INTERVEST BANCSHARES CORPORATION
(a Delaware corporation)
1,250,000 Shares of Common Stock
UNDERWRITING AGREEMENT
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This Underwriting Agreement is made and entered into this 10th day of August,
2005 by and between Intervest Bancshares Corporation, a Delaware corporation
(the "Company") and Ryan Beck & Co., Inc. ("Ryan Beck") as representative of the
co-managers and the underwriters named in Schedule I hereto (such syndicate of
underwriters collectively referred to as the "Underwriters"). The Company
hereby confirms its agreement with the Underwriters with respect to the issue
and sale by the Company and the purchase by the Underwriters of 1,250,000 shares
(the "Initial Securities") of the Company's $1.00 par value Class A common stock
("Common Stock"). The Company also proposes to issue and sell to the
Underwriters, at the Underwriters' option, up to an additional 187,500 shares of
Common Stock (the "Option Securities") as set forth herein. The term
"Securities" as used herein, unless indicated otherwise, shall mean the Initial
Securities and the Option Securities.
The public offering price for the Securities, the purchase price to be paid by
the Underwriters for the Securities, and the number of Securities to be sold to
the Underwriters by the Company shall be agreed upon by the Company and the
Underwriters, and such agreement shall be set forth in a separate written
instrument substantially in the form of EXHIBIT A hereto (the "Price
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Determination Agreement"). The Price Determination Agreement may take the form
of an exchange of any standard form of written telecommunication between the
Company and the Underwriter and shall specify such applicable information as is
indicated in EXHIBIT A hereto. The offering of the Securities will be governed
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by this Agreement, as supplemented by the Price Determination Agreement. From
and after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and all references
herein to "this Agreement" shall be deemed to include, the Price Determination
Agreement.
The Company has prepared and filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (File No. 333-126493)
covering the registration of the Securities under the Securities Act of 1933, as
amended (the "1933 Act"), including the related preliminary prospectus, and, if
such registration statement has not become effective, the Company will prepare
and file, prior to the effective date of such registration statement, an
amendment to such registration statement, including a final prospectus. Each
prospectus used before the time such registration statement becomes effective is
herein called a "preliminary prospectus." Such registration statement, at the
time it becomes effective, is herein called the "Registration Statement," and
the prospectus, included in the Registration Statement at the time it becomes
effective is herein called the "Prospectus," except that, if any revised
prospectus provided to the Underwriter by the Company for use in connection with
the offering of the
Securities differs from the prospectus included in the Registration Statement at
the time it becomes effective (whether or not such prospectus is required to be
filed pursuant to Rule 424(b) under the 1933 Act ("Rule 424(b)"), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first furnished to the Underwriters for such use and distributed by the
Underwriters.
The Company understands that the Underwriter proposes to make a public offering
of the Securities (the "Offering") as soon as possible after the Registration
Statement becomes effective. The Underwriters may assemble and manage a selling
group of broker-dealers that are members of the National Association of
Securities Dealers, Inc. ("NASD") to participate in the solicitation of purchase
orders for the Securities. It is acknowledged and agreed in connection with the
proposed Offering, that (i) the Underwriter is not acting as a financial advisor
to the Company and, except as specifically contemplated by the Underwriting
Agreement, the Underwriter owes no duties (fiduciary or other) to the Company in
connection with any aspect of the Offering of the Securities (including, without
limitation, the structuring, marketing, timing, pricing, offering, allocation
and distribution of the Securities) or any related matters; and (ii) the
Underwriter has advised the Company that the Underwriter has agreements,
arrangements, understandings and other relationships with and owe duties and
obligations to third parties, including potential purchasers of the Securities,
that may create or exacerbate actual, potential or apparent conflicts of
interest between the issuer and the Underwriter.
Section 1. Representations and Warranties.
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(a) The Company represents and warrants to and agrees with the
Underwriters that:
(i) The Company meets the requirements for use of Form S-1 under the
1933 Act and, when the Registration Statement on such form shall become
effective and at all times subsequent thereto up to the Closing Time
referred to below (and, with respect to the Option Securities, up to the
"Option Closing Time" referred to below), (A) the Registration Statement
and any amendments and supplements thereto will comply in all material
respects with the requirements of the 1933 Act and the rules and
regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"); (B) neither the Registration Statement nor any amendment or
supplement thereto will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; and (C) neither the Prospectus nor any amendment
or supplement thereto will include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriter
expressly for use in the Registration Statement or the Prospectus. The
statements contained under the caption "Underwriting" in the Prospectus
constitute the only information furnished to the Company in writing by the
Underwriter expressly for use in the Registration Statement or the
Prospectus.
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(ii) Documents previously filed either with the Commission, or, if
filed by Intervest National Bank (the "Bank"), with the Federal Reserve
System (the "FRB"), the Office of the Comptroller of the Currency (the
"OCC") or the Federal Deposit Insurance Corporation (the "FDIC"), as
predecessor filer to the Company, complied in all material respects with
the requirements of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and the rules and regulations of the Commission thereunder
(the "1934 Act Regulations") as adopted by the appropriate federal banking
regulator and, when read together and with the other information in the
Prospectus, at the time the Registration Statement becomes effective and at
all times subsequent thereto up to the Closing Time (and with respect to
the Option Securities, up to the "Option Closing Time" referred to below),
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading, in each case after excluding any
statement that does not constitute a part of the Registration Statement or
the Prospectus pursuant to Rule 412 of the 1933 Act Regulations.
(iii) Hacker, Johnson & Smith ("Hacker Johnson"), who is reporting
upon the audited financial statements of the Company included or
incorporated by reference in the Registration Statement, has advised the
Company that it is an independent registered public accountant as required
by the 1933 Act and the 1933 Act Regulations and the Public Company
Accounting Oversight Board ("PCAOB"), and Hacker Johnson is, with respect
to the Company and each of its subsidiaries, independent certified public
accountants. Eisner LLP, who is reporting upon the audited financial
statements of Intervest Mortgage Corporation, has advised the Company that
it is an independent registered public accountant as required by the 1933
Act and the 1933 Act Regulations and the PCAOB, and Eisner LLP is, with
respect to Intervest Mortgage Corporation and each of its subsidiaries,
independent certified public accountants.
(iv) The consolidated financial statements of the Company, audited
and, if any, unaudited (including the notes thereto), included or
incorporated by reference in the Registration Statement present fairly the
consolidated financial position of the Company and its subsidiaries as of
the dates indicated and the consolidated results of operations and cash
flows of the Company and its subsidiaries for the periods specified. Such
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved, except as otherwise stated therein. The financial
statement schedules, if any, included in the Registration Statement present
fairly the information required to be stated therein. The selected
financial, pro forma and statistical data included in the Prospectus are
accurate in all material respects and present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited and, if any, unaudited consolidated financial statements included
or incorporated by reference in the Registration Statement. The
consolidated financial statements audited and, if any, unaudited (including
the notes thereto relied upon by Hacker Johnson in preparing the Company's
consolidated financial statements), present fairly the consolidated
financial position of Intervest Mortgage Corporation and its subsidiaries
as of the dates indicated and the consolidated results of operations and
cash flows of Intervest Mortgage Corporation and its subsidiaries for the
periods specified. Such financial statements of Intervest Mortgage
Corporation have
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been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except as
otherwise stated therein. The tables and other information included in the
Prospectus are in accordance with the requirements of SEC Industry Guide 3,
fairly present the information shown therein and any quarterly information
omitted from the Prospectus in reliance on Guide 3, General Instruction 3,
does not reflect any material change from the last annual period included
therein and the omission of this non-material quarterly financial
information does not render the Guide 3 information provided therein
misleading in any material respect.
