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EXHIBIT 1.1
[FORM OF UNDERWRITING AGREEMENT]
[# OF SHARES] Shares
Capstead Mortgage Corporation
Common Stock
UNDERWRITING AGREEMENT
[DATE]
[NAME OF LEAD UNDERWRITER]
As representatives of the several Underwriters
named in Schedule I hereto
c/o [NAME AND ADDRESS OF LEAD UNDERWRITER]
Dear Sirs:
Fortress Investment Group, LLC (the "Selling Stockholder") proposes to
sell to the several underwriters named in Schedule I hereto (the "Underwriters")
an aggregate of [# OF SHARES] shares (the "Firm Shares") of the common stock,
par value $0.01 per share ("Common Stock"), of Capstead Mortgage Corporation, a
Maryland corporation (the "Company"). The Selling Stockholder proposes to sell
to the several Underwriters not more than an additional [# ADDITIONAL SHARES]
shares of Common Stock of the Company (the "Additional Shares") if requested by
the Underwriters as provided in Section 2 hereof, in the amount of [# OF
ADDITIONAL SHARES] Additional Shares. The Firm Shares and the Additional Shares
are hereinafter referred to collectively as the "Shares." The shares of common
stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "Common Stock."
SECTION 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3, including a
prospectus, relating to the Shares. The registration statement, as amended at
the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A under the Act, is hereinafter referred to as the "Registration
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Statement"; and the prospectus in the form first used to confirm sales of Shares
is hereinafter referred to as the "Prospectus." If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional shares of Common Stock (a
"Rule 462(b) Registration Statement"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462(b) Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up Agreements. On
the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, (i) Selling Stockholder agrees to sell the
Firm Shares to the Underwriters and (ii) each Underwriter agrees, severally and
not jointly, to purchase from the Selling Stockholder at a price per Share of
$[PURCHASE PRICE] (the "Purchase Price") the number of Firm Shares (subject to
such adjustments to eliminate fractional shares as you may determine) that bears
the same proportion to the total number of Firm Shares to be sold by the Selling
Stockholder as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Selling Stockholder
agrees to sell the Additional Shares and (ii) the Underwriters shall have the
right to purchase, severally and not jointly, up to [AN AGGREGATE OF] [#
ADDITIONAL SHARES] Additional Shares from the Selling Stockholder at the
Purchase Price and in the amounts hereinafter specified. Additional Shares may
be purchased solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. The Underwriters may exercise
their right to purchase Additional Shares in whole or in part from time to time
by giving written notice thereof to the Company and the Selling Stockholder
within 30 days after the date of this Agreement. You shall give any such notice
on behalf of the Underwriters and such notice shall specify the aggregate number
of Additional Shares to be purchased pursuant to such exercise and the date for
payment and delivery thereof, which date shall be a business day (i) no earlier
than two business days after such notice has been given (and, in any event, no
earlier than the Closing Date (as hereinafter defined)) and (ii) no later than
ten business days after such notice has been given. If any Additional Shares are
to be purchased, each Underwriter, severally and not jointly, agrees to purchase
from the Selling Stockholder the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) which bears the
same proportion to the total number of Additional Shares to be purchased from
the Selling Stockholder as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I bears to the total number of Firm Shares.
The Selling Stockholder hereby agrees not to (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in clause
(i) or (ii) is to be settled by the delivery of Common Stock, or such
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other securities, in cash or otherwise), except to the Underwriters pursuant to
this Agreement, for a period of 180 days after the date of the Prospectus
without the prior written consent of [NAME OF LEAD UNDERWRITER] ("Lead
Underwriter"). Each Selling Stockholder agrees that, for a period of 180 days
after the date of the Prospectus without the prior written consent of [LEAD
UNDERWRITER], it will not make any demand for, or exercise any right with
respect to, the registration of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock. The Company
shall, prior to or concurrently with the execution of this Agreement, deliver an
agreement executed by (i) the Selling Stockholder, and (ii) each of the
directors and officers of the Company to the effect that such person will not,
during the period commencing on the date such person signs such agreement and
ending 180 days after the date of the Prospectus, without the prior written
consent of [LEAD UNDERWRITER], (A) engage in any of the transactions described
in the first sentence of this paragraph or (B) make any demand for, or exercise
any right with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
SECTION 3. Terms of Public Offering. The Selling Stockholder is advised
by you that the Underwriters propose (i) to make a public offering of their
respective portions of the Shares as soon after the execution and delivery of
this Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. Delivery to the Underwriters of and
payment for the Firm Shares shall be made at [FIRM SHARES CLOSING TIME], [FIRM
SHARES CLOSING CITY] time, on [FIRM SHARES CLOSING DATE] (the "Closing Date") at
such place as you shall designate. The Closing Date and the location of delivery
of and payment for the Firm Shares may be varied by agreement between you and
the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at such place as you shall
designate at [ADDITIONAL SHARES CLOSING TIME], [ADDITIONAL SHARES CLOSING CITY]
time, on the date specified in the applicable exercise notice given by you
pursuant to Section 2 (an "Option Closing Date"). Any such Option Closing Date
and the location of delivery of and payment for such Additional Shares may be
varied by agreement between you and the Company.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection not
later than [INSPECTION TIME], [INSPECTION CITY] time, on the business day
immediately prior to the Closing Date or the applicable Option Closing Date, as
the case may be. Certificates in definitive form evidencing the Shares shall be
delivered to you on the Closing Date or the applicable Option Closing Date, as
the case may be, with any transfer taxes thereon duly paid by the Selling
Stockholder, for the respective accounts of the several Underwriters, against
payment to the Selling Stockholder of the Purchase Price therefor by wire
transfer of Federal or other funds immediately available in New York City.
