EXHIBIT 1.15
CONTROLLED EQUITY OFFERING(SM)
SALES AGREEMENT
March 19, 2004
CANTOR XXXXXXXXXX & CO.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxxxxx Mortgage, Inc., a Maryland corporation (the "Company"),
confirms its agreement ("Agreement") with Cantor Xxxxxxxxxx & Co. ("CF&Co"), as
follows:
1. Issuance and Sale of Placement Shares. The Company agrees that, from
time to time during the term of this Agreement, on the terms and subject to the
conditions set forth herein, it will issue and sell through CF&Co, acting as
agent and/or principal, up to 10,000,000 shares (the "Placement Shares") of the
Company's common stock, par value $0.01 per share ("Common Stock"); provided,
however, that with respect to "At The Market" sales (as defined in Section 3
hereof), the aggregate sales price shall not exceed $233.7 million. The issuance
and sale of Placement Shares through CF&Co will be effected pursuant to a
registration statement on Form S-3 filed by the Company and declared effective
by the Securities and Exchange Commission (the "Commission").
2. Placements. Each time that the Company wishes to issue and sell
Placement Shares hereunder (each, a "Placement"), it will notify CF&Co of the
proposed terms of such Placement. If CF&Co wishes to accept such proposed terms
(which it may decline to do for any reason in its sole discretion) or, following
discussions with the Company, wishes to accept amended terms, CF&Co will, prior
to 4:30 p.m. (eastern time) on the Business Day following the Business Day on
which such notice is delivered to CF&Co, issue to the Company a written notice
setting forth the terms that CF&Co is willing to accept, including without
limitation the number of Placement Shares to be issued, the manner(s) in which
sales are to be made, the date or dates on which such sales are anticipated to
be made, any minimum price below which sales may not be made, and the capacity
in which CF&Co may act in selling Placement Shares hereunder (as principal,
agent or both) (a "Placement Notice"), the form of which is annexed hereto as
Schedule 1. The amount of any discount, commission or other compensation (other
than expenses pursuant to Section 7(h) hereunder) to be paid by the Company to
CF&Co for effecting sales hereunder shall be equal to (i) two percent (2%) of
the initial Fifteen Million Dollars ($15,000,000) of the gross proceeds with
respect to sales actually effected by CF&Co during any calendar month (the
"Monthly Sales Threshold") prior to the termination of this Agreement, plus (ii)
three percent (3%) of the gross proceeds in excess of the Monthly Sales
Threshold for sales actually effected by CF&Co during that same calendar month
prior to the termination of this Agreement. For the avoidance of doubt, the date
that any sale shall be deemed to have been effected for purposes of
determining whether the Monthly Sales Threshold has been achieved in any
calendar month and the corresponding, applicable discount to be applied pursuant
to the immediately preceding sentence (i.e. 2% or 3%) shall be conclusively
determined by the trade date set forth on the relevant confirmation sales
ticket, and such determination shall be final and binding upon the parties. The
terms set forth in a Placement Notice will not be binding on the Company or
CF&Co unless and until the Company delivers written notice of its acceptance of
all of the terms of such Placement Notice (an "Acceptance"), the form of which
is annexed hereto as Schedule 2; provided, however, that neither the Company nor
CF&Co will be bound by the terms of a Placement Notice unless the Company
delivers to CF&Co an Acceptance with respect thereto prior to 4:30 p.m. (eastern
time) on the Business Day following the Business Day on which such Placement
Notice is delivered to the Company. It is expressly acknowledged and agreed that
neither the Company nor CF&Co will have any obligation whatsoever with respect
to a Placement or any Placement Shares unless and until CF&Co delivers a
Placement Notice to the Company and the Company accepts such Placement Notice by
means of an Acceptance, and then only upon the terms specified therein and
herein. In the event of a conflict between the terms of this Agreement and the
terms of a Placement Notice, the terms of such Placement Notice will control.
3. Sale of Placement Shares by CF&Co. Subject to the terms and conditions
of this Agreement, upon the Acceptance of a Placement Notice, and unless the
sale of the Placement Shares described therein has been suspended or otherwise
terminated in accordance with the terms of this Agreement, CF&Co will use its
commercially reasonable efforts consistent with its normal trading and sales
practices to sell such Placement Shares up to the amount specified, and
otherwise in accordance with the terms of such Placement Notice. CF&Co will
provide written confirmation to the Company no later than the opening of the
Trading Day next following the Trading Day on which it has made sales of
Placement Shares hereunder setting forth the number of Placement Shares sold on
such day, the compensation payable by the Company to CF&Co with respect to such
sales, and the Net Proceeds (as defined in Section 5(a)) payable to the Company,
with an itemization of the deductions made by CF&Co (as set forth in Section
5(a)) from the gross proceeds that it receives from such sales. CF&Co may sell
any Placement Shares in privately negotiated transactions and/or any other
method permitted by law, including but not limited to sales at other than a
fixed price made on or through the facilities of the New York Stock Exchange
(the "NYSE"), the existing trading market for the Common Stock, or sales made to
or through a market maker or through an electronic communications network, or in
any other manner that may be deemed to be an "At The Market" offering as defined
in Rule 415 of the Securities Act of 1933, as amended (the "Act"). The Company
acknowledges and agrees that (i) there can be no assurance that CF&Co will be
successful in selling Placement Shares, and (ii) CF&Co will incur no liability
or obligation to the Company or any other person or entity if it does not sell
Placement Shares for any reason other than a failure by CF&Co to use its
commercially reasonable efforts consistent with its normal trading and sales
practices to sell such Placement Shares as required under this Section 3. For
the purposes hereof, "Trading Day" means any day on which Common Stock is
purchased and sold on the principal market on which the Common Stock is listed
or quoted.
4. Suspension of Sales. The Company or CF&Co may, upon notice to the other
party hereto in writing or by telephone (confirmed immediately by verifiable
facsimile transmission), suspend any sale of Placement Shares; provided,
however, that such suspension shall not affect or impair
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either party's obligations with respect to any Placement Shares sold hereunder
prior to the receipt of such notice. The Company agrees that no such notice
shall be effective against CF&Co unless it is made to one of the individuals
named on Schedule 3 annexed hereto, as such Schedule may be amended from time to
time. CF&Co agrees that no such notice shall be effective against the Company
unless it is made to one of the individuals named on Schedule 3 annexed hereto,
as such Schedule may be amended from time to time.
5. Settlement.
(a) Settlement of Placement Shares. Unless otherwise specified in
the applicable Placement Notice, settlement for sales of Placement Shares will
occur on the third (3rd) Business Day (or such earlier day as is industry
practice for regular-way trading) following the date on which such sales are
made (each a "Settlement Date"). The amount of proceeds to be delivered to the
Company on a Settlement Date against the receipt of the Placement Shares sold
("Net Proceeds") will be equal to the aggregate sales price at which such
Placement Shares were sold, after deduction by CF&Co for all (i) CF&Co's
commission, discount, or other compensation for such sales payable by the
Company pursuant to Section 2 hereof, (ii) any other amounts due and payable by
the Company to CF&Co hereunder pursuant to Section 7(h) hereof, and (iii) any
transaction fees imposed by any governmental or self-regulatory organization in
respect of such sales.
