Exhibit 1.1
MFA MORTGAGE INVESTMENTS, INC.
5,000,000 Shares
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
August 5, 2003
UNDERWRITING AGREEMENT
August 5, 2003
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
RBC XXXX XXXXXXXX INC.
FLAGSTONE SECURITIES, LLC
as Representatives of the several Underwriters,
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
MFA Mortgage Investments, Inc., a Maryland corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule A annexed
hereto (the "Underwriters"), for whom Friedman, Billings, Xxxxxx & Co., Inc.
("FBR"), RBC Xxxx Xxxxxxxx Inc. and Flagstone Securities, LLC are acting as
representatives, an aggregate of 5,000,000 the "Firm Shares") of common stock,
$0.01 par value (the "Common Stock"), of the Company. In addition, solely for
the purpose of covering over-allotments, the Company proposes to grant to the
Underwriters the option to purchase from the Company up to an additional 750,000
shares of Common Stock (the "Additional Shares"). The Firm Shares and the
Additional Shares are hereinafter collectively sometimes referred to as the
"Shares." The Shares are described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the "Securities Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-106606),
including a base prospectus, with respect to the Shares, and which incorporates
by reference documents which the Company has filed or will file in accordance
with the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the "Exchange Act"). The Company
has prepared a prospectus supplement (the "Prospectus Supplement") to the base
prospectus included as part of such registration statement setting forth the
terms of the offering, sale and plan of distribution of the Shares and
additional information concerning the Company and its business. Except where the
context otherwise requires, such registration statement, as amended when it
became effective, including all documents filed as part thereof or incorporated
by reference therein, and including any information contained in a Prospectus
(as defined below) subsequently filed with the Commission pursuant to Rule
424(b) under the Securities Act and also including any other registration
statement filed pursuant to Rule 462(b) under the Securities Act, collectively,
are herein called the "Registration Statement," and the base prospectus,
including all documents incorporated therein by reference, included in the
Registration Statement, as supplemented by the Prospectus Supplement, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Securities Act on or before the second Business Day (as defined below) following
the date of this Underwriting Agreement (this "Agreement") (or on such other day
as the parties may mutually agree), is herein called the "Prospectus." Any
reference herein to the Registration Statement, the Prospectus or any amendment
or supplement thereto shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement
or the Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein. For purposes of this Agreement, all references to the
Registration Statement, the Prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System ("XXXXX"), and such copy
shall be identical in content to any Prospectus delivered to the Underwriters
for use in connection with the offering of the Shares.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and representations
and subject to the terms and conditions herein set forth, the Company agrees to
issue and sell the Firm Shares to the several Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
respective number of Firm Shares (subject to such adjustment as FBR may
determine to avoid fractional shares) set forth opposite the name of such
Underwriter in Schedule A annexed hereto at a purchase price of $9.359 per
Share. The Company is advised by FBR that the Underwriters intend (i) to make a
public offering of the Shares as soon as the Underwriters deem advisable after
this Agreement has been executed and delivered and (ii) initially to offer the
Firm Shares upon the terms set forth in the Prospectus. The Underwriters may
from time to time increase or decrease the public offering price after the
initial public offering to such extent as they may determine in accordance with
the rules and regulations of the Securities Act.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company ratably
in accordance with the number of Firm Shares to be purchased by each of them
(subject to such adjustment as FBR shall determine to avoid fractional shares),
all or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for
the Firm Shares. This option may be exercised by FBR on behalf of the several
Underwriters at any time (but not more than once) on or before the thirtieth day
following the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised and the date and time when the Additional Shares are to be
delivered (such date and time being hereinafter referred to as the "additional
time of purchase"); provided, however, that the additional time of purchase
shall not be (i) earlier than the time of purchase (as defined below) or (ii)
later than the tenth Business Day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the
aggregate number of Firm Shares (subject, in each case, to such adjustment as
FBR may determine to eliminate fractional shares). As used herein "Business Day"
shall mean a day on which the New York Stock Exchange (the "NYSE") is open for
trading and commercial banks in The City of New York are open for business.
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2. Payment and Delivery. Payment of the purchase price for the Firm Shares
shall be made to the Company by federal funds wire transfer against delivery of
the certificates for the Firm Shares to FBR through the facilities of The
Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on August 11, 2003 (unless another time shall be agreed to by FBR and
the Company or unless postponed in accordance with the provisions of Section 8
hereof). The time at which such payment and delivery are actually made is
hereinafter sometimes called the "time of purchase." Certificates for the Firm
Shares shall be delivered to you through the facilities of DTC, in book-entry
form at the time of purchase in such names and in such denominations as FBR
shall specify. For the purpose of expediting the checking of the certificates
for the Firm Shares by FBR, the Company agrees to make a form of such
certificate available to FBR for such purpose at least one full Business Day
preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made at
the additional time of purchase in the same manner and at the same office as the
payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to you through the facilities of DTC, in book-entry form at the
additional time of purchase in such names and in such denominations as FBR shall
specify. For the purpose of expediting the checking of the certificates for the
Additional Shares by FBR, the Company agrees to make a form of such certificate
available to FBR for such purpose at least one full Business Day preceding the
additional time of purchase.
3. Representations and Warranties of the Company. The Company represents
and warrants to each of the Underwriters that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act. The Registration Statement has been filed with the Commission
and has been declared effective under the Securities Act. The Company has not
received, and has no notice of, any order of the Commission preventing or
suspending the use of the Registration Statement, or threatening or instituting
proceedings for that purpose. 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 have been so
described or filed. The Prospectus Supplement has been or will be so prepared
and will be filed pursuant to Rule 424(b) of the Securities Act on or before the
second Business Day following the date of this Agreement or on such other day as
the parties may mutually agree. Copies of the Registration Statement and the
Prospectus, any such amendments or supplements and all documents incorporated by
reference therein that were filed with the Commission on or prior to the date of
this Agreement (including one fully executed copy of each of the Registration
Statement and of each amendment thereto for the Underwriters) have been
delivered to the Underwriters and their counsel. The Company has not distributed
and will not distribute any offering material in connection with the offering or
sale of the Shares other than the Registration Statement and the Prospectus.
(b) Each part of the Registration Statement, when such part became
or becomes effective or was or is filed with the Commission, and the Prospectus
and any amendment or supplement thereto, on the date of filing thereof with the
Commission and at the time of purchase and, if applicable, at the additional
time of purchase, conformed or will conform in all material respects with the
requirements of the Securities Act. Each part of the Registration Statement,
when such part became or becomes effective or was or is filed with the
Commission, did not, or will 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 not misleading. The Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and at the
time of purchase and, if applicable, at the additional time of purchase, did not
or will not include an 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
foregoing shall not apply to statements in, or omissions from, any such document
in reliance upon, and in conformity with, written information concerning the
Underwriters that was furnished in writing to the Company by FBR, on behalf of
the several Underwriters, specifically for use in the preparation thereof.
