Exhibit 1.1
FORM OF UNDERWRITING AGREEMENT
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[Shares]
Arbor National Holdings, Inc.
[ ] Shares of Common Stock
July __, 1998
▇▇▇▇▇▇ BROTHERS INC.,
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
As Representative of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Arbor National Holdings, Inc., a New York corporation (the "Company"),
proposes to sell _________ shares (the "Firm Stock") of the Company's Common
Stock, par value $0.01 per share (the "Common Stock"). In addition, the Company
proposes to grant to the Underwriters named in Schedule 1 hereto (the
"Underwriters") an option to purchase up to an additional [ ] shares of
the Common Stock on the terms and for the purposes set forth in Section 2 (the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters named
in Schedule 1 hereto.
At or prior to the First Delivery Date (as hereinafter defined), the
Company will complete certain transactions, described in the Prospectus (as
hereinafter defined) under the heading "Reorganization Transactions"
(collectively, the "Reorganization"). As part of the Reorganization, all of the
members of Arbor National Commercial Mortgage, L.L.C. ("ANCM") will (i) enter
into an agreement (the "Exchange Agreement") pursuant to which they will
exchange their membership interests in ANCM for an aggregate of 7,500,000 shares
of Common Stock, and (ii) enter into lock-up agreements (the "ANCM Lock-Up
Agreements") pursuant to which each member of ANCM will agree not to sell or
otherwise dispose of the Common Stock they receive through the Exchange
Agreement for a period of 180 days from the date of the Prospectus without the
prior written consent of ▇▇▇▇▇▇ Brothers Inc., on behalf of the Representatives.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND
ANCM. The Company and ANCM represent, warrant and agree that:
(a) A registration statement on Form S-1, and amendments thereto,
with respect to the Stock has (i) been prepared by the Company in
conformity with the requirements of the United States Securities Act of
1933 (the "Securities Act") and the rules and regulations (the "Rules and
Regulations") of the United States Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. Copies
of such registration statement and the amendments thereto have been
delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this Agreement,
"Effective Time" means (i) with respect to the first such registration
statement, the date and the time as of which such registration statement,
or the most recent post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date of the
Effective Time; "Preliminary Prospectus" means each prospectus included in
such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement" means
such registration statement referred to in this Section 1(a), as amended,
at the Effective Time including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations in accordance with Section 5(a) hereof and deemed to be a
part of the registration statement as of the Effective Time pursuant to
paragraph (b) of Rule 430A of the Rules and Regulations; and "Prospectus"
means such final prospectus, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do not
and will not, as of the applicable Effective Date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date
(as to the Prospectus and any amendment or supplement thereto) contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading; PROVIDED that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
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(c) The Company and ANCM and its Significant Subsidiaries (as
defined below) have each been duly formed and are validly existing and in
good standing under the laws of their respective jurisdictions of
organization, duly qualified to do business and in good standing as a
foreign corporation or a foreign limited liability company, as the case may
be, in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification and have all power and authority necessary to own or hold
their respective properties and to conduct the businesses in which they are
engaged; the Company has no subsidiaries and none of the subsidiaries of
ANCM (other than Arbor Secured Funding, Inc. and [ ], (together, the
"Significant Subsidiaries")) is a "significant subsidiary", as such term is
defined in Rule 405 of the Rules and Regulations.
(d) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all of the membership interests or issued shares of
capital stock, as the case may be, of ANCM and its Significant Subsidiaries
have been duly and validly authorized and issued and are fully paid and
non-assessable and, except for directors' qualifying shares and except as
set forth in the Registration Statement and the Prospectus, are owned
directly or indirectly by ANCM, free and clear of all liens, encumbrances,
equities or claims.
(e) The shares of the Stock have been duly and validly authorized
and, when issued and delivered against payment therefor as provided herein
will be duly and validly issued, fully paid and non-assessable; and the
Stock will conform to the description thereof contained in the Prospectus.
