement
or instrument to which the Company or any of the Subsidiaries is a party
or by which any of them or their respective properties may be bound or
affected or under any law, regulation or rule or any decree, judgment or
order applicable to the Company or any of the Subsidiaries, except such
breaches or defaults which would not have a material adverse effect on
the assets, business, operations, earnings, prospects, properties, or
condition (financial or otherwise) of the Company and its Subsidiaries
taken as a whole;
(vi) the execution, delivery and performance of this Agreement and
the Separation Agreements by the Company and the consummation by the
Company of the transactions contemplated thereby do not and will not (A)
conflict with, or result in any breach of, or constitute a default under
(nor constitute any event which with notice, lapse of time, or both would
constitute a breach of or default under), (i) any provisions of the
certificate of incorporation, by-laws, partnership agreement, limited
liability company agreement or other organizational document, as
applicable, of the Company or any Subsidiary, (ii) any provision of any
license, indenture, mortgage, deed of trust, loan, credit or other
agreement or instrument known to such counsel and to which the Company or
any Subsidiary is a party or by which any of them or their respective
properties or assets may be bound or affected except such conflicts,
breaches or defaults that could not, individually or in the aggregate,
have a Material Adverse Effect, (iii) any law or regulation binding upon
or applicable to the Company or any Subsidiary or any of their respective
properties or assets, or (iv) any decree, judgment or order known to such
counsel to be applicable to the Company or any Subsidiary; or (B) result
in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or assets of the Company or the Subsidiaries;
(vii) this Agreement and the Separation Agreements have been duly
authorized, executed and delivered by the Company and are legal, valid
and binding agreements of the Company enforceable in accordance with
their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity, and
except that enforceability of the indemnification and contribution
provisions set forth in Section 9 of this Agreement may be limited by the
federal or state securities laws of the United States or public policy
underlying such laws;
(viii) no approval, authorization, consent or order of or filing
with any federal or state governmental or regulatory commission, board,
body, authority or agency is required in connection with the execution,
delivery and performance of this Agreement and the Separation Agreements,
the consummation of the transactions contemplated herein and therein, and
the sale and delivery of the Shares by the Company as contemplated
herein, other than such as have been obtained or made, and except that
such counsel need express no opinion as to any necessary qualification
under the state securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters;
(ix) to the best of such counsel's knowledge, each of the Company
and the Subsidiaries has all necessary licenses, authorizations, consents
and approvals and has made all necessary filings required under any
federal, state or local law, regulation or rule, and has obtained all
necessary authorizations, consents and approvals from other persons,
required to conduct their respective businesses, as described in the
Prospectus, except to the extent the failure to have such licenses,
authorizations, consents or approvals could not, individually or in the
aggregate, have a Material Adverse Effect; to the best of such counsel's
knowledge, neither the Company nor any Subsidiary is in violation of, in
default under, or has received any notice regarding a possible violation,
default or revocation of any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or
decree, order or judgment applicable to the Company or any of the
Subsidiaries, except any such violation, default or revocation that could
not, individually or in the aggregate, have a Material Adverse Effect;
(x) the Company is not (i) subject to registration as an
investment company under the Investment Company Act of 1940, as amended,
and the transactions contemplated by this Agreement will not cause the
Company to become an investment company subject to registration under
such Act; or (ii) a "public utility company," "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" thereof
under the Public Utility Holding Company Act of 1935, as amended
("PUHCA");
(xi) the Shares have been duly authorized and when the Shares have
been issued and duly delivered against payment therefor as contemplated
by this Agreement, the Shares will be validly issued, fully paid and
non-assessable, and the Underwriters will acquire good and marketable
title to the Shares, free and clear of any pledge, lien, encumbrance,
security interest, or other claim;
(xii) the issuance and sale of the Shares by the Company is not
subject to preemptive or other similar rights arising by operation of
law, under the certificate of incorporation, charter or by-laws of the
Company, or under any agreement known to such counsel to which the
Company or any of the Subsidiaries is a party or, to such counsel's
knowledge, otherwise;
(xiii) to the best of such counsel's knowledge, there are no
persons with registration or other similar rights to have any equity or
debt securities, including securities that are convertible into or
exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act applicable to the offering contemplated by this Agreement;
(xiv) the Shares conform in all material respects to the
descriptions thereof contained in the Registration Statement and
Prospectus;
(xv) the form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the organizational
documents of the Company and the requirements of The NASDAQ National
Market;
(xvi) the Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the best of such counsel's
