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EXHIBIT 1.1
2,000,000 Shares
PMC COMMERCIAL TRUST
Shares of Beneficial Interest
UNDERWRITING AGREEMENT
________ __, 1996
OPPENHEIMER & CO., INC.
J.C. BRADFORD & CO.
FAHNESTOCK & CO., INC.
c/o Oppenheimer & Co., Inc.
Oppenheimer Tower
World Financial Center
New York, New York 10281
On behalf of the several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
PMC Commercial Trust, a Texas real estate investment trust
(the "Company"), proposes to sell to you and the other underwriters named on
Schedule I to this Agreement (the "Underwriters"), for whom you are acting as
Representatives, an aggregate of 2,000,000 shares (the "Firm Shares") of its
common shares of beneficial interest, $0.01 par value (the "Common Shares").
In addition, the Company proposes to grant to the Underwriters an option to
purchase up to an additional 300,000 Common Shares (the "Option Shares") from
it for the purpose of covering over-allotments in connection with the sale of
the Firm Shares. The Firm Shares and the Option Shares are together called the
"Shares."
1. Sale and Purchase of the Shares. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at $_____ per share (the
"Initial Price"), the number of Firm Shares set forth opposite the
name of such Underwriter on Schedule I to this Agreement.
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(b) The Company grants to the several Underwriters an
option to purchase, severally and not jointly, all or any part of the
Option Shares at the Initial Price. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage (adjusted
by the Representatives to eliminate fractions) of the total number of
Option Shares to be purchased by the Underwriters as such Underwriter
is purchasing of the Firm Shares. Such option may be exercised only
to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on
or before 12:00 noon, New York City time, on the business day before
the Firm Shares Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each
case upon written or telegraphic notice, or verbal or telephonic
notice confirmed by written or telegraphic notice, by the
Representatives to the Company no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at
least two business days before each Option Shares Closing Date (as
defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm
Shares Closing Date) of such purchase.
Furthermore, on the Firm Shares Closing Date (as hereinafter defined), the
Company proposes to issue and sell directly to certain officers and trust
managers of the Company up to 60,000 additional Common Shares pursuant to
agreements (the "Purchase Agreements"), dated as of ___________, 1996, between
the Company and each such party (each a "Direct Purchaser"). The Common Shares
to be purchased by all Direct Purchasers on the Firm Shares Closing Date
pursuant to the Purchase Agreements are hereinafter called the "Company
Directed Shares" and are not "Shares" within the meaning of this Agreement.
2. Delivery and Payment. Delivery by the Company of the
Firm Shares to the Representatives for the respective accounts of the
Underwriters, and payment of the purchase price by certified or official bank
check or checks payable in New York Clearing House (next day) funds to the
Company shall take place at the offices of Oppenheimer & Co., Inc., at
Oppenheimer Tower, World Financial Center, New York, New York 10281, at 10:00
a.m., New York City time, on the third or fourth business day (as permitted
under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) following the date of this Agreement, or at such time on such
other date, not later than 10 business days after the date of this Agreement,
as shall be agreed upon by the Company and the Representatives (such time and
date of delivery and payment are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is
exercised, delivery by the Company of the Option Shares to the Representatives
for the respective accounts of the Underwriters and payment of the purchase
price by certified or official bank check or checks payable in New York
Clearing House (next day) funds to the Company, for the purchase price of the
Option Shares being sold by the Company, shall take place at the offices of
Oppenheimer & Co., Inc. specified above at the time and on the date (which may
be the same date as, but in no event shall be earlier than, the Firm Shares
Closing Date) specified in the notice referred to in Section l(b) (such time
and date of delivery and payment
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are called an "Option Shares Closing Date"). The Firm Shares Closing Date and
each Option Shares Closing Date are called, individually, a "Closing Date" and,
together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such
names and shall be in such denominations as the Representatives shall request
at least two full business days before the Firm Shares Closing Date or, in the
case of Option Shares, on the day of notice of exercise of the option as
described in Section l(b) and shall be made available to the Representatives
for checking and packaging, at such place as is designated by the
Representatives, on the full business day before the Firm Shares Closing Date
(or the Option Shares Closing Date in the case of the Option Shares).
3. Registration Statement and Prospectus, Public
Offering. The Company has prepared in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-11
(No. 333-_______), including a preliminary prospectus relating to the Shares
and the Company Directed Shares, and has filed with the Commission the
Registration Statement (as hereinafter defined) and such amendments thereof as
may have been required to the date of this Agreement. Copies of such
Registration Statement (including all amendments thereof) and of the related
preliminary prospectus have heretofore been delivered by the Company to you.
The term "preliminary prospectus" means any preliminary prospectus (as
described in Rule 430 of the Rules) included at any time as a part of the
Registration Statement. The Registration Statement as amended at the time and
on the date it becomes effective (the "Effective Date"), including all exhibits
and information, if any, deemed to be part of the Registration Statement
pursuant to Rule 424(b) and Rule 430A of the Rules, is called the "Registration
Statement." The term "Prospectus" means the prospectus in the form first used
to confirm sales of the Shares (whether such prospectus was included in the
Registration Statement at the time of effectiveness or was subsequently filed
with the Commission pursuant to Rule 424(b) of the Rules).
The Company understands that the Underwriters propose to make
a public offering of the Shares, as set forth in and pursuant to the
Prospectus, as soon after the Effective Date and the date of this Agreement as
the Representatives deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each preliminary prospectus and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters).
4. Representations and Warranties of the Company. The
Company hereby represents and warrants to each Underwriter as follows:
(a) The Company meets the requirements for use of Form
S-11 under the Securities Act. On the Effective Date the Registration
Statement complied, and on the date of the Prospectus, on the date any
post-effective amendment to the Registration Statement shall become
effective, on the date any supplement or amendment to the
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Prospectus is filed with the Commission and on each Closing Date, the
Registration Statement and the Prospectus (and any amendment thereof
or supplement thereto) will comply, in all material respects, with the
applicable provisions of the Securities Act and the Rules and the
Exchange Act and the rules and regulations of the Commission
thereunder; the Registration Statement did not, as of the Effective
Date, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading; and on the other dates
referred to above neither the Registration Statement nor the
Prospectus, nor any amendment thereof or supplement thereto, will
contain any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading. When any related
preliminary prospectus was first filed with the Commission (whether
filed as part of the Registration Statement or any amendment thereto
or pursuant to Rule 424(a) of the Rules) and when any amendment
thereof or supplement thereto was first filed with the Commission,
such preliminary prospectus as amended or supplemented complied in all
material respects with the applicable provisions of the Securities Act
and the Rules and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading.
Notwithstanding the foregoing, the Company makes no representation or
warranty as to the paragraph with respect to stabilization on the
inside front cover page of the Prospectus and the statements contained
under the caption "Underwriting" in the Prospectus. The Company
acknowledges that the statements referred to in the previous sentence
constitute the only information furnished in writing by the
Representatives on behalf of the several Underwriters specifically for
inclusion in the Registration Statement, any preliminary prospectus or
the Prospectus.
(b) The financial statements of the Company (including
all notes and schedules thereto) included in the Registration
Statement and Prospectus comply with the requirements of the
Securities Act and present fairly the financial position and the other
information purported to be shown therein of the Company at the
respective dates to which they apply; such financial statements and
related schedules and notes have been prepared in conformity with
generally accepted accounting principles consistently applied and all
adjustments necessary for a fair presentation of the results at such
dates have been made; and the other financial and statistical
information and data set forth in the Registration Statement and
Prospectus are accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the
Company.
(c) Coopers & Lybrand, whose report is filed with the
Commission as a part of the Registration Statement are, and during the
periods covered by their report were, independent public accountants
as required by the Securities Act and the Rules.