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SECTION 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, (iii) when any amendment to the
Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has been filed with the
Commission and (v) of the happening of any event during the period referred to
in Section 5(d) below which makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or which requires any additions
to or changes in the Registration Statement or the Prospectus in order to make
the statements therein not misleading. If at any time the Commission shall issue
any stop order suspending the effectiveness of the Registration Statement, the
Company will use its best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
(b) To furnish to you six signed copies of the Registration Statement
as first filed with the Commission and of each amendment to it, including all
exhibits, and to furnish to you and each Underwriter designated by you such
number of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the Commission
within the applicable period specified in Rule 424(b) under the Act; and during
the period specified in Section 5(d) below, not to file any further amendment to
the Registration Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to which you
shall reasonably object after being so advised unless the Company shall have
determined based on the advice of counsel that such amendment or supplement is
required by law; and, during such period, to prepare and file with the
Commission, promptly upon your reasonable request, any amendment to the
Registration Statement or amendment or supplement to the Prospectus which may be
necessary or advisable in connection with the distribution of the Shares by you,
and to use its best efforts to cause any such amendment to the Registration
Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of counsel
for the Underwriters, it becomes necessary to
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amend or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare and file with the Commission an appropriate amendment or
supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with
applicable law, and to furnish to each Underwriter and to any dealer that you
may specify as many copies thereof as such Underwriter or dealer may reasonably
request.
(f) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.
(g) To mail or otherwise make generally available to its stockholders
as soon as practicable an earnings statement covering the twelve-month period
ending [EARNINGS STATEMENT DATE] that shall satisfy the provisions of Section
11(a) of the Act, and to advise you in writing when such statement has been so
made available.
(h) During the period of three years after the date of this Agreement,
to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed and such other publicly available
information concerning the Company and its subsidiaries as you may reasonably
request.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Company's obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company's
counsel and the Company's accountants in connection with the registration and
delivery of the Shares under the Act and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing prior to or during the period specified in Section 5(d),
including the mailing and delivering of copies thereof to the Underwriters and
dealers in the quantities specified herein, (ii) all costs and expenses related
to the transfer and delivery of the Shares to be sold
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hereunder by the Selling Stockholder to the Underwriters, including any transfer
or other taxes payable thereon, (iii) all costs of printing or producing this
Agreement and any other agreements or documents in connection with the offering,
purchase, sale or delivery of the Shares, (iv) all expenses in connection with
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any Preliminary and Supplemental Blue Sky Memoranda in connection
therewith (including the filing fees and fees and disbursements of counsel for
the Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and disbursements of counsel
for the Underwriters in connection with the review and clearance of the offering
of the Shares by the National Association of Securities Dealers, Inc., (vi) all
fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and all costs
and expenses incident to the listing of the Shares on the New York Stock
Exchange ("NYSE") and other national securities exchanges and foreign stock
exchanges, (vii) the cost of printing certificates representing the Shares,
(viii) the costs and charges of any transfer agent, registrar and/or depositary,
and (ix) all other costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholder hereunder for which
provision is not otherwise made in this Section. Notwithstanding any of the
foregoing, the Selling Stockholder will pay all expenses incident to the
performance of their obligations under, and the consummation of the transactions
contemplated by, this Agreement, including the fees and disbursements of its
respective counsel. The provisions of this Section shall not supersede or
otherwise affect any agreement that the Company and the Selling Stockholder may
otherwise have for allocation of such expenses among themselves.
(j) To use its best efforts to list the Shares on the NYSE and to
maintain the listing of the Shares on the NYSE for a period of three years after
the date of this Agreement.
(k) To 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 Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares which are within the
Company's control.
(l) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so covered
in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the date of
this Agreement and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
SECTION 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become
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effective no later than 10:00 P.M., New York City time, on the date of this
Agreement; and no stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose are pending before
or, to the Company's knowledge, threatened by the Commission.