(v) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with corporate
power and authority under such laws to own, lease and operate its
properties and conduct its business as described in the Prospectus. Each
direct and indirect subsidiary of the Company is an entity duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of organization with corporate power and authority under such
laws to own, lease and operate its properties and conduct its business as
described on the prospectus. Each of the Company and its direct and
indirect subsidiaries is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it
owns or leases property of a nature, or transacts business of a type, that
would make such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the results of operations, the condition (financial or
otherwise), earnings, business affairs, operations, stockholders' equity,
assets, or business prospects of the Company and its subsidiaries,
considered as one enterprise or the ability of the Company to consummate
the transactions contemplated herein (a "Material Adverse Effect").
(vi) The Company is duly registered with the Board of Governors of the
Federal Reserve System as a financial holding company under the Bank
Holding Company Act of 1956, as amended. The Bank is an OCC chartered
commercial bank subsidiary of the Company; and the deposit accounts of the
Bank are insured by the Bank Insurance Fund of the FDIC up to the maximum
allowable limits thereof. The Company has all such power, authority,
authorization, approvals and orders as may be required to enter into this
Agreement to carry out the provisions and conditions hereof and thereof and
to issue and sell the Securities.
(vii) All of the outstanding shares of capital stock of the Bank and
Intervest Mortgage Corporation and each of the Company's other subsidiaries
have been duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company directly or indirectly, free
and clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind.
(viii) Except for the Bank, Intervest Mortgage Corporation, Intervest
Securities Corporation, Intervest Statutory Trust I, Intervest Statutory
Trust II, Intervest Statutory Trust III and Intervest Statutory Trust IV,
the Company does not have any "significant subsidiaries" as defined in Rule
1-02 of Regulation S-X of the Commission.
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(ix) The Company had at the date indicated a duly authorized and
outstanding capitalization as set forth in the Prospectus under the caption
"Description of Our Securities." The capital stock, trust preferred
securities and other securities of the Company and the subordinated
debentures of Intervest Mortgage Corporation conform in all material
respects to the description thereof contained or incorporated by reference
in the Prospectus and such description conforms to the rights set forth in
the instruments defining the same. Except as described in the Prospectus,
there are no outstanding rights (contractual or otherwise), warrants or
options to acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of, any
shares of capital stock of or other equity interest in the Company.
(x) This Agreement has been duly authorized, executed and delivered by
the Company and, when duly executed by the Underwriter, will constitute the
valid and binding agreement of the Company enforceable against the Company
in accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general
equitable principles.
(xi) The Securities have been duly and validly authorized by the
Company for issuance and sale to the Underwriter pursuant to this Agreement
and, when issued and delivered by the Company to the Underwriter pursuant
to this Agreement against payment of the consideration set forth herein,
will be validly issued, fully paid and non-assessable. The Securities
conform in all material respects to the description thereof in the
Prospectus, and such description conforms in all material respects to the
rights set forth in the instruments defining the same; and the issuance of
the Securities is not subject to any preemptive or other similar rights.
(xii) The issuance and sale of the Securities pursuant to this
Agreement by the Company and the compliance by the Company with all of the
provisions of the Agreement and the consummation of the transactions
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument filed as an exhibit to the Registration Statement
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject, nor will
such action result in any violation of the provisions of the Restated
Certificate of Incorporation or Bylaws of the Company or any federal
statute, rule, regulation, Delaware law or regulation or any Delaware
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries, or any order of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets.
(xiii) The issuance and sale of the Securities by the Company, the
compliance by the Company with all of the provisions of this Agreement and
the consummation of the transactions herein contemplated will not conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default under, any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
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Company or any of its properties; and no consent, approval, authorization,
order, license, certificate, permit, registration or qualification of or
with any such court or other governmental agency or body is required to be
obtained by the Company for the issue and sale of the Securities by the
Company, or the consummation by the Company of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations, licenses, certificates, permits, registrations or
qualifications as have already been obtained, or as may be required under
the 1933 Act or the 1933 Act Regulations, the Rules and Regulations of the
NASD or the state securities laws.
(xiv) Each person who is an executive officer or director of the
Company or a director or officer of the Bank or Intervest Mortgage
Corporation has agreed to sign an agreement substantially in the form
attached hereto as EXHIBIT B (the "Lock-up Agreements"). The Company has
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provided to counsel for the Underwriter true, accurate and complete copies
of all of the Lock-up Agreements presently in effect or effected hereby.
The Company hereby represents and warrants that it will not release any of
its officers, directors or other shareholders from any Lock-up Agreements
currently existing or hereafter effected without the prior written consent
of the Underwriter.
(xv) The Company has not engaged in any activity that would result in
the Company being, and after giving effect to the offering and sale of the
Securities, the Company will not be, an "investment company," or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(xvi) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and
non-assessable, and are not subject to the preemptive rights of any
stockholder of the Company.
(xvii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, there has not been (A) any material adverse change in the results
of operations, condition (financial or otherwise), earnings, business
affairs, stockholders' equity, assets or business prospects of the Company
and its subsidiaries, considered as one enterprise, whether or not arising
in the ordinary course of business (a "Material Adverse Change"), (B) any
transaction entered into by the Company or any subsidiary thereof, other
than in the ordinary course of business, that is material to the Company
and its subsidiaries, considered as one enterprise, or (C) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock. None of the Company, the Bank, Intervest Mortgage
Corporation or any other subsidiary of the Company has any material
liability of any nature, contingent or otherwise, except as set forth in
the Registration Statement and the Prospectus.
(xviii) Neither the Company, the Bank, Intervest Mortgage Corporation
nor any other direct or indirect subsidiary of the Company is in violation
of any provision of its certificate of incorporation, charter, certificate
of trust, trust agreement or bylaws, as applicable, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
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note, lease or other agreement or instrument to which it is a party or by
which it may be bound or to which any of its respective properties may be
subject, except for such defaults that, individually or in the aggregate,
would not have a Material Adverse Effect.
(xix) Except as disclosed in the Prospectus, there is no action, suit,
proceeding or investigation before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company, threatened against the Company, the Bank or any
other subsidiary that is required to be disclosed in the Prospectus or that
could reasonably be expected to result in a Material Adverse Change, or
that could reasonably be expected to have a Material Adverse Effect on the
properties or assets of the Company and its subsidiaries, considered as one
enterprise, or that could reasonably be expected materially and adversely
to affect the consummation of the transactions contemplated in this
Agreement; all pending legal or governmental proceedings to which the
Company, the Bank or any other direct or indirect subsidiary is a party
that are not described in the Prospectus, including ordinary routine
litigation incidental to its business, if decided in a manner adverse to
the Company, would not have a Material Adverse Effect.