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(c) The documents incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto, when they
became or become effective under the Securities Act or were or are filed with
the Commission under the Securities Act or the Exchange Act, as the case may be,
conformed or will conform in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable.
(d) The consolidated financial statements of the Company, together
with the related schedules and notes thereto, set forth or included or
incorporated by reference in the Registration Statement and the Prospectus are
accurate in all material respects and fairly present the financial condition of
the Company as of the dates indicated and the results of operations, changes in
financial position, stockholders' equity and cash flows for the periods therein
specified are in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise stated
therein). The selected financial and statistical data included or incorporated
by reference in the Registration Statement and the Prospectus present fairly the
information shown therein and, to the extent based upon or derived from the
financial statements, have been compiled on a basis consistent with the
financial statements presented therein. Any pro forma financial statements of
the Company, and the related notes thereto, included or incorporated by
reference in the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the basis described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein. The Company and, to the Company's knowledge,
the Subsidiaries (as defined below) do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet obligations),
not disclosed in the Registration Statement and the Prospectus. No other
financial statements are required to be set forth or to be incorporated by
reference in the Registration Statement or the Prospectus under the Securities
Act.
(e) The Prospectus delivered to the Underwriters for use in
connection with this offering will be identical to the versions of the
Prospectus, created to be transmitted to the Commission for filing via XXXXX,
except to the extent permitted by Regulation S-T.
(f) The Company has been duly formed and incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland and is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or assets or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the business, assets, properties, prospects, financial condition or results
of operations of the Company and the Subsidiaries taken as a whole (a "Material
Adverse Effect") and has full corporate power and authority necessary to own,
hold, lease and/or operate its assets and properties, to conduct the business in
which it is engaged and as described in the Registration Statement and the
Prospectus and to enter into and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby, and the Company is in
compliance in all material respects with the laws, orders, rules, regulations
and directives issued or administered by any jurisdictions in which it owns or
leases property or conducts business.
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(g) The Company has no "significant subsidiaries" (as such term is
defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act);
and does not own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity,
except that it owns (a) (i) a 100% ownership interest in PF One Corporation, a
Nebraska corporation ("PF One"), which in turn owns an 1.766% ownership interest
in Xxxxxxx Place, LLC, a Georgia limited liability company ("Xxxxxxx"), (ii) a
100% ownership interest in Retirement Centers Corporation, a Delaware
corporation ("RCC"), which in turn owns a 100% ownership interest in Greenhouse
Holdings, LLC, a Nebraska limited liability company ("Greenhouse"), and an 88.3%
ownership interest in Xxxxxxx, (iii) a 99% limited partner interest in Morrowood
Associates, Ltd., a Georgia limited partnership ("Morrowood"), (v) a 99% limited
partner interest in Harmony Bay Associates, Ltd., a Georgia limited partnership
("Harmony Bay"), (vi) a 99% limited partner interest in Xxxxxx Xxxxx Limited
Partnership, a Maryland limited partnership ("Xxxxxx Xxxxx"), which in turn
holds a 9.934% ownership interest in Xxxxxxx and (vii) a 50% limited partner
interest in Gold Key Venture, a Georgia limited partnership ("Gold Key" and,
together with Xxxxxxx, Greenhouse, Harmony Bay and Xxxxxx Xxxxx, the "Property
Entities", and together with PF One, RCC and Morrowood, the "Subsidiaries") and
(b) the securities comprising the Investment Portfolio (as defined below).
Complete and correct copies of the articles of incorporation and of the bylaws
or other formation documents of the Company and each of the Subsidiaries, as
applicable, and all amendments thereto have been made available to FBR and,
except as set forth in the exhibits to, or incorporated by reference into, the
Registration Statement, no changes therein will be made subsequent to the date
hereof and prior to the time of purchase or, if applicable, the additional time
of purchase. To the Company's knowledge, each Subsidiary has been duly formed
and incorporated or organized and is validly existing as a corporation,
partnership or limited liability company in good standing under the laws of the
jurisdiction of its incorporation or formation or organization and is duly
qualified to do business and is in good standing as a foreign corporation,
partnership or limited liability company in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified would not have a
Material Adverse Effect and to the Company's knowledge, each Subsidiary has full
corporate, partnership or limited liability power and authority, as applicable,
necessary to own, hold, lease and/or operate its assets and properties and to
conduct its business in which it is engaged and as described in the Registration
Statement and the Prospectus, and, to the Company's knowledge, each Subsidiary
is in compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by jurisdictions in which it
owns or leases property or conducts business; to the Company's knowledge, all of
the outstanding shares of capital stock or other equity interests, as the case
may be, of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable with respect to the corporate
Subsidiaries, and have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right and are not subject to any
security interest, other encumbrance or adverse claims; and to the Company's
knowledge, no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation into shares of
capital stock or ownership interests in the Subsidiaries are outstanding.
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(h) Neither the Company nor, to the Company's knowledge, any of the
Subsidiaries is in breach or violation of or in default under (nor has any event
occurred which with notice, lapse of time or both would result in any breach or
violation of or constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to require
the repurchase, redemption or repayment of all or a part of such indebtedness
under) (i) its respective charter, bylaws, certificate of formation, partnership
agreement or limited liability company agreement, as the case may be, or (ii)
any indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their properties may be bound or affected the effect
of which breach, violation or default under clause (ii) could reasonably be
expected to result in a Material Adverse Effect, and the execution, delivery and
performance of this Agreement, the issuance and sale of the Shares and the
consummation of the transactions contemplated hereby will not conflict with,
result in any breach or violation of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would result in
any breach or violation of or constitute a default under) (i) the charter,
bylaws, certificate of formation, partnership agreement or limited liability
company agreement, as the case may be, of the Company or, to the Company's
knowledge, any of the Subsidiaries, or (ii) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which the Company
or, to the Company's knowledge, any of the Subsidiaries is a party or by which
any of them or any of their respective properties may be bound or affected, the
effect of which breach, violation or default under clause (ii) could reasonably
be expected to result in a Material Adverse Effect or (iii) any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or, to the Company's knowledge, any of the
Subsidiaries.
(i) As of June 30, 2003, as of the date of this Agreement and as of
the time of purchase, the Company had, has and will have, as applicable, an
authorized, issued and outstanding capitalization as set forth in the section of
the Prospectus Supplement entitled "Capitalization." All of the issued and
outstanding shares of capital stock, including the Common Stock, of the Company
have been duly and validly authorized and issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right.