(d) The Company is a real estate investment trust duly
organized, validly existing and in good standing under the laws of the
State of Texas. The Company is qualified as a real estate investment
trust under the Texas Real Estate Investment
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Trust Act and the rules and regulations thereunder, and the Company's
method of operation as described in the Registration Statement and
Prospectus will enable it to continue to meet the requirements for
qualification as a real estate investment trust under such act.
Except as described in the Prospectus, the Company does not own,
directly or indirectly, any interest in, or control, directly or
indirectly, any corporation, partnership, joint venture, association
or other business organization. The Company is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which
the character or location of its assets or properties (owned, leased
or licensed) or the nature of its business makes such qualification
necessary except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(e) The Company does not own, lease or license any asset
or property or conduct any business outside the United States of
America. The Company has all requisite power and authority, and the
Company and its officers, trust managers and employees have all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory
bodies or any other person or entity, domestic or foreign ("Permits"),
to own, lease and license their assets and properties and conduct
their businesses as now being conducted and as described in the
Registration Statement and the Prospectus except for such Permits the
failure to so obtain would not, individually or in the aggregate, have
a material adverse effect upon the assets or properties, business,
results of operations, prospects or condition (financial or otherwise)
of the Company; no such Permit contains a materially burdensome
restriction other than as disclosed in the Registration Statement and
the Prospectus; the Company and each of its officers, trust managers
and employees has fulfilled and performed in all material respects its
obligations with respect to such Permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or any other material impairment of the rights
of the holder of any such Permit; and the Company has all such power
and authority, and such authorizations, approvals, consents, orders,
licenses, certificates and Permits to enter into, deliver and perform
this Agreement and the Investment Management Agreement, dated as of
December 16, 1993, between PMC Advisers, Inc. ("PMC Advisers") and the
Company, including the Loan Origination Agreement attached as Exhibit
A thereto (collectively, the "Management Agreement") and to issue and
sell the Shares (except as may be required under state securities and
Blue Sky laws) and the Company Directed Shares.
(f) The Company owns or possesses adequate and
enforceable rights to use all patents, patent applications,
trademarks, trademark applications, trade names, service marks,
copyrights, copyright applications, licenses, know-how and other
similar rights and proprietary knowledge (collectively, "Intangibles")
necessary for the conduct of its business as described in the
Registration Statement and the Prospectus. The Company has not
received any notice of, and to its best knowledge is not aware of, any
infringement of or conflict with asserted rights of others with
respect to any Intangibles which, singly or in the aggregate, if the
subject of an unfavorable decision,
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ruling or finding, would have a material adverse effect upon the
assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(g) The Company has good title to each of the items of
property (real and personal) which are reflected in the financial
statements referred to in Section 4(b) or are referred to in the
Registration Statement and the Prospectus as being owned by it and
valid and enforceable leasehold interests in each of the items of real
and personal property which are referred to in the Registration
Statement and the Prospectus as being leased by it, in each case free
and clear of all liens, encumbrances, claims, security interests and
defects, other than those described in the Registration Statement and
the Prospectus and those which do not and will not have a material
adverse effect upon the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the
Company.
(h) There is no litigation or governmental or other
proceeding or investigation before any court or before or by any
public body or board pending or, to the Company's best knowledge,
threatened (and the Company does not know of any basis therefor)
against, or involving the assets, properties or business of, the
Company or any of its officers, trust managers or five percent
shareholders which would materially adversely affect the value or the
operation of any such assets or properties or the business, results of
operations, prospects or condition (financial or otherwise) of the
Company.
(i) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as described therein, (i) there has not been any material
adverse change, or any development involving or which could reasonably
be expected to involve a prospective material adverse change, in the
assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company, whether or not
arising from transactions in the ordinary course of business; (ii)
there has not been any material change in the capital stock, or
material increase in the short-term or long-term debt, of the Company;
(iii) the Company has not sustained any material loss or interference
with its assets, businesses or properties (whether owned or leased)
from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree; and (iv)
since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, except as reflected
therein, the Company has not (a) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed money,
except such liabilities or obligations incurred in the ordinary course
of business, (b) entered into any transaction not in the ordinary
course of business or (c) declared or paid any dividend or made any
distribution on any shares of its stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire
any shares of its stock.
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(j) There is no document or contract of a character
required to be described in the Registration Statement or Prospectus
or to be filed as an exhibit to the Registration Statement which is
not described or filed as required. Each material agreement to which
the Company is a party is in full force and effect and is valid and
enforceable by and against the Company in accordance with its terms,
assuming the due authorization, execution and delivery thereof by each
of the other parties thereto. Neither the Company nor, to the best of
the Company's knowledge, any other party is in default in the
observance or performance of any term or obligation to be performed by
it under any such agreement, and no event has occurred which with
notice or lapse of time or both would constitute such a default, in
any such case which default or event would have a material adverse
effect on the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company.
(k) The Company is operating in compliance with (and has
not violated) all federal, state and local laws, regulations,
administrative orders or rulings or court decrees applicable to it or
to any of its property, (including without limitation those relating
to environmental, safety and similar matters, discrimination in the
hiring, promotion and pay of employees, the Employee Retirement Income
Security Act and the rules and regulations thereunder), except for
violations which would not, individually or in the aggregate, have a
material adverse effect on the assets or properties, business, results
of operations, prospects or condition (financial or otherwise) of the
Company. The Company is not in violation of any term or provision of
its declaration of trust or by-laws, and the Company has not taken any
actions which may result in the inability of the Company to qualify as
a real estate investment trust under the Texas Real Estate Investment
Trust Act.
(l) Neither the execution, delivery and performance of
this Agreement or the Management Agreement by the Company nor the
consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the Company
of the Shares and the Company Directed Shares) or thereby will give
rise to a right to terminate or accelerate the due date of any payment
due under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or require
any consent or waiver under, or result in the execution or imposition
of any lien, charge or encumbrance upon any properties or assets of
the Company pursuant to the terms of, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company is a party
or by which it or any of its properties or businesses is bound, or any
franchise, license, Permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or violate any provision of the
declaration of trust or by-laws of the Company, except for such
consents or waivers which have already been obtained and are in full
force and effect, or require any consent, approval, authorization or
other order of or registration or filing with, any court, regulatory
body, administrative agency or other governmental body, agency or
official (except compliance with the Securities Act, the Exchange Act
and the securities or Blue Sky laws of various jurisdictions, which
has been or will be effected in accordance with this Agreement).
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(m) The Company has authorized and outstanding shares of
beneficial interest as set forth under the caption "Capitalization" in
the Prospectus. All of the outstanding Common Shares have been duly
and validly issued and are fully paid and nonassessable and were
issued and sold in compliance with all applicable federal and state
securities laws, and none of them were issued in violation of any
preemptive or other similar right. The Shares, when issued and sold
pursuant to this Agreement, and the Company Directed Shares, when
issued and sold pursuant to the Purchase Agreements, will be duly and
validly issued, fully paid and nonassessable and none of them will be
issued in violation of any preemptive or other similar right. Except
as disclosed in the Registration Statement and the Prospectus, there
is no outstanding option, warrant or other right calling for the
issuance of, and there is no commitment, plan or arrangement to issue,
any shares of the Company or any security convertible into, or
exercisable or exchangeable for, such shares. The Common Shares, the
Company's Preferred Shares and the Shares conform in all material
respects to all statements in relation thereto contained in the
Registration Statement and the Prospectus.
(n) No holder of any shares of beneficial interest of the
Company has the right to have any security owned by such holder
included in the Registration Statement or to demand registration of
any security owned by such holder. Each trust manager and officer of
the Company has delivered to the Representatives his enforceable
written agreement that he will not, for a period of 180 days after the
date of the Prospectus, offer for sale, sell, distribute, grant any
option for the sale of, or otherwise dispose of, directly or
indirectly, any Common Shares (or any securities convertible into,
exercisable for, or exchangeable for any shares of Common Shares)
owned by him, without the prior written consent of Oppenheimer & Co.,
Inc.