(b)(i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement and any amendments thereto, when they become effective (A) will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (B) will comply in all material respects with the Act and (iv)
the Prospectus does not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph (b) do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph (c) do not apply to statements or omissions in any
preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by any Underwriter through you expressly for
use therein or to statements corrected in a subsequent filing.
(d) Each of the Company and its material subsidiaries (the "Material
Subsidiaries") has been duly incorporated, is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in the
Prospectus and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not reasonably be expected to have a material
adverse effect on the business, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole.
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(e) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities or commitments of sale or liens granted or issued
by the Company or any of its Material Subsidiaries relating to or entitling any
person to purchase or otherwise to acquire any shares of the capital stock of
the Company or any of its Material Subsidiaries, except as otherwise disclosed
in the Registration Statement.
(f) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholder) have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights; and the Shares to be issued and sold by the
Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
(g) All of the outstanding shares of capital stock of each of the
Company's Material Subsidiaries have been duly authorized and validly issued and
are fully paid and non-assessable, and are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature.
(h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(i) Neither the Company nor any of its Material Subsidiaries is (i) in
violation of its respective charter or bylaws or (ii) in default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument to
which the Company or any of its Material Subsidiaries is a party or by which the
Company or any of its Material Subsidiaries or their respective property is
bound, except with respect to item (ii) for such defaults that would not
reasonably be expected to have a material adverse effect on the business,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(j) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as are required under the Act
or as may be required under the securities or Blue Sky laws of the various
states), (ii) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter, bylaws of the Company or any of
its Material Subsidiaries is a party or by which the Company or any of its
Material Subsidiaries or their respective property is bound or, (iii) conflict
with or constitute a breach of any of the terms or provisions of, or a default
under, any indenture, loan agreement, mortgage, lease or other agreement or
instrument to which the Company or any of its Material Subsidiaries is a party
or by which the Company or any of its Material Subsidiaries or their respective
property is bound, (iv) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company, any
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of its subsidiaries or their respective property; except with respect to items
(i), (iii), (iv) and (v) for such consents, approvals, authorizations, orders or
qualifications which if not made or obtained, or conflicts, violations or
defaults which if existing would not reasonably be expected to have a material
adverse effect on the Company and its subsidiaries, taken as a whole, or prevent
or materially restrict or otherwise adversely affect in any material respect the
performance by the Company of its obligations hereunder, or (v) result in the
suspension, termination or revocation of any Authorization (as defined below) of
the Company or any of its subsidiaries or any other impairment of the rights of
the holder of any such Authorization.
(k) There are no legal or governmental proceedings pending or, to the
Company's knowledge, threatened to which the Company or any of its Material
Subsidiaries is or could be a party or to which any of their respective property
is or could be subject that are required to be described in the Registration
Statement or the Prospectus and are not so described; nor are there any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed as
required.
(l) Neither the Company nor any of its Material Subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws") or any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations promulgated thereunder, except for such violations
which, singly or in the aggregate, would not reasonably be expected to have a
material adverse effect on the business, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole.
(m) Each of the Company and its Material Subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a material adverse effect on the business,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole. Each such Authorization is valid and in full
force and effect and each of the Company and its Material Subsidiaries is in
substantial compliance with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and, to the knowledge of the Company, no
event has occurred (including, without limitation, the receipt of any notice
from any authority or governing body) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other material impairment of the rights of the holder of any such
Authorization; and, except as disclosed in the Prospectus, such Authorizations
contain no restrictions that are burdensome to the Company or any of its
Material Subsidiaries; and, except as disclosed in the Prospectus, except where
such failure to be valid and in
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full force and effect or to be in compliance, the occurrence of any such event
or the presence of any such restriction would not, singly or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(n) This Agreement has been duly authorized, executed and delivered by
the Company.
(o) Ernst & Young LLP are independent public accountants with respect
to the Company and its subsidiaries as required by the Act.
(p) The consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus (and any amendment or
supplement thereto), together with related schedules and notes, present fairly
the consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the basis stated
therein at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; the supporting
schedules, if any, included in the Registration Statement present fairly in
accordance with generally accepted accounting principles the information
required to be stated therein; and the other financial and statistical
information and data set forth in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) are, in all material respects,
accurately presented and prepared in good faith on the basis of the assumptions
described in the Registration Statement and such assumptions are reasonable and
the adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(q) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(r) Except as has been described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares registered
pursuant to the Registration Statement.
(s) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred any
material liability
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or obligation, direct or contingent, except for trade payables and other similar
liabilities incurred in the ordinary course of business.
(t) Each certificate signed by any officer of the Company and delivered
at the Closing to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the Underwriters as
to the matters covered thereby.
(u) The Company and its subsidiaries have good and indefeasible title
to all property and assets described in the Registration Statement as being
owned by them and which is material to the business of the Company and its
subsidiaries, taken as a whole, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries and which are material to the business
of the Company and its subsidiaries, taken as a whole, are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries, in each case except
as described in the Prospectus.