(j) This Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except to the extent that (i)
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
equitable principles and (ii) the indemnification and contribution provisions of
Section 9 hereof may be limited by federal or state securities laws and public
policy considerations in respect thereof.
(k) The capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus and such description conforms to the
rights set forth in the instruments defining the same. The certificates for the
Shares are in due and proper form and the holders of the Shares will not be
subject to personal liability by reason of being such holders.
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(l) The Shares have been duly and validly authorized by the Company
for issuance and sale pursuant to this Agreement and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued and
fully paid and nonassessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim, including any statutory or contractual
preemptive rights, resale rights, rights of first refusal or other similar
rights, and will be registered pursuant to Section 12 of the Exchange Act.
(m) No approval, authorization, consent or order of or filing with
any national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transaction contemplated hereby
other than (i) registration of the Shares under the Securities Act, (ii) any
necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters, or
(iii) such approvals obtained in connection with the approval of the listing of
the Shares on the NYSE.
(n) Except as set forth in the Registration Statement and the
Prospectus, (i) no person, as such term is defined in Rule 1-02 of Regulation
S-X promulgated under the Securities Act (each, a "Person"), has the right,
contractual or otherwise, to cause the Company to issue or sell to such Person
any shares of Common Stock or shares of any other capital stock or other
securities of the Company, (ii) no Person has any preemptive rights, resale
rights, rights of first refusal or other rights to purchase any shares of Common
Stock or shares of any other capital stock or other securities of the Company,
and (iii) no Person has the right to act as an underwriter or as a financial
advisor to the Company in connection with the offer and sale of the Shares, in
the case of each of the foregoing clauses (i), (ii) and (iii), whether as a
result of the filing or effectiveness of the Registration Statement or the sale
of the Shares as contemplated thereby or otherwise; except for registration
rights granted to certain former shareholders of America First Mortgage Advisory
Corporation, a Maryland corporation ("America First"), in connection with the
consummation of the transactions contemplated in that certain Agreement and Plan
of Merger, dated September 24, 2001, among the Company, America First and the
other parties thereto (the "Merger Agreement"), no Person has the right,
contractual or otherwise, to require the Company to register under the
Securities Act any shares of Common Stock or shares of any other capital stock
or other securities of the Company, or to include any such shares or other
securities in the Registration Statement or the offering contemplated thereby,
whether as a result of the filing or effectiveness of the Registration Statement
or the sale of the Shares as contemplated thereby or otherwise.
(o) PricewaterhouseCoopers LLP whose report on the consolidated
financial statements of the Company is filed with the Commission as part of the
Registration Statement and the Prospectus were during the periods covered by
their reports independent public accountants as required by the Securities Act.
Ernst & Young LLP who has reviewed interim financial information of the Company
are and, during the periods covered by their review, were independent public
accountants as required by the Securities Act.
(p) The Company and, to the Company's knowledge, each Subsidiary has
all necessary licenses, authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary permits, authorizations,
consents and approvals from other Persons, in order to conduct its business as
described in the Prospectus except such as could not have a Material Adverse
Effect. Neither the Company nor, to the Company's knowledge, any Subsidiary is
in violation of, or in default under, any such license, permit, authorization,
consent or approval or any federal, state, local or foreign law, regulation or
rule or any decree, order or judgment applicable to the Company or such
Subsidiary, the effect of which could have a Material Adverse Effect. The
Company is not required by any applicable law to obtain accreditation or
certification from any governmental agency or authority in order to provide the
products and services which it currently provides or which it proposes to
provide as set forth in the Prospectus, except such accreditations or
certifications that the Company has already obtained.
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(q) The descriptions in the Registration Statement and the
Prospectus of the legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions, contracts, leases and other legal documents
therein described present fairly the information required to be shown, and there
are no legal or governmental proceedings, affiliate transactions, off-balance
sheet transactions, contracts, leases, or other documents of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement which are not described or
filed as required. All agreements between the Company and third parties
expressly referenced in the Prospectus are legal, valid and binding obligations
of the Company enforceable in accordance with their respective terms, except to
the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general equitable principles.
(r) There are no actions, suits, claims, investigations, inquiries
or proceedings pending or, to the best of the Company's knowledge, threatened to
which either the Company or, to the Company's knowledge, any Subsidiaries or any
of their respective officers or directors is a party or of which any of their
respective properties or other assets is subject at law or in equity, or before
or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency which could result in a judgment,
decree or order having individually or in the aggregate a Material Adverse
Effect or prevent, or interfere in any material respect with the consummation of
the transactions contemplated hereby.
(s) During the 24 calendar months prior to the date of this
Agreement, the Company has timely filed with the Commission all documents and
other material required to be filed pursuant to Sections 13, 14 and 15(d) under
the Exchange Act. During the 36 calendar months preceding the filing of the
Registration Statement, the Company filed all reports required to be filed
pursuant to Sections 13, 14 and 15(d) under the Exchange Act. As of the date of
this Agreement, the aggregate market value of the Company's voting stock held by
nonaffiliates of the Company was equal to or greater than $150 million.
(t) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been (i)
any material adverse change, or any development which in the Company's
reasonable judgment is likely to cause a material adverse change, in the
business, properties, management or assets described or referred to in the
Registration Statement or the Prospectus, or the results of operations,
condition (financial or otherwise), net worth, business or operations of the
Company and the Subsidiaries taken as a whole, (ii) any transaction which is
material to the Company and the Subsidiaries taken as a whole, except
transactions in the ordinary course of business, (iii) any obligation, direct or
contingent (including off-balance sheet obligations), which is material to the
Company and the Subsidiaries taken as a whole, except obligations incurred in
the ordinary course of business, (iv) any change in the capital stock or, except
obligations incurred in the ordinary course, outstanding indebtedness of the
Company, or (v) except for the Company's second quarter dividend on the Common
Stock, any dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock. The Company has no material
contingent obligation (including off-balance sheet obligations) which is not
disclosed in the Registration Statement or the Prospectus.
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(u) The Company (i) does not have any issued or outstanding
preferred stock or (ii) has not defaulted on any installment on indebtedness for
borrowed money or on any rental on one or more long-term leases, which defaults
would have a Material Adverse Effect. The Company has not filed a report
pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its
last Annual Report on Form 10-K, indicating that it (i) has failed to pay any
dividend or sinking fund installment on preferred stock or (ii) has defaulted on
any installment on indebtedness for borrowed money or on any rental on one or
more long-term leases, which defaults would have a Material Adverse Effect.
(v) Neither the Company nor, to the Company's knowledge, any of the
Subsidiaries nor any of their respective directors, officers or controlling
persons has taken, directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(w) At the Closing, the Shares will be approved for listing on the
NYSE, subject to official notice of issuance.