(o) All necessary action has been duly and validly taken
by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares and the Company
Directed Shares by the Company. Each of this Agreement, the
Management Agreement and the Purchase Agreements has been duly and
validly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except
(i) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and by general
equitable principles and (ii) to the extent that rights to indemnity
or contribution under this Agreement may be limited by Federal and
state securities laws or the public policy underlying such laws.
(p) The Company is not involved in any labor dispute nor,
to the knowledge of the Company, is any such dispute threatened, which
dispute would have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
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(q) No transaction has occurred between or among the
Company and any of its affiliates or any of its officers, trust
managers or five percent shareholders or any affiliate or affiliates
of any such officer, trust manager or five percent shareholder that is
required to be described in and is not described in the Registration
Statement and the Prospectus.
(r) Neither the Company nor, to the best knowledge of the
Company, any affiliate of the Company or any other person acting on
its or their behalf has directly or indirectly (i) used any of its
funds for any unlawful payment to any foreign or domestic governmental
or judicial officials or employees, (ii) made any unlawful payment
(including any bribe, rebate, payoff, kickback or influence payment)
to any person or entity, private or public, whether in the form of
cash, property, services or otherwise, (iii) violated or is in
violation of any provision of federal or state laws relating to
corruption of governmental officials or representatives, including the
Foreign Corrupt Practices Act of 1977 and similar laws, (iv)
established or maintained any fund of monies or other assets for the
purposes specified in clauses (i) or (ii) above or (v) made any false
or fictitious entry on the books or records of the Company relating to
any payment referred to in clauses (i) or (ii) above.
(s) The Company has not taken, nor will it take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Shares to facilitate the sale
or resale of any of the Shares.
(t) The Company has filed all Federal, state and local
tax returns which are required to be filed through the date hereof, or
has received extensions thereof, and has paid all taxes shown on such
returns and all assessments received by them to the extent that the
same are material and have become due.
(u) The Company is not and, upon sale of the Shares to be
issued and sold thereby in accordance herewith and the sale of the
Company Directed Shares pursuant to the Purchase Agreements and the
application of the net proceeds to the Company of such sales as
described in the Prospectus under the caption "Use of Proceeds," will
not be an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(v) The Shares and the Company Directed Shares have been
approved for listing on the American Stock Exchange, and a
registration statement has been filed on Form 8-A pursuant to Section
12 of the Exchange Act for the Shares and the Company Directed Shares,
which registration statement complies in all material respects with
the Exchange Act.
(w) The Company has complied with all of the requirements
and filed the required forms as specified in Florida Statutes Section
517.075.
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(x) The Company has complied and intends to continue to
comply with the requirements of Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the
Company is qualified as a real estate investment trust under the Code.
The method of operation of the Company's business as described in the
Registration Statement and the Prospectus is in conformity with the
requirements for qualification as a real estate investment trust under
the Code.
5. Representations and Warranties of PMC Advisers. PMC
Advisers makes the same representations and warranties as the Company set forth
under Sections 4(a) above, and further represents to, warrants to and agrees
with each of the several Underwriters that:
(a) PMC Advisers has been duly organized, is validly
existing and is in good standing as a corporation under the laws of
the State of Texas, with full power and authority to own or lease its
properties and conduct its business as described in the Prospectus and
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which such qualification is
required (except where the failure so to qualify would not have a
material adverse effect on the ability of PMC Advisers to conduct its
business with respect to the Company as described in the Prospectus),
and has all power and authority necessary to perform its advisory
services with respect to the Company as described in the Prospectus.
(b) PMC Advisers is duly registered and in good standing
with the Commission under the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), and all applicable state laws, as an
investment adviser. PMC Advisers is not prohibited by the Advisers
Act, or the rules and regulations under such Act, or applicable state
law, from acting for the Company under the Management Agreement as
contemplated by the Prospectus.
(c) The description of each of PMC Advisers and PMC
Capital, Inc., the sole shareholder of PMC Advisers ("PMC Capital"),
in the Prospectus is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they
were made.
(d) This Agreement and the Management Agreement have each
been duly authorized, executed and delivered by PMC Advisers and each
constitutes the valid and binding obligation of PMC Advisers and is
enforceable against PMC Advisers in accordance with its terms. No
consent, approval, authorization or order of, or filing with, any
court or governmental agency or body or financial institution is
required for the execution, delivery and performance of this Agreement
or the Management Agreement by PMC Advisers or the consummation by PMC
Advisers of the transactions contemplated hereby or thereby, except
such as have been obtained under the Securities Act, the Exchange Act,
the Advisers Act or applicable state securities laws in connection
with the purchase and distribution of the Shares by the Underwriters.
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(e) Neither the execution, delivery and performance of
this Agreement or the Management Agreement by PMC Advisers nor the
consummation of any of the transactions contemplated hereby or thereby
(including, without limitation, the issuance and sale by the Company
of the Shares and the Company Directed Shares) will give rise to a
right to terminate or accelerate the due date of any payment due
under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or require
any consent or waiver under, or result in the execution or imposition
of any lien, charge or encumbrance upon any properties or assets of
PMC Advisers pursuant to the terms of, any indenture, mortgage, deed
of trust or other agreement or instrument to which PMC Advisers is a
party or by which it or any of its properties or businesses is bound,
or any franchise, license, Permit, judgment, decree, order, statute,
rule or regulation applicable to PMC Advisers or violate any provision
of the articles of incorporation or by-laws of PMC Advisers, except
for such consents or waivers which have already been obtained and are
in full force and effect.
(f) Except as described in the Registration Statement and
the Prospectus, there is no litigation or governmental proceeding to
which PMC Advisers or PMC Capital is a party or to which any property
of PMC Advisers or PMC Capital is subject or which is pending or, to
the knowledge of PMC Advisers, contemplated against PMC Advisers or
PMC Capital which might result in any material adverse change in the
condition (financial or other), results of operations, business or
prospects of PMC Advisers or which is required to be disclosed in the
Registration Statement and the Prospectus.
(g) Except as described in or contemplated by the
Registration Statement and the Prospectus, (A) there has not been any
material adverse change in, or adverse development which materially
affects, the condition (financial or other), results of operation,
business or prospects, of PMC Advisers as of the date of the
Prospectus and (B) there have been no transactions entered into by PMC
Advisers that are material to PMC Advisers other than those in the
ordinary course of business.
(h) All financial and statistical information data set
forth in the Registration Statement and Prospectus relating to PMC
Capital are accurately presented and prepared on a basis consistent
with the books and records of PMC Capital.
(i) Neither PMC Advisers nor PMC Capital has taken,
directly or indirectly, any action designed to or that might
reasonably by expected to cause or result in stabilization or
manipulation of the price of the Common Shares to facilitate the sale
or resale of the Shares.
(j) PMC Capital has received an Exemptive Order pursuant
to Section 6(c) of the Investment Company Act of 1940 which exempts
PMC Capital from the provisions of Section 12(d)(3) of such Act and
permits PMC Capital to establish PMC Advisers as a registered adviser
under the Advisers Act and pursuant to Section 17(d) of the Investment
Company Act of 1940 and Rule 17d-1 thereunder which permits
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PMC Advisers to provide advisory services to the Company (the
"Exemptive Order"). The Exemptive Order is in full force and effect,
and no proceeding to withdraw the Exemptive Order has been instituted
or, to the knowledge of PMC Advisers, is threatened. PMC Capital and
PMC Advisers are in compliance with the terms of the Exemptive Order.
6. Conditions of the Underwriters' Obligations. The
obligations of the Underwriters under this Agreement are several and not
joint. The respective obligations of the Underwriters to purchase the Shares
are subject to each of the following terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 7(A)(a) of this Agreement.