(f) (i) This Agreement has been duly authorized, executed and
delivered by the Company and ANCM, and assuming due authorization,
execution and delivery by the Representatives, is a valid and binding
agreement of each of the Company and ANCM, enforceable against such parties
in accordance with its terms, (ii) the Exchange Agreement has been duly
authorized, executed and delivered by the Company, ANCM and the members of
ANCM, and is a valid and binding agreement of the Company, ANCM and the
members of ANCM, enforceable against such parties in accordance with its
terms and (iii) the ANCM Lock-Up Agreements have all been duly authorized,
executed and delivered by each of the members of ANCM, and each ANCM
Lock-Up Agreement is a valid and binding agreement of the respective member
of ANCM, enforceable against such party in accordance with its terms.
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(g) The execution, delivery and performance of this Agreement by the
Company and ANCM and the consummation of the transactions contemplated
hereby and by the Reorganization, including without limitation, the
execution, delivery and performance of the Exchange Agreement and the ANCM
Lock-Up Agreements, will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or ANCM or its Significant
Subsidiaries is a party or by which the Company or ANCM or its Significant
Subsidiaries is bound or to which any of the properties or assets of the
Company or ANCM or its Significant Subsidiaries is subject, nor will such
actions result in any violation of the provisions of the charter or by-laws
(or other organizational document) of the Company or ANCM or its
Significant Subsidiaries or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or ANCM or its Significant Subsidiaries or any of their properties
or assets; and except for (i) the registration of the Common Stock under
the Securities Act, (ii) such consents, approvals, authorizations,
registrations or qualifications as may be required under the United States
Securities Exchange Act of 1934 ("Exchange Act") and applicable state
securities laws in connection with the purchase and distribution of the
Common Stock by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance of
this Agreement by the Company and ANCM, and the consummation of the
transactions contemplated hereby and by the Reorganization.
(h) There are no contracts, agreements or understandings between the
Company or ANCM and any person granting such person the right, other than
rights which have been waived or satisfied, to require the Company to file
a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(i) Except as described in the Prospectus, the Company has not sold
or issued any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A or
Regulations D or S under the Securities Act other than shares issued
pursuant to director or employee benefit plans, qualified stock options
plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(j) The Company and ANCM and its Significant Subsidiaries have not
sustained, since the date of the latest audited financial statements
included in the
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Prospectus, any material loss or interference with their business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since such date, there has not been any change in the capital stock or
membership interests, as the case may be, or long-term debt of the Company
or ANCM, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, equity interests or results of operations
of the Company or ANCM, otherwise than as set forth or contemplated in the
Registration Statement.
(k) The financial statements and pro forma financial information
(including all necessary pro forma adjustments, related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved, and all adjustments necessary for a fair
presentation of results for such periods have been made. The pro forma
financial statements and other pro forma financial information filed as
part of the Registration Statement or included in the Prospectus have been
prepared (i) based on assumptions that are reasonable and adjustments that
are appropriate to give effect to the transactions or circumstances
referred to therein and (ii) in accordance with the applicable requirements
of Rules 11-01 and 11-02 of the Regulation S-X under the Securities Act.
(l) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, who have certified certain financial
statements of the Company and ANCM, whose reports appear in the Prospectus
and who have delivered the initial letter referred to in Section 9(f)
hereof, are independent public accountants as required by the Securities
Act and the Rules and Regulations; and Ernst & Young, LLP, whose report
appears in the Prospectus and who have delivered the initial letter
referred to in Section 9(g) hereof, were independent accountants as
required by the Securities Act and Rules and regulations during the periods
covered by the financial statements on which they reported contained in the
Prospectus.
(m) The Company and ANCM and its Significant Subsidiaries carry, or
are covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(n) The Company and ANCM and its Significant Subsidiaries own or
possess adequate rights to use all material patents, patent applications,
trademarks,
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service marks, trade names, trademark registrations, service ▇▇▇▇
registration, copyrights and licenses necessary for the conduct of their
respective businesses and have no reason to believe that the conduct of
their respective businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of others.