(b) Delivery of Placement Shares. On or before each Settlement
Date, the Company will, or will cause its transfer agent to, electronically
transfer the Placement Shares being sold by crediting CF&Co's or its designee's
account at The Depository Trust Company through its Deposit Withdrawal Agent
Commission System, or by such other means of delivery as may be mutually agreed
upon by the parties hereto, and, upon receipt of such Placement Shares, which in
all cases shall be freely tradeable, transferable, registered shares of Common
Stock in good deliverable form, CF&Co will cause the related Net Proceeds to be
delivered in same day funds to an account designated by the Company prior to the
Settlement Date. If the Company defaults in its obligation to deliver Placement
Shares on a Settlement Date, the Company agrees that in addition to and in no
way limiting the rights and obligations set forth in Section 9(a) hereto, it
will (i) hold CF&Co harmless against any loss, claim, damage, or expense
(including reasonable legal fees and expenses) of any nature whatsoever, as
incurred, arising out of or in connection with such default by the Company, and
(ii) immediately pay to CF&Co any commission, discount, or other compensation or
other amounts due and payable pursuant to Section 7(h) hereof to which it would
otherwise have been entitled absent such default.
6. Representations and Warranties of the Company. The Company and, where
applicable, the Manager (as defined herein), represent and warrant to, and agree
with, CF&Co that:
(a) The Common Stock is registered pursuant to Section 12(b) of
the Exchange Act (as hereinafter defined) and the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the Commission (the "Commission Documents") for at least two (2) years, and all
of such filings have been made on a timely basis. The Common Stock is currently
listed and quoted on the NYSE under the trading symbol "TMA". The Company meets
the requirements of Form S-3 under the Act and the rules and regulations
thereunder ("Rules and Regulations") including but not limited to the
transactions requirements for a primary offering. A registration statement on
Form S-3 (Registration No. 333-111784)
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with respect to the Placement Shares, as amended or supplemented (the
"Registration Statement"), including the form of prospectus contained therein,
as amended or supplemented (the "Prospectus"), has been prepared by the Company
in conformity with the requirements of the Act and the Rules and Regulations and
has been filed with the Commission and has been declared effective by the
Commission. The Company shall promptly prepare and file any amendment or
supplement to the Registration Statement or Prospectus required by this
Agreement or otherwise and the Company will use its best efforts to cause any
such amendment to become effective as soon as reasonably practicable. No stop
order suspending the effectiveness of the Registration Statement has been
issued, and no proceeding for that purpose has been instituted or threatened by
the Commission. Copies of all filings made by the Company under the Act and all
Commission Documents that were filed with the Commission on or prior to the date
of this Agreement which relate to the Registration Statement have been delivered
to CF&Co. 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 (or deemed to be incorporated) by reference therein, and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement or 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. The Prospectus
delivered to CF&Co for use in connection with this Agreement will be identical
to the version of the Prospectus created to be transmitted to the Commission for
filing via XXXXX, except to the extent permitted by Regulation S-T.
(b) Each part of the Registration Statement, when such part became
or becomes effective, and the Prospectus, on the date of filing thereof with the
Commission and at each Settlement Date, conformed or will conform with the
requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, 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; and the Prospectus, on the date of filing thereof with
the Commission and at each Settlement Date, 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 or omissions in any such document made in reliance on information
furnished to the Company by CF&Co specifically stating that it is intended for
use in the Registration Statement, the Prospectus, or any amendment or
supplement thereto.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, when they
became or become effective under the Act or were or are filed with the
Commission under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as the case may be, conformed or will conform with the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained or will contain an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and any further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such documents
become effective or are filed with the Commission, as the case may be, will
conform to the requirements of the Act or the Exchange Act, as applicable, and
the rules and
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regulations of the Commission thereunder and 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;
except that the foregoing will not apply to statements or omissions in any such
document made in reliance on information furnished to the Company by CF&Co
specifically stating that it is intended for use in any such document.
(d) The consolidated financial statements of the Company and the
Subsidiaries (as defined below), together with the related schedules and notes
thereto, set forth or included or incorporated by reference in the Registration
Statement and Prospectus fairly present the financial condition of the Company
and the Subsidiaries as of the dates indicated and the results of operations,
changes in financial position, shareholders' 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 Subsidiaries, 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. 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 Act that are not so set forth or
incorporated by reference therein.
(e) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of Maryland with
full corporate power and authority necessary to own, hold, lease and/or operate
its assets and properties and to conduct the business in which it is engaged and
as described in the Registration Statement and Prospectus; and the Company is
duly qualified as a foreign entity to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where
the failure, individually or in the aggregate, to be so qualified and be in good
standing would not have a material adverse effect on (i) the consolidated
business, operations, properties, financial condition, reputation, prospects or
results of operations of the Company and the Subsidiaries (as defined herein)
and the Trust (as defined herein) taken as a whole, (ii) the transactions
contemplated hereby, (iii) the shares of Common Stock, including the Placement
Shares, or (iv) the ability of the Company to perform its obligations under this
Agreement (collectively, a "Material Adverse Effect"). The Company has full
corporate power and authority necessary to enter into and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The Company is in compliance in all material respects with the laws,
orders, rules, regulations and directives applicable to it. Complete and correct
copies of the articles of incorporation and of the bylaws of the Company and all
amendments thereto have been delivered to CF&Co.
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(f) (1) The Company has no "subsidiaries" (as such term is defined
in Rule 1-02 of Regulation S-X promulgated under the Act) other than Xxxxxxxxx
Mortgage Funding Corporation ("Funding I"), Xxxxxxxxx Mortgage Acceptance
Corporation ("Acceptance I"), Xxxxxxxxx Mortgage Home Loans, Inc. ("TMHL"),
Xxxxxxxxx Mortgage Funding Corporation II ("Funding II") and Xxxxxxxxx Mortgage
Acceptance Corporation II ("Acceptance II") (each a "Subsidiary" and,
collectively, the "Subsidiaries"). Each of the Subsidiaries has been duly formed
and incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware, 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, 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 Prospectus and to enter
into and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. Each of the Subsidiaries is in compliance in
all material respects with the laws, orders, rules, regulations and directives
applicable to it. Complete and correct copies of the certificates of
incorporation and of the bylaws of the Subsidiaries and all amendments thereto
have been delivered to CF&Co.
(2) Other than the Subsidiaries, the Company 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. All of the outstanding
shares of capital stock of each of the Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable, and are wholly owned by
the Company, directly or through TMHL, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or other equity or adverse claims.
The Company directly owns 100% of each of Funding I, Acceptance I and TMHL.
Funding II and Acceptance II are wholly owned by TMHL. 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.
(3) Xxxxxxxxx Mortgage Advisory Corporation (the "Manager")
has been duly formed and incorporated and is validly existing as a corporation
in good standing under the laws of the State of Delaware, 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 Manager, 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 Prospectus, and the Manager is in compliance in all material
respects with the laws, orders, rules, regulations and directives issued or
administered by such jurisdictions. Complete and correct copies of the
certificate of incorporation and of the bylaws of the Manager and all amendments
thereto have been delivered to CF&Co. The Manager has no "subsidiaries" (as such
term is defined in Rule 1-02 of Regulation S-X promulgated under the Act).
(4) TMA Mortgage Funding Trust II (the "Trust") has been duly
formed and is validly existing as a business trust under the Delaware Statutory
Trust Act, in good standing under the laws of Delaware, with full authority to
perform all functions (i) which business trusts
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are authorized to perform and (ii) which are described in the Prospectus. The
trustee for the Trust is the Wilmington Trust Company.
(g) 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.
(h) The Company has an authorized capitalization as set forth in
its Annual Report on Form 10-K for the year ending December 31, 2003, as amended
(the "2003 Form 10-K"), and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable and have been issued in compliance with all applicable federal
and state securities laws. The capital stock of the Company conforms in all
material respects to the description thereof contained in the Registration
Statement and Prospectus and such description conforms to the rights set forth
in the instruments defining the same.