(xx) There are no contracts or documents of the Company or any
subsidiaries of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described and filed as required.
(xxi) Each of the Company and its direct and indirect subsidiaries,
including the Bank, has good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear of all
liens, charges, encumbrances or restrictions, except such as (A) are
described in the Prospectus or (B) are neither material in amount nor
materially significant in relation to the business of the Company and its
subsidiaries, considered as one enterprise; all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise are in full force and effect, and none of the Company, the
Bank, Intervest Mortgage Corporation or any other subsidiary has any notice
of any material claim that has been asserted by anyone adverse to the
rights of the Company, the Bank, Intervest Mortgage Corporation or any
other subsidiary under any such lease or sublease or affecting or
questioning the rights of such corporation to the continued possession of
the leased or subleased premises under any such lease or sublease.
(xxii) Each of the Company and its direct and indirect subsidiaries,
owns, possesses or has obtained all material governmental licenses,
permits, certificates, consents, orders, approvals and other authorizations
and have made all filings, applications and registrations necessary to own
or lease, as the case may be, and to operate its properties and to carry on
its business as presently conducted; all such licenses, permits,
certificates, consents, orders, approvals and authorizations are valid and
in full force and effect, except where the invalidity would not have a
Material Adverse Effect and none of the Company, the Bank, Intervest
Mortgage Corporation or any other subsidiary has received any notice of any
restriction upon, or any notice of proceedings relating to revocation or
modification of, any such licenses, permits, certificates,
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consents, orders, approvals or authorizations. Neither the Company, nor any
of its direct or indirect subsidiaries is a party to or subject to any
order, decree, directive, agreement, memorandum of understanding or similar
arrangement with, or a commitment letter, supervisory letter or similar
submission to, the OCC, the FRB, the FDIC, the SEC, the NASD or any other
governmental entity charged with the supervision or regulation of
depository institutions or engaged in the insurance of deposits (including
the FDIC) or the supervision or regulation of it or any of its subsidiaries
and neither the Company nor any of its subsidiaries has been advised by any
of the aforementioned governmental entities that such governmental entity
is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
directive, agreement, memorandum of understanding, commitment letter,
supervisory letter or similar submission.
(xxiii) No labor problem with the employees of the Company, the Bank,
Intervest Mortgage Corporation or any other direct or indirect subsidiary
of the Company exists or, to the best knowledge of the Company, is imminent
such that it could result in a Material Adverse Effect, and the Company is
not aware of any existing or imminent labor disturbance by the employees of
any of its, the Bank's or any other subsidiary's principal suppliers,
contractors or customers that could reasonably be expected to result in a
Material Adverse Effect.
(xxiv) Except as disclosed in the Prospectus, there are no persons
with registration or other similar rights to have any securities of the
Company registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
(xxv) Except as disclosed in the Prospectus, the Company and its
direct and indirect subsidiaries, including the Bank, own or possess all
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets or other unpatented and/or unpatentable
proprietary or confidential information systems or procedures), trademarks,
service marks and trade names (collectively, "Patent and Proprietary
Rights") currently employed by them in connection with the business now
operated by them except where the failure to own, possess or acquire such
Patent and Proprietary Rights would not have a Material Adverse Effect.
Neither the Company, the Bank nor any other subsidiary has received any
notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Patent and Proprietary
Rights, and which infringement or conflict (if the subject of any
unfavorable decision, rule and refinement, singly or in the aggregate)
could reasonably be expected to result in any Material Adverse Change.
(xxvi) The Company and each subsidiary of the Company have filed all
federal, state and local income, franchise or other tax returns required to
be filed and have made timely payments of all taxes due and payable in
respect of such returns, and no material deficiency has been asserted with
respect thereto by any taxing authority.
(xxvii) The Company's common stock is listed on the NASDAQ National
Market. The Company has filed with the NASD or the NASDAQ Stock Market all
documents and notices required by the NASD or the NASDAQ Stock Market of
companies that have issued securities that are traded in the
over-the-counter market and quotations for which are reported by the NASDAQ
National Market.
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(xxviii) None of the Company, the Bank, Intervest Mortgage Corporation
or any other subsidiary of the Company has taken or will take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation, under the 1934 Act or otherwise, of the
price of the Securities or the Common Stock.
(xxix) None of the Company, the Bank, Intervest Mortgage Corporation
or any direct or indirect subsidiary is or has been (by virtue of any
action, omission to act, contract to which it is a party or by which it is
bound, or any occurrence or state of facts whatsoever) in violation of any
applicable foreign, federal, state, municipal or local statutes, laws,
ordinances, rules, regulations and/or orders issued pursuant to foreign,
federal, state, municipal or local statutes, laws, ordinances, rules, or
regulations (including those relating to any aspect of securities
registration or issuance, banking, bank holding companies, consumer credit,
truth-in-lending, truth-in-savings, usury, currency transaction reporting,
anti-money laundering and customer identification regulations, applicable
state corporate law, environmental protection, transactions with
affiliates, occupational safety and health and equal employment practices)
heretofore or currently in effect, except such violations that have been
fully cured or satisfied without recourse or that in the aggregate will not
have a Material Adverse Effect.
(xxx) None of the Company, the Bank, Intervest Mortgage Corporation or
any other subsidiary has any agreement or understanding with any person (A)
concerning the future acquisition by the Company or the Bank of a
controlling interest in any entity or (B) concerning the future acquisition
by any person of a controlling interest in the Company, the Bank or any
other subsidiary, in either case that is required by the 1933 Act or the
1933 Act Regulations to be disclosed by the Company that is not disclosed
in the Prospectus.
(xxxi) Except for information provided in writing to the Company by
the Underwriter about the Underwriter for use in the Prospectus, the
Company has not relied upon the Underwriter or its legal or other advisors
for any legal, tax, accounting or financial advice in connection with the
Offering or otherwise. The Company understands that it may seek the advice
of its own advisors with respect to these matters or other matters related
to the Offering of the Securities.
(b) Any certificate signed by any authorized officer of the
Company or the Bank and delivered to the Underwriter or to counsel for the
Underwriter pursuant to this Agreement shall be deemed a representation and
warranty by the Company to the Underwriter as to the matters covered thereby.