(x) Neither the Company nor any of its affiliates (i) is required to
register as a "broker" or "dealer" in accordance with the provisions of the
Exchange Act or (ii) directly or indirectly through one or more intermediaries,
controls or has any other association with (within the meaning of Article I of
the Bylaws of the National Association of Securities Dealers, Inc. ("NASD")) any
member firm of the NASD.
(y) The Company has not relied upon FBR or legal counsel for the
Underwriters for any legal, tax or accounting advice in connection with the
offering and sale of the Shares.
(z) Any certificate signed by any officer of the Company delivered
to FBR or to counsel for the Underwriters pursuant to or in connection with this
Agreement shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
(aa) As of June 30, 2003, the investment portfolio (the "Investment
Portfolio") of the Company consisted of approximately 99.2% of (x)
mortgage-backed securities and related receivables issued or guaranteed, as to
payments of principal or interest, by an agency of the U.S. government or a
Federally chartered corporation such as the Federal Home Loan Mortgage
Corporation, Xxxxxx Xxx or the Government National Mortgage Association, (y)
mortgage-backed securities rated in one of the two highest rating categories by
at least one nationally recognized rating agency and (z) cash. As of the date of
this Agreement and except as otherwise disclosed in the Prospectus, the Company
has no plan or intention to materially alter its stated investment policies and
operating policies and strategies, as such are described in the Prospectus,
including making any change to any stated investment percentages or guidelines
or the stated assets-to-equity ratio currently employed by the Company; the
Company and, to the Company's knowledge, the Subsidiaries have good and
marketable title to all properties and assets owned directly by them, in each
case free and clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects (except for any security interest, lien
encumbrance or claim that may otherwise exist under any applicable repurchase
agreement or as otherwise disclosed in the Prospectus), except such as do not
interfere with the use made or proposed to be made of such asset or property by
the Company or any Subsidiary, as the case may be; the Company does not directly
own any real property; any real property and buildings held under lease directly
by the Company are held under valid, existing and enforceable leases, with such
exceptions, liens, security interests, pledges, charges, encumbrances, mortgages
and defects, as are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company.
9
(bb) The Company and, to the Company's knowledge, each of the
Subsidiaries has filed on a timely basis (taking into account all applicable
extensions) all necessary federal, state, local and foreign income and franchise
tax returns, if any such returns were required to be filed, through the date
hereof and have paid all taxes shown as due thereon; and no tax deficiency has
been asserted against the Company or any of the Subsidiaries, nor does the
Company know of any tax deficiency which is likely to be asserted against any
such entity which, if determined adversely to any such entity, could have a
Material Adverse Effect; all tax liabilities, if any, are adequately provided
for on the books of the Company and, to the Company's knowledge, the
Subsidiaries.
(cc) The Company and, to the Company's knowledge, each Subsidiary
owns or possesses adequate license or other rights to use all patents,
trademarks, service marks, trade names, copyrights, software and design
licenses, trade secrets, manufacturing processes, other intangible property
rights and know-how, if any (collectively "Intangibles"), necessary to entitle
the Company and, to the Company's knowledge, each Subsidiary to conduct its
business as described in the Prospectus, and neither the Company nor, to the
Company's knowledge, any Subsidiary has received notice of infringement of or
conflict with (and knows of no such infringement of or conflict with) asserted
rights of others with respect to any Intangibles which could have a Material
Adverse Effect.
(dd) Except as otherwise disclosed in the Prospectus, neither the
Company nor, to the Company's knowledge, any of the Property Entities has
authorized or conducted or has knowledge of the generation, transportation,
storage, presence, use, treatment, disposal, release, or other handling of any
hazardous substance, hazardous waste, hazardous material, hazardous constituent,
toxic substance, pollutant, contaminant, asbestos, radon, polychlorinated
biphenyls, petroleum product or waste (including crude oil or any fraction
thereof), natural gas, liquefied gas, synthetic gas or other material defined,
regulated, controlled or potentially subject to any remediation requirement
under any environmental law (collectively, "Hazardous Materials"), on, in, under
or affecting any real property currently leased or owned or by any means
controlled by the Company or any Property Entity, including any real property
underlying any loan held by any Property Entity (collectively, the "Real
Property"), except in material compliance with applicable laws; to the knowledge
of the Company, the Real Property, and the Company's and the Property Entities'
operations with respect to the Real Property, are in compliance with all
federal, state and local laws, ordinances, rules, regulations and other
governmental requirements relating to pollution, control of chemicals,
management of waste, discharges of materials into the environment, health,
safety, natural resources, and the environment (collectively, "Environmental
Laws"), and the Company and, to the Company's knowledge, the Property Entities
are in material compliance with, all licenses, permits, registrations and
government authorizations necessary to operate under all applicable
Environmental Laws; except as otherwise disclosed in the Prospectus, neither the
Company nor, to the Company's knowledge, the Property Entities has received any
written or oral notice from any governmental entity or any other Person and
there is no pending or threatened claim, litigation or any administrative agency
proceeding that: alleges a violation of any Environmental Laws by the Company or
any of the Property Entities; or that the Company or any of the Property
Entities is a liable party or a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
ss. 9601, ET SEQ., or any state superfund law; has resulted in or could result
in the attachment of an environmental lien on any of the Real Property; or
alleges that the Company or any of the Property Entities is liable for any
contamination of the environment, contamination of the Real Property, damage to
natural resources, property damage, or personal injury based on their activities
or the activities of their predecessors or third parties (whether at the Real
Property or elsewhere) involving Hazardous Materials, whether arising under the
Environmental Laws, common law principles, or other legal standards.
10
(ee) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain asset accountability, (iii) access
to assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ff) The Company and, to the Company's knowledge, each of the
Subsidiaries maintains insurance (issued by insurers of recognized financial
responsibility) of the types and in the amounts generally deemed adequate, if
any, for their respective businesses and consistent with insurance coverage
maintained by similar companies in similar businesses, including, but not
limited to, insurance covering real and personal property owned or leased by the
Company and the Subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(gg) Neither the Company nor, to the Company's knowledge, any
Subsidiary is in violation, and none of them has received notice of any
violation with respect to, any applicable environmental, safety or similar law
applicable to its business and which, in the case of the Property Entities,
could reasonably expect to result in a Material Adverse Effect. The Company and,
to the Company's knowledge, each Subsidiary have received all permits, licenses
or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to conduct
their businesses, and the Company and, to the Company's knowledge, each
Subsidiary is in compliance with all terms and conditions of any such permit,
license or approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals which could not,
singly or in the aggregate, have a Material Adverse Effect.