(b) No order preventing or suspending the use of any
preliminary prospectus or the Prospectus shall have been or shall be
in effect and no order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or threatened by the Commission, and
any requests for additional information on the part of the Commission
(to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of the
Representatives.
(c) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company, PMC Advisers or PMC Capital
not contemplated by the Prospectus, which in your opinion, as
Representatives of the several Underwriters, would materially
adversely affect the market for the Shares, or (ii) any event or
development relating to or involving the Company, PMC Advisers or PMC
Capital, any officer or trust manager of the Company or officer or
director of PMC Advisers or PMC Capital, which makes any statement
made in the Prospectus untrue or which, in the opinion of the Company
and its counsel or the Underwriters and their counsel, requires the
making of any addition to or change in the Prospectus in order to
state a material fact required by the Securities Act or any other law
to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectus to
reflect such event or development would, in your opinion, as
Representatives of the several Underwriters, adversely affect the
market for the Shares.
(d) The representations and warranties of the Company and
PMC Advisers contained in this Agreement and in the certificates
delivered pursuant to Section 6(e) shall be true and correct when made
and on and as of each Closing Date as if made on such date and the
Company shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to
be performed or satisfied by it at or before such Closing Date.
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(e) The Representatives shall have received on each
Closing Date (i) a certificate, addressed to the Representatives and
dated such Closing Date, of the chief executive officer and the chief
financial officer or chief accounting officer of the Company to the
effect that the signers of such certificate have carefully examined
the Registration Statement, the Prospectus and this Agreement and that
the representations and warranties of the Company in this Agreement
are true and correct on and as of such Closing Date with the same
effect as if made on such Closing Date and the Company has performed
all covenants and agreements and satisfied all conditions contained in
this Agreement required to be performed or satisfied by it at or prior
to such Closing Date, and (ii) a certificate, addressed to the
Representatives and dated such Closing Date, of the chief executive
officer and the chief financial or chief accounting officer of PMC
Advisers to the effect that the representations and warranties of PMC
Advisers in this Agreement are true and correct on and as of such
Closing Date with the same effect as if made on such Closing Date and
PMC Advisers has performed all covenants and agreements and satisfied
all conditions contained in this Agreement required to be performed or
satisfied by it at or prior to such Closing Date.
(f) The Representatives shall have received at the time
this Agreement is executed and on each Closing Date a signed letter
from Coopers & Lybrand, addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date,
in form and substance reasonably satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of
the Securities Act and the Rules, that the response to Item 28 of the
Registration Statement is correct insofar as it relates to them and
stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included in the
Registration Statement and the Prospectus and reported on by
them and the unaudited financial statements for the period
ended March 31, 1996 included in the Registration Statement
and the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Securities
Act and the Rules, and were prepared on a consistent basis;
(ii) On the basis of a reading of the amounts
included in the Registration Statement and the Prospectus
under the headings "Summary Financial and Operating
Information" and "Selected Financial Data," carrying out
certain procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter, a reading of the minutes of
the meetings of the shareholders and trust managers of the
Company, and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of
the Company as to transactions and events subsequent to the
date of the latest audited financial statements, except as
disclosed in the Registration Statement and the Prospectus,
nothing came to their attention which caused them to believe
that:
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(A) the amounts shown in "Summary Financial and Operating Data" and
"Selected Financial Data" included in the Registration Statement and
the Prospectus do not agree with the corresponding amounts in the
audited financial statements from which such amounts were derived; or
(B) with respect to the period subsequent to March 31, 1996, there
were, at a specified date not more than five business days prior to
the date of the letter, any increases in the current liabilities and
long-term liabilities of the Company or any decreases in total assets
or the shareholders' equity of the Company, as compared with the
amounts shown on the Company's unaudited balance sheet at March 31,
1996 included in the Registration Statement, except for changes set
forth in such letter, in which case the letter shall be accompanied by
an explanation by the Company to the significance thereof unless said
explanation is not deemed necessary by the Representatives; and
(iii) they have performed certain other procedures
as a result of which they determined that certain information
of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information
derived from the general accounting records of the Company)
set forth in the Registration Statement and the Prospectus and
reasonably specified by the Representatives agrees with the
accounting records of the Company.
References to the Registration Statement and the Prospectus in
this paragraph (f) are to such documents as amended and supplemented
at the date of the letter.
(g) The Representatives shall have received on each
Closing Date from Winstead, Sechrest & Minick P.C., counsel for the
Company, an opinion, addressed to the Representatives and dated such
Closing Date, and stating in effect that:
(i) The Company is a real estate investment trust
duly organized, validly existing and in good standing under
the laws of the State of Texas. The Company is qualified as a
real estate investment trust under the Texas Real Estate
Investment Trust Act and the rules and regulations thereunder,
and the Company's method of operation as described in the
Registration Statement and Prospectus will enable it to
continue to meet the requirements for qualification as a real
estate investment trust under such act. The Company is duly
qualified and in good standing in each jurisdiction in which
the character or location of its assets or properties (owned,
leased or licensed) or the nature of its businesses makes such
qualification necessary, except for such jurisdictions where
the failure to so qualify would not have a material adverse
effect on the assets or properties, business, results of
operations, prospects or conditions (financial or otherwise)
of the Company. To the best of such counsel's knowledge,
except as described in the Prospectus, the Company does not
own, directly or indirectly, any interest in, or control,
directly or indirectly, any corporation, partnership, joint
venture, association or other business organization.
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(ii) The Company has all requisite power and
authority to own, lease and license its assets and properties
and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus;
and the Company has all requisite power and authority and all
necessary authorizations, approvals, consents, orders,
licenses, certificates and Permits to enter into, deliver and
perform this Agreement and the Management Agreement and to
issue and sell the Shares and the Company Directed Shares
(other than those required under state securities and Blue Sky
laws, as to which such counsel need express no opinion).
(iii) The Company has authorized and issued shares
of beneficial interest as set forth in the Registration
Statement and the Prospectus; the certificates evidencing the
Shares conform to the requirements of the Texas Real Estate
Investment Trust Act and have been duly authorized for
issuance by the Company; all of the outstanding Common Shares
of the Company have been duly and validly authorized and have
been duly and validly issued and are fully paid and
nonassessable and none of them was issued in violation of any
preemptive or other similar right. The Shares, when issued
and sold pursuant to this Agreement, and the Company Directed
Shares, when issued and sold pursuant to the Purchase
Agreements, will be duly and validly issued, outstanding,
fully paid and, except as disclosed in the Prospectus,
nonassessable and none of them will have been issued in
violation of any preemptive or other similar right. To the
best of such counsel's knowledge, except as disclosed in the
Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the
issuance of, and no commitment, plan or arrangement to issue,
any shares of beneficial interest of the Company or any
security convertible into, exercisable for, or exchangeable
for shares of beneficial interest of the Company. Except as
described in the Registration Statement and the Prospectus,
such counsel does not know of any holder of any securities of
the Company or any other person who has the right, contractual
or otherwise, to cause the Company to sell or otherwise issue
to them, or to permit them to underwrite the sale of, any of
the Shares or the right to have any Common Shares or other
securities of the Company included in the Registration
Statement or the right, as a result of the filing of the
Registration Statement, to require registration under the
Securities Act of any Common Shares or other securities of the
Company. The authorized shares of beneficial interest
(including the Shares) conform in all material respects to the
descriptions thereof contained in the Registration Statement
and the Prospectus.