(i) The Placement Shares have been duly authorized and, when
issued, delivered and paid for pursuant to this Agreement, will be validly
issued and fully paid and non-assessable, free and clear of all liens, charges,
claims, security interests or encumbrances (collectively "Encumbrances") and
will be issued in compliance with all applicable federal and state securities
laws; the Placement Shares conform to the description thereof contained in the
Registration Statement and the Prospectus. The certificates for the Placement
Shares shall be in due and proper form and the holders of the Placement Shares
will not be subject to personal liability by reason of being such holders.
Neither the stockholders of the Company, nor any other person or entity have any
preemptive rights or anti-dilution rights or rights of first refusal or first
offer or any similar rights (whether pursuant to a so-called "poison pill"
provision or otherwise) with respect to the Placement Shares or other rights to
purchase or receive any of the Placement Shares or any other securities or
assets of the Company, except as set forth in Exhibit 6(i); and no person has
the right, contractual or otherwise, to cause the Company to issue to it, or
register pursuant to the Act, any shares of capital stock or other securities or
assets of the Company upon the issuance or sale of the Placement Shares, except
under the Company's Amended and Restated 2002 Long-Term Incentive Plan or its
Dividend Reinvestment and Stock Purchase Plan (collectively, the "Stock Plans").
(j) All necessary action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of this Agreement.
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 Placement
Shares or the consummation by the Company of the transaction contemplated hereby
other than (i) registration of the Placement Shares under the Act, (ii) any
necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Placement Shares are being offered, or (iii) such
approvals as shall be obtained in connection with the approval of the listing of
the Placement Shares on the NYSE.
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(k) Neither the Company, any of the Subsidiaries, the Trust nor
the Manager is in breach of, or in default under (nor has any event occurred
which with notice, lapse of time or both would result in any breach of, or
constitute a default under), (i) their respective charters, bylaws or
organizational documents, as the case may be, or (ii) any obligation, agreement,
covenant or condition contained in any contract, license, repurchase agreement,
management agreement, indenture, mortgage, deed of trust, bank loan or credit
agreement, note, lease or other evidence of indebtedness, or any lease, contract
or other agreement or instrument to which the Company, any of the Subsidiaries,
the Trust or the Manager is a party or by which the Company, the Subsidiaries,
the Trust, the Manager or any of their respective assets or properties may be
bound or affected. To the knowledge of the Company and the Manager, no other
party under any contract or other agreement to which the Company or any of the
Subsidiaries is a party is in default in any respect thereunder. The execution,
delivery and performance of this Agreement, the issuance and sale of the
Placement Shares and the consummation of the transactions contemplated hereby
will not conflict with, or result in any breach of or constitute a default under
(nor constitute any event which with notice, lapse of time or both would result
in any breach of, or constitute a default under), (i) any provision of the
charter, bylaws or organizational documents, as the case may be, of the Company,
any of the Subsidiaries, the Trust or the Manager, (ii) any provision of any
contract, license, repurchase agreement, management agreement, indenture,
mortgage, deed of trust, bank loan or credit agreement, note, lease or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company, any of the Subsidiaries, the Trust or the
Manager is a party or by which the Company, any of the Subsidiaries, the Trust
or the Manager, or any of their respective assets or properties may be bound or
affected, or, with respect to the Manager, which would have a material adverse
effect on the ability of the Manager to perform its obligations under the
Management Agreement (as defined below) or (iii) any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or any of the Subsidiaries. Neither the Company, any of the
Subsidiaries, the Trust nor the Manager has, at any time during the past five
years, (i) made any unlawful contributions to any candidate for any political
office or failed fully to disclose any contribution in violation of law, or (ii)
made any payment to any state, federal or foreign government official or other
person charged with similar public or quasi-public duty (other than payment
required or permitted by applicable law).
(l) Executing and delivering this Agreement and the issuance and
sale of the Placement Shares and the compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions
contemplated herein will not result in the creation of any Encumbrance upon any
assets of the Company or of any of the Subsidiaries or the triggering of any
preemptive or anti-dilution rights or rights of first refusal or first offer, or
any similar rights (whether pursuant to a so-called "poison pill" provision or
otherwise), on the part of holders of the Company's securities or any other
person. Neither the Company nor any of the Subsidiaries, nor any person acting
on its or their behalf, has issued or sold any shares of Common Stock or
securities or instruments convertible into, exchangeable for and/or otherwise
entitling the holder thereof to acquire shares of Common Stock which would be
integrated with the offer and sale of the Placement Shares hereunder, including,
without limitation, for purposes of any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of
any exchange or automated quotation system on which any of the securities of the
Company are listed or designated.
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(m) PricewaterhouseCoopers LLP ("PWC"), whose report on the
consolidated financial statements of the Company is filed with the Commission as
part of the Registration Statement and the Prospectus, are and, during the
periods covered by their report, were independent public accountants as required
by the Act. PWC is not in violation of the auditor independence requirements of
the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act") with respect to the
Company.
(n) Each of the Company, the Subsidiaries, the Trust and the
Manager has all necessary licenses, permits, 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 (as defined
below), in order to conduct its business as described in the Prospectus, except
where the failure to obtain such licenses, permits, authorizations, consents and
approvals would not have a Material Adverse Effect. Each of the Company, the
Subsidiaries, the Trust and the Manager has obtained all accreditation or
certification required by any applicable law 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. Neither
the Company, any of the Subsidiaries, the Trust nor the Manager 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, any of the Subsidiaries,
the Trust or the Manager, except where any such violation or default would not
have a Material Adverse Effect.
(o) The descriptions in the Registration Statement and the
Prospectus of the legal or governmental proceedings, contracts, leases and other
legal documents therein described present fairly the information required to be
shown, and there are no legal or governmental proceedings, 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, any of the Subsidiaries, the Trust or the Manager, as the case may
be, and third parties expressly referenced in the Prospectus are legal, valid
and binding obligations of the Company, the Subsidiaries, the Trust or the
Manager, as the case may be, 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.
(p) There are no actions, suits, claims, investigations, inquiries
or proceedings pending or, to the Company's knowledge, threatened to which the
Company, any of the Subsidiaries, the Trust or the Manager or any of their
respective officers or directors is a party or of which the properties or other
assets of any such entity 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.
(q) During the period of at least the last 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 period of at least
the last 36 calendar months preceding the filing of the Registration Statement,
the Company has 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
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Company's voting stock held by nonaffiliates of the Company was equal to or
greater than $150 million.
(r) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has been no
event which would result in a Material Adverse Effect. Subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus and during the time that a prospectus relating to the
Placement Shares is required to be delivered under the Act, there shall not be
(i) any transaction which is material to the Company, the Subsidiaries and the
Trust, except transactions in the ordinary course of business, (ii) any
obligation, direct or contingent, which is material to the Company, the
Subsidiaries and the Trust taken as a whole, incurred by the Company, the
Subsidiaries or the Trust, except obligations incurred in the ordinary course of
business, or (iii) except for regular quarterly dividends on the Common Stock in
amounts per share that are consistent with past practice, any dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock. Neither the Company, any of the Subsidiaries nor the Trust
has any material contingent obligation which is not disclosed in the
Registration Statement or Prospectus.
(s) There are no persons (as such term is defined in Rule 1-02 of
Regulation S-X promulgated under the Act) ("Persons") with registration or other
similar rights to have any equity or debt securities, including securities which
are convertible into or exchangeable for equity securities, registered pursuant
to the Registration Statement or otherwise registered by the Company under the
Act.