(v) The Company and each of its Material Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; and neither the Company nor any of its Material Subsidiaries (i)
has received notice from any insurer which indicates that the Company or such
Material Subsidiary will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers at a cost that would not have a material adverse effect on the
business, prospects, financial conditions or results of operations of the
Company and its subsidiaries, taken as a whole.
(w) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which is required by the Act to be described in the
Registration Statement or the Prospectus which is not so described.
(x) The Company and each of its Material Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
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(y) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
SECTION 7. Representations and Warranties of the Selling Stockholder.
The Selling Stockholder represents and warrants to each Underwriter that:
(a) The Selling Stockholder is the lawful owner of the Shares to be
sold by the Selling Stockholder pursuant to this Agreement and has, and on the
Closing Date will have, good and clear title to such Shares, free of all
restrictions on transfer (other than any restrictions arising pursuant to
applicable securities laws), liens, encumbrances, security interests, equities
and claims whatsoever.
(b) The Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement signed by
the Selling Stockholder and the Company, as Custodian, relating to the deposit
of the Shares to be sold by the Selling Stockholder (the "Custody Agreement")
and the Power of Attorney of the Selling Stockholder appointing certain
individuals as the Selling Stockholder's attorneys-in-fact (the "Attorneys") to
the extent set forth therein, relating to the transactions contemplated hereby
and by the Registration Statement and the Custody Agreement (the "Power of
Attorney") and to sell, assign, transfer and deliver the Shares to be sold by
the Selling Stockholder in the manner provided herein and therein.
(c) This Agreement has been duly authorized, executed and delivered by
or on behalf of the Selling Stockholder.
(d) The Custody Agreement of the Selling Stockholder has been duly
authorized, executed and delivered by the Selling Stockholder and is a valid and
binding agreement of the Selling Stockholder, enforceable in accordance with its
terms.
(e) The Power of Attorney of the Selling Stockholder has been duly
authorized, executed and delivered by the Selling Stockholder and is a valid and
binding instrument of the Selling Stockholder, enforceable in accordance with
its terms, and, pursuant to such Power of Attorney, the Selling Stockholder has,
among other things, authorized the Attorneys, or any one of them, to execute and
deliver on the Selling Stockholder's behalf this Agreement and any other
document that they, or any one of them, may deem necessary or desirable in
connection with transactions contemplated hereby and thereby and to deliver the
Shares to be sold by the Selling Stockholder pursuant to this Agreement.
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(f) Upon delivery of and payment for the Shares to be sold by the
Selling Stockholder pursuant to this Agreement, good and clear title to such
Shares will pass to the Underwriters, free of all restrictions on transfer,
liens, encumbrances, security interests, equities and claims whatsoever.
(g) The execution, delivery and performance of this Agreement and the
Custody Agreement and Power of Attorney of the Selling Stockholder by or on
behalf of the Selling Stockholder, the compliance by the Selling Stockholder
with all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the [ACT, OR
THE] securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the organizational documents of the Selling Stockholder, if the Selling
Stockholder is not an individual, (iii) conflict with or constitute breach of
any of the terms or provisions of, or default under, any indenture, loan
agreement, mortgage, lease or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder or any property of
the Selling Stockholder is bound or (iv) violate or conflict with any applicable
law or any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Selling Stockholder or
any property of the Selling Stockholder; except for such consents, approvals,
authorizations, orders or qualifications which if not made or obtained, or
conflicts, violations or defaults which if existing, would not prevent or
otherwise adversely affect the performance by the Selling Stockholder of its
obligations hereunder.
(h) The information in the Prospectus under the caption "The Selling
Stockholder" which specifically relates to the Selling Stockholder does not, and
will not on the Closing Date, 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, in the light of the circumstances under which they
were made, not misleading.
(i) At any time during the period described in Section 5(d), if there
is any change in the information referred to in Section 7(i), the Selling
Stockholder will immediately notify you of such change.
(j) Each certificate signed by or on behalf of the Selling Stockholder
and delivered on the Closing Date to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by the Selling
Stockholder to the Underwriters as to the matters covered thereby.