(iv) The agreement of the Company's trust managers
and officers stating that for a period of 180 days from the
date of the Prospectus they will not, without the prior
written consent of Oppenheimer & Co., Inc., offer for sale,
sell, distribute, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any Common
Shares (or any securities convertible into, exercisable for,
or exchangeable for any Common Shares) owned by them has been
duly and validly delivered by such persons and constitutes the
legal,
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valid and binding obligation of each such person enforceable
against each such person in accordance with its terms, except
as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(v) All necessary action has been duly and
validly taken by the Company to authorize the execution,
delivery and performance of this Agreement, the Management
Agreement and the issuance and sale of the Shares and the
Company Directed Shares. Each of this Agreement and the
Management Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (A)
as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles and (B) to the
extent that rights to indemnity or contribution under this
Agreement may be limited by Federal or state securities laws
or the public policy underlying such laws.
(vi) Neither the execution, delivery and
performance of this Agreement or the Management Agreement by
the Company (including, without limitation, the issuance and
sale by the Company of the Shares and the Company Directed
Shares) will give rise to a right to terminate or accelerate
the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or
constitute a default (or any event which with notice or lapse
of time, or both, would constitute a default) under, or
require consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any
properties or assets of the Company pursuant to the terms of
any indenture, mortgage, deed of trust, note or other
agreement or instrument of which such counsel is aware and to
which the Company is a party or by which the Company or any of
its properties or businesses is bound, or any franchise,
license, Permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or violate any provision
of the declaration of trust or by-laws of the Company.
(vii) To the best of such counsel's knowledge, no
default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default, in the due
performance and observance of any term, covenant or condition
by the Company of any indenture, mortgage, deed of trust, note
or any other agreement or instrument to which the Company is a
party or by which it or any of its assets or properties or
businesses may be bound or affected, where the consequences of
such default would have a material and adverse effect on the
assets, properties, business, results of operations, prospects
or condition (financial or otherwise) of the Company.
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(viii) To the best of such counsel's knowledge, the
Company is not in violation of any term or provision of its
declaration of trust or by-laws and is not in violation of any
term or provision of any Permit, judgment, decree, order,
statute, rule or regulation, where the consequences of such
violation would have a material and adverse effect on the
assets or properties, businesses, results of operations,
prospects or condition (financial or otherwise) of the
Company.
(ix) No consent, approval, authorization or order
of any court or governmental or regulatory agency or body is
required for the performance of this Agreement or the
Management Agreement by the Company or the consummation of the
transactions contemplated hereby or thereby, except such as
have been obtained under the Securities Act and the Rules or
the Exchange Act and such as may be required under state
securities or Blue Sky laws (as to which such counsel need not
express any opinion) in connection with the purchase and
distribution of the Shares by the several Underwriters.
(x) To the best of such counsel's knowledge,
there is no litigation or governmental or other proceeding or
investigation, before any court or before or by any public
body or board, pending or threatened against, or involving the
assets, properties or businesses of, the Company or any of its
officers, trust managers or five percent shareholders which if
adversely determined could have a material adverse effect upon
the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the
Company.
(xi) The descriptions in the Registration
Statement and Prospectus of statutes, legal and governmental
proceedings, contracts and other documents are accurate and
fairly present the information required to be shown; and such
counsel do not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus that
are not described as required, or of any contracts or
documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that are not described
and filed as required.
(xii) The Registration Statement, all preliminary
prospectuses and the Prospectus and each amendment or
supplement thereto (except for the financial statements and
schedules and other financial and statistical data included
therein, as to which such counsel expresses no opinion) comply
as to form in all material respects with the requirements of
the Securities Act and the Rules.
(xiii) The Registration Statement has become
effective under the Securities Act, the Prospectus has been
filed as required by Section 6(a) hereof, and to the knowledge
of such counsel no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceeding
for that purpose has been instituted or threatened, pending or
contemplated.
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(xiv) The Shares and the Company Directed Shares
have been approved for listing on the American Stock Exchange
and a registration statement has been filed pursuant to
Section 12 of the Exchange Act and has been declared
effective.
(xv) The Company is not, and upon sale of the
Shares and the Company Directed Shares and the application of
the net proceeds therefrom as described in the Prospectus
under the caption "Use of Proceeds" will not be, an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(xvi) The information in the Registration Statement
and Prospectus under the caption "Federal Income Tax
Considerations" has been reviewed by such counsel and is
accurate in all material respects and does not omit to state
any material matter of law relating to the taxation of the
Company and its shareholders.
(xvii) The Company is qualified as a real estate
investment trust under the Code and the rules and regulations
thereunder, and the Company's method of operation as described
in the Registration Statement and Prospectus will enable it to
continue to meet the requirements for taxation as a real
estate investment trust under the Code and the rules and
regulations thereunder.
To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of responsible officers of the Company
and public officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws
of the State of Texas and the Federal laws of the United States; provided that
such counsel shall state that in their opinion the Underwriters and they are
justified in relying on such other opinions. Copies of such certificates and
other opinions shall be furnished to the Representatives and counsel for the
Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent certified public accountants of the Company, at which conferences
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except
as specified in the foregoing opinion), on the basis of the foregoing, no facts
have come to the attention of such counsel which lead such counsel to believe
that the Registration Statement at the time it became effective (except with
respect to the financial statements and
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notes and schedules thereto and other financial data, as to which such counsel
need express no belief or opinion) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the Prospectus
as amended or supplemented (except with respect to the financial statements and
notes and schedules thereto and other financial data, as to which such counsel
need make no statement) as of its date and as of the Firm Shares Closing Date
or the Option Shares Closing Date contained any untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) The Representatives shall have received on each
Closing Date from Winstead, Sechrest & Minick P.C., counsel for PMC
Advisers, an opinion, addressed to the Representatives and dated such
Closing Date, and stating in effect that:
(i) PMC Advisers has been duly organized, is
validly existing as a corporation and is in good standing
under the laws of the State of Texas. PMC Advisers is duly
qualified and in good standing in each jurisdiction in which
the character or location of its assets or properties (owned,
leased or licensed) or the nature of its businesses makes such
qualification necessary, except for such jurisdictions where
the failure to so qualify would not have a material adverse
effect on the assets or properties, business, results of
operations, prospects or conditions (financial or otherwise)
of PMC Advisers. To the best of such counsel's knowledge, PMC
Advisers does not own, directly or indirectly, any interest
in, or control, directly or indirectly, any corporation,
partnership, joint venture, association or other business
organization.
(ii) PMC Advisers has all requisite power and
authority to own, lease and license its assets and properties
and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus;
and PMC Advisers has all requisite power and authority and all
necessary authorizations, approvals, consents, orders,
licenses, certificates and Permits to enter into, deliver and
perform this Agreement and the Management Agreement.
(iii) All necessary action has been duly and
validly taken by PMC Advisers to authorize the execution,
delivery and performance of this Agreement and the Management
Agreement. Each of this Agreement and the Management
Agreement has been duly and validly authorized, executed and
delivered by PMC Advisers and constitutes the legal, valid and
binding obligation of PMC Advisers enforceable against PMC
Advisers in accordance with its terms, except (A) as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and
by general equitable principles and (B) to the extent that
rights to indemnity or contribution under this Agreement may
be limited by Federal or state securities laws or the public
policy underlying such laws.
(iv) Neither the execution, delivery and
performance of this Agreement or the Management Agreement by
PMC Advisers will give rise to a right to terminate or
accelerate the due date of any payment due under, or
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conflict with or result in the breach of any term or provision
of, or constitute a default (or any event which with notice or
lapse of time, or both, would constitute a default) under, or
require consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any
properties or assets of PMC Advisers pursuant to the terms of
any indenture, mortgage, deed of trust, note or other
agreement or instrument of which such counsel is aware and to
which PMC Advisers is a party or by which PMC Advisers or any
of its properties or businesses is bound, or any franchise,
license, Permit, judgment, decree, order, statute, rule or
regulation applicable to PMC Advisers or violate any provision
of the articles of incorporation or by-laws of PMC Advisers.