(hh) The Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions herein
contemplated, except as may otherwise exist with respect to the Underwriters
pursuant to this Agreement.
(ii) There are no existing or threatened labor disputes with the
employees of the Company or, to the Company's knowledge, any Subsidiary which
are likely to have individually or in the aggregate a Material Adverse Effect.
11
(jj) None of the Company or, to the Company's knowledge, any
Subsidiary or any employee or agent of the Company or any Subsidiary, has made
any payment of funds or received or retained any funds in violation of any law,
rule or regulation or of a character required to be disclosed in the Prospectus.
No relationship, direct or indirect, exists between or among the Company or, to
the Company's knowledge, any Subsidiary or any affiliate of any of them, on the
one hand, and the directors, officers and stockholders of the Company or, to the
Company's knowledge, any Subsidiary, on the other hand, which is required by the
Securities Act to be described in the Registration Statement and the Prospectus
that is not so described.
(kk) The Company has been, and upon the sale of the Shares will
continue to be, organized and operated in conformity with the requirements for
qualification and taxation as a "real estate investment trust" (a "REIT") under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), for all taxable years commencing with its taxable year ended December
31, 1997. The proposed method of operation of the Company as described in the
Prospectus will enable the Company to continue to meet the requirements for
qualification and taxation as a REIT under the Code, and no actions have been
taken (or not taken which are required to be taken) which would cause such
qualification to be lost. The Company intends to continue to operate in a manner
which would permit it to qualify as a REIT under the Code. The Company has no
intention of changing its operations or engaging in activities which would cause
it to fail to qualify, or make economically undesirable its continued
qualification, as a REIT.
(ll) Neither the Company nor PF One or RCC, or to the knowledge of
the Company, the Property Entities, after giving effect to the offering and sale
of the Shares, will 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").
(mm) No relationship, direct or indirect, exists between or among
the Company or any Subsidiary or any affiliate of them, on the one hand, and the
directors, officers, stockholders or directors of the Company or any Subsidiary,
on the other hand, which is required by the rules of the NASD to be described in
the Registration Statement and the Prospectus which is not so described. Except
as otherwise disclosed in the Prospectus, there are no material outstanding
loans or advances or material guarantees of indebtedness by the Company or, to
the Company's knowledge, any Subsidiary or any affiliate of them to or for the
benefit of any of the officers or directors of the Company or any Subsidiary or
any of the members of the families of any of them.
(nn) Neither the Company nor, to the Company's knowledge, any of the
Subsidiaries has sustained since the date of the last audited financial
statements included in the Registration Statement and the Prospectus any loss or
interference with its respective business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree.
(oo) The Company has obtained for the benefit of the Underwriters
the agreements (the "Lock-Up Agreements"), in substantially the form set forth
as Exhibit A hereto, of each of its directors and officers and each stockholder
named in Exhibit A-1 hereto.
(pp) The Company is in compliance with all presently applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act") and is
actively taking steps to ensure that it will be in compliance with other
applicable provisions of the Xxxxxxxx-Xxxxx Act upon the effectiveness of such
provisions.
12
4. Certain Covenants of the Company. The Company hereby covenants and
agrees with each of the Underwriters that:
(a) The Company will furnish such information as may be required and
otherwise will cooperate in qualifying the Shares for offering and sale under
the securities or blue sky laws of such jurisdictions (both domestic and
foreign) as FBR may designate and to maintain such qualifications in effect so
long as required for the distribution of the Shares, provided that the Company
shall not be required to qualify as a foreign corporation or to consent to the
service of process under the laws of any such jurisdiction (except service of
process with respect to the offering and sale of the Shares). The Company will
promptly advise FBR of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(b) The Company will prepare the Prospectus in a form approved by
the Underwriters and file such Prospectus with the Commission pursuant to Rule
424(b) under the Securities Act not later than 10:00 A.M. (New York City time)
on or before the second Business Day following the date of this Agreement or on
such other day as the parties may mutually agree and will furnish promptly (and
with respect to the initial delivery of such Prospectus, not later than 10:00
A.M. (New York City time) on or before the second Business Day following the
date of this Agreement or on such other day as the parties may mutually agree)
to the Underwriters copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements
thereto after the effective date of the Registration Statement) in such
quantities and at such locations as the Underwriters may reasonably request for
the purposes contemplated by the Securities Act, which the Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the version created to be transmitted to the Commission for filing
via XXXXX, except to the extent permitted by Regulation S-T.
(c) The Company will advise FBR immediately, confirming such advice
in writing, of (i) the receipt of any comments from the Commission relating to
any filing of the Company under the Securities Act or the Exchange Act, (ii) any
request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information with respect thereto,
(iii) 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 the Prospectus, (iv) the suspension of the qualification
of the Shares for offering or sale in any jurisdiction, (v) the initiation,
threatening or contemplation of any proceedings for any of such purposes and, if
the Commission or any other governmental agency or authority should issue any
such order, the Company will make every reasonable effort to obtain the lifting
or removal of such order as soon as possible. The Company will advise FBR
promptly of any proposal to amend or supplement the Registration Statement or
the Prospectus including by filing any documents that would be incorporated
therein by reference and to file no such amendment or supplement to which FBR
shall object to in writing.
(d) The Company will advise FBR promptly and, if requested by FBR,
will confirm such advice in writing when any post-effective amendment to the
Registration Statement becomes effective under the Securities Act.
13
(e) The Company will, promptly upon request, furnish to FBR and,
upon request, to each of the other Underwriters for a period of five years from
the date of this Agreement (i) copies of any reports or other communications
which the Company shall send to its stockholders or shall from time to time
publish or publicly disseminate, (ii) copies of all annual, quarterly and
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar form as may be designated by the Commission, (iii) copies of
documents or reports filed with any national securities exchange on which any
class of securities of the Company is listed, and (iv) such other information as
FBR may reasonably request regarding the Company, in each case as soon as such
communication, document or information becomes available.
(f) The Company will advise the Underwriters promptly of the
happening of any event known to the Company within the time during which a
Prospectus relating to the Shares is required to be delivered under the
Securities Act which would require the making of any change in the Prospectus
then being used, or in the information incorporated by reference therein, so
that the Prospectus would not include an untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or supplement
the Prospectus to comply with any law. If within the time during which a
Prospectus relating to the Shares is required to be delivered under the
Securities Act any event shall occur or condition shall exist which, in the
reasonable opinion of the Company, FBR or their respective counsel, would
require the making of any change in the Prospectus then being used, or in the
information incorporated by reference therein, so that the Prospectus would not
include an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to amend or supplement the Prospectus to comply with
any law, the Company will promptly prepare and furnish to the Underwriters
copies of the proposed amendment or supplement before filing any such amendment
or supplement with the Commission and thereafter promptly furnish, at the
Company's own expense, to the Underwriters and to dealers copies in such
quantities and at such locations as FBR may from time to time reasonably request
of an appropriate amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will not, in the
circumstances when it is so delivered, be misleading or so that the Prospectus
will comply with the law.