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Section 2. Sale and Delivery to the Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
the number of Initial Securities set forth across from the name of each
Underwriter on Schedule I at the purchase price and terms set forth herein and
in the Price Determination Agreement.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters to purchase all or a portion of the
Option Securities in accordance with the terms set forth herein and in the Price
Determination Agreement. The option hereby granted will expire at 5:00 p.m. on
the 30th day after the date the Registration Statement is declared effective by
the Commission (or at 5:00 p.m. on the next business day following the 30th day
if such 30th day is not a business day) and may be exercised, solely for the
purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Securities upon notice by Ryan Beck as
representative of the co-managers and the Underwriters to the Company setting
forth the number of Option Securities as to which the Underwriters are
exercising the option and the time, date and place of payment and delivery for
the Option Securities. In the event and to the extent the Underwriters elect to
purchase the Option Securities as provided herein, the Company agrees to issue
and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company in accordance with the
terms set forth herein and in the Price Determination Agreement, that portion of
the number of Option Securities as to which such Underwriter shall have been
exercised (as adjusted to eliminate fractional shares) determined by multiplying
such number of Option Securities by a fraction, the numerator of which is the
maximum number of Option Securities which such Underwriter is entitled to
purchase set forth opposite the name of such Underwriter on Schedule I hereof
and the denomination of which is the maximum numbers of Option Securities that
all of the Underwriters are entitled to purchase hereunder. Such time and date
of delivery (the "Option Closing Date") shall be determined by Ryan Beck as
representative of the co-managers and the Underwriters but shall not be later
than five full business days after the exercise of said option, nor in any event
prior to the Closing Time, as hereinafter defined, nor earlier than the second
business day after the date on which the notice of the exercise of the option
shall have been given.
(b) Payment of the purchase price for, and delivery of
certificates for, the Common Stock issuable in connection with the Initial
Securities shall be made at such place as shall be agreed upon by the Company,
at 9:30 a.m. on the third full business day after the effective date of the
Registration Statement, or at such other time not earlier than three or more
than ten full business days thereafter as the Underwriters and the Company shall
determine (such date and time of payment and delivery being herein called the
"Closing Time"). In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates for, such Option Securities shall be made at such
place as shall be agreed upon by the Company and the Underwriters, on the Option
Closing Date as specified in the notice from the Underwriters to the Company.
Payment for the Initial Securities and the Option Securities, if any, shall be
made to the Company by wire transfer of
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immediately available funds, against delivery of the Common Stock which
comprises the Initial Securities and Option Securities, as the case may be, to
the Underwriters.
(c) The Common Stock which comprises the Initial Securities and
Option Securities, as the case may be, shall be registered in such name or names
as the Underwriters may request in writing at least two business days prior to
the Closing Time or the Option Closing Time, as the case may be.
Section 3. Certain Covenants of the Company. The Company
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covenants with each of the Underwriters as follows:
(a) The Company will cause the Registration Statement to become
effective and will notify the Underwriters immediately, and confirm the notice
in writing, (i) when the Registration Statement, or any post-effective amendment
to the Registration Statement, shall have become effective, or any supplement to
the Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, the NASD, the NASDAQ or any state
securities commission, (iii) of any request of the Commission to amend the
Registration Statement or amend or supplement the Prospectus or for additional
information and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the institution or threatening of any proceedings for any of
such purposes. The Company will use every reasonable effort to prevent the
issuance of any such stop order or of any order preventing or suspending such
use and, if any such order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company will not at any time file or make any amendment to
the Registration Statement or, if the Company has elected to rely upon Rule 430A
of the 1933 Act Regulations ("Rule 430A"), any amendment or supplement to the
Prospectus (including documents incorporated by reference into the Registration
Statement or the Prospectus) of which the Underwriters shall not previously have
been advised and furnished a copy, or to which the Underwriters or counsel for
the Underwriters shall reasonably object.
(c) The Company has furnished or will furnish to the Underwriter
as many signed and conformed copies of the Registration Statement as originally
filed and of each amendment thereto, whether filed before or after the
Registration Statement becomes effective, copies of all exhibits and documents
filed therewith and signed copies of all consents and certificates of experts as
the Underwriters may reasonably request.
(d) The Company will deliver or cause to be delivered to the
Underwriters, without charge, from time to time until the effective date of the
Registration Statement, as many copies of each preliminary prospectus as the
Underwriters may reasonably request, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will deliver
or cause to be delivered to the Underwriter, without charge, as soon as the
Registration Statement shall have become effective (or, if the Company has
elected to rely upon Rule 430A, as soon as practicable after the Price
Determination Agreement has been executed and delivered) and thereafter from
time to time as requested by the Underwriters during the
11
period when the Prospectus is required to be delivered under the 1933 Act, such
number of copies of the Prospectus (as supplemented or amended) as the
Underwriters may reasonably request.
(e) The Company will comply with the 1933 Act and the 1933 Act
Regulations, and the 1934 Act and the 1934 Act Regulations, so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If, at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the Securities, any
event shall occur or condition exist as a result of which it is necessary, in
the reasonable opinion of counsel for the Underwriters or counsel for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein not misleading, in light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
reasonable opinion of either such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section 3(b)
hereof, such amendment or supplement as may be necessary to correct such untrue
statement or omission or to make the Registration Statement or the Prospectus
comply with such requirements.
(f) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions as the
Underwriters may designate and to maintain such qualifications in effect for a
period of not less than one year from the effective date of the Registration
Statement; provided, however, that the Company shall not be obligated to file
------------------
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The Company will file
such statements and reports as may be required by the laws of each jurisdiction
in which Securities have been qualified as above provided.
(g) The Company will make generally available, within the meaning
of Rule 158 of the 1933 Act Regulations ("Rule 158"), to the holders of the
Securities and the Underwriter as soon as practicable, but not later than 90
days after the close of the period covered thereby, an earnings statement of the
Company and its subsidiaries (in form complying with the provisions of Rule 158)
covering a period of at least 12 months beginning after the effective date of
the Registration Statement but not later than the first day of the Company's
fiscal quarter next following such effective date.
(h) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus under the
caption "Use of Proceeds."
(i) The Company, during the period when a prospectus is required
by the 1933 Act to be delivered in connection with the sales of Common Stock,
will cause a registration statement for the Common Stock to be effective and
will file promptly all documents required to
12
be filed with the Commission pursuant to Section 13 or 14 of the 1934 Act
subsequent to the time the Registration Statement becomes effective.
(j) For a period of five years after the Closing Time, the Company
will furnish to the Underwriter copies of all annual reports, quarterly reports
and current reports filed by the Company with the Commission, such other
documents, reports, proxy statements and information as shall be furnished by
the Company to its stockholders generally, and such other public information
concerning the Bank, Intervest Mortgage Corporation or the Company as the
Underwriter may reasonably request.
(k) The Company will provide to the holders of the Common Stock
annual reports containing financial statements audited by the Company's
independent auditors and, upon written request, the Company's annual reports on
Form 10-K or Form 10-KSB, as applicable.
(l) The Company will file with the NASDAQ Stock Market or the NASD
all documents and notices required by the NASDAQ Stock Market or the NASD of
companies that have issued securities that are traded on the NASDAQ Stock
Market.
(m) The Company shall cause to be prepared by its counsel one or
more "blue sky" surveys (each, a "Blue Sky Survey") for use in connection with
the offering of the Securities as contemplated by the Prospectus and a copy of
each Blue Sky Survey or surveys shall be delivered to each of the Company and
the Underwriters. Furthermore, the Underwriters may, in their discretion,
require the Company to cause any Blue Sky Survey prepared in connection with any
prior public offering of the Company's securities to be updated by counsel for
the Company through and as of the date hereof.
(n) If, at the time the Registration Statement becomes effective,
any information shall have been omitted therefrom in reliance upon Rule 430A,
then the Company will prepare, and file or transmit for filing with the
Commission in accordance with Rule 430A and Rule 424(b), copies of an amended
Prospectus or, if required by Rule 430A, a post-effective amendment to the
Registration Statement (including an amended Prospectus) containing all
information so omitted.