(t) Neither the Company nor any of the Subsidiaries nor the Trust
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 on the financial position of the Company or any of the
Subsidiaries. Since it first became a publicly-registered entity, the Company
has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act
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 on the financial
position of the Company or any of the Subsidiaries.
(u) Each of the Company, the Subsidiaries, the Trust, the Manager
and each of their respective officers, directors and controlling Persons has
not, directly or indirectly, taken any action designed to cause or to result in,
or that has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock.
(v) The Placement Shares will be approved prior to their issuance
for listing on the NYSE, subject to official notice of issuance.
(w) Except for Xxxxxxxxx Securities Corporation which shall in no
way participate in the sale of Placement Shares, neither the Company nor any of
the Subsidiaries, the Trust or related entities (including the Manager) (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
10
of the Bylaws of the National Association of Securities Dealers ("NASD")) any
member firm of the NASD.
(x) As of the date of this Agreement, the investment portfolio
(other than cash and cash equivalents) of the Company consists of adjustable and
variable-rate mortgage securities and adjustable and variable-rate mortgage
loans. As of the date of this Agreement, the derivative financial instruments
held by the Company consist solely of interest rate cap agreements, eurodollar
futures contracts and interest rate swap agreements. 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 2003 Form 10-K,
including making any change to any stated investment percentages or guidelines
or the stated equity-to-assets ratio currently employed by the Company, the
Subsidiaries and the Trust. The Company, the Subsidiaries and the Trust have
good and marketable title to all properties and assets owned, directly or
indirectly, by the Company, the Subsidiaries and the Trust, in each case free
and clear of any security interests, liens, encumbrances, equities, claims and
other defects (except for any security interest, lien, encumbrance or claim that
may otherwise exist under any applicable repurchase agreement), except such as
do not interfere with the use made or proposed to be made of such property or
asset by the Company, the Subsidiaries and the Trust. Except for real estate
properties owned by the Company as a result of foreclosure on delinquent loans,
if any, the Company, the Subsidiaries and the Trust do not own any real
property. Any real property and buildings held under lease by the Company, the
Subsidiaries and the Trust are held under valid, existing and enforceable
leases, with such exceptions as are disclosed in the Prospectus or are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company and the Subsidiaries.
(y) Each of the Company, the Subsidiaries and the Trust has filed
all federal, state and foreign income and franchise tax returns required to be
filed on or prior to the date hereof and has paid taxes shown as due thereon (or
that are otherwise due and payable), other than taxes which are being contested
in good faith and for which adequate reserves have been established in
accordance with generally accepted accounting principles. Neither the Company
nor the Manager has knowledge, after due inquiry, of any tax deficiency which
has been asserted or threatened against the Company, any of the Subsidiaries or
the Trust. To the knowledge of the Company and the Manager, there are no tax
returns of the Company, the Subsidiaries or the Trust that are currently being
audited by federal, state or local taxing authorities or agencies which would
have a Material Adverse Effect.
(z) Each of the Company, the Subsidiaries and the Trust 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 intellectual property rights and
know-how (collectively, "Intangibles") necessary to entitle the Company, the
Subsidiaries and the Trust to conduct their business as described in the
Prospectus, and the Company, the Subsidiaries and the Trust have not received
notice of infringement of or conflict with (and the Company 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.
(aa) TMHL owns or possesses adequate and validly issued licenses,
or is otherwise authorized by law, to originate loans as a mortgage lender in
all states in which TMHL has
11
originated or is currently originating loans. As of the date of this Agreement,
TMHL is licensed, or is otherwise authorized by law, to originate loans in each
of the jurisdictions set forth on Schedule G annexed thereto. To the knowledge
of the Company and the Manager, all third-party service providers used,
employed, hired or otherwise contracted with by the Company or any of the
Subsidiaries have obtained all necessary licenses or other relevant
authorization to do business in all jurisdictions in which such third-party
service providers do business on behalf of the Company or the Subsidiaries.
(bb) Each of the Company, the Subsidiaries, the Trust and the
Manager 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.
(cc) Each of the Company, the Subsidiaries and the Trust is insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the business in which it is
engaged, including, but not limited to, directors' and officers' insurance and
insurance covering real and personal property owned or leased by the Company,
the Subsidiaries and the Trust against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect. Neither the Company, any of the
Subsidiaries, the Trust nor the Manager has been refused any insurance coverage
which has been sought and applied for and the Company has no reason to believe
that such parties will not be able to renew their existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue their business at a cost that would not
have a Material Adverse Effect.
(dd) Neither the Company, any of the Subsidiaries, the Trust nor
the Manager is in violation of, and none has received notice of any violation
with respect to, any applicable local, state or federal environmental, safety or
similar law applicable to the business of the Company, the Subsidiaries and the
Trust. Each of the Company, the Subsidiaries, the Trust and the Manager has
received all permits, licenses or other approvals required of it under
applicable federal and state occupational safety and health and environmental
laws and regulations to conduct its business, and each of the Company, the
Subsidiaries, the Trust and the Manager is in compliance with all terms and
conditions of any such permit, license or approval, except where 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 would not, singly or in the aggregate, have a
Material Adverse Effect.
(ee) Neither the Company nor any of the Subsidiaries or the Trust
has 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 CF&Co pursuant to this Agreement.
12
(ff) There are no existing or, to the Company's knowledge,
threatened labor disputes with the employees of the Company, any of the
Subsidiaries or the Manager which are likely to have individually or in the
aggregate a Material Adverse Effect.
(gg) Neither the Company nor any of the Subsidiaries or the Trust
nor, to the knowledge of the Company, any employee or agent of the Company, the
Subsidiaries or the Trust, has made any payment of funds of the Company or any
of the Subsidiaries or the Trust 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, any of the Subsidiaries, the Trust or the Manager, on the one hand, and
the directors, officers and stockholders of the Company, any of the
Subsidiaries, the Trust or the Manager, on the other hand, which is required by
the Act to be described in the Registration Statement and the Prospectus that is
not so described.
(hh) The Company, for all taxable years commencing with the taxable
year ended December 31, 1993, and each of the Subsidiaries, since its respective
date of inception, have been, and upon the sale of the Placement Shares will
continue to be, organized and operated in conformity with the requirements for
qualification and taxation of the Company as a "real estate investment trust"
("REIT") under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended (the "Code"). The proposed method of operation of the Company, each of
the Subsidiaries and the Trust 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.
(ii) Neither the Company, the Subsidiaries nor the Trust is, and,
after giving effect to the offering and sale of the Placement 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").
(jj) The Manager has full legal right, power and authority to
perform its duties in accordance with and under the Management Agreement, dated
July 15, 1999, between the Company and the Manager, as amended on October 17,
2000 (the "Management Agreement"), and to consummate the transactions
contemplated therein. The Management Agreement has been duly authorized,
executed and delivered by the Manager and constitutes a valid and binding
agreement of the Manager, enforceable in accordance with its terms, except to
the extent that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general equitable principles. To the knowledge of the Company, there is
no breach of, or default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of, or default under), the
Management Agreement by the Manager.
(kk) No relationship, direct or indirect, exists between or among
the Company, any of the Subsidiaries, the Trust or the Manager, on the one hand,
and the directors, officers, stockholders or trustees of the Company, any of the
Subsidiaries, the Trust or the Manager, on
13
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 any
of the Subsidiaries or the Trust to or for the benefit of any of the officers or
directors of the Company, any of the Subsidiaries or the Manager or any of the
members of the families of any of them.