(o) The Company and ANCM and its Significant Subsidiaries have good
and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case free
and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value
of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company or ANCM or its
Significant Subsidiaries; and all real property and buildings held under
lease by the Company or ANCM or its Significant Subsidiaries are held by
them under valid, subsisting and enforceable leases, with such exceptions
as are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company or ANCM or its
Significant Subsidiaries.
(p) There are no legal or governmental proceedings pending to which
the Company or ANCM or its Significant Subsidiaries is a party or of which
any property or assets of the Company or ANCM or its Significant
Subsidiaries is the subject which, if determined adversely to the Company
or ANCM or its Significant Subsidiaries, are reasonably likely to have a
material adverse effect on the consolidated financial position, equity
interests, results of operations, business or prospects of the Company and
ANCM and its Significant Subsidiaries; and to the best of the Company's
knowledge and ANCM's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or by others.
(q) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(r) No relationship, direct or indirect, exists between or among the
Company or ANCM on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or ANCM on the other hand, which is
required to be described in the Prospectus which is not so described.
(s) The Company and ANCM have filed all federal, state and local
income and franchise tax returns required to be filed through the date
hereof and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or ANCM or its Significant Subsidiaries
which has had, nor does the
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Company or ANCM or its Significant Subsidiaries have any knowledge of any
tax deficiency which, if determined adversely to such parties, might have a
material adverse effect on the consolidated financial position,
stockholders' equity interests, results of operations, business or
prospects of the Company or ANCM or its Significant Subsidiaries as the
case may be.
(t) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Registration Statement, the Company and ANCM have not (i) issued or granted
any securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any transaction not in
the ordinary course of business or (iv) declared or paid any dividend on
its capital stock.
(u) The Company and ANCM (i) make and keep accurate books and records
and (ii) maintain internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of their financial statements and to maintain
accountability for their assets, (C) access to their assets is permitted
only in accordance with management's authorization and (D) the reported
accountability for their assets is compared with existing assets at
reasonable intervals.
(v) The Company and ANCM and its Significant Subsidiaries are not
(i) in violation of their charter (or other organizational document) or
by-laws, (ii) in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which they are a party
or by which they are bound or to which any of their properties or assets
are subject (iii) in violation in any material respect of any federal or
state law or regulation relating to their lending or other mortgage
financing activities (including, without limitation, rules and regulations
of the Federal National Mortgage Association ("FNMA"), the Government
National Mortgage Association ("GNMA"), the Federal Home Loan Mortgage
Association ("FHLMC") or the Federal Housing Administration ("FHA")), or
(iv) in violation in any material respect of any other statute, law,
ordinance, governmental rule, regulation or court decree to which they or
their property or assets may be subject or has failed to obtain any
material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of their property or to
the conduct of their business.
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(w) None of the Company or ANCM or its Significant Subsidiaries is
an "investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(x) No labor disturbance by the employees of the Company or ANCM
exists or, to the knowledge of the Company or ANCM, is imminent which might
be expected to have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business or
prospects of the Company or ANCM or its Significant Subsidiaries.
(y) The Company and ANCM 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 ANCM would have any liability; the Company
and ANCM 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) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company or
ANCM 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.
(z) Neither the Company nor ANCM, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the Company
or ANCM, has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(aa) [There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or ANCM or
its Significant Subsidiaries (or, to the knowledge of such parties, any of
their predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or ANCM or its Significant
Subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any
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violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and ANCM and its Significant Subsidiaries; there
has been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the
Company or ANCM or its Significant Subsidiaries or with respect to which
the Company or ANCM or its Significant Subsidiaries have knowledge, except
for any such spill, discharge, leak, emission, injection, escape, dumping
or release which would not have or would not be reasonably likely to have,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a material adverse
effect on the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; and the terms "hazardous wastes", "toxic wastes", "hazardous
substances" and "medical wastes" shall have the meanings specified in any
applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.]
2. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell [ ] shares of the
Firm Stock to the several Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase the number of shares of the Firm Stock set
opposite that Underwriter's name in Schedule 1 hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company grants to the Underwriters an option to purchase
up to [ ] shares of Option Stock. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 4 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Stock shall be adjusted by the Representatives so that no Underwriter
shall be obligated to purchase Option Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be $[ ] per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), as the case may be,
except upon payment for all the Stock to be purchased on such Delivery Date as
provided herein.
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3. OFFERING OF STOCK BY THE UNDERWRITERS. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment for
the Firm Stock shall be made at the office of Skadden, Arps, Slate ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP at 10:00 A.M., New York City time, on the third (fourth, if pricing
occurs after 4:30 p.m. New York City time) full business day following the date
of this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Stock to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Firm Stock shall be registered
in such names and in such denominations as the Representatives shall request in
writing not less than two full business days prior to the First Delivery Date.
For the purpose of expediting the checking and packaging of the certificates for
the Firm Stock, the Company shall make the certificates representing the Firm
Stock available for inspection by the Representatives in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to the First
Delivery Date.
The option granted in Section 2 will expire 30 days after the date of this
Agreement and may be exercised in whole or in part from time to time by written
notice being given to the Company by the Representatives. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is
being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; PROVIDED, HOWEVER, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as the "Second Delivery Date", and the First Delivery
Date and the Second Delivery Date are sometimes each referred to as a "Delivery
Date".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on the Second Delivery Date.
On the Second Delivery Date, the Company shall deliver or cause to be delivered
the certificates representing the Option Stock to the Representatives for the
account of each Underwriter against payment to or upon the order of the Company
of the purchase price by wire transfer in immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names
and
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in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the Option Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Second Delivery Date.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus 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, if applicable,
such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Representatives, promptly after it receives notice thereof, of
the time when any amendment to either Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to provide the Representatives with copies
thereof; to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with
the Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings), (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus, and (iii) any document incorporated by reference in the
Prospectus (including exhibits thereto); and, if the delivery of a
prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Stock or any other securities relating
thereto and if at
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such time any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Prospectus in
order to comply with the Securities Act, to notify the Representatives and,
upon their request, to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or omission or
effect such compliance;
(d) 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;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Representatives and counsel for the Underwriters and obtain
the consent of the Representatives to the filing;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the Company,
Rule 158);
(g) For a period of five years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange or automated quotation system upon which the Common
Stock may be listed pursuant to requirements of or agreements with such
exchange system, and copies of all reports filed by the Company with or to
the Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such
12
jurisdictions for as long as may be necessary to complete the distribution
of the Stock; and
(i) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, (i) 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 or purchase by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other than
the Common Stock issued pursuant to director or employee benefit plans,
qualified stock option plans or other employee compensation plans existing
on the date hereof or pursuant to currently outstanding options, warrants
or rights), or sell or grant options, rights or warrants with respect to
any shares of Common Stock (other than the grant of options pursuant to
option plans existing on the date hereof), or (ii) 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 (i) or (ii)
above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, in each case without the prior written consent of ▇▇▇▇▇▇
Brothers Inc; and to cause each officer and director of the Company to
furnish to the Representatives, prior to the First Delivery Date, a letter
or letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree not to,
directly or indirectly, (i) 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 (ii) 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 (i) or (ii) 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 ▇▇▇▇▇▇ Brothers Inc.;
(j) Prior to the Effective Date, to apply for the quotation of the
Stock on the Nasdaq National Market System, and to use its best efforts to
seek approval of that application, subject only to official notice of
issuance, prior to the First Delivery Date;
(k) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the Underwriters and receive and consider its