SECTION 8. Indemnification. (a) The Selling Shareholder agrees to
indemnify and hold harmless each Underwriter, its directors, its officers and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to
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any such losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished in writing
to the Company by such Underwriter through you expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter in
connection with any losses, claims, damages and liabilities and judgments if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given to
the person asserting such losses, claims, damages, liabilities or judgments at
or prior to the written confirmation of the sale of the Shares to such person,
and if the Prospectus (as so amended and supplemented) would have cured the
defect giving rise to such loss, claim, damage, liability or judgment, unless
such failure to deliver such amended or supplemented Prospectus was a result of
noncompliance by the Company with its delivery obligations under Section 5
hereof. Notwithstanding the foregoing, the aggregate liability of the Selling
Stockholder pursuant to this Section 8(a) shall be limited to an amount equal to
the total proceeds (after deducting underwriting discounts and commissions but
before deducting expenses) received by the Selling Stockholder from the
Underwriters for the sale of the Shares sold by the Selling Stockholder
hereunder.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, the Selling
Stockholder and each person, if any, who controls the Selling Stockholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Selling Stockholder to such
Underwriter but only with reference to information relating to such Underwriter
furnished in writing to the Company by or on behalf of such Underwriter through
you expressly for use in the Registration Statement (or any amendment thereto),
the Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the
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right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for (i) the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all Underwriters, their
officers and directors and all persons, if any, who control any Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act, (ii) the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and all persons, if any, who control the Company
within the meaning of either such Section and (iii) the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
the Selling Stockholder and all persons, if any, who control the Selling
Stockholder within the meaning of either such Section, and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
[LEAD UNDERWRITER]. In the case of any such separate firm for the Company and
such directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Stockholder and such control persons of the Selling Stockholder,
such firm shall be designated in writing by the Attorneys. The indemnifying
party shall indemnify and hold harmless the indemnified party from and against
any and all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action effected with the indemnifying party's written consent,
which consent will not be unreasonably withheld. Notwithstanding the immediately
preceding sentence, if in any case where the fees and expenses of counsel are at
the expense of the indemnifying party and an indemnified party shall have
requested the indemnifying party to reimburse the indemnified party for such
fees and expenses of counsel actually incurred by it, such indemnifying party
agrees that it shall be liable for any settlement of any action effected without
its written consent if (i) such settlement is entered into more than 60 days
after the receipt by such indemnifying party of the aforesaid request (ii) such
indemnifying party shall have received notice of the proposed settlement being
entered into at least 20 days prior to such settlement being entered into and
(iii) prior to the date of such settlement such indemnifying party shall have
failed to reimburse the indemnified party in accordance with such request for
reimbursement (or, if within 30 days of the receipt of the aforesaid request,
the indemnifying party shall have made a good faith written challenge to the
reasonableness of the amount of the reimbursement requested or the sufficiency
of the documentation supporting the reimbursement requested (which challenge
shall specifically set forth the amount of the requested reimbursement which the
indemnifying party in good faith believes to be unreasonable
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or the basis for the good faith claim as to the insufficiency of any supporting
documentation), this sentence shall only apply if such indemnifying party shall
not have reimbursed the indemnified party for the amount which is not being so
challenged).] No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Selling Stockholder on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if the allocation provided by clause 8(d)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Selling Stockholder on the one hand and the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by the Selling Stockholder on the one hand and the Underwriters on the
other hand shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Selling
Stockholder, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Selling Stockholder on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholder on the one hand or the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Selling Stockholder and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the
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provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 8(d) are
several in proportion to the respective number of Shares purchased by each of
the Underwriters hereunder and not joint. Notwithstanding any other provision of
this Agreement, no Selling Stockholder shall be required to contribute pursuant
to this Section 8(d) any amount in excess of the amount of the total proceeds
(before deducting expenses) received by the Selling Stockholder from the
Underwriters for the sale of the Shares sold by the Selling Stockholder
hereunder. The Selling Stockholder's obligations to contribute pursuant to this
Section 8(d) are several in proportion to the respective number of Shares sold
by the Selling Stockholder hereunder and not joint.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) Each Selling Stockholder hereby designates [REGISTERED AGENT NAME],
[REGISTERED AGENT ADDRESS], as its authorized agent, upon which process may be
served in any action which may be instituted in any state or federal court in
the State of New York by any Underwriter, any director or officer of any
Underwriter or any person controlling any Underwriter asserting a claim for
indemnification or contribution under or pursuant to this Section 8, and the
Selling Stockholder will accept the jurisdiction of such court in such action,
and waives, to the fullest extent permitted by applicable law, any defense based
upon lack of personal jurisdiction or venue. A copy of any such process shall be
sent or given to the Selling Stockholder, at the address for notices specified
in Section 12 hereof.
SECTION 9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or, to the knowledge of the Company, contemplated by the Commission.
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(c) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by [NAME OF OFFICER], in his capacities as [TITLE OF
OFFICER] of the Company, confirming the matters set forth in Sections 6(t), 9(a)
and 9(b) and that the Company has complied with all of the agreements and
satisfied all of the conditions herein contained and required to be complied
with or satisfied by the Company on or prior to the Closing Date.
(d) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(d)(i),
9(d)(ii) or 9(d)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(e) All the representations and warranties of the Selling Stockholder
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date and you shall
have received on the Closing Date a certificate dated the Closing Date from the
Selling Stockholder to such effect and to the effect that the Selling
Stockholder has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by the
Selling Stockholder on or prior to the Closing Date.