(ll) No forward looking statement within the meaning of Section 27A
of the Act and Section 21E of the Exchange Act contained in the Commission
Documents or Registration Statement has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
(mm) On each Settlement Date and each Filing Date (as defined in
Section 7(m) below), the Company shall be deemed to have confirmed (i) the
accuracy and completeness, as of such date, of each representation and warranty
made by it in this Agreement, as if each such representation and warranty were
made on and as of such date, and (ii) that the Company has complied with all of
the agreements to be performed by it hereunder at or prior to such date.
(nn) The Company is in compliance with applicable provisions of the
Xxxxxxxx-Xxxxx Act that are effective 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.
(oo) The Company, the Subsidiaries and the Trust are in compliance
in all material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"). No "reportable
event" (as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company, the Subsidiaries and the Trust would
have any liability. The Company, the Subsidiaries and the Trust have not
incurred and do not expect to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Code. Each "pension plan" for which the Company, the
Subsidiaries or the Trust would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
7. Covenants of the Company. The Company covenants and agrees with CF&Co
that:
(a) During any period in which either a Placement Notice is in
effect or a prospectus relating to the Placement Shares is required to be
delivered by CF&Co under the Act, the Company will notify CF&Co (i) before the
filing of any subsequent amendment to the Registration Statement with the
Commission or any subsequent supplement to the Prospectus, and (ii) of any
request by the Commission for any amendment or supplement to the Registration
Statement or Prospectus or for additional information with respect thereto; the
Company will prepare and file with the Commission, promptly upon CF&Co's
request, any amendments or supplements to the Registration Statement or
Prospectus that, in CF&Co's and the Company's reasonable opinion, may be
necessary or advisable in connection with the distribution of the Placement
Shares by CF&Co (provided, however that the failure of CF&Co to make such
request shall not relieve the Company of any obligation or liability hereunder,
or affect CF&Co's
14
right to rely on the representations and warranties made by the Company in this
Agreement); the Company shall furnish CF&Co with a copy of any amendment or
supplement to the Registration Statement or Prospectus relating to the Placement
Shares a reasonable period of time before the filing thereof and shall not file
any such amendment or supplement to the Registration Statement or Prospectus if
CF&Co has reasonably objected thereto (provided, however that the failure of
CF&Co to make such objection shall not relieve the Company of any obligation or
liability hereunder, or affect CF&Co's right to rely on the representations and
warranties made by the Company in this Agreement), unless the Company reasonably
objects thereto; the Company will furnish to CF&Co at the time of filing thereof
a copy of any document that upon filing is deemed to be incorporated by
reference in the Registration Statement or Prospectus; and the Company will
cause each amendment or supplement to the Prospectus to be filed with the
Commission as required pursuant to the applicable paragraph of Rule 424(b) of
the Rules and Regulations or, in the case of any document to be incorporated
therein by reference, to be filed with the Commission as required pursuant to
the Exchange Act, within the time period prescribed (the determination to file
or not file any amendment or supplement with the Commission under this Section
7(a), based on the Company's reasonable opinion or reasonable objection, shall
be made exclusively by the Company).
(b) The Company will advise CF&Co, promptly after it receives
notice or obtains knowledge thereof, of the issuance or threatened issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the Placement
Shares for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose; and it will promptly use its
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such a stop order should be issued.
(c) During the time in which either a Placement Notice is in
effect or a prospectus relating to the Placement Shares is required to be
delivered by CF&Co under the Act, the Company will comply with all requirements
imposed upon it by the Act and by the Rules and Regulations, as from time to
time in force, and will file on or before their respective due dates all reports
and any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any
other provision of or under the Exchange Act. If during such period any event
occurs as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the Act, the
Company will promptly notify CF&Co to suspend the offering of Placement Shares
during such period and the Company will promptly amend or supplement the
Registration Statement or Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance.
(d) The Company will use its best efforts to cause the Placement
Shares to be listed on the NYSE and to qualify the Placement Shares for sale
under the securities laws of such jurisdictions as CF&Co designates and to
continue such qualifications in effect so long as required for the distribution
of the Placement Shares; provided that the Company shall not be required in
connection therewith to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction.
15
(e) The Company will furnish to CF&Co and its counsel (at the
expense of the Company) copies of the Registration Statement, the Prospectus
(including all documents incorporated by reference therein) and all amendments
and supplements to the Registration Statement or Prospectus that are filed with
the Commission during the period in which either a Placement Notice is in effect
or a prospectus relating to the Placement Shares is required to be delivered
under the Act (including all documents filed with the Commission during such
period that are deemed to be incorporated by reference therein), in each case as
soon as reasonably practicable and in such quantities as CF&Co may from time to
time reasonably request and, at CF&Co's request, will also furnish copies of the
Prospectus to each exchange or market on which sales of Placement Shares may be
made.
(f) The Company will furnish to CF&Co such information as
reasonably requested by CF&Co regarding the Company, any of its Subsidiaries,
the Trust or the Manager during the term of this Agreement and for a period of
one year after the termination of this Agreement.
(g) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15 months after
the end of the Company's current fiscal quarter, an earnings statement covering
a 12-month period that satisfies the provisions of Section 11(a) of the Act and
Rule 158 of the Rules and Regulations.
(h) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated in accordance with
Section 11 of this Agreement, will pay all expenses incident to the performance
of its obligations hereunder, including, but not limited to, expenses relating
to (i) the preparation, printing and filing of the Registration Statement and
each amendment and supplement thereto, of each Prospectus and of each amendment
and supplement thereto, (ii) the preparation, issuance and delivery of the
Placement Shares, (iii) the fees and disbursements of the Company's counsel and
accountants, (iv) the qualification of the Placement Shares under securities
laws in accordance with the provisions of Section 7(d) of this Agreement,
including filing fees and any reasonable fees or disbursements of counsel for
CF&Co in connection therewith, (v) the printing and delivery to CF&Co of copies
of the Prospectus and any amendments or supplements thereto, and of this
Agreement, (vi) the fees and expenses incurred in connection with the listing or
qualification of the Placement Shares for trading on the NYSE, or (vii) filing
fees and expenses, if any, of the Commission and the NASD Corporate Finance
Department. Each party hereto shall be responsible for its own costs and
expenses incurred in connection with entering into this Agreement; provided,
however, in the event and to the extent that subsequent to the execution hereof,
CF&Co is required, directly or through any of its agents (including but not
limited to its legal counsel), to undertake any actions, prepare any documents
or review any materials in connection with this Agreement and the transactions
contemplated hereunder in a manner that is beyond the reasonably contemplated
scope of CF&Co's engagement hereunder in terms of time, effort or expense, then
the Company agrees that CF&Co shall be entitled to reimbursement hereunder for
such reasonable legal and accounting costs and expenses with respect thereto no
later than seven (7) Business Days (as that term is defined in Section 12 below)
after CF&Co's request therefor and upon the review and approval by the Company
of an invoice submitted to it by CF&Co detailing such costs and expenses. For
the avoidance of doubt, the parties hereto expressly agree that the review of
the Registration Statement and Prospectus, the deliveries made pursuant to
Sections 7(a), (o) and (p) hereof, any Placement Notice or Acceptance, and any
filing made on Filing Dates as defined in
16
Section 7(m) below will be considered to be within the reasonably contemplated
scope of CF&Co's engagement hereunder and that CF&Co shall not be entitled to
reimbursement by the Company hereunder with respect to any fees and expenses
relating thereto, including but not limited to those of its agents (including
its legal counsel and accountants); provided that the review of any such filing
or document containing disclosures out of the ordinary course of business of the
Company consistent with past practice shall be deemed to be beyond the
contemplated scope of CF&Co's engagement, in which case CF&Co shall be entitled
to reimbursement for reasonable legal and accounting expenses with respect to
the review of such filings and documents that are incurred by it or on its
behalf in the review of such filings.