knowledge, no proceedings with respect thereto have been commenced or
threatened;
(xvii) as of the effective date of the Registration Statement, the
Registration Statement and the Prospectus (except as to the financial
statements and other financial and statistical data contained therein, as
to which such counsel need express no opinion) complied as to form in all
material respects with the requirements of the Securities Act, the
Exchange Act, the Securities Act Regulations and the Exchange Act
Regulations;
(xviii) the statements under the captions "Capitalization,"
"Business - Governmental Regulation," "Business - Credit Facilities,"
"Description of Capital Stock," "Relationship with Resource America,"
"Principal Stockholder" and "Shares Eligible for Future Sale," in the
Registration Statement and the Prospectus, insofar as such statements
constitute a summary of the legal matters referred to therein, constitute
accurate summaries thereof in all material respects;
(xix) the 8-A Registration Statement complied as to form in all
material respects with the requirements of the Exchange Act; the 8-A
Registration Statement has become effective under the Exchange Act; and
the Initial Shares and the Option Shares have been validly registered
under the Securities Act, the Exchange Act and the Securities Act
Regulations and the Exchange Act Regulations;
(xx) there are no actions, suits or proceedings, inquiries, or
investigations pending or, to the best of such counsel's knowledge,
threatened against the Company or any of the Subsidiaries or any of their
respective officers and directors or to which the properties, assets or
rights of any such entity are subject, at law or in equity, before or by
any federal, state, local or foreign governmental or regulatory
commission, board, body, authority, arbitral panel or agency which are
required to be described in the Prospectus but are not so described;
(xxi) there are no contracts or documents of a character which are
required to be filed as exhibits to the Registration Statement or
required to be described or summarized in the Prospectus which have not
been so filed, summarized or described, and all such summaries and
descriptions, in all material respects, fairly and accurately set forth
the material provisions of such contracts and documents;
(xxii) to the best of such counsel's knowledge, the Company and
each Subsidiary owns or possesses adequate licenses or other rights to
use all patents, trademarks, service marks, trade names, copyrights,
software and design licenses, trade secrets, manufacturing processes,
other intangible property rights and know-how (collectively
"Intangibles") necessary to entitle the Company and each Subsidiary to
conduct its business as described in the Prospectus, and neither the
Company, nor any Subsidiary, has received notice of infringement of or
conflict with (and knows of no such infringement of or conflict with)
asserted rights of others with respect to any Intangibles which could
materially and adversely affect the business, prospects, properties,
assets, results of operations or condition (financial or otherwise) of
the Company or any Subsidiary; and
(xxiii) to the best of such counsel's knowledge, each of the
Company and the Subsidiaries has filed on a timely basis all necessary
federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes
shown as due thereon; and no tax deficiency has been asserted against any
such entity, nor does any such entity know of any tax deficiency which is
likely to be asserted against any such entity which, if determined
adversely to any such entity, could materially and adversely affect the
business, prospects, properties, assets, results of operations or
condition (financial or otherwise) of any such entity, respectively.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, independent
public accountants of the Company, representatives of the Representatives, at
which the contents of the Registration Statement and Prospectus were discussed
and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus (except as and to the
extent stated in subparagraphs (xiv), (xvii), and (xix) above), they have no
reason to believe that the Registration Statement, the Preliminary Prospectus or
the Prospectus, as of their respective effective or issue date, and as of the
date of such counsel's opinion, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that, in each case, such counsel need express no view with respect to the
financial statements and other financial and statistical data included in the
Registration Statement, Preliminary Prospectus or Prospectus).
(c) RAI and its counsel shall have provided to the Representatives (i) a
detailed schedule of the activities RAI intends to take to achieve the Spin-off
(as defined in the form of Master Separation and Distribution Agreement filed as
an exhibit to the Registration Statement), including a timeline for receipt of
information, preparation of a draft, filing and related conferences for the
private letter ruling request to the Internal Revenue Service (the "Service")
and (ii) a letter of counsel to RAI in connection with the Spin-off to the
effect that such counsel has reviewed and is familiar with applicable tax law
and precedent relating to tax-free distributions such as the Spin-off and the
facts and circumstances of RAI and its subsidiaries relevant to such analysis,
and believes that the Spin-off will qualify as a tax-free distribution to the
stockholders of RAI under such applicable law and precedent;
(d) [Intentionally omitted];
(e) The Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
letters dated, respectively, as of the date of this Agreement, the Closing Time
and each Date of Delivery, as the case may be, addressed to the Representatives,
in form and substance satisfactory to the Representatives, relating to the
financial statements, including any pro forma financial statements, of the
Company and the Subsidiaries, and such other matters customarily covered by
comfort letters issued in connection with registered public offerings.