(f) You shall have received on the Closing Date an opinion (in a form
reasonably satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of [COUNSEL FOR THE COMPANY], counsel for the Company, or [LOCAL
COUNSEL FOR THE COMPANY], [LOCAL STATE] counsel for the Company, with respect to
the portions of the opinions rendered below involving questions of Maryland law,
to the effect that:
(i) Each of the Company and its Material Subsidiaries which
are corporations has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to
own, lease and operate its property and to conduct its business as
described in the Prospectus;
(ii) Each of the Company and its Material Subsidiaries is duly
qualified and is in good standing as a foreign corporation or foreign
limited liability company (as the case may be) authorized to do
business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not reasonably be
expected to have a material adverse effect on the business, financial
condition or results of operations of the Company and its subsidiaries,
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taken as a whole; provided however that (i) in rendering such opinion
as to the jurisdictions in which the Company and its Material
Subsidiaries do business or own or lease property, such counsel may
rely solely upon certificates of officers of the Company and (ii) in
rendering such opinion as to whether each of the Company and its
Material Subsidiaries is duly qualified and in good standing in such
jurisdictions, such counsel may rely solely upon certificates of
governmental officials of such jurisdictions;
(iii) All the outstanding shares of capital stock of the
Company (including the Shares to be sold by the Selling Stockholder)
have been duly authorized by all necessary corporate action on the part
of the Company and are validly issued, fully paid and non-assessable,
and none of such outstanding shares of Common Stock were issued in
violation of any preemptive or other similar rights to subscribe for or
purchase the same arising under the Certificate of Incorporation or
Bylaws of the Company or the General Corporation Law of the State of
Delaware or, to their knowledge, under any agreement to which the
Company or any of its Material Subsidiaries is a party or by which it
is bound;
(iv) The Shares to be issued and sold by the Company hereunder
have been duly authorized by all necessary corporate action on the part
of the Company and, when issued and delivered to the Underwriters
against payment of the consideration therefor as provided in accordance
with the terms of this Agreement, will be validly issued, fully paid
and non-assessable and such Shares will not have been issued in
violation of any preemptive or similar rights to subscribe for or
purchase the same arising under the Certificate of Incorporation or
Bylaws of the Company or the General Corporation Law of the State of
Delaware or, to their knowledge, under any agreement to which the
Company or any of its subsidiaries is a party or by which it is bound;
(v) All of the outstanding shares of capital stock of each of
the Material Subsidiaries which are corporations have been duly
authorized and validly issued and are fully paid and non-assessable; to
the Company's knowledge, all of the outstanding shares of capital stock
of the Material Subsidiaries are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of any
perfected security interest;
(vi) This Agreement has been duly authorized by all necessary
corporate action on the part of the Company, executed and has been
delivered by the Company;
(vii) The authorized capital stock of the Company conforms as
to legal matters in all material respects to the description thereof
contained in the Prospectus;
(viii) Based solely upon oral confirmation from the staff of
the Commission, the Registration Statement has become effective under
the Act; to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or threatened by the
Commission;
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(ix) The statements under the captions "Description of
Securities" and "Plan of Distribution" in the Prospectus and Items 14
and 15 of Part II of the Registration Statement, insofar as such
statements constitute a summary of the legal matters or documents
referred to therein, are accurate and fairly present the information
set forth therein, in each case in all material respects;
(x) No consent, approval, authorization or order of, or
qualification with, any Applicable Governmental Authority (as
hereinafter defined) is required pursuant to any Applicable Laws (as
hereinafter defined) for the execution and delivery of this Agreement
by the Company, the performance by the Company of its obligations
hereunder or the consummation by the Company of the transactions
contemplated hereby, except for any such consent, approval,
authorization, order or qualification which (i) has been made or
obtained prior to the Closing Date or (ii) may be required under
applicable state or foreign securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters
and the clearance of such offering with the NASD (as to which such
counsel need not express an opinion) or (iii) if not made or obtained
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(xi) The execution and delivery of this Agreement by the
Company, the performance by the Company of its obligations hereunder
and the consummation by the Company of the transactions contemplated
hereby will not (i) result in a violation of the terms of Certificate
of Incorporation or Bylaws of the Company or the Material Subsidiaries,
(ii) result in a breach or violation of or constitute (either alone or
with notice or the passage of time, or both) a default under, any
agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Company or its
Material Subsidiaries is a party or by which the Company, the Material
Subsidiaries or their properties are bound that is filed as an exhibit
to the Registration Statement or (iii) result in a violation of any
Applicable Laws to which the Company, the Material Subsidiaries or
their properties are subject or any judgment, decree or order of any
Applicable Governmental Authority that specifically names the Company,
the Material Subsidiaries or is directed at their property (provided,
however, that such counsel need not express an opinion with respect to
compliance with any federal or state securities or antifraud law, rule
or regulation except as otherwise specifically stated in the opinion of
such counsel); except for any such violation, breach or default
referred to in clause (i), (ii) or (iii) above which would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole;
(xii) To the knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened against the Company or
any of the Material Subsidiaries or by which any of their respective
property is or could be subject that are required to be described in
the Registration Statement or the Prospectus and are not so described;
(xiii) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be,
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an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended;
(xiv) To the knowledge of such counsel, except as described in
the Prospectus, no holder of securities of the Company has any right to
require the registration of such securities by the Company under Act as
a result of the filing of the Registration Statement or in connection
with the offering of the Shares pursuant to the Prospectus which have
not been waived by such holder or complied with by the Company;
(xv) The Registration Statement (and any amendment thereto),
as of its effective date, and the Prospectus (or any supplement or
amendment thereto), as of its date (other than (a) the financial
statements and schedules (including the notes thereto and the auditors'
reports thereon) included therein and (b) the other financial
information included therein appear on their face to comply as to form
in all material respects with the requirements of the Act.