(i) The Company will use the Net Proceeds as described in the
Prospectus and, in any case, for general corporate purposes only, in the
ordinary course of its business and consistent with past practice and, without
limiting the generality of the foregoing, shall not use such proceeds to make a
loan to any employee, officer, director or stockholder of the Company (other
than loans made to new employees as a condition of employment or to existing
employees as part of the Company's ongoing employee loan program), to repay any
loan or other obligation of the Company to any such person or to repurchase or
pay a dividend on shares of Common Stock or other securities of the Company (in
any such case, regardless of whether such loan or payment was authorized by the
Company's Board of Directors prior to the date hereof).
(j) Without the written consent of CF&Co, the Company will not,
directly or indirectly, offer to sell, sell, contract to sell, grant any option
to sell or otherwise dispose of any shares of Common Stock (other than the
Placement Shares offered pursuant to the provisions of this Agreement) or
securities convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire, Common Stock during the period beginning on the
fifth (5th) Trading Day immediately prior to the date on which any Acceptance of
a Placement Notice is delivered to CF&Co hereunder and ending on the fifth (5th)
Trading Day immediately following the final Settlement Date with respect to
Placement Shares sold pursuant to such Placement Notice; provided, however, that
such restriction will not be required in connection with the Company's issuance
or sale of (i) Common Stock, options to purchase shares of Common Stock or
Common Stock issuable upon the exercise of options, pursuant to any employee or
director stock option or benefits plan or the Stock Plans, excluding sales of
shares of Common Stock in excess of approved limits in the Stock Plans, and (ii)
Common Stock issuable upon conversion of securities or the exercise of warrants,
options or other rights in effect or outstanding, and disclosed in writing to
CF&Co.
(k) The Company will, at any time during the term of this
Agreement, as supplemented from time to time, advise CF&Co immediately after it
shall have received notice or obtained knowledge thereof, of any information or
fact that would alter or affect any opinion, certificate, letter or other
document provided to CF&Co pursuant to this Agreement.
(l) The Company will cooperate with any due diligence review
conducted by CF&Co or its agents, including, without limitation, providing
information and making available documents and senior corporate officers, as
CF&Co may reasonably request; provided, however, that the Company shall be
required to make available documents and senior corporate officers only (i) at
the Company's principal offices and (ii) during the Company's ordinary business
hours.
17
(m) The Company agrees that on or prior to the first Business Day
after the end of each calendar week during which sales of Placement Shares were
made by CF&Co in other than At The Market transactions (each such week, a
"Reporting Period") or on such earlier date as may be required by the Rules and
Regulations, the Company will, if necessary, (i) file a prospectus supplement
with the Commission under the applicable paragraph of Rule 424(b) under the Act
(each and every filing under Rule 424(b) a "Filing Date"), which prospectus
supplement will set forth, with regard to such sales, the dates included within
the Reporting Period, the amount of Placement Shares sold through CF&Co, the Net
Proceeds to the Company and the compensation payable by the Company to CF&Co and
(ii) deliver such number of copies of each such prospectus supplement to each
exchange or market on which such sales were effected as may be required by the
rules or regulations of such exchange or market.
(n) [Intentionally Omitted].
(o) Upon the signing of this Agreement and each time thereafter
that the Registration Statement is amended or the Prospectus is supplemented,
whether by way of any document or filing being incorporated by reference
therein, including any proxy and information statements subject to Section 14 of
the Exchange Act, and any Reports on Form 10-K, Form 10-Q and Form 8-K (but
excluding (i) matters reported solely under Item 9 and Item 12 of Form 8-K, (ii)
any supplement solely containing information provided by CF&Co pursuant to
Section 7(m) hereof, and (iii) any amendment to the Registration Statement or
supplement to the Prospectus directly relating to an offer and sale other than
the offer and sale of Placement Shares hereunder), the Company shall cause to be
furnished to CF&Co and to counsel to CF&Co a written opinion of Dechert LLP,
counsel to the Company ("Company Counsel"), no later than the trade date of the
first Placement under this Agreement for the first such opinion (the "Initial
Opinion") in the form annexed hereto as Exhibit 7(o)(A) and, for subsequent
opinions, no later than two (2) Business Days after the date of effectiveness of
the amendment or the date of filing of the supplement or other document with the
Commission, as the case may be, in the form annexed hereto as Exhibit 7(o)(B)
and dated the date of effectiveness or filing of such document, as the case may
be. The Initial Opinion shall satisfy the opinion requirements that would
otherwise be triggered by the filing of this Agreement on Form 8-K and the
filing of the related final Prospectus under Rule 424(b).
(p) Upon the signing of this Agreement and each time thereafter
that the Registration Statement is amended or the Prospectus relating to the
Placement Shares supplemented to include additional or amended financial
information or there is filed with the Commission any Report on Form 10-K,
Report on Form 10-Q or Report on Form 8-K or any other filing or document
incorporated by reference into the Prospectus relating to the Placement Shares
which contains additional or amended financial information (but excluding any
amendment to the Registration Statement or supplement to the Prospectus directly
relating to an offer and sale other than the offer and sale of Placement Shares
hereunder), the Company shall cause its independent accountants, to furnish to
CF&Co and to counsel of CF&Co a letter (the "Comfort Letter"), no later than the
trade date of the first Placement under this Agreement for the first such letter
(the "Initial Comfort Letter") and for each subsequent letter, no later than two
(2) Business Days after the date of effectiveness of the amendment or the date
of filing of the supplement or other document with the Commission, as the case
may be, and dated the date of effectiveness or filing of such document, as the
case may be, in form and substance satisfactory to CF&Co, (i)
18
confirming that they are independent public accountants within the meaning of
the Act and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of such date, the conclusions and findings of such
firm with respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection with
registered public offerings and (iii) updating the Initial Comfort Letter with
any information which would have been included in the Initial Comfort Letter had
it been given on such date and modified as necessary to relate to the
Registration Statement and the Prospectus, as amended and supplemented to the
date of such letter.
(q) The Company will not, directly or indirectly, (i) take any
action designed to cause or result in, or that constitutes or might reasonably
be expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Placement Shares
or (ii) sell, bid for, or purchase the Placement Shares, or pay anyone any
compensation for soliciting purchases of the Placement Shares other than CF&Co.
The Company acknowledges and agrees that CF&Co has informed the Company that
CF&Co may, to the extent permitted under the Act, the Exchange Act and the rules
of the New York Stock Exchange, purchase and sell shares of Common Stock for its
own account at the same time as Placement Shares are being sold by the Company
pursuant to this Agreement, provided that the Company shall not be deemed to
have authorized or consented to any such purchases or sales by CF&Co.
(r) The Company, the Subsidiaries and the Trust 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, the Subsidiaries and the Trust, (iii) access to the assets of the
Company, the Subsidiaries and the Trust is permitted only in accordance with
management's authorization, and (iv) the recorded accounts of the assets of the
Company, the Subsidiaries and the Trust are compared with existing assets at
reasonable intervals. The Company, the Subsidiaries and the Trust 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 Principal 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, the Subsidiaries and the Trust is made known to them by others
within those entities, particularly during the period in which such periodic
reports are being prepared. The Company, the Subsidiaries and the Trust will
comply with all effective applicable provisions of the Xxxxxxxx-Xxxxx Act.