(o) The Company will, at its expense, subsequent to the issuance
of the Securities, prepare and distribute to the Underwriters and counsel to the
Underwriters up to 15 bound volumes and/or cds containing copies of the
documents used in connection with the issuance of the Securities, as requested
by the Underwriters.
(p) Neither the Company nor any of its subsidiaries will, prior to
the Option Closing Date or thirty (30) days after the date of this Agreement,
whichever occurs first, incur any material liability or obligation, direct or
contingent, or enter into any material transaction, other than in the ordinary
course of business, or any transaction with a related party which is required to
be disclosed in the Prospectus pursuant to Item 404 of Regulation S-K of the
Commission, except as disclosed in or contemplated by the Prospectus.
(q) The Company will not sell or issue, contract to sell or issue,
or otherwise dispose of, for a period of 180 days after the Closing Time,
without the prior written consent of
13
the Underwriters, any shares of, or any securities convertible into or
exercisable for shares of, Common Stock other than in connection with any plan
or arrangement described in the Prospectus.
Section 4. Payment of Expenses.
-------------------
(a) Whether or not the sale of the Securities by the Company is
consummated, the Company agrees to pay all expenses incident to the performance
of the obligations of the Company under this Agreement, including the following:
(i) the preparation, printing, issuance and delivery of the certificates or
entries evidencing the shares of Common Stock comprising the Securities; (ii)
the fees and disbursements of the Company's counsel, accountants and other
advisors; (iii) the qualification or exemption from qualification of the
Securities under all applicable securities or "blue sky" laws, including filing
fees and the reasonable fees and disbursements of counsel in connection
therewith and in connection with the preparation of the Blue Sky Survey
concerning such jurisdictions as the Underwriters may reasonably designate; (iv)
the printing and delivery to the Underwriters, in such quantities as the
Underwriters shall reasonably request, copies of the Prospectus, and all other
documents in connection with this Agreement; (v) the filing fees and the fees
and disbursements of counsel incurred in connection with the review of the
Offering by the NASD; (vi) the fees for listing the Common Stock comprising the
Securities on the Nasdaq SmallCap Market or the NASDAQ National Market, as
applicable; (vii) the fees and expenses relating to advertising expenses,
investor meeting expenses and other miscellaneous expenses relating to the
marketing by the Underwriters of the Securities other than Underwriters'
out-of-pocket expenses described in (b) below; and (viii) the fees and charges
of any transfer agent, registrar or other agent. In the event that the
Underwriters incur any such expenses on behalf of the Company, the Company will
pay or reimburse the Underwriters for such expenses regardless of whether the
Offering is successfully completed, and such reimbursements will not be included
in the expense limitations set forth in the following paragraph.
(b) In addition, the Company will reimburse the Underwriters for
all reasonable out-of- pocket expenses, including legal fees and expenses of
Underwriters' counsel, incurred by the Underwriter in connection with the
services provided by the Underwriters to the Company pursuant to this Agreement.
Such legal fees shall not exceed (i) $50,000 with regard to the Offering
(excluding the out-of-pocket expenses of counsel and any "blue sky" fees and
expenses), (ii) and $10,000 with regard to the Underwriters' other out-of-pocket
expenses, without the approval of the Company. The Underwriters will provide a
detailed accounting of the out-of-pocket expenses referred to in this paragraph,
which will be paid by the Company on the Closing Time. The parties hereto
acknowledge that the expense limitations set forth in this paragraph may be
exceeded in the event of a material delay in the Offering that requires an
update of financial or other information contained in the Prospectus.
(c) If (i) the Closing Time does not occur on or before August 30,
2005, (ii) the Company abandons or terminates the Offering, or (iii) this
Agreement is terminated by the Underwriter in accordance with the provisions of
Section 5, (6)(i), or 9(a), the Company shall reimburse the Underwriters for its
reasonable out-of-pocket expenses, as set forth in this Section 4, including the
reasonable fees and disbursements of counsel for the Underwriters.
14
Section 5. Conditions of Underwriter's Obligations. The
---------------------------------------
obligations of the Underwriters to purchase and pay for the Securities that it
has agreed to purchase pursuant to this Agreement are subject, in the discretion
of the Underwriters, to the accuracy of the representations and warranties of
the Company contained herein or in certificates of the officers of the Company
or any subsidiary delivered pursuant to the provisions hereof, to the execution
of the Price Determination Agreement no later than 5:30 p.m. on the first
business day following the date hereof, or at such later time as the
Underwriters may agree in writing (in the Underwriters' sole discretion), to the
performance by the Company of its obligations hereunder and to the following
further conditions:
(a) The Registration Statement shall have become effective no
later than 4:00 p.m. on the first business day following the date hereof, or at
such later time or on such later date as the Underwriter may agree to in
writing; at the Closing Time, no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall be pending or, to the Underwriters' knowledge
or the knowledge of the Company, shall be contemplated by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the satisfaction of counsel for the Underwriters. If the
Company has elected to rely upon Rule 430A, a prospectus containing the
information required by Rule 430A shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) At the Closing Time, the Underwriters shall have received:
(i) The favorable legal opinion, dated as of the Closing Time, of
Harris Beach PLLC ("Harris Beach"), counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Underwriter,
substantially in the form set forth in EXHIBIT C and a letter in the form
---------
of EXHIBIT D.
----------
(ii) The favorable legal opinion, dated as of the Closing Time, of
Blank Rome LLP ("Blank Rome") counsel for the Underwriter, in form and
substance satisfactory to the Underwriter.
In rendering their opinion, counsel may rely, to the extent such
counsel deems such reliance necessary or appropriate, upon certificates of
governmental officials, certificates or opinions of other counsel reasonably
satisfactory to the Underwriter and, as to matters of fact, officers'
certificates. The opinion of such counsel need refer only to matters of
Delaware and federal law and may add other qualifications and explanations of
the basis of their opinion as may be reasonably acceptable to the Underwriter.
(c) At the Closing Time and again at the Option Closing Date, (i)
the Registration Statement and the Prospectus, as they may then be amended or
supplemented, shall contain all statements that are required to be stated
therein under the 1933 Act and the 1933 Act Regulations and shall conform in all
material respects to the requirements of the 1933 Act and the 1933 Act
Regulations, the Company shall have complied in all material respects with Rule
430A (if it shall have elected to rely thereon), and neither the Registration
Statement nor the
15
Prospectus, as they may then be amended or supplemented, shall contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; (ii)
there shall not have been, since the respective dates as of which information is
given in the Prospectus, any Material Adverse Change in the condition (financial
or otherwise), earnings, business affairs, assets or business prospects of the
Company and its subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business; (iii) no action, suit or proceeding
at law or in equity shall be pending or, to the knowledge of the Company,
threatened against the Company or its subsidiaries that would be required to be
set forth in the Registration Statement that is not set forth therein, and no
proceedings, investigations or inquiries shall be pending or, to the knowledge
of the Company, threatened against either of the Company or any subsidiary of
the Company or any officer of the Company, the Bank or Intervest Mortgage
Corporation before or by any federal, state or other commission, board or
administrative agency wherein an unfavorable decision, ruling or finding would
materially adversely affect the condition (financial or otherwise), earnings,
business affairs, assets or business prospects of the Company and its
subsidiaries, considered as one enterprise, other than as set forth in the
Prospectus; (iv) the Company shall have complied, in all material respects, with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time or Option Closing Date, as applicable;
(v) the other representations and warranties of the Company set forth in Section
l(a) hereof shall be accurate in all material respects as though expressly made
at and as of the Closing Time or Option Closing Date, as applicable; and (vi) no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose been initiated or, to the best
knowledge of the Company, threatened by the Commission. At the Closing Time, the
Underwriter shall have received a certificate of the President and the Chief
Financial Officer of the Company, dated as of the Closing Time, to such effect.