(v) PMC Advisers is duly registered with the
Commission under the Advisers Act as an investment adviser and
is not prohibited by the Advisers Act, or the rules and
regulations thereunder, from acting as an investment adviser
for the Company under the Management Agreement as contemplated
by the Prospectus. The Management Agreement complies with all
applicable provisions of the Advisers Act.
(vi) To the best of such counsel's knowledge, no
default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default, in the due
performance and observance of any term, covenant or condition
by PMC Advisers of any indenture, mortgage, deed of trust,
note or any other agreement or instrument to which PMC
Advisers is a party or by which it or any of its assets or
properties or businesses may be bound or affected, where the
consequences of such default would have a material and adverse
effect on the assets, properties, business, results of
operations, prospects or condition (financial or otherwise) of
PMC Advisers.
(vii) To the best of such counsel's knowledge, PMC
Advisers is not in violation of any term or provision of its
articles of incorporation or by-laws and is not in violation
of any term or provision of any Permit, judgment, decree,
order, statute, rule or regulation, where the consequences of
such violation would have a material and adverse effect on the
assets or properties, businesses, results of operations,
prospects or condition (financial or otherwise) of PMC
Advisers.
(viii) No consent, approval, authorization or order
of any court or governmental or regulatory agency or body is
required for the performance of this Agreement or the
Management Agreement by PMC Advisers or the consummation of
the transactions contemplated hereby or thereby, except such
as have been obtained under the Advisers Act.
(ix) To the best of such counsel's knowledge,
there is no litigation or governmental or other proceeding or
investigation, before any court or before or by any public
body or board pending or threatened against, or involving the
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assets, properties or businesses of, PMC Advisers or any of
its officers or directors or its shareholder which if
adversely determined could have a material adverse effect upon
the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of PMC
Advisers.
(x) PMC Capital has obtained the Exemptive Order,
which is in full force and effect and, to the best of such
counsel's knowledge, no proceeding to withdraw the Exemptive
Order has been instituted or is threatened.
(i) All proceedings taken in connection with the sale of
the Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives
and their counsel and the Underwriters shall have received from
Simpson Thacher & Bartlett a favorable opinion, addressed to the
Representatives and dated such Closing Date, with respect to the
Shares, the Registration Statement and the Prospectus, and such other
related matters, as the Representatives may reasonably request, and
the Company shall have furnished to Simpson Thacher & Bartlett such
documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(j) The Representatives shall have received on each
Closing Date a certificate, addressed to the Representatives, and
dated such Closing Date, of an executive officer of the Company to the
effect that the signer of such certificate has reviewed and
understands the provisions of Section 517.075 of the Florida Statutes,
and represents that the Company has complied, and at all times will
comply, with all provisions of Section 517.075 and further, that as of
such Closing Date, neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba.
7. Covenants of the Company. (A) The Company covenants
and agrees as follows:
(a) The Company shall prepare the Prospectus in a form
approved by the Representatives and file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the Commission's
close of business on the second business 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, and
shall promptly advise the Representatives (i) when any amendment to
the Registration Statement shall have become effective, (ii) of any
request by the Commission for any amendment of the Registration
Statement or the Prospectus or for any additional information, (iii)
of the prevention or suspension of the use of any preliminary
prospectus or the Prospectus or of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose and (v) of the happening of any event during the
period when a Prospectus
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relating to the States is required to be delivered under the
Securities Act that in the judgment of the Company makes any statement
made in the Registration Statement or Prospectus untrue or that
requires the making of any changes in the Registration Statement or
the Prospectus in order to make the statements therein, in light of
the circumstances in which they are made, not misleading. The Company
shall not file any amendment of the Registration Statement or
supplement to the Prospectus unless the Company has furnished the
Representatives a copy for its review prior to filing and shall not
file any such proposed amendment or supplement to which the
Representatives reasonably object. The Company shall use its best
efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) Within the time period during which the Prospectus
relating to the Shares is required to be delivered under the
Securities Act, the Company shall comply with all requirements imposed
on it by the Securities Act and the Rules so far as is necessary to
permit the continuance of sales or dealings in the Shares as
contemplated hereby and by the Registration Statement and the
Prospectus. If, at any time when a prospectus relating to the Shares
is required to be delivered under the Securities Act and the Rules,
any event occurs as a result of which the Prospectus as then amended
or supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Securities Act or the Rules, the Company
promptly shall prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 7(A), an amendment or
supplement which shall correct such statement or omission or an
amendment which shall effect such compliance.
(c) The Company shall make generally available to its
security holders and to the Representatives as soon as practicable,
but not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company during which
the Effective Date occurs (or 90 days if such 12-month period
coincides with the Company's fiscal year), an earnings statement
(which need not be audited) of the Company, covering such 12-month
period, which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Rules.
(d) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including all exhibits thereto and amendments
thereof) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and all amendments thereof and,
so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Securities Act or the Rules, as many copies of any
preliminary prospectus and the Prospectus and any amendments thereof
and supplements thereto as the Representatives may reasonably request.
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(e) The Company shall use its reasonable best efforts to
qualify, and shall cooperate with the Representatives and their
counsel in endeavoring to qualify, the Shares for offer and sale under
the laws of such jurisdictions as the Representatives may designate
and shall maintain such qualifications in effect so long as required
for the distribution of the Shares; provided, however, that the
Company shall not be required in connection therewith, as a condition
thereof, to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction or subject itself to
taxation as doing business in any jurisdiction.
(f) For a period of five years after the date of this
Agreement, the Company shall supply to the Representatives, and to
each other Underwriter who may so request in writing, copies of such
financial statements and other periodic and special reports as the
Company may from time to time distribute generally to the holders of
any class of its shares of beneficial interest and to furnish to the
Representatives a copy of each annual or other report it shall be
required to file with the Commission (including any Report on Form SR
required by Rule 463 of the Rules).
(g) Without the prior written consent of the
Representatives, for a period of 180 days after the date of the
Prospectus, the Company shall not issue, sell or register with the
Commission (other than on Form S-8 or on any successor form), or
otherwise dispose of, directly or indirectly, any shares of beneficial
interest of the Company (or any securities convertible into or
exercisable or exchangeable for equity securities of the Company),
except for the issuance of the Shares pursuant to the Registration
Statement, the issuance of Company Directed Shares pursuant to the
Purchase Agreements and the issuance of shares pursuant to the
Company's existing share option plans. In the event that during this
period, (i) any shares are issued pursuant to the Company's existing
share option plans or (ii) any registration is effected on Form S-8 or
on any successor form, the Company shall obtain the written agreement
of such grantee or purchaser or holder of such securities that, for a
period of six months after the date of the Prospectus, such person
will not, without the prior written consent of the Representatives,
offer for sale, sell, distribute, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, or exercise any
registration rights with respect to, any Common Shares (or any
securities convertible into, exercisable for, or exchangeable for any
shares of Common Shares) owned by such person.
(h) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and
by the American Stock Exchange (including any required registration
under the Exchange Act).
(i) The Company will apply the net proceeds from the sale
of the Shares to be sold by it hereunder and the sale of the Company
Directed Shares to be sold pursuant to the Purchase Agreements
substantially in accordance with the description set forth in the
Prospectus. The Company shall take all steps as shall be necessary to
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ensure that the Company shall not become an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(j) The Company shall use its best efforts to do and
perform all things required or necessary to be done and performed
under this Agreement by the Company prior to the Firm Shares Closing
Date or Option Share Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.
(k) For its taxable year ending December 31, 1995 and for
all subsequent taxable years, the Company will elect to qualify as a
real estate investment trust under the Code and will use its best
efforts to continue to meet the requirements of the Code and the Texas
Real Estate Investment Trust Act to qualify as a real estate
investment trust.