19
8. Conditions to CF&Co's Obligations. The obligations of CF&Co hereunder
with respect to a Placement will be subject to the continuing accuracy and
completeness of the representations and warranties made by the Company herein,
to the due performance by the Company of its obligations hereunder, to the
completion by CF&Co of a due diligence review satisfactory to CF&Co in its
reasonable judgment, and to the continuing satisfaction (or waiver by CF&Co in
its sole discretion) of the following additional conditions:
(a) The Registration Statement shall be effective and shall be
available for the sale of (i) all Placement Shares issued pursuant to all prior
Placements and not yet sold by CF&Co and (ii) all Placement Shares contemplated
to be issued by the Placement Notice relating to such Placement.
(b) None of the following events shall have occurred: (i) receipt
by the Company of any request for additional information from the Commission or
any other federal or state governmental authority during the period of
effectiveness of the Registration Statement, the response to which would require
any amendments or supplements to the Registration Statement or the Prospectus;
(ii) the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; (iii) receipt
by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Placement Shares for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and (iv) the occurrence of any event that makes any statement made
in the Registration Statement or the Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(c) CF&Co shall not have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact that in CF&Co's opinion is material, or omits to state
a fact that in CF&Co's opinion is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(d) Except as contemplated in the Prospectus, or disclosed in the
Company's reports filed with the Commission prior to the date of this Agreement,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus and during the time that a prospectus
relating to the Placement Shares is required to be delivered under the Act,
there shall not have been any material adverse change, on a consolidated basis,
in the authorized capital stock of the Company and the Subsidiaries, or any
Material Adverse Effect, or any development that may reasonably be expected to
cause a Material Adverse Effect, or a downgrading in or withdrawal of the rating
assigned to any of the Company's securities by any rating organization or a
public announcement by any rating organization that it has under surveillance or
review its rating of any of the Company's securities, the effect of which, in
the case of any such action by a rating organization described above, in the
sole judgment of CF&Co
20
(without relieving the Company of any obligation or liability it may otherwise
have), is so material as to make it impracticable or inadvisable to proceed with
the offering of the Placement Shares on the terms and in the manner contemplated
in the Prospectus.
(e) CF&Co shall have received the opinion of Company Counsel
required to be delivered pursuant to Section 7(o) on or before the date on which
delivery of such opinion is required pursuant to Section 7(o).
(f) CF&Co shall have received the Comfort Letter required to be
delivered pursuant to Section 7(p) on or before the date on which delivery of
such Comfort Letter is required pursuant to Section 7(p).
(g) The Placement Shares shall have been duly listed, subject to
notice of issuance, on the NYSE, and trading in the Common Stock shall not have
been suspended on such market.
(h) There shall not have occurred any event that would permit
CF&Co to terminate this Agreement pursuant to Section 11(a).
(i) CF&Co shall have received such other documents from the
Company as it shall reasonably request.
(j) The Company shall have filed with the Commission a supplement
to the Prospectus that reflects the principal terms of this Agreement.
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless CF&Co, the
directors, officers, partners, employees and agents of CF&Co and each person, if
any, who (i) controls CF&Co within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or (ii) is controlled by or is under common
control with CF&Co (a "CF&Co Affiliate") from and against any and all losses,
claims, liabilities, expenses and damages (including, but not limited to, any
and all investigative, legal and other expenses reasonably incurred in
connection with, and any and all amounts paid in settlement of, any action, suit
or proceeding between any of the indemnified parties and any indemnifying
parties or between any indemnified party and any third party, or otherwise, or
any claim asserted), as and when incurred, to which CF&Co, or any such person,
may become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses or damages arise out of or are based, directly or
indirectly, on (i) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or 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
Placement Shares under the securities laws thereof or filed with the Commission,
(ii) the omission or alleged omission to state in such document a material fact
required to be stated in it or necessary to make the statements in it not
misleading or (iii) any breach by any of the indemnifying parties of any of
their respective representations, warranties and agreements contained in this
Agreement; provided that this indemnity agreement shall not apply to the extent
that such loss, claim, liability, expense or damage arises from the sale of the
21
Placement Shares pursuant to this Agreement and is caused by an untrue statement
or omission made in reliance on and in conformity with information relating to
CF&Co and furnished in writing to the Company by CF&Co expressly stating that
such information is intended for inclusion in any document described in clause
(a)(i) above. This indemnity agreement will be in addition to any liability that
the Company might otherwise have.
(b) CF&Co agrees to indemnify and hold harmless the Company and
its directors and each officer of the Company who signed the Registration
Statement, and each person, if any, who (i) controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act or (ii) is
controlled by or is under common control with the Company (a "Company
Affiliate") against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendments thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information and relating to CF&Co furnished to the Company by CF&Co expressly
stating that such information is intended for use in the Registration Statement
(or any amendment thereto) or such preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or any breach by CF&Co of any
representation, warranty or agreement contained in this Agreement or any
Placement Notice issued to the Company and which has been accepted by the
Company pursuant to this Agreement.
(c) Any party that proposes to assert the right to be indemnified
under this Section 9 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve the indemnifying party from (i) any liability that it might have to any
indemnified party otherwise than under this Section 9 and (ii) any liability
that it may have to any indemnified party under the foregoing provision of this
Section 9 unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be entitled
to participate in and, to the extent that it elects by delivering written notice
to the indemnified party promptly after receiving notice of the commencement of
the action from the indemnified party, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with counsel reasonably
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own counsel
in any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (1) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (3) a conflict or potential conflict exists (based on
advice of counsel to the indemnified
22
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent. No indemnifying party shall, without the
prior written consent of each indemnified party, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 9 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action or
proceeding. Notwithstanding any other provision of this Section 9(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel for which it is
entitled to reimbursement pursuant to this Section 9(c), such indemnifying party
agrees that it shall be liable for any settlement effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into, and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement; provided that an indemnifying
party shall not be liable for any such settlement effected without its consent
if such indemnifying party, at least five days prior to the date of such
settlement, (1) reimburses such indemnified party in accordance with such
request for the amount of such fees and expenses of counsel as the indemnifying
party believes in good faith to be reasonable and (2) provides written notice to
the indemnified party that the indemnifying party disputes in good faith the
reasonableness of the unpaid balance of such fees and expenses.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 9 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or CF&Co, the Company and
CF&Co will contribute to the total losses, claims, liabilities, expenses and
damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than CF&Co, such as persons who
control the Company within the meaning of the Act, officers of the Company who
signed the Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company and CF&Co may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company on the one hand and CF&Co on the other. The relative benefits
received by the Company on the one hand and CF&Co on the other hand shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the
23
total compensation (before deducting expenses) received by CF&Co from the sale
of Placement Shares on behalf of the Company. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault of the Company, on the one hand, and CF&Co, on the
other, with respect to the statements or omission which resulted in such loss,
claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering. Such
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or CF&Co, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and CF&Co agree that it would not be just and equitable if
contributions pursuant to this Section 9(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense, or
damage, or action in respect thereof, referred to above in this Section 9(d)
shall be deemed to include, for the purpose of this Section 9(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim to the extent consistent
with Section 9(c) hereof. Notwithstanding the foregoing provisions of this
Section 9(d), CF&Co shall not be required to contribute any amount in excess of
the commissions received by it under this Agreement and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and any officers, directors,
partners, employees or agents of CF&Co will have the same rights to contribution
as CF&Co, and each officer and director of the Company will have the same rights
to contribution as the Company, subject in each case to the provisions hereof.
Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 9(d), will notify any such party or
parties from whom contribution may be sought, but the omission to so notify will
not relieve that party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 9(d). Except for a
settlement entered into pursuant to the last sentence of Section 9(c) hereof, no
party will be liable for contribution with respect to any action or claim
settled without its written consent if such consent is required pursuant to
Section 9(c) hereof.