(d) At the time that this Agreement is executed by the Company,
the Underwriters shall have received from each of Hacker Johnson and Eisner LLP
a letter or letters, dated such date, in form and substance satisfactory to the
Underwriter, confirming that they are independent registered public accountants
with respect to the Company and Intervest Mortgage Corporation, respectively,
within the meaning of the 1933 Act and the 1933 Act Regulations and the rules
and regulations of PCAOB, and stating in effect that, with respect to the
Company and Intervest Mortgage Corporation, as applicable:
(i) in their opinion, the consolidated financial statements as of
December 31, 2004 and 2003, and for each of the years in the three year
period ended December 31, 2004 and the related financial statement
schedules, if any, included or incorporated by reference in the
Registration Statement and the Prospectus with respect to the Company or
the consolidated financial statements as of December 31, 2004 and 2003, and
for each of the years in the three year period ended December 31, 2004 and
the related annual statement schedules of Intervest Mortgage Corporation
relied upon in preparing the consolidated financial statements of the
Company with respect to Intervest Mortgage Corporation and covered by their
opinions included therein comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations and the Securities Exchange Act of 1934 (the "1934 Act") and
related regulations of the SEC (the "1934 Act Regulations");
16
(ii) on the basis of procedures (but not an audit in accordance with
generally accepted accounting standards) specified by the PCAOB for a
review of interim financial information as described in SAS No. 100,
Interim Financial Information, including a reading of the latest available
------- --------- -----------
interim consolidated financial statements of the Company or Intervest
Mortgage Corporation, as applicable, a reading of the minutes of all
meetings of the Board of Directors of the Company and the Bank with respect
to the Company or the minutes of all meetings of the Board of Directors of
Intervest Mortgage Corporation with respect to Intervest Mortgage
Corporation and of the Audit, Loan and Executive Committees of the Board of
Directors of the Company and Bank with respect to the Company or the Audit
Committee of Intervest Mortgage Corporation, with respect to Intervest
Mortgage Corporation since March 31, 2005, inquiries of certain officials
of the Company and its subsidiaries or the Intervest Mortgage Corporation
and its subsidiaries, as applicable, responsible for financial and
accounting matters, and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited interim consolidated financial information of
the Company included or incorporated by reference in the Prospectus,
if any, with respect to the Company, or the unaudited interim
consolidated financial information of Intervest Mortgage Corporation
included in the Company's interim consolidated financial information,
with respect to the Company do not comply as to form in all material
respects with applicable accounting requirements of the 1933 Act, the
1934 Act and related regulations, or are not presented in conformity
with generally accepted accounting principles applied on a basis
consistent with that of the audited financial statements included in
the Prospectus;
(B) at a specified date not more than three days prior to the
date of this Underwriting Agreement, there was any increase in total
borrowings, FRB borrowings, real estate owned or Federal Home Loan
Bank advances of the Company and its consolidated subsidiaries or any
decrease in total assets, total deposits or stockholders' equity of
the Company and its consolidated subsidiaries, any increase in the
number of outstanding shares of capital stock of the Company and its
consolidated subsidiaries or any increase or decrease in the provision
for loan losses allowance of the Company and its consolidated
subsidiaries, in each case as compared with amounts shown in the
financial statements at March 31, 2005 included in the Registration
Statement, except in all cases for changes, increases or decreases
that the Registration Statement discloses have occurred or may occur;
or
(C) for the period from March 31, 2005 to a specified date not
more than three days prior to the date of this Agreement, there was no
decrease in consolidated net interest income, non-interest income, net
income or net income per share or any increase in the consolidated
provision for loan losses, in each case as compared with a period of
comparable length in the preceding year, except in all cases for
changes, increases or decreases that the Registration Statement
discloses have occurred or may occur; and
17
(iii) in addition to the procedures referred to in clause (ii) above,
they have performed other specified procedures, not constituting an audit,
with respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement (including the Selected
Consolidated Financial Data) (having compared such items with, and having
found such items to be in agreement with, the financial statements of the
Company or general accounting records of the Company, as applicable, which
are subject to the Company's internal accounting controls or other data and
schedules prepared by the Company from such records); and
(iv) on the basis of a review of schedules provided to them by the
Company, nothing came to their attention that caused them to believe that
the pro forma information set forth in the Prospectus under the heading
"Capitalization" had not been correctly calculated on the basis described
therein.
(e) At the Closing Time, the Underwriters shall have received from
each of Hacker Johnson and Eisner LLP, a letter, in form and substance
satisfactory to the Underwriters and dated as of the Closing Time, reaffirming
the statements made in the letter(s) furnished pursuant to Section 5(d) hereof,
except that the inquiries specified in Section 5(d) hereof shall be made based
upon the latest available unaudited interim consolidated financial statements
and the specified date referred to shall be a date not more than five days
prior to the Closing Time.
(f) At the Closing Time and the Option Closing Date, counsel for
the Underwriters shall have been furnished with all such documents, certificates
and opinions as they may reasonably request for the purpose of enabling them to
pass upon the issuance and sale of the Securities as contemplated in this
Agreement and the matters referred to in Section 5(c) hereof and in order to
evidence the accuracy and completeness of any of the representations, warranties
or statements of the Company, the performance of any of the covenants of the
Company or the fulfillment of any of the conditions herein contained; and all
proceedings taken by the Company at or prior to the Closing Time and the Option
Closing Date, as applicable, in connection with the authorization, issuance and
sale of the Securities as contemplated in this Agreement shall be satisfactory
in form and substance to the Underwriters and to counsel for the Underwriters.
(g) The Company shall have paid, or made arrangements satisfactory
to the Underwriter for the payment of, all such expenses as may be required by
Section 4 hereof.