In the event that the letters referred to above set forth any changes in
indebtedness, decreases in total assets or retained earnings or increases in
borrowings, it shall be a further condition to the obligations of the
Underwriters that (A) such letters shall be accompanied by a written explanation
of the Company as to the significance thereof, unless the Representatives deems
such explanation unnecessary, and (B) such changes, decreases or increases do
not, in the sole judgment of the Representatives, make it impractical or
inadvisable to proceed with the purchase and delivery of the Shares as
contemplated by the Registration Statement.
(f) The Representatives shall have received at the Closing Time and on
each Date of Delivery the favorable opinion of Ledgewood Law Firm, P.C., dated
the Closing Time or such Date of Delivery, addressed to the Representatives and
in form and substance satisfactory to the Representatives.
(g) No amendment or supplement to the Registration Statement or
Prospectus shall have been filed to which the Underwriters shall have objected
in writing.
(h) Prior to the Closing Time and each Date of Delivery (i) no stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus has
been issued, and no proceedings for such purpose shall have been initiated or
threatened, by the Commission, and no suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or the initiation or
threatening of any proceedings for any of such purposes, has occurred, (ii) all
requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of the Representatives, and
(iii) the Registration Statement and the Prospectus shall 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 statements therein, in the light of the
circumstances under which they were made, not misleading.
(i) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the Closing Time shall have been made
within the applicable time period prescribed for such filing by such Rule.
(j) Between the time of execution of this Agreement and the Closing Time
or the relevant Date of Delivery there shall not have been any Material Adverse
Change, and no transaction which is material and unfavorable to the Company
shall have been entered into by the Company or any of the Subsidiaries, in each
case, which in the Representatives' sole judgment, makes it impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated by
the Registration Statement.
(k) The Shares shall have been approved for inclusion in The NASDAQ
National Market.
(l) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(m) The Representatives shall have received lock-up agreements from each
officer, director and 1% or greater stockholder of the Company, in the form of
Exhibit B attached hereto, and such letter agreements shall be in full force and
effect.
(n) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters a certificate of its Chairman of the Board, Chief
Executive Officer, President, Chief Operating Officer or Vice President and
Chief Accounting Officer or Chief Financial Officer, to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the date hereof,
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the date hereof;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference therein
("Incorporated Document") has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Securities Act;
(iii) when the Registration Statement became effective and at all
times subsequent thereto up to the date hereof, the Registration
Statement and the Prospectus, and any amendments or supplements thereto
contained all material information required to be included therein by the
Securities Act or the Exchange Act and the applicable rules and
regulations of the Commission thereunder, as the case may be, and in all
material respects conformed to the requirements of the Securities Act or
the Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be; the Registration Statement and
the Prospectus, and any amendments or supplements thereto, did not and do
not include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and, since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in an amendment or supplemented Prospectus which has not been so
set forth; and
(iv) 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 the Subsidiaries considered as one enterprise, except
transactions entered into in the ordinary course of business, (c) any
obligation, direct or contingent, that is material to the Company and the
Subsidiaries considered as one enterprise, incurred by the Company or the
Subsidiaries, except obligations incurred in the ordinary course of
business, (d) any change in the equity securities or outstanding
indebtedness of the Company or any Subsidiary that is material to the
Company and the Subsidiaries considered as one enterprise, (e) any
dividend or distribution of any kind declared, paid or made on the equity
securities of the Company or any Subsidiary(1), or (f) any loss or damage
(whether or not insured) to the property of the Company or any Subsidiary
which has been sustained or will have been sustained which has a Material
Adverse Effect.
(o) [Intentionally omitted];
(p) The Company shall have furnished to the Underwriters such other
documents and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Prospectus, the representations,
warranties and statements of the Company contained herein, and the performance
by the Company of its covenants contained herein, and the fulfillment of any
conditions contained herein as of the Closing Time or any Date of Delivery, as
the Underwriters may reasonably request.