(g) The Company will make generally available to its stockholders as
soon as practicable, and in the manner contemplated by Rule 158 of the
Securities Act but in any event not later than 15 months after the end of the
Company's current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period beginning after the date upon which the
Prospectus Supplement is filed pursuant to Rule 424(b) under the Securities Act
that shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder and will advise the Underwriters in writing when such
statement has been made available.
(h) The Company will furnish to FBR a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents incorporated by
reference therein) and such number of conformed copies of the foregoing (other
than exhibits) as FBR may reasonably request.
(i) The Company will apply the net proceeds from the sale of the
Shares in the manner set forth under the caption "Use of Proceeds" in the
Prospectus.
14
(j) The Company will furnish to FBR, not less than two Business Days
before a filing with the Commission during the period referred to in paragraph
(f) above, a copy of any document proposed to be filed pursuant to Section 13,
14 or 15(d) of the Exchange Act and during such period will file all such
documents in a manner and within the time periods required by the Exchange Act.
(k) The Company will not sell, offer, contract to sell, pledge,
register, grant any option to purchase or otherwise dispose of, directly or
indirectly, any shares of capital stock, or any securities convertible into, or
exercisable, exchangeable or redeemable for shares of capital stock for a period
of 45 days after the date hereof (the "Lock-Up Period"), without the prior
written consent of FBR. The foregoing sentence shall not apply to (i) the Shares
to be sold hereunder, (ii) any shares of Common Stock issued by the Company upon
the exercise of an option outstanding on the date hereof and referred to in the
Prospectus, (iii) the granting of options pursuant to the Company's Second
Amended and Restated 1997 Employee Stock Option Plan (not to exceed 500,000
options not exercisable within the Lock-Up Period), (iv) the payment in stock to
directors of the Company of a portion of their annual or other directors fees,
(v) the filing of any shelf registration statement after thirty days from the
date hereof, (vi) the filing of any registration statement, including any
amendment thereto, relating to the registration rights granted to certain
stockholders in accordance with the Merger Agreement or any dividend
reinvestment and/or stock purchase plan to be instituted by the Company or (vii)
shares of Common Stock issued pursuant to the Company's existing Discount
Waiver, Direct Stock Purchase and Dividend Reinvestment Plan.
(l) The Company will use its best efforts to cause the Shares to be
listed on the NYSE and to maintain such listing and to file with the NYSE all
documents and notices required by the NYSE of companies that have securities
that are listed on the NYSE.
(m) The Company will maintain and keep accurate books and records
reflecting their assets and maintain internal accounting controls which provide
reasonable assurance that (i) transactions are executed in accordance with
management's authorization, (ii) transactions are recorded as necessary to
permit the preparation of the Company's consolidated financial statements and to
maintain accountability for the assets of the Company, (iii) access to the
assets of the Company is permitted only in accordance with management's
authorization and (iv) the recorded accounts of the assets of the Company are
compared with existing assets at reasonable intervals.
(n) The Company will engage and maintain, at its expense, a
registrar and transfer agent for the Shares.
(o) The Company will pay all expenses, fees and taxes (other than
any transfer taxes and fees and disbursements of counsel for the Underwriters,
except as set forth under Section 5 hereof or in clause (iii) or (iv) below) in
connection with (i) the preparation and filing of the Registration Statement,
the Prospectus, and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (ii) the issuance, sale and delivery
of the Shares by the Company, (iii) the qualification, if any, of the Shares for
offering and sale under state laws and the determination of their eligibility
for investment under state law as aforesaid (the legal fees and filing fees and
other disbursements of counsel to the Underwriters) and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to the
Underwriters and to dealers, (iv) any listing of the Shares on the NYSE and any
registration thereof under the Exchange Act, (v) the filing, if any, for review
of the public offering of the Shares by the NASD, (vi) the costs and expenses of
the Company relating to presentations or meetings undertaken in connection with
the marketing of the offering and sale of the Shares to prospective investors
and the Underwriters' sales forces, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged by the Company in connection with the road
show presentations, travel, lodging and other expenses incurred by the officers
of the Company and any such consultants, and (vii) the performance of the
Company's other obligations hereunder.
15
(p) The Company will not (i) take, directly or indirectly, prior to
termination of the underwriting syndicate contemplated by this Agreement, any
action designed to stabilize or manipulate the price of any security of the
Company, or which may cause or result in, or which might in the future
reasonably be expected to cause or result in, the stabilization or manipulation
of the price of any security of the Company, to facilitate the sale or resale of
any of the Shares, (ii) sell, bid for, purchase or pay any Person (other than as
contemplated by the provisions hereof) any compensation for soliciting purchases
of the Shares, or (iii) pay or agree to pay to any Person any compensation for
soliciting any order to purchase any other securities of the Company.
(q) The Company will not invest in futures contracts, options on
futures contracts or options on commodities unless the Company is exempt from
the registration requirements of the Commodity Exchange Act, as amended, or
otherwise complies with the Commodity Exchange Act, as amended. In addition, the
Company will not engage in any activities which might be subject to the
Commodity Exchange Act, as amended, unless such activities are exempt from that
act or otherwise comply with that act or with an applicable no-action letter to
the Company from the Commodities Futures Trading Commission.
(r) The Company will comply with all of the provisions of any
undertakings in the Registration Statement.
(s) The Company has been organized and operated in conformity with
the requirements for qualification and taxation of the Company as a REIT under
the Code, and the Company's proposed methods of operation will enable the
Company to continue to meet the requirements for qualification and taxation as a
REIT under the Code for subsequent taxable years.
(t) The Company will not be or become, at any time prior to the
expiration of three years after the date of the Agreement, an "investment
company," as such term is defined in the Investment Company Act.
(u) The Company has retained Ernst & Young LLP as its qualified
accountants and qualified tax experts (i) to test procedures and conduct annual
compliance reviews designed to determine compliance with the REIT provisions of
the Code and (ii) to otherwise assist the Company in monitoring appropriate
accounting systems and procedures designed to determine compliance with the REIT
provisions of the Code.
(v) The Company will comply with all requirements imposed upon it by
the Securities Act and the Exchange Act as from time to time in force, so far as
necessary to permit the continuance of sales of, or dealings in, the Shares as
contemplated by the provisions hereof and the Prospectus.