comments thereon, and to deliver promptly to the Representatives a signed
copy of each report on Form SR filed by it with the Commission;
13
(l) To apply the net proceeds from the sale of the Stock being sold
by the Company as set forth in the Prospectus; and
(m) To take such steps as shall be necessary to ensure that neither
the Company nor any subsidiary shall become an "investment company" within
the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
6. EXPENSES. The Company and ANCM agree to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of producing and distributing
this Agreement and any other related documents in connection with the offering,
purchase, sale and delivery of the stock; (e) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of sale of the Stock; (f) any applicable listing or other
fees; (g) the fees and expenses of qualifying the Stock under the securities
laws of the several jurisdictions as provided in Section 5(h) and of preparing,
printing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the Underwriters); and (h) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement; PROVIDED that, except as provided in this Section 6 and in Section
11, the Underwriters shall pay their own costs and expenses, including the costs
and expenses of their counsel, any transfer taxes on the Stock which they may
sell and the expenses of advertising any offering of the Stock made by the
Underwriters.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and ANCM
contained herein, to the performance by the Company and ANCM of their
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the Commission
in accordance with Section 5(a); no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or threatened
by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that either of the Registration Statement
or the Prospectus or any amendment or supplement thereto contains any
untrue statement
14
of a fact which, in the opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇,
LLP counsel for the Underwriters, is material or omits to state any fact
which, in the opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) Pryor, Cashman, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed
to the Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company and ANCM and its Significant Subsidiaries
have each been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of
organization, duly qualified to do business and in good standing as a
foreign corporation or a foreign limited liability company, as the
case may be, in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification and have all power and authority necessary
to own or hold their respective properties and conduct the businesses
in which they are engaged;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company (including the shares of Stock being delivered on such
Delivery Date) have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus; and all of the membership interests or
issued shares of capital stock, as the case may be, of ANCM and its
Significant Subsidiaries have been duly and validly authorized and
issued and are fully paid, non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by ANCM, free and
clear of all liens, encumbrances, equities or claims;
(iii) There are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of,
any shares of the Stock pursuant to the Company's charter, articles of
incorporation or by-laws or any agreement or other instrument known to
such counsel;
15
(iv) The Company and ANCM and its Significant Subsidiaries
have good and marketable title in fee simple to all real property
owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Prospectus or such as
do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company or ANCM or its Significant Subsidiaries, as
the case may be; and all real property and buildings held under lease
by the Company or ANCM or its Significant Subsidiaries, are held by
them under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company
or ANCM or its Significant Subsidiaries, as the case may be;
(v) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or ANCM or its Significant
Subsidiaries is a party, or of which any property or assets of the
Company or ANCM or its Significant Subsidiaries is the subject, which,
if determined adversely to the Company or ANCM or its Significant
Subsidiaries might have a material adverse effect on the consolidated
financial position, equity interests, results of operations, business
or prospects of the Company or ANCM or its Significant Subsidiaries;
and, to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others;
(vi) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such opinion,
the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and Regulations specified in
such opinion on the date specified therein and no stop order
suspending the effectiveness of the Registration Statement has been
issued and, to the knowledge of such counsel, no proceeding for that
purpose is pending or threatened by the Commission;
(vii) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to
such Delivery Date (other than the financial statements including the
notes thereto and other financial and statistical data contained
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the
Securities Act and the Rules and Regulations;
16
(viii) The statements contained in the Prospectus under the
captions "Risk Factors", "Business" and [ ], insofar as they
describe federal statutes, rules and regulations, constitute a fair
summary thereof;
(ix) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules and
Regulations;
(x) (1) This Agreement has been duly authorized, executed and
delivered by the Company and ANCM, and assuming due authorization,
execution and delivery by the Representatives, is a valid and binding
agreement of each of the Company and ANCM, enforceable against such
parties in accordance with its terms; (2) the Exchange Agreement has
been duly authorized, executed and delivered by the Company, ANCM and
the members of ANCM, and is a valid and binding agreement of the
Company, ANCM and the members of ANCM, enforceable against such
parties in accordance with its terms; and (3) the ANCM Lock-Up
Agreements have all been duly authorized, executed and delivered by
each of the members of ANCM, and each ANCM Lock-Up Agreement is a
valid and binding agreement of the respective member of ANCM,
enforceable against such party in accordance with its terms;