7. Termination:
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representatives, at any time prior
to the Closing Time or any Date of Delivery, (i) if any of the conditions
specified in Section 6 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, or (ii) if there has been since the respective
dates as of which information is given in the Registration Statement, any
Material Adverse Change, or any development involving a prospective Material
Adverse Change, or material change in management of the Company or any
Subsidiary, whether or not arising in the ordinary course of business, or (iii)
if there has occurred any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic, political or
other conditions the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representatives,
impracticable to market the Shares or enforce contracts for the sale of the
Shares, or (iv) if trading in any securities of the Company has been suspended
by the Commission or by The NASDAQ National Market, or if trading generally on
--------
(1) Add exception for APL quarterly distribution if declared or made since
effective time.
the New York Stock Exchange or in The NASDAQ over-the-counter market has been
suspended (including an automatic halt in trading pursuant to market-decline
triggers, other than those in which solely program trading is temporarily
halted), or limitations on prices for trading (other than limitations on hours
or numbers of days of trading) have been fixed, or maximum ranges for prices for
securities have been required, by such exchange or the NASD or the
over-the-counter market or by order of the Commission or any other governmental
authority, or (v) if there has been any downgrade in the rating of any of the
Company's debt securities or preferred stock by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Securities Act), or (vi) any federal or state statute, regulation, rule or
order of any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated which, in the reasonable opinion of the
Representatives, materially adversely affects or will materially adversely
affect the business or operations of the Company, or (vii) any action has been
taken by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which, in the reasonable opinion of the
Representatives, has a material adverse effect on the securities markets in the
United States.
If the Representatives elect to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments:
If any Underwriter shall default at the Closing Time or on a Date of
Delivery in its obligation to take up and pay for the Shares to be purchased by
it under this Agreement on such date, the Representatives shall have the right,
within 36 hours after such default, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Shares which such Underwriter shall have agreed but failed
to take up and pay for (the "Defaulted Shares"). Absent the completion of such
arrangements within such 36-hour period, (i) if the total number of Defaulted
Shares does not exceed 10% of the total number of Shares to be purchased on such
date, each non-defaulting Underwriter shall take up and pay for (in addition to
the number of Shares which it is otherwise obligated to purchase on such date
pursuant to this Agreement) the portion of the total number of Shares agreed to
be purchased by the defaulting Underwriter on such date in the proportion that
its underwriting obligations hereunder bears to the underwriting obligations of
all non-defaulting Underwriters; and (ii) if the total number of Defaulted
Shares exceeds 10% of such total, the Representatives may terminate this
Agreement by notice to the Company, without liability of any party to any other
party except that the provisions of Sections 5 and 9 hereof shall at all times
be effective and shall survive such termination.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by the Representatives with the approval of
the Company or selected by the Company with the approval of the
Representatives).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with the same effect as
if such substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company and the Underwriters:
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Underwriter or
controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim arises out
of or is based upon (A) any breach of any representation, warranty or covenant
of the Company contained herein, (B) any failure on the part of the Company to
comply with any applicable law, rule or regulation relating to the offering of
securities being made pursuant to the Prospectus, (C) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company), the Prospectus (the term Prospectus for the
purpose of this Section 9 being deemed to include any Preliminary Prospectus,
the Prospectus and the Prospectus as amended or supplemented by the Company),
(D) any application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction (domestic or foreign) in order
to qualify the Shares under the securities or blue sky laws thereof or filed
with the Commission or any securities association or securities exchange (each
an "Application"), (E) any omission or alleged omission to state a material fact
required to be stated in any such Registration Statement, Prospectus or any
Application or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading, or (F) any untrue
statement or alleged untrue statement of any material fact contained in any
audio or visual materials used in connection with the marketing of the Shares,
including, without limitation, slides, videos, films and tape recordings; except
insofar as any such loss, expense, liability, damage or claim arises out of or
is based upon any untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in and in conformity with
information furnished in writing by the Underwriters through the Representatives
to the Company expressly for use in such Registration Statement, Prospectus or
Application. The indemnity agreement set forth in this Section 9(a) shall be in
addition to any liability which the Company may otherwise have.
(b) If any action is brought against an Underwriter or controlling person
in respect of which indemnity may be sought against the Company pursuant to
subsection (a) above, such Underwriter shall promptly notify the Company in
writing of the institution of such action, and the Company shall assume the
defense of such action, including the employment of counsel and payment of
expenses; provided, however, that any failure or delay to so notify the Company
will not relieve the Company of any obligation hereunder, except to the extent
that its ability to defend is actually impaired by such failure or delay. Such
Underwriter or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action, or the Company shall not have
employed counsel to have charge of the defense of such action within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available
to it or them which are different from or additional to those available to the
Company (in which case the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the Company and paid as
incurred (it being understood, however, that the Company shall not be liable for
the expenses of more than one separate firm of attorneys for the Underwriters or
controlling persons in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Company shall not be liable for
any settlement of any such claim or action effected without its consent.