As used herein, (i) the term "Applicable Laws" means the
General Corporation Law of the State of Delaware, the contract laws of the State
of New York, the laws of the State of Texas and the laws of the United States of
America that, in the experience of such counsel, are normally applicable to
transactions of the type contemplated by this Agreement and (ii) the term
"Applicable Governmental Authority" means any governmental authority or body of
the United States of America or the State of Texas or the State of New York or
(solely with respect to the General Corporation Law of the State of Maryland)
the State of Maryland.
Such opinion shall also include a statement to the effect that
although such counsel did not independently verify, are not passing upon and do
not assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except to
the extent stated in paragraphs (f)(vii) and (f)(ix) above), they advise you
that no facts have come to their attention which lead them to believe that the
Registration Statement (other than (i) the financial statements (including the
notes thereto and the auditors' report thereon) included therein, and (ii) the
other financial and statistical information included therein, as to which such
counsel need express no opinion), as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus (other than (i) the financial statements (including the
notes thereto and the auditors' report thereon) included therein and (ii) the
other financial and statistical information included therein), as of its date
and as of the Closing Date, contained or contains any untrue statement of a
material fact or omitted or omits to state any 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.
(g) You shall have received on the Closing Date, with respect to the
Selling Stockholder, an opinion (in form reasonably satisfactory to you and
counsel for the Underwriters), dated the
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Closing Date, of [COUNSEL FOR THE COMPANY] (to the extent that [COUNSEL FOR THE
COMPANY] is counsel to the Selling Stockholder) or other counsel reasonably
acceptable to you to the effect that:
(i) Such Selling Stockholder is the sole registered holder of
the Shares to be sold by the Selling Stockholder pursuant to this
Agreement; upon delivery of the Shares to be sold by the Selling
Stockholder under this Agreement and payment of the purchase price
therefor in accordance with this Agreement, assuming that (a) the
Underwriters have purchased such Shares in good faith and without
notice of any "adverse claim" (within the meaning of the Uniform
Commercial Code) and (b) certificates evidencing such Shares have been
registered in the name of the Underwriters or certificates evidencing
the same which are registered in the name of the Selling Stockholder
have been delivered to the Underwriters duly endorsed for transfer (or
accompanied by duly executed stock powers or other forms of assignment
in proper form for transfer), the Underwriters will acquire such shares
free and clear of any security interests, liens, encumbrances or other
"adverse claims" (within the meaning of the Uniform Commercial Code);
(ii) Such Selling Stockholder has full legal right and power
(if the Selling Stockholder is not a corporation or a partnership), or
all requisite corporate or partnership authority (if the Selling
Stockholder is a corporation or partnership) to enter into this
Agreement and the Custody Agreement and the Power of Attorney of the
Selling Stockholder and to sell, assign, transfer and deliver the
Shares to be sold by the Selling Stockholder in the manner provided
herein and therein;
(iii) The Custody Agreement and Power of Attorney of the
Selling Stockholder has been duly authorized, executed and delivered by
the Selling Stockholder and is a valid and binding agreement of the
Selling Stockholder, enforceable in accordance with its terms except as
enforceability thereof may be limited (a) by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors' rights generally, (b) by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (c) by principles
of public policy;
(iv) No consent, approval, authorization or order of, or
qualification with, any Applicable Governmental Authority is required
pursuant to any Applicable Laws for the execution and delivery of this
Agreement or the Custody Agreement and Power of Attorney of the Selling
Stockholder (collectively, the "Selling Stockholder Agreements") by or
on behalf of the Selling Stockholder, the performance by the Selling
Stockholder of its obligations hereunder or thereunder or the
consummation by it of the transactions contemplated hereby or thereby,
except for any such consent, approval, authorization, order or
qualification which (i) has been made or obtained prior to the Closing
Date, (ii) may be required under the Act, the Exchange Act or any
applicable state or foreign securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters
and the clearance of such offering with the NASD (as to which such
counsel need not express an opinion) or (iii) if not made or obtained,
would not reasonably be expected to adversely
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affect the performance by the Selling Stockholder of its obligations
under the Selling Stockholder Agreements; and
(v) The execution and delivery of the Selling Stockholder
Agreements on behalf of the Selling Stockholder, the performance by the
Selling Stockholder of its obligations hereunder or thereunder and the
consummation by the Selling Stockholder of the transactions
contemplated hereby or thereby will not (i) result in a breach or
violation of the terms of the Certificate of Incorporation or Bylaws or
the partnership agreement of the Selling Stockholder, if applicable,
(ii) to such counsel's knowledge, result in a breach or violation of or
constitute (either alone or with the passage of time or both) a default
under any agreement or other instrument binding upon the Selling
Stockholder, (iii) result in a violation of any Applicable Laws to
which the Selling Stockholder or its properties are subject or any
judgment, decree or order of any Applicable Governmental Authority that
specifically names the Selling Stockholder or is directed at the
Selling Stockholder's property (provided, however, that such counsel
need not express an opinion with respect to compliance with any federal
or state securities or antifraud law, rule or regulation), except for
any such breach, violation or default referred to in clauses (ii) or
(iii) above which would not reasonably be expected to adversely affect
the performance by the Selling Stockholder of its obligations under the
Selling Stockholder Agreements.