10. Representations and Agreements to Survive Delivery. During the time
that a prospectus relating to the Placement Shares is required to be delivered
under the Act, all representations and warranties of the Company herein or in
any certificate or documents delivered pursuant hereto shall remain operative
and in full force and effect as of the date on which they were made regardless
of (i) any investigation made by or on behalf of CF&Co or the Company (or any of
their respective officers, directors or controlling persons) or (ii) delivery
and acceptance of the Placement Shares and payment therefor.
24
11. Termination.
(a) CF&Co shall have the right by giving notice as hereinafter
specified at any time to terminate this Agreement if (i) any Material Adverse
Effect, or any development that is reasonably expected to cause a Material
Adverse Effect, has occurred which, in the reasonable judgment of CF&Co, may
materially impair the investment quality of the Placement Shares, (ii) the
Company shall have failed, refused or been unable, at or prior to any Settlement
Date, to perform any agreement on its part to be performed hereunder, (iii) any
other condition of CF&Co's obligations hereunder is not fulfilled, (iv) any
suspension or limitation of trading in the shares of Common Stock or in
securities generally on the NYSE, or any setting of minimum prices for trading
of the shares of Common Stock or in securities generally on such exchange, shall
have occurred, (v) any banking moratorium shall have been declared by federal or
New York authorities or (vi) an outbreak or material escalation of major
hostilities in which the United States is involved, a declaration of war by
Congress, any other substantial national or international calamity or any other
event or occurrence of a similar character shall have occurred since the
execution of this Agreement that, in the sole judgment of CF&Co, makes it
impractical or inadvisable to proceed with the completion of the sale of and
payment for the Placement Shares to be sold by CF&Co on behalf of the Company.
Any such termination shall be without liability of any party hereto to any other
party hereto except that the provisions of Sections 7(f), (g), (h) and (i), 9,
12, 16 and 17 hereof shall remain in full force and effect notwithstanding such
termination. If CF&Co elects to terminate this Agreement as provided in this
Section, CF&Co shall provide the required notice as specified herein.
(b) The Company shall have the right, by giving notice as
hereinafter specified, to terminate this Agreement in its sole discretion at any
time following the period of twelve (12) months after the date of this
Agreement. Any such termination shall be without liability of any party hereto
to any other party hereto except that the provisions of Sections 7(f), (g), (h)
and (i), 9, 12, 16 and 17 hereof shall remain in full force and effect
notwithstanding such termination.
(c) CF&Co shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time
following the period of twelve (12) months after the date of this Agreement. Any
such termination shall be without liability of any party hereto to any other
party hereto except that the provisions of Sections 7(f), (g), (h) and (i), 9,
12, 16 and 17 hereof shall remain in full force and effect notwithstanding such
termination.
(d) Unless earlier terminated pursuant to any other provision of
this Section 11 or Section 13, this Agreement shall be terminated automatically
upon the issuance and sale of all of the Placement Shares through CF&Co on the
terms and subject to the conditions set forth herein. At such time, the parties
hereto shall sign a termination notice annexed hereto in the form of Exhibit
11(d).
(e) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 11(a), (b), (c) or (d) above, Section 13 or
otherwise by mutual agreement of the parties hereto; provided that any such
termination by mutual agreement shall in all cases be deemed to provide that
Sections 7(f), (g), (h) and (i), 9, 12, 16 and 17 shall remain in full force and
effect.
(f) Any termination of this Agreement shall be effective on the
date specified in such notice of termination; provided that such termination
(other than a termination pursuant to
25
Section 11(d) above) shall not be effective until the close of business on the
date of receipt of such notice by CF&Co or the Company, as the case may be. If
such termination shall occur prior to the Settlement Date for any sale of
Placement Shares, such Placement Shares shall settle in accordance with the
provisions of this Agreement.
12. Notices. All notices or other communications required or permitted to
be given by any party hereto to any other party hereto pursuant to the terms of
this Agreement shall be in writing and if sent to CF&Co, shall be delivered to
CF&Co at Cantor Xxxxxxxxxx & Co., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, fax no. (000) 000-0000, attention: ITD-Investment Banking, with a copy to
Xxxx Xxxxxx, at the same address, with a copy to Xxxxxxxx Xxxx & Brandeis, LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, fax no. (000) 000-0000, attention:
Xxxxxxxx X. Xxxxxxxx, Esq.; or if sent to the Company, shall be delivered to
Xxxxxxxxx Mortgage, Inc., 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xx, Xxx Xxxxxx
00000, fax no. (000) 000-0000 , attention: Xxxxxxx X. Story, with a copy to
Dechert LLP, 0000 XxxXxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx Xxxxx, Xxxxxxxxxx, 00000,
fax no. (000) 000-0000, attention: Xxxxxxx X. Xxxxxxx, Esq. Each party hereto
may change such address for notices by sending to the other party hereto written
notice of a new address for such purpose. Each such notice or other
communication shall be deemed given (i) when delivered personally or by
verifiable facsimile transmission (with an original to follow) on or before 4:30
p.m., eastern time, on a Business Day or, if such day is not a Business Day, on
the next succeeding Business Day, (ii) on the next Business Day after timely
delivery to a nationally-recognized overnight courier and (iii) on the Business
Day actually received if deposited in the U.S. mail (certified or registered
mail, return receipt requested, postage prepaid). For purposes of this
Agreement, "Business Day" shall mean any day on which the NYSE and commercial
banks in the city of New York are open for business.
13. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and CF&Co and their respective successors and
the affiliates, controlling persons, officers and directors referred to in
Section 9 hereof. References to any of the parties contained in this Agreement
shall be deemed to include the successors and permitted assigns of such party.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Neither party
may assign its rights or obligations under this Agreement without the prior
written consent of the other party hereto, provided, however, that CF&Co may
assign its rights and obligations hereunder to an affiliate of CF&Co without
obtaining the Company's consent, but must provide prompt notice of such
assignment to the Company, and provided, further, that the Company may terminate
this Agreement at any time following any such assignment by CF&Co.
14. Adjustments for Stock Splits. The parties hereto acknowledge and agree
that all share related numbers contained in this Agreement shall be adjusted to
take into account any stock split, stock dividend or similar event effected with
respect to the shares of Common Stock.
15. Entire Agreement; Amendment; Severability. This Agreement constitutes
the entire agreement and supersedes all other prior and contemporaneous
agreements and undertakings, both written and oral, among the parties hereto
with regard to the subject matter hereof. Neither this Agreement nor any term
hereof may be amended except pursuant to a written instrument
26
executed by the Company and CF&Co. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
16. Applicable Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York without regard to the principles of conflicts of laws. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection with any transaction
contemplated hereby, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof (certified or registered mail, return
receipt requested) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
17. Waiver of Jury Trial. The Company and CF&Co each hereby irrevocably
waives any right it may have to a trial by jury in respect of any claim based
upon or arising out of this Agreement or any transaction contemplated hereby.
18. Counterparts. This Agreement may be executed in one or more original or
facsimile counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Delivery of an
executed Agreement by one party to the other may be made by facsimile
transmission.
27
In the event that the foregoing correctly sets forth the agreement
between the Company and CF&Co with respect to the subject matter hereof, please
so indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement between the Company and CF&Co.
Very truly yours,
XXXXXXXXX MORTGAGE, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President and Chief Operating
Officer
ACCEPTED AND AGREED TO as of the date
first-above written, only as to the
representations and warranties of the
Manager as set forth in Section 6 hereof.
XXXXXXXXX MORTGAGE ADVISORY
CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chief Executive Officer
ACCEPTED as of the date first-above written:
CANTOR XXXXXXXXXX & CO.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Managing Director
28