(c) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, the Company's directors, the Company's
officers that signed the Registration Statement, and any person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any loss, expense, liability, damage or claim
(including the reasonable cost of investigation) which, jointly or severally,
the Company, or any such person may incur under the Securities Act, the Exchange
Act or otherwise, but only insofar as such loss, expense, liability, damage or
claim arises out of or is based upon (A) any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by such Underwriter through the Representatives to the
Company expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Company),
the Prospectus, or any Application, or (B) any omission or alleged omission to
state a material fact in connection with such information required to be stated
either in such Registration Statement, Prospectus or any Application or
necessary to make such information, in the light of the circumstances under
which made, not misleading. The statements set forth in the 5th and 7th through
10th paragraphs under the caption "Underwriting" in the Preliminary Prospectus
and the Prospectus (to the extent such statements relate to the Underwriters)
constitute the only information furnished by or on behalf of any Underwriter
through the Representatives to the Company for purposes of Section 3(k) and this
Section 9. The indemnity agreement set forth in this Section 9(c) shall be in
addition to any liabilities that such Underwriter may otherwise have.
If any action is brought against the Company, or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Representatives in writing of the institution of such action and the
Representatives, on behalf of the Underwriters, shall assume the defense of such
action, including the employment of counsel and payment of expenses. The Company
or such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Company
or such person unless the employment of such counsel shall have been authorized
in writing by the Representatives in connection with the defense of such action
or the Representatives shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Underwriters (in which case the
Representatives shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the expenses
of more than one separate firm of attorneys in any one action or series of
related actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of any such claim or action
effected without the written consent of the Representatives.
(d) If the indemnification provided for in this Section 9 is unavailable
or insufficient to hold harmless an indemnified party under subsections (a), (b)
and (c) of this Section 9 in respect of any losses, expenses, liabilities,
damages or claims referred to therein, then each applicable indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, expenses,
liabilities, damages or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Underwriters from
the offering of the Shares or (ii) if (but only if) the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, and of the Underwriters in
connection with the statements or omissions which resulted in such losses,
expenses, liabilities, damages or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company bear to the underwriting discounts
and commissions received by the Underwriters. The relative fault of the Company
and of the Underwriters shall be determined by reference to, among other things,
whether the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission relates to information supplied by the Company or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any claim or action.
(e) 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 (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in subsection (d)(i) and, if applicable
(ii), above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by such
Underwriter. 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. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
(f) The Company agrees to indemnify and hold harmless each Underwriter
and its affiliates and each person, if any, who controls each Underwriter and
its affiliates within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) (i) caused by any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to participants in connection with the
Directed Share Program, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) as a result of the failure of any
participant to pay for and accept delivery of Directed Shares that the
participant has agreed to purchase; or (iii) related to, arising out of, or in
connection with the Directed Share Program.
10. Survival:
The indemnity and contribution agreements contained in Section 9 and the
covenants, warranties and representations of the Company contained in Sections
3, 4 and 5 of this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, or any person who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors and officers or any person who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the sale and delivery of the
Shares. The Company and each Underwriter agree promptly to notify the others of
the commencement of any litigation or proceeding against it and, in the case of
the Company, against any of the Company's officers and directors, in connection
with the sale and delivery of the Shares, or in connection with the Registration
Statement or Prospectus.
11. Notices:
Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram and, if to the Underwriters,
shall be sufficient in all respects if delivered to Friedman, Billings, ▇▇▇▇▇▇ &
Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Syndicate Department; if to the Company, shall be sufficient in all respects if
delivered to the Company at the offices of the Company at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
12. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. Parties at Interest:
The Agreement herein set forth has been and is made solely for the
benefit of the Underwriters, the Company and the controlling persons, directors
and officers referred to in Sections 9 and 10 hereof, and their respective
successors, assigns, executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
14. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts which
together shall constitute one and the same agreement among the parties. A
facsimile signature shall constitute an original signature for all purposes.
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this Agreement shall constitute a binding agreement among the
Company, the Selling Stockholders and the Underwriters.
Very truly yours,
ATLAS AMERICA, INC.
By:____________________________
By:
Title:
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
McDONALD INVESTMENTS, INC.
By FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
By:_______________________________
Name:
Title:
For themselves and as Representatives of the other
Underwriters named on Schedule I hereto.
Schedule I
Number of Initial Number of Option
Name of Party Selling Shares Shares to be Sold Shares to be Sold
--------------------------------------------------------------------------------
Atlas America, Inc. 2,300,000 345,000
Schedule II
Number of Initial
Underwriter Shares to be Purchased
-----------------------------------------------------------------------------
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. [ ]
McDonald Investments, Inc. [____________]
[INSERT NAMES OF OTHER UNDERWRITER] [____________]
Total................................. 2,300,000
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