(xi) The execution, delivery and performance of this Agreement
by the Company and ANCM and the consummation of the transactions
contemplated hereby and by the Reorganization, including without
limitation, the execution, delivery and performance of the Exchange
Agreement and the ANCM Lock-Up Agreements, will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
or ANCM or its Significant Subsidiaries is a party or by which the
Company or ANCM or its Significant Subsidiaries is bound or to which
any of the properties or assets of the Company or ANCM or its
Significant Subsidiaries is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws (or other
organizational document) of the Company or ANCM or its Significant
Subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or ANCM or its Significant Subsidiaries or any of their
properties or assets; and except for (i) the registration of the
Common Stock under the Securities Act, (ii) such consents, approvals,
authorizations, registrations or qualifications as
17
may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of
the Common Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, by the Company and the
consummation of the transactions contemplated hereby and by the
Reorganization; and
(xxi) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Company or ANCM
and any person granting such person the right (other than rights which
have been waived or satisfied) to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States of
America and the laws of the State of New York and (ii) in giving the
opinion referred to in Section 7(d)(iv), state that no examination of
record titles for the purpose of such opinion has been made, and that it is
relying upon a general review of the titles of the Company and ANCM and its
Significant Subsidiaries, upon opinions of local counsel and abstracts,
reports and policies of title companies rendered or issued at or subsequent
to the time of acquisition of such property by the Company and ANCM and its
Significant Subsidiaries, upon opinions of counsel to the lessors of such
property and, in respect of matters of fact, upon certificates of officers
of the Company and ANCM and its Significant Subsidiaries, PROVIDED that
such counsel shall state that he believes that both he and the Underwriters
are justified in relying upon such opinions, abstracts, reports, policies
and certificates.
Such counsel shall also have furnished to the Representatives a
written statement, addressed to the Underwriters and dated such Delivery
Date, in form and substance satisfactory to the Representatives, to the
effect that (x) such counsel has, in its capacity as special counsel to the
Company in connection with the preparation of the Registration Statement,
participated in conferences with officers and other representatives of the
Company and ANCM and its Significant Subsidiaries, representatives of the
independent accountants and representatives of the Representatives at which
the contents of the Registration Statement and Prospectus have been
discussed, and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead it to believe that the Registration
Statement, as of the Effective Date, contained any untrue statement of any
material fact or omitted
18
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or that the Prospectus
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The foregoing opinion and statement may be qualified
by a statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for the
statements made in the Prospectus under the captions "Description of
Capital Stock" and [ ], insofar as such statements relate to the
Stock and concern legal matters.
(e) The Representatives shall have received from Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, LLP, counsel for the Underwriters, such opinion or
opinions, dated such Delivery Date, with respect to the issuance and sale
of the Stock, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company and
ANCM and its Subsidiaries shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to
pass upon such matters.
(f) At the time of execution of this Agreement, the Representatives
shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP a letter (an "initial
letter"), in form and substance satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission, (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof),
the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings.
(g) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP an initial letter, in form and
substance satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and
are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the
19
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(h) With respect to the initial letters of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP and
Ernst & Young LLP referred to in subsections (f) and (g) above and
delivered to the Representatives concurrently with the execution of this
Agreement, the Company shall have furnished to the Representatives letters
(the "bring-down letters") from each of such accountants, addressed to the
Underwriters and dated such Delivery Date in which each accountant shall
(i) confirm that they are independent public accountants within the meaning
of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (ii) state, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than three
days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirm in all material
respects the conclusions and findings set forth in the initial letter.
(i) The Company and ANCM shall have furnished to the Representatives
a certificate, dated such Delivery Date, of their Chief Executive or their
President or a Vice President and a chief financial officer stating that:
(i) the representations, warranties and agreements of the
Company and ANCM in Section 1 are true and correct as of such Delivery
Date; the Company and ANCM have complied in all material respects
with all the agreements contained herein; and the conditions set forth
in Sections 7(a) and 7(j) have been fulfilled; and
(ii) they have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective Date,
the Registration Statement and the Prospectus did not include any
untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) since the Effective Date of
the Registration Statement, no event has occurred which should have
been set forth in a supplement or amendment to the Registration
Statement or the Prospectus.