For purposes of the foregoing opinions, the definitions of the term
"Applicable Laws" and "Applicable Governmental Authority" shall mean federal
laws and the laws of the jurisdiction of incorporation or formation (as the case
may be) of the Selling Stockholder.
The opinion of [COUNSEL FOR THE COMPANY] or such other counsel as
described in Section 9(f) and 9(g) above shall be rendered to you at the request
of the Company or the Selling Stockholder, as applicable, and shall so state
therein.
(h) You shall have received on the Closing Date an opinion, dated the
Closing Date, of [COUNSEL FOR THE UNDERWRITERS], counsel for the Underwriters,
as to the matters referred to in Sections 9(f)(iv), 9(f)(vi) [(BUT ONLY WITH
RESPECT TO THE COMPANY)], and 9(f)(ix) (but only with respect to the statements
under the caption "Description of Capital Stock" and "Underwriting") and the
last paragraph of Section 9(f).
In giving such opinions with respect to the matters covered by the last
paragraph of Section 9(f), [COUNSEL FOR THE COMPANY] and [COUNSEL FOR THE
UNDERWRITERS] may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification except as
specified.
(i) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from Ernst & Young LLP, independent
public accountants, containing the information and
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statements of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(j) The Company shall have delivered to you the agreements specified in
Section 2 hereof which agreements shall be in full force and effect on the
Closing Date.
(k) The Shares shall have been duly listed on the NYSE.
(l) The Company and the Selling Stockholder shall not have failed on or
prior to the Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company or the
Selling Stockholder, as the case may be, on or prior to the Closing Date.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
SECTION 10. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Sellers if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange or the Nasdaq National Market or limitation on
prices for securities or other instruments on any such exchange or the Nasdaq
National Market, (iii) the suspension of trading of the Common Stock on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your reasonable
opinion materially and adversely affects, or will materially and adversely
affect, the business, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal or state government or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may
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be, which it or they have agreed to purchase hereunder on such date and the
aggregate number of Firm Shares or Additional Shares, as the case may be, which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Firm Shares
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 11
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased by all Underwriters and arrangements satisfactory to you,
the Company and the Selling Stockholder for purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Stockholder. In any such case which does not result in termination of
this Agreement, either you or the Selling Stockholder shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase such Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase on such date in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
SECTION 11. Agreements of the Selling Stockholder. The Selling
Stockholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by the Selling Stockholder
to the Underwriters.
(b) To do and perform all things to be done and performed by the
Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares to be sold by the
Selling Stockholder pursuant to this Agreement.
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SECTION 12. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company or to the
Selling Stockholder, to [COMPANY FULL NAME], [COMPANY ADDRESS], and (ii) if to
any Underwriter or to you, to you [C/O [NAME AND ADDRESS OF LEAD UNDERWRITER],
ATTENTION: SYNDICATE DEPARTMENT], or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholder and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company, any person controlling the
Company, the Selling Stockholder or any person controlling the Selling
Stockholder, (ii) acceptance of the Shares and payment for them hereunder and
(iii) termination of this Agreement.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholder, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the Company's directors and the
Company's officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this Agreement, 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 a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholder and the several Underwriters.
Very truly yours,
CAPSTEAD MORTGAGE CORPORATION
By:
--------------------------------------
Title:
President
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FORTRESS INVESTMENT GROUP, LLC
By:
--------------------------------------
Attorney-in-Fact
[NAMES OF UNDERWRITERS]
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: [LEAD UNDERWRITER]
By:
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SCHEDULE I
NUMBER OF
FIRM SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Total
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