(l) The Company will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(B) The Company agrees to pay, or reimburse if paid by
the Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the obligations of the
Company under this Agreement, including without limitation those relating to:
(i) the preparation, printing, filing and distribution of the Registration
Statement, including all exhibits thereto, each preliminary prospectus, the
Prospectus, all amendments and supplements to the Registration Statement and
the Prospectus, and the printing, filing and distribution of this Agreement;
(ii) the preparation and delivery of certificates for the Shares to the
Underwriters; (iii) the registration or qualification of the Shares for offer
and sale under the securities or Blue Sky laws of the various jurisdictions
referred to in Section 7 (A) (e), including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
registration and qualification and the preparation, printing, distribution and
shipment of preliminary and supplementary Blue Sky memoranda; (iv) the
furnishing (including costs of shipping and mailing) to the Representatives and
to the Underwriters of copies of each preliminary prospectus, the Prospectus
and all amendments or supplements to the Prospectus, and of the several
documents required by this Section to be so furnished, as may be reasonably
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold; (v) the filing fees of
the National Association of Securities Dealers, Inc. in connection with its
review of the terms of the public offering; (vi) the furnishing (including
costs of shipping and mailing) to the Representatives and to the Underwriters
of copies of all reports and information required by Section 7(A)(f); (vii)
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inclusion of the Shares and the Company Directed Shares for listing on the
American Stock Exchange; and (viii) all transfer taxes, if any, with respect to
the sale and delivery of the Shares by the Company to the Underwriters.
Subject to the provisions of Section 10, the Underwriters agree to pay, whether
or not the transactions contemplated hereby are consummated or this Agreement
is terminated, all costs and expenses incident to the performance of the
obligations of the Underwriters under this Agreement not payable by the Company
pursuant to the preceding sentence, including, without limitation, the fees and
disbursements of counsel for the Underwriters.
8. Indemnification.
(a) The Company agrees to indemnity and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal fees and expenses of one
counsel representing all the Underwriters (except for certain situations set
forth in Section 8(d) where separate counsel is permitted, in which case
indemnification hereunder shall cover the reasonable legal fees and expenses of
all such counsel) and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment thereof or
supplement thereto, or arise out of or are based upon 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; provided, however,
that such indemnity shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) on account of any losses, claims, damages
or liabilities arising from the sale of the Shares to any person by such
Underwriter if such untrue statement or omission or alleged untrue statement or
omission was made in such preliminary prospectus, the Registration Statement or
the Prospectus, or such amendment or supplement, in reliance upon and in
conformity with information furnished in writing to the Company by the
Representatives on behalf of any Underwriter specifically for use therein; and
provided further that the indemnification contained in this Section 8(a) with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Shares by such Underwriter to any person if a copy of the
Prospectus shall not have been delivered or sent to such person within the time
required by the Securities Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such preliminary prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
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In addition to its other obligations under this Section 8(a),
the Company agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 8(a), it will reimburse the Underwriters on a monthly
basis for all reasonable legal fees and expenses of one counsel representing
all the Underwriters (except for certain situations set forth in Section 8(d)
where separate counsel is permitted, in which case reimbursement hereunder
shall cover the reasonable legal fees and expenses of all such counsel) and
other reasonable expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceedings,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse the Underwriters for
such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that
any such interim reimbursement payment is so held to have been improper, the
Underwriters shall promptly return it to the Company, together with interest,
compounded daily, determined on the basis of the prime rate (or other
commercial lending rate for borrowers of the highest credit standing) announced
from time to time by Citibank, N.A. (the "Prime Rate"). Any such interim
reimbursement payments which are not made to you within 30 days of a request
for reimbursement shall bear interest at the Prime Rate from the date of such
request.
It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in this paragraph (a),
including the amounts of any requested reimbursement payments and the method of
determining such amounts, shall be settled by arbitration conducted under the
provisions of the Constitution and Rules of the Board of Governors of the New
York Stock Exchange, Inc. or pursuant to the Code of Arbitration Procedure of
the NASD. Any such arbitration shall be commenced by service of a written
demand for arbitration or a written notice of intention to arbitrate, therein
electing the arbitration tribunal. In the event the party demanding
arbitration shall not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice shall be
authorized to do so. Such arbitration shall be limited to the operation of the
interim reimbursement provisions contained in this paragraph (a) and shall not
resolve the ultimate propriety or enforceability of the other obligations
created by this Section 8.
(b) PMC Advisers agrees to indemnity and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal fees and expenses of one
counsel representing all the Underwriters (except for certain situations set
forth in Section 8(d) where separate counsel is permitted, in which case
indemnification hereunder shall cover the reasonable legal fees and expenses of
all such counsel) and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon (i) any untrue statement or alleged
untrue statement made by PMC Advisers
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in Section 5 of this Agreement or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment thereof or supplement
thereto, or arising out of or are based upon 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 with respect to PMC Advisers and PMC
Capital; provided, however, that such indemnity shall not inure to the benefit
of any Underwriter (or any person controlling such Underwriter) on account of
any losses, claims, damages or liabilities arising from the sale of the Shares
to any person by such Underwriter if such untrue statement or omission or
alleged untrue statement or omission was made in such preliminary prospectus,
the Registration Statement or the Prospectus, or such amendment or supplement,
in reliance upon and in conformity with information furnished in writing to the
Company by the Representatives on behalf of any Underwriter specifically for
use therein; and provided further that the indemnification contained in this
Section 8(b) with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the Securities Act and the regulations thereunder, and the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact contained in such preliminary prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. This indemnity agreement will be in addition to any
liability which PMC Advisers may otherwise have.
(c) Each Underwriter agrees, severally and not jointly,
to indemnity and hold harmless the Company, PMC Advisers, each person, if any,
who controls the Company or PMC Advisers within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, each trust manager of the
Company, each director of PMC Advisers, and each officer of the Company who
signs the Registration Statement to the same extent as the foregoing indemnity
from the Company and PMC Advisers to each Underwriter, but only insofar as such
losses, claims, damages or liabilities arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which was
made in. any preliminary prospectus, the Registration Statement or the
Prospectus, or any amendment thereof or supplement thereto, contained in the
paragraph relating to stabilization on the inside front cover page of the
Prospectus and the statements contained under the caption "Underwriting" in the
Prospectus; provided, however, that the obligation of each Underwriter to
indemnity the Company and PMC Advisers (including any controlling person,
trust manager, director or officer thereof) shall be limited to the net
proceeds received by the Company from such Underwriter.
(d) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 8(a), 8(b) or 8(c) shall be available
to any party who
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shall fail to give notice as provided in this Section 8(d) if the party to whom
notice was not given was unaware of the proceeding to which such notice would
have related and was prejudiced by the failure to give such notice but the
omission so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to any
indemnified party for contribution or indemnification otherwise than under this
Section. In case any such action, suit or proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and the approval by the indemnified party of such counsel, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses, except as provided below and except for the reasonable costs
of investigation subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right to employ
its counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party has been authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have reasonably
concluded that there may be a conflict of interest between the indemnifying
parties and the indemnified party in the conduct of the defense of such action
(in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the defense of
such action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the expense
of the indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its
written consent. The Company and PMC Advisers will not, without the prior
written consent of the Representatives, settle, compromise or consent to the
entry of any judgment in any pending or threatened action, suit, proceeding or
claim in respect of which indemnification may be sought hereunder (whether or
not such Underwriter or any person controlling such Underwriter is a party to
such action, suit, proceeding or claim), unless such settlement, compromise or
consent includes an unconditional release of each Underwriter and each
controlling person of such Underwriters from all liability relating to the
matters arising from such action, suit, proceeding or claim.
9. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnification provided
for in Section 8 is due in accordance with its terms but for any reason is held
to be unavailable from the Company, PMC Advisers or the Underwriters, the
Company, PMC Advisers and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting any contribution received by the Company and PMC Advisers from
persons other than the Underwriters, such as persons who control the Company or
PMC Advisers within the meaning of the Securities Act, officers of the Company
who signed the Registration Statement, trust managers of the Company and
directors of PMC Advisers, who may also be liable for contribution) to which
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29
the Company, PMC Advisers and one or more of the Underwriters may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company and PMC Advisers on the one hand and the Underwriters on the other
from the offering of the Shares or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 8 hereof,
in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and PMC Advisers
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and PMC Advisers
and the Underwriters shall be deemed to be in the same proportion as (x) the
total proceeds from the offering (net of underwriting discounts but before
deducting expenses) received by the Company, as set forth in the table on the
cover page of the Prospectus, bear to (y) the underwriting discounts received
by the Underwriters, as set forth in the table on the cover page of the
Prospectus, respectively. The relative fault of the Company and PMC Advisers
or the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact related to
information supplied by the Company and PMC Advisers or the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, PMC Advisers
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 above. Notwithstanding the provisions of this
Section 9, (i) in no case shall any Underwriter (except as may be provided in
the Agreement Among Underwriters) be liable or responsible for any amount in
excess of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder, and (ii) the Company and PMC Advisers shall be liable
and responsible for any amount in excess of such underwriting discount;
provided, however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company or PMC
Advisers within the meaning of the Section 15 of the Securities Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed
the Registration Statement, each trust manager of the Company and each director
of PMC Advisers shall have the same rights to contribution as the Company and
PMC Advisers, subject in each case to clauses (i) and (ii) in the immediately
preceding sentence of this Section 9. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section, notify such party
or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this Section.
No party shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its written
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consent. The Underwriters' obligations to contribute pursuant to this Section
9 are several in proportion to their respective underwriting commitments and
not joint.
10. Termination. This Agreement may be terminated with
respect to the Shares to be purchased on a Closing Date by the Representatives
by notifying the Company at any time
(a) in the absolute discretion of the Representatives at
or before any Closing Date: (i) if on or prior to such date, any
domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Representatives will in the future
materially disrupt, the securities markets; (ii) if there has occurred
any new outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the
Representatives, inadvisable to proceed with the offering; (iii) if
there shall be such a material adverse change in general financial,
political or economic conditions or the effect of international
conditions on the financial markets in the United States is such as to
make it, in the reasonable judgment of the Representatives,
inadvisable or impracticable to market the Shares; (iv) if trading in
the Shares has been suspended by the Commission or trading generally
on the New York Stock Exchange, Inc. or on the American Stock
Exchange, Inc. has been suspended or limited, or minimum or maximum
ranges for prices for securities shall have been fixed, or maximum
ranges for prices for securities have been required, by said exchanges
or by order of the Commission, the National Association of Securities
Dealers, Inc., or any other governmental or regulatory authority; or
(v) if a banking moratorium has been declared by any state or Federal
authority, or
(b) at or before any Closing Date, that any of the
conditions specified in Section 6 shall not have been fulfilled when
and as required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, the Company and PMC Advisers shall not be under any liability to
any Underwriter, and no Underwriter shall be under any liability to the Company
or PMC Advisers, except that (y) if this Agreement is terminated by the
Representatives or the Underwriters because of any failure, refusal or
inability on the part of the Company or PMC Advisers to comply with the terms
or to fulfill any of the conditions of this Agreement, the Company will
reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by them in
connection with the proposed purchase and sale of the Shares or in
contemplation of performing their obligations hereunder and (z) no Underwriter
who shall have failed or refused to purchase the Shares agreed to be purchased
by it under this Agreement, without some reason sufficient hereunder to justify
cancellation or termination of its obligations under this Agreement, shall be
relieved of liability to the Company or to the other Underwriters for damages
occasioned by its failure or refusal.
11. Substitution of Underwriters. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 10) to purchase on
any Closing Date the Shares agreed to be
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31
purchased on such Closing Date by such Underwriter or Underwriters, the
Representatives may find one or more substitute underwriters to purchase such
Shares or make such other arrangements as the Representatives may deem
advisable or one or more of the remaining Underwriters may agree to purchase
such Shares in such proportions as may be approved by the Representatives, in
each case upon the terms set forth in this Agreement. If no such arrangements
have been made by the close of business on the business day following such
Closing Date,
(a) if the number of Shares to be purchased by the
defaulting Underwriters on such Closing Date shall not exceed 10% of
the Shares that all the Underwriters are obligated to purchase on such
Closing Date, then each of the nondefaulting Underwriters shall be
obligated to purchase such Shares on the terms herein set forth in
proportion to their respective obligations hereunder; provided, that
in no event shall the maximum number of Shares that any Underwriter
has agreed to purchase pursuant to Section 1 be increased pursuant to
this Section 11 by more than one-ninth of such number of Shares
without the written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the
defaulting Underwriters on such Closing Date shall exceed 10% of the
Shares that all the Underwriters are obligated to purchase on such
Closing Date, then the Company shall be entitled to an additional
business day within which it may, but is not obligated to, find one or
more substitute underwriters reasonably satisfactory to the
Representatives to purchase such Shares upon the terms set forth in
this Agreement.
In any such case, either the Representatives or the Company
shall have the right to postpone the applicable Closing Date for a period of
not more than five business days in order that necessary changes and
arrangements (including any necessary amendments or supplements to the
Registration Statement or Prospectus) may be effected by the Representatives
and the Company. If the number of Shares to be purchased on such Closing Date
by such defaulting Underwriter or Underwriters shall exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing Date, and
none of the nondefaulting Underwriters or the Company shall make arrangements
pursuant to this Section within the period stated for the purchase of the
Shares that the defaulting Underwriters agreed to purchase, this Agreement
shall terminate with respect to the Shares to be purchased on such Closing Date
without liability on the part of any nondefaulting Underwriter to the Company
or PMC Advisers and without liability on the part of the Company or PMC
Advisers, except in both cases as provided in Sections 7(B), 8, 9 and 10. The
provisions of this Section shall not in any way affect the liability of any
defaulting Underwriter to the Company, PMC Advisers or the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
12. Miscellaneous. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers, of PMC Advisers or its officers and of the Underwriters set forth
in or made pursuant to this Agreement shall remain in full force and effect,
regardless of any investigation made by or on behalf of any
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Underwriter, the Company or PMC Advisers or any of the officers, trust manager,
directors or controlling persons referred to in Sections 8 and 9 hereof, and
shall survive delivery of and payment for the Shares. The provisions of
Sections 7(B), 8, 9 and 10 shall survive the termination or cancellation of
this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters, or the Company, and trust managers and officers of the
Company, and their respective successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser of Shares from any
Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Representatives, c/o Oppenheimer & Co., Inc.,
Oppenheimer Tower, World Financial Center, New York, New York 10281 Attention:
Mark Biderman, and (b) if to the Company, to its agent for service as such
agent's address appears on the cover page of the Registration Statement.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflict
of laws.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
PMC COMMERCIAL TRUST
By:
-----------------------------------
Lance B. Rosemore
President and
Chief Executive Officer
PMC ADVISERS, INC.
By:
-----------------------------------
Lance B. Rosemore
President and
Chief Executive Officer
Confirmed:
OPPENHEIMER & CO., INC.
FAHNESTOCK & CO., INC.
J.C. BRADFORD & CO.
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I
annexed hereto.
By OPPENHEIMER & CO., INC.
By:
-----------------------------------
34
SCHEDULE I
Number of
Firm Shares to
Be Purchased
--------------
Name
Oppenheimer & Co., Inc. . . . . . . . . . . . . . . . .
J.C. Bradford & Co... . . . . . . . . . . . . . . . . .
Fahnestock & Co., Inc... . . . . . . . . . . . . . . .
------------
2,000,000