(j) (i) The Company and ANCM and its Significant Subsidiaries shall
not have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
20
contemplated in the Prospectus or (ii) since such date there shall not have
been any change in the capital stock or membership interests, as the case
may be, or long-term debt of the Company or ANCM or its Significant
Subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, equity interest or results of operations of the Company or ANCM
or its Significant Subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Stock being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange, or
in the over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the Stock
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(l) The Nasdaq National Market System shall have approved the Stock
for listing, subject only to official notice of issuance.
(m) All of the transactions which are to occur in order to consummate
the Reorganization, including without limitation the execution, delivery
and performance of the Exchange Agreement and the ANCM Lock-Up Agreements,
shall have been consummated on terms satisfactory to the Representatives,
and the Representatives shall have been furnished with all of the ANCM
Lock-Up Agreements.
(n) On the First Delivery Date, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may require
for the purpose of enabling them to pass upon the issuance and sale of the
Stock as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of
21
the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Stock as herein contemplated
shall be satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
(o) The Representatives shall have been furnished with the written
letter agreements executed by each officer and director of the Company
referred to in Section 5(i) hereof.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and ANCM jointly and severally, shall indemnify and
hold harmless each Underwriter (including any Underwriter in its role as
qualified independent underwriter pursuant to the rules of the National
Association of Securities Dealers, Inc.), its officers and employees and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Stock), to which that Underwriter, officer, employee
or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any act or failure to act, or
any alleged act or failure to act, by any Underwriter in connection with,
or relating in any manner to, the Stock or the offering contemplated
hereby, and which is included as part of or referred in any loss, claim,
damage, liability or action arising out of or based upon matters covered by
clause (i) or (ii) above (PROVIDED that the Company and ANCM shall not be
liable under this clause (iii) to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or willful misconduct), and shall reimburse
each Underwriter and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by
that Underwriter, officer, employee or controlling person in connection
with investigating
22
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; PROVIDED, HOWEVER, that
the Company and ANCM shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any such amendment or supplement in
reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein which
information consists solely of the information specified in Section 7(e).
The foregoing indemnity agreement is in addition to any liability which the
Company or ANCM may otherwise have to any Underwriter or to any officer,
employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its
directors (including any person who, with his or her consent, is named in
the Registration Statement as about to become a director of the Company),
and each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or
any such director, officer or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in
any Preliminary Prospectus, the Registration Statement or the Prospectus,
or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with the written
information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person
in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses
are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or any
such director, officer or controlling person.
23
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent
it has been materially prejudiced by such failure and, PROVIDED FURTHER,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than
under this Section 8. If any such claim or action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; PROVIDED,
HOWEVER, that the Representatives shall have the right to employ counsel to
represent jointly the Representatives and those other Underwriters and
their respective officers, employees and controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity
may be sought by the Underwriters against the Company or ANCM under this
Section 8 if, in the reasonable judgment of the Representatives, it is
advisable for the Representatives and those Underwriters, officers,
employees and controlling persons to be jointly represented by separate
counsel, and in that event the fees and expenses of such separate counsel
shall be paid by the Company or ANCM. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the
consent of the indemnifying party or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under
24
Section 8(a) or 8(b) in respect of any loss, claim, damage or liability, or
any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of such
loss, claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company and ANCM on the one hand and the Underwriters on
the other from the offering of the Stock or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and ANCM on the
one hand and the Underwriters on the other with respect to the statements
or omissions which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and ANCM on
the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and ANCM on the one
hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the shares of the Stock purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the
offering of the shares of the Stock under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company, ANCM
or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. For purposes of the preceding two sentences, the
net proceeds deemed to be received by the Company shall be deemed to be
also for the benefit of ANCM and information supplied by the Company shall
also be deemed to have been supplied by ANCM. The Company, ANCM, and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section were to be 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 into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be
deemed to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Stock underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of
25
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 as provided in this Section 8(d) are several in
proportion to their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information furnished in