(h) In the event the Underwriters exercise the option provided in
Section 2 hereof to purchase all or any portion of the Option Securities, the
obligations of the Underwriters to purchase the Option Securities that they have
agreed to purchase shall be subject to the receipt by the Underwriters on the
Option Closing Date of:
(i) A certificate, dated the Option Closing Date, of the President and
the Chief Financial Officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(c) hereof remains true
as of the Option Closing Date;
(ii) The favorable opinion of Harris Beach, counsel for the Company,
addressed to the Underwriters and dated the Option Closing Date, in form
satisfactory to
18
Blank Rome, counsel to the Underwriters, relating to the Option Securities
and otherwise to the same effect as the opinion required by Section 5(b)(i)
hereof;
(iii) The favorable opinion of Blank Rome LLP, counsel to the
Underwriters, dated the Option Closing Date, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(b)(ii) hereof; and
(iv) A letter from each of Hacker Johnson and Eisner LLP addressed to
the Underwriters and dated the Option Closing Date, in form and substance
satisfactory to the Underwriters and substantially the same in form and
substance as the letter(s) furnished to the Underwriters pursuant to
Section 5(e) hereof.
(i) The Common Stock comprising the Securities shall have been
qualified or registered for sale, or subject to an available exemption from such
qualification or registration, under the "blue sky" or securities laws of such
jurisdictions as shall have been reasonably specified by the Underwriters, and
the Offering contemplated by this Agreement shall have been cleared by the NASD.
(j) The Lock-Up Agreements shall have been delivered to the
Underwriters.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement, this Agreement may be
terminated by the Underwriters on notice to the Company at any time at or prior
to the Closing Time, and such termination shall be without liability of any
party to any other party, except as provided in Section 4 of this Agreement.
Notwithstanding any such termination, the provisions of Sections 4, 6, 7, 10 and
12 of this Agreement shall remain in effect.
Section 6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each of the
Underwriters, each officer, partner, director, employee, agent and legal counsel
of the Underwriters, and each person, if any, who controls the Underwriters
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act, against any loss, liability, claim, damage and expense whatsoever (which
shall include, but not be limited to, amounts incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim or investigation whatsoever and any and all amounts paid in settlement of
any claim or litigation, provided such settlement is entered into with the
consent of the Company as provided herein), as and when incurred, arising out
of, based upon or in connection with (i) any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, contained in (A) any preliminary prospectus, the
Registration Statement or the Prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto or in any document
incorporated by reference therein or required to be delivered with any
preliminary prospectus or the Prospectus or (B) in any application or other
document or communication (collectively called an "application") executed by or
on behalf of the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the
Securities under the "blue sky" or securities laws thereof or
19
filed with the Commission, the NASD or any securities exchange, unless such
statement or omission or alleged statement or omission was made in reliance upon
and in conformity with written information concerning the Underwriter, this
Agreement or the compensation of the Underwriters furnished to the Company by or
on behalf of the Underwriter expressly for inclusion in any preliminary
prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or in any application, as the case may be, or (ii) any
breach of any representation, warranty, covenant or agreement of the Company
contained in this Agreement. For purposes of this section, the term "expense"
shall include, but not be limited to, counsel fees and costs, court costs,
out-of-pocket costs and compensation for the time spent by any of the
Underwriter's directors, partners, officers, employees and counsel according to
his or her normal hourly billing rates. The indemnification provisions shall
also extend to all directors, partners, officers, employees, agents, legal
counsel and controlling persons of each affiliate of each of the Underwriters.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, its directors, each officer who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act, against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) above, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in any preliminary prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or any application in
reliance upon and in conformity with written information about such Underwriter,
this Agreement or the compensation of the Underwriter, furnished to the Company
by the Underwriter expressly for inclusion in such preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or in any application.
(c) An indemnified party shall give prompt notice to each
indemnifying party if any action, suit, proceeding or investigation is commenced
in respect of which indemnity may be sought hereunder, but failure to notify an
indemnifying party shall not relieve the indemnifying party from its obligations
to indemnify hereunder, except to the extent that the indemnifying party has
been prejudiced in any material respect by such failure. If it so elects within
a reasonable time after receipt of such notice, an indemnifying party may assume
the defense of such action, including the employment of counsel satisfactory to
the indemnified parties and the payment of all expenses of the indemnified party
in connection with such action. Such indemnified party or parties shall have
the right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties, unless the employment of such counsel shall have been authorized in
writing by the indemnifying party in connection with the defense of such action
or the indemnifying party shall not have promptly employed counsel satisfactory
to such indemnified party or parties or such indemnified party or parties shall
have reasonably concluded that there may be one or more legal defenses available
to it or them or to other indemnified parties that are different from or
additional to those available to one or more of the indemnifying parties, in any
of which events such fees and expenses shall be borne by the indemnifying party
and the indemnifying party shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties. The Company shall be
liable for any settlement of any claim against such Underwriter (or any of its
directors, officers, employees, agents, legal counsel or controlling persons)
made
20
with the Company's written consent, which consent shall not be unreasonably
withheld. The Company shall not, without the written consent of any
Underwriter, settle or compromise any claim against such Underwriter (or any of
its directors, officers, employees, agents, legal counsel or controlling
persons) based upon circumstances giving rise to an indemnification claim
against the Company hereunder unless such settlement or compromise provides that
such Underwriter and the other indemnified parties shall be unconditionally and
irrevocably released from all liability in respect to such claim.
(d) In order to provide for just and equitable contribution, if a
claim for indemnification pursuant to these indemnification provisions is made
but it is found in a final judgment by a court that such indemnification may not
be enforced in such case, even though the express provisions hereof provide for
indemnification in such case, then the Company, on the one hand, and any
Underwriter, on the other hand, shall contribute to the amount paid or payable
by such indemnified persons as a result of such loss, liability, claim, damage
and expense (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriter, on the
other hand, from the underwriting, or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, on the one hand, and the Underwriter, on the
other hand, in connection with the statements, acts or omissions which resulted
in such loss, liability, claim, damage and expense, and any other relevant
equitable considerations. No person found liable for a fraudulent
misrepresentation or omission shall be entitled to contribution from any person
who is not also found liable for such fraudulent misrepresentation or omission.
Notwithstanding the foregoing, no Underwriter shall be obligated to contribute
any amount hereunder that exceeds the amount of the underwriting discount
retained by it.
(e) The indemnity and contribution agreements contained herein are
in addition to any liability which the Company may otherwise have any of the
Underwriters.
(f) Neither termination nor completion of the engagement of the
Underwriters nor any investigation made by or on behalf of any of the
Underwriters shall affect the indemnification obligations of the Company or the
Underwriters hereunder, which shall remain and continue to be operative and in
full force and effect.
(g) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder at Closing Time (or
Option Closing Time), the non-defaulting Underwriter may, in its discretion and
without obligation, arrange for it or another party or other parties to purchase
such Securities on the terms contained herein. If within thirty-six hours after
such default by any Underwriter, the non-defaulting Underwriter does not arrange
for the purchase of such Securities, then the Company shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the non-defaulting Underwriter to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, the non-defaulting Underwriter notifies the Company that it has so
arranged for the purchase of such Securities, or the Company notifies the
non-defaulting Underwriter that it has so arranged for the purchase of such
Securities, the non-defaulting Underwriter or the Company shall have the right
to postpone such Closing Time (or Option Closing Time, as applicable) for a
period of not more than seven days, in order to effect
21
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in the non-defaulting Underwriter's opinion may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(h) If, after giving effect to any arrangement for the purchase of
the Securities of a defaulting Underwriter by the non-default Underwriter and
the Company as provided in subsection (g) above, the aggregate number of
Securities which remains unpurchased does not exceed one-tenth of the aggregate
number of all of the Securities to be purchased at such Closing Time (or Option
Closing Time), then the Company shall have the right to require the
non-defaulting Underwriter to purchase the number of shares which such
Underwriter agreed to purchase hereunder at such Closing Time (or Option Closing
Time) and, in addition, to require the non-defaulting Underwriter to purchase
the Securities of such defaulting Underwriter for which such arrangements have
not been made, but nothing herein shall relieve a default Underwriter from
liability for its default.