16
(w) The Company will maintain such controls and other procedures,
including, without limitation, those required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act and the applicable regulations thereunder, that are designed
to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commission's
rules and forms, including, without limitation, controls and procedures designed
to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company's management, including its chief executive officer
and chief financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure and to
ensure that material information relating to the Company is made known to them
by others within those entities, particularly during the period in which such
periodic reports are being prepared.
(x) The Company will comply with all effective applicable provisions
of the Xxxxxxxx-Xxxxx Act.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the default by one or more of the Underwriters in its or their respective
obligations hereunder, the Company shall, in addition to paying the amounts
described in Section 4(o) hereof, reimburse the Underwriters for all of their
out-of-pocket expenses, including the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof, at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to FBR at the time of purchase and at
the additional time of purchase, as the case may be, opinions of Xxxxxxxx Chance
US LLP, counsel for the Company, addressed to the Underwriters, and dated the
time of purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form satisfactory to
Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, substantially in the
forms of Exhibit B-1 and Exhibit B-2 attached hereto. FBR shall have received at
the time of purchase and at the additional time of purchase, as the case may be,
an opinion of Xxxxx Xxxx LLP, special Maryland counsel for the Underwriters,
addressed to the Underwriters, and dated the time of purchase or the additional
time of purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form reasonably satisfactory to Xxxxxxxx & Xxxxxxxx
LLP, counsel for the Underwriters, substantially in the form of Exhibit C
attached hereto.
(b) FBR shall have received from PricewaterhouseCoopers LLP and
Ernst & Young LLP letters dated, respectively, the date of this Agreement and
the time of purchase and the additional time of purchase, as the case may be,
and addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in the forms heretofore approved by FBR relating to the financial
statements, including any pro forma financial statements of the Company and such
other matters customarily covered by comfort letters issued in connection with a
registered public offering.
17
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (i) such letters shall be accompanied by a
written explanation from the Company as to the significance thereof, unless FBR
deems such explanation unnecessary, and (ii) such changes, decreases or
increases do not, in the sole judgment of FBR, make it impractical or
inadvisable to proceed with the purchase and delivery of the Shares as
contemplated by the Registration Statement and the Prospectus.
(c) FBR shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion and
letter of Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, dated the time
of purchase or the additional time of purchase, as the case may be, with respect
to such matters as FBR shall reasonably request, and such counsel shall have
received such papers and information as they may reasonably require to enable
them to pass upon such matters.
(d) No amendment or supplement to the Registration Statement or the
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed to which the Underwriters object in writing.
(e) Prior to the time of purchase or the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under the
Securities Act or proceedings initiated under Section 8(d) or 8(e) of the
Securities Act; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) the
Prospectus and all amendments or supplements thereto, or modifications thereof,
if any, shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they are made,
not misleading.
(f) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the time of purchase or the additional time
of purchase, as the case may be, shall have been made within the applicable time
period prescribed for such filing by Rule 424.
(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and the Prospectus on the date hereof), in the business,
condition, net worth or prospects of the Company and the Subsidiaries taken as a
whole shall have occurred or become known and (ii) no transaction which is
material and unfavorable to the Company shall have been entered into by the
Company.
(h) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to FBR a certificate of two of its
executive officers to the effect that the representations and warranties of the
Company as set forth in this Agreement are true and correct as of each such
date, that the Company shall perform such of its obligations under this
Agreement as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be, and that the
conditions set forth in paragraphs (e) and (g) of this Section 6 have been met.
18
(i) The Company shall have furnished to FBR such other documents and
certificates, including as to the accuracy and completeness of any statement in
the Registration Statement and the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as FBR may reasonably request.
(j) The Shares shall have been approved for listing on the NYSE,
subject only to notice of issuance at or prior to the time of purchase or the
additional time of purchase, as the case may be.
(k) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(l) FBR shall have received the Lock-Up Agreements referred to in
Section 3(oo), and such Lock-Up Agreements shall be in full force and effect.
(m) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall not
have occurred any downgrading, nor shall any notice or announcement have been
given or made of (i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company by any "nationally recognized
statistical rating organization," as that term is defined in Rule 436(g)(2)
under the Securities Act.
7. Termination. The obligations of the several Underwriters hereunder
shall be subject to termination in the absolute discretion of FBR, at any time
prior to the time of purchase or, if applicable, the additional time of
purchase, (i) if any of the conditions specified in Section 6 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, (ii) if
any material adverse and unfavorable change (financial or otherwise) or any
development involving a material adverse and unfavorable change (financial or
otherwise) (in each case, other than disclosed, or incorporated by reference
into the Registration Statement and the Prospectus on the date hereof), in the
operations, business, net worth, financial condition or prospects of the Company
and the Subsidiaries taken as a whole shall have occurred which would, in the
sole judgment of FBR, make it impracticable to market the Shares, (iii) if the
United States shall have declared war in accordance with its constitutional
processes or there has occurred an outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic,
political or other conditions the effect of which on the financial markets of
the United States is such as to make it, in the sole judgment of FBR,
impracticable or inadvisable to market the Shares or enforce contracts for the
sale of the Shares, (iv) if trading in any securities of the Company has been
suspended by the Commission or by the NYSE, or if trading generally on the NYSE
has been suspended (including an automatic halt in trading pursuant to
market-decline triggers other than those in which solely program trading is
temporarily halted), or limitations on or minimum prices for trading (other than
limitations on hours or numbers of days of trading) shall have been fixed, or
maximum ranges for prices for securities have been required, by such exchange or
the NASD or Nasdaq or by order of the Commission or any other governmental
authority, (v) if a banking moratorium shall have been declared by New York or
United States authorities or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States,
(vi) if there shall have occurred any downgrading, or any notice or announcement
shall have been given or made of (a) any intended or potential downgrading or
(b) any review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization," as that term is defined
in Rule 436(g)(2) under the Securities Act, (vii) if any federal or state
statute, regulation, rule or order of any court or other governmental authority
has been enacted, published, decreed or otherwise promulgated which, in the
opinion of FBR, materially adversely affects or will materially adversely affect
the business or operations of the Company, or (viii) if any action has been
taken by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which, in the opinion of FBR, has a material adverse
effect on the securities markets in the United States.