writing to the Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
9. DEFAULTING UNDERWRITERS.
If, on either Delivery Date, any Underwriter defaults in the performance of
its obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Stock which the defaulting Underwriter agreed
but failed to purchase on such Delivery Date in the respective proportions which
the number of shares of the Firm Stock set opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the total number of
shares of the Firm Stock set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; PROVIDED, HOWEVER, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Stock on such Delivery Date if the total number of shares of the Stock which
the defaulting. Underwriter or Underwriters agreed but failed to purchase on
such date exceeds 9.09% of the total number of shares of the Stock to be
purchased on such Delivery Date, and any remaining non-defaulting. Underwriter
shall not be obligated to purchase more than 110% of the number of shares of the
Stock which it agreed to purchase on such Delivery Date pursuant to the terms of
Section 2. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company, except that the Company and ANCM will
continue to be liable for the payment of expenses to the extent set forth in
Sections 6 and 11. As used in this Agreement, the term "Underwriter" includes,
for all purposes of this Agreement unless the context requires otherwise, any
party not listed in Schedule 1 hereto who, pursuant to this Section 9, purchases
Firm Stock which a defaulting Underwriter agreed but failed to purchase.
26
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock if, prior to that time, any
of the events described in Sections 7(j), or 7(k)], shall have occurred or if
the Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement.
11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the Company shall
fail to tender the Stock for delivery to the Underwriters by any reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed or because any other condition of the
Underwriter's obligations hereunder required to be fulfilled by the Company or
ANCM is not fulfilled, or (b) the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement (including the termination
of this Agreement pursuant to Section 10), the Company or ANCM will reimburse
the Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company or
ANCM shall pay the full amount thereof to the Representatives. If this
Agreement is terminated pursuant to Section 9 by reason of the default of one or
more Underwriters, the Company and ANCM shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
12. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department (Fax:
▇▇▇-▇▇▇-▇▇▇▇) with a copy, in the case of any notice pursuant to Section
8(c), to the Director of Litigation, Office of the General Counsel, ▇▇▇▇▇▇
Brothers Inc., Three World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇;
(b) if to the Company or to ANCM, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: [▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice
President (Fax: );]
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its
27
acceptance telex to the Representatives, which address will be supplied to any
other party hereto by the Representatives upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
▇▇▇▇▇▇ Brothers Inc. on behalf of the Representatives.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Company, ANCM and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company and ANCM
contained in this Agreement shall also be deemed to be for the benefit of the
officers and employees of each Underwriter and the person or persons, if any,
who control each Underwriter within the meaning of Section 15 of the Securities
Act and (b) the indemnity agreement of the Underwriters contained in
Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors, officers and employees of the Company, and any person controlling the
Company within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 13, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
14. SURVIVAL. The respective indemnities, representations, warranties and
agreements of the Company, ANCM and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
15. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For purposes
of this Agreement, (a) "business day" means any day on which the Nasdaq National
Market is open for trading and (b) "subsidiary" has the meaning set forth in
Rule 405 of the Rules and Regulations.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
28
If the foregoing correctly sets forth the agreement among the Company,
ANCM and the Underwriters, please indicate your acceptance in the space provided
for that purpose below.
Very truly yours,
ARBOR NATIONAL HOLDINGS, INC.
By
----------------------------------
Name:
Title:
ARBOR NATIONAL COMMERCIAL MORTGAGE, LLC
By
----------------------------------
Name:
Title:
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By ▇▇▇▇▇▇ BROTHERS INC.
By
-----------------------------
Authorized Representative
29
SCHEDULE 1
Underwriter Number of Shares
----------- ----------------
▇▇▇▇▇▇ Brothers, Inc.
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
Total
30