(i) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Underwriter by the non-defaulting Underwriter
and the Company as provided in subsection (g) above, the aggregate number of
such Securities which remains unpurchased exceeds one-tenth of the aggregate
number of all the Securities to be purchased at such Closing Time, or if the
Company shall not exercise the right described in subsection (h) above to
require the non-defaulting Underwriter to purchase Securities of the defaulting
Underwriter, then this Agreement (or, with respect to the Option Closing Time,
the obligations of the remaining Underwriter to purchase and of the Company to
sell the Option Securities) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company as provided in Section 4 hereof and the indemnity and
contribution agreements in this Section 6 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
Section 7. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. The representations, warranties, indemnities, agreements and other
- --------
statements of the Company or its officers set forth in or made pursuant to this
Agreement will remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriters or any controlling person
of the Underwriter and will survive termination of this Agreement and receipt or
delivery of and payment for the Securities.
Section 8. Offering by the Underwriter. The Company is advised by
---------------------------
the Underwriters that the Underwriters propose to make a public offering of the
Securities, on the terms and conditions set forth in the Registration Statement
from time to time as and when the Underwriters deem advisable after the
Registration Statement becomes effective.
Section 9. Termination of Agreement.
------------------------
(a) The Underwriters may terminate this Agreement, by notice to
the Company, at any time at or prior to the Closing Time (i) if there has been,
since the time of
22
execution of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any Material Adverse Change;
or (ii) if there has occurred any material adverse change in the financial
markets of the United States, any outbreak of hostilities or escalation thereof
or other calamity or crisis or any change or development involving a prospective
change in national or international political, financial or economic conditions,
in each case the effect of which is such as to make it, in the judgment of the
Underwriters, impracticable or inadvisable to market the Securities or enforce
contracts for the sale of the Securities; or (iii) if trading in any securities
of the Company has been suspended or materially limited by the Commission or the
NASD, or if trading generally on The New York Stock Exchange, Nasdaq National
Market, Nasdaq SmallCap market or in the over-the-counter market has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been required, by
such exchange or system or by order of the Commission, the NASD or any other
governmental authority with appropriate jurisdiction over such matters, or a
material disruption has occurred in commercial banking or securities settlement
or clearance services in the United States; or (iv) if a banking moratorium has
been declared by any federal, Delaware, New York or New Jersey authority; or (v)
if there shall have been such material and substantial change in the market for
securities in general or in political, financial or economic conditions as in
the Underwriters' judgment makes it inadvisable to proceed with the offering,
sale and delivery of the Securities on the terms contemplated by the Prospectus;
or (vi) if the Underwriters reasonably determines (which determination shall be
in good faith) that there has not been satisfactory disclosure of all relevant
financial information relating to the Company in the Company's disclosure
documents and that the sale of the Securities is inadvisable given such
disclosures; (vii) if the events described in Section 6(i) occur; or (viii) if
the Price Determination Agreement has not been executed by all the parties
hereto prior to 5:30 p.m. on the first business day following the date of this
Agreement.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4 and 6(i) hereof. Notwithstanding any such
termination, the provisions of Sections 4, 6, 7, 10 and 12 hereof shall remain
in effect.
Section 10. Notices. All notices and other communications under
-------
this Agreement shall be in writing and shall be deemed to have been duly given
if delivered, mailed or transmitted by any standard form of telecommunication.
Notices shall be addressed as follows:
If to the Underwriter:
Ryan Beck & Co., Inc., as representative of the co-managers
and the Underwriters
18 Columbia Turnpike
Florham Park, New Jersey 07932-2289
Attention: Bruce G. Miller, Managing Director
23
with a copy to:
Blank Rome LLP
One Logan Square
Philadelphia, PA 19103
Attention: Barry H. Genkin, Esquire
If to the Company:
Intervest Bancshares Corporation
One Rockefeller Plaza, Suite 400
New York, NY 10020
Attention: Lowell S. Dansker, President and Vice Chairman
with a copy to:
Harris Beach PLLC
99 Garnsey Road
Pittsford, NY 14534
Attention: Thomas E. Willett, Esquire
Section 11. Parties. This Agreement is made solely for the
-------
benefit of the Underwriters, and the officers, directors, employees, agents and
legal counsel of the Underwriters specified in Section 6 hereof, the Company
and, to the extent expressed, any person controlling the Company or the
Underwriters, and the directors of the Company, its officers who have signed the
Registration Statement, and their respective executors, administrators,
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, as such purchaser, from the Underwriters of the
Securities.
Section 12. WAIVER OF TRIAL BY JURY. THE UNDERWRITERS AND THE
-----------------------
COMPANY HEREBY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM
OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) RELATED TO OR
ARISING OUT OF THIS AGREEMENT.
Section 13. Governing Law and Time. This Agreement shall be
----------------------
governed by the laws of the State of New Jersey. Specified times of the day
refer to New York City time.
Section 14. Counterparts. This Agreement may be executed in one
------------
or more counterparts, and when a counterpart has been executed by each party,
all such counterparts taken together shall constitute one and the same
agreement.
Section 15. Miscellaneous. This Agreement, including all Exhibits
-------------
hereto, constitutes the entire understanding of the parties and supercedes any
and all prior negotiations of the parties with respect to this subject matter.
This Agreement may be amended only in
24
writing signed by each of the parties. In the event that any term, provision or
covenant herein or the application thereof to any circumstances or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstance or
situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law. The
failure or delay by the Underwriters or the Company in exercising any right,
power or privilege hereunder shall not operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. If
the Public Offering is consummated, the Underwriters may, at their option and
expense, place an announcement in such newspapers and periodicals as the
Underwriters may choose stating that the Underwriters have so acted, and the
capacity in which they acted.
[The remainder of this page has been left blank intentionally.]
25
IN WITNESS WHEREOF, the parties hereto have signed this Agreement and have
declared it effective as of the date written above.
INTERVEST BANCSHARES CORPORATION
By: /s/ Lowell S. Dansker
-----------------------
Lowell S. Dansker
President and Vice Chairman
RYAN BECK & CO., INC., AS REPRESENTATIVE OF
THE CO-MANAGERS AND THE UNDERWRITERS
By: /s/ Bruce G. Miller
-------------------
Bruce G. Miller
Managing Director
26
SCHEDULE I
----------
Number of Option Securities to be
Total number of Initial purchased if Maximum Option is
Underwriter Securities Exercised
- -------------------------------- ----------------------- ---------------------------------
Ryan Beck & Co., Inc. 1,000,000 150,000
Sandler O'Neill & Partners, L.P. 250,000 37,500
Total 1,250,000 187,500