19
If FBR elects to terminate this Agreement as provided in this Section 7,
the Company and each other Underwriter shall be notified promptly by telephone,
which shall be promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(o), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. If any Underwriter shall default
in its obligation under this Agreement to take up and pay for the Shares to be
purchased by it under this Agreement (otherwise than for reasons sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof), FBR shall have the right, within 36 hours after such default, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Shares which such
Underwriter shall have agreed but failed to take up and pay for (the "Defaulted
Shares"). Absent the completion of such arrangements within such 36-hour period,
(i) if the total number of Defaulted Shares does not exceed 10% of the total
number of Shares to be purchased at the time of purchase or the additional time
of purchase, as the case may be, each non-defaulting Underwriter shall take up
and pay for (in addition to the number of Shares which it is otherwise obligated
to purchase on such date pursuant to this Agreement) the number of Shares agreed
to be purchased by all such defaulting Underwriters in such amount or amounts as
FBR may designate with the consent of each Underwriter so designated or, in the
event no such designation is made, such Shares shall be taken up and paid for by
all non-defaulting Underwriters pro rata in proportion to the aggregate number
of Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A; and (ii) if the total number of Defaulted Shares exceeds 10% of such
total number of Shares to be purchased at the time of purchase or the additional
time of purchase, as the case may be, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the five Business
Day period from the date of default for the purchase of such Defaulted Shares,
FBR may terminate this Agreement by notice to the Company, without liability of
any party to any other party, except that the provisions of Sections 4(o), 5 and
9 shall at all times be effective and shall survive such termination. Nothing in
this paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
20
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that they
will not sell any Shares hereunder unless all of the Shares are purchased by the
Underwriters (or by substituted Underwriters selected by FBR with the approval
of the Company or selected by the Company with FBR's approval).
If a new Underwriter is, or new Underwriters are, substituted for a
defaulting Underwriter or Underwriters in accordance with the foregoing
provisions, the Company or FBR shall have the right to postpone the time of
purchase or the additional time of purchase, as the case may be, for a period
not exceeding five Business Days from the date of substitution in order that any
necessary changes in the Registration Statement and the Prospectus and other
documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any underwriter substituted under this Section 8 with like effect as if such
substituted underwriter had originally been named in Schedule A.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any Person who controls
any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons from and against any loss, damage, expense, liability or claim
(including, but not limited to, the reasonable cost of investigation) which,
jointly or severally, any such Underwriter or any such Person may incur under
the Securities Act, the Exchange Act, federal or state statutory law or
regulation, common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus (the term Prospectus for
the purpose of this Section 9(a) being deemed to include the Prospectus and the
Prospectus as amended or supplemented by the Company), or in any documents filed
under the Exchange Act and deemed to be incorporated by reference into the
Prospectus, or in any application or other document executed by or on behalf of
the Company or based on written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Shares under the
securities or blue sky laws thereof or filed with the Commission, or arises out
of or is based upon any omission or alleged omission to state in any such
document a material fact required to be stated therein or necessary to make the
statements made therein not misleading except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information concerning such Underwriter and furnished in writing by or on
behalf of such Underwriter through FBR to the Company expressly for use with
reference to such Underwriter in the Registration Statement or Prospectus or
arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such information
not misleading.
21
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such Person in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such Underwriter
or such Person shall promptly notify the Company in writing of the institution
of such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the omission
to so notify the Company shall not relieve the Company from any liability which
the Company may have to any Underwriter or any such Person or otherwise. Such
Underwriter or such controlling Person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such Person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such Proceeding or the Company shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in conflict
with those available to the Company (in which case the Company shall not have
the right to direct the defense of such Proceeding on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by the Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate counsel
(in addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). The Company shall not be liable for any
settlement of any such Proceeding effected without its written consent (which
shall not be unreasonably withheld) but if settled with the written consent of
the Company, the Company agrees to indemnify and hold harmless any Underwriter
and any such Person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 Business Days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers and any Person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and the successors and assigns of all of the foregoing Persons
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company or
any such Person may incur under the Securities Act, the Exchange Act, federal or
state statutory law or regulation, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information concerning such Underwriter furnished in writing
by or on behalf of such Underwriter through FBR to the Company expressly for use
with reference to such Underwriter in, the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such information
required to be stated therein or necessary to make the statement in such
Registration Statement or Prospectus, in the light of the circumstances under
which they were made, not misleading.
22
If any Proceeding is brought against the Company or any such Person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such Person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such Person or otherwise.
The Company or such Person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such Person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the defense of such
Proceeding or such Underwriter shall not have employed counsel to have charge of
the defense of such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties,
but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company and any such
Person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 Business Days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding.
23
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 or insufficient to hold an Indemnified Party harmless with respect to
any losses, damages, expenses, liabilities or claims referred to therein, then
in order to provide just and equitable contribution in such circumstance, each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, damages, expenses, liabilities or claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company 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 (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
respective proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and the total underwriting discounts and commissions received by
the Underwriters, bear to the aggregate public offering price of the shares. The
relative fault of the Company on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending any claim or
Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, no Underwriter shall be liable or responsible
for, or be required to contribute, any amount pursuant to this Section 9 in
excess of the amount of the underwriting discounts and commissions applicable to
the Shares purchased by such Underwriter. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, its directors and
officers or any Person (including each partner, officer or director of such
Person) who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, its directors or officers or any Person who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and shall survive any termination of this Agreement or the issuance and
delivery of the Shares. The Company and each Underwriter agree promptly to
notify each other upon the commencement of any Proceeding against it and, in the
case of the Company, against any of the Company's officers or directors in
connection with the issuance and sale of the Shares, or in connection with the
Registration Statement or the Prospectus.
24
10. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Friedman, Billings, Xxxxxx & Co., Inc., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
XX 00000 Attention: Xxx Xxxxxxxxx; and if to the Company, shall be sufficient in
all respects if delivered or sent to the Company at the offices of the Company
at 000 Xxxx Xxx., 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx
Xxxxx, Esq., Fax No. (000) 000-0000.
11. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement (a "Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in The City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against FBR or any indemnified party.
Each of FBR and the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) waives all right
to trial by jury in any action, proceeding or counterclaim (whether based upon
contract, tort or otherwise) in any way arising out of or relating to this
Agreement. The Company agrees that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and may be enforced in any other courts in the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
13. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company and, to the extent
provided in Section 9 hereof, the controlling Persons, directors and officers
referred to in such Section, and their respective successors, assigns, heirs,
personal representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
15. Successors and Assigns. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
25
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this Agreement and your acceptance shall constitute a binding
agreement among the Company and the Underwriters, severally.
Very truly yours,
MFA MORTGAGE INVESTMENTS, INC.
By /s/ Xxxxxxx Xxxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
Accepted and agreed to as of the date
first above written, on behalf of itself
and the other several Underwriters
named in Schedule A
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Managing Director
26
SCHEDULE A
Number of Number of
Underwriter Firm Shares Optional Shares
----------- ----------- ---------------
Friedman, Billings, Xxxxxx & Co., Inc. ...... 3,250,000 487,500
RBC Xxxx Xxxxxxxx Inc. ...................... 1,250,000 187,500
Flagstone Securities, LLC ................... 500,000 75,000
--------- ---------
Total .............................. 5,000,000 750,000
========= =========
Sch A
