FORM OF
MORTGAGEIT HOLDINGS, INC.
SHARES
COMMON STOCK
($0.01 PAR VALUE)
UNDERWRITING AGREEMENT
, 2005
FORM OF UNDERWRITING AGREEMENT
, 2005
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Friedman, Billings, Xxxxxx & Co., Inc.
as Representatives to the Underwriters listed on Schedule II of this
Underwriting Agreement c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
MortgageIT Holdings, Inc., a Maryland corporation (the
"Company") and certain stockholders of the Company listed on Schedule I hereto
(the "Selling Stockholders") each confirms its respective agreement with the
underwriters named in Schedule II hereto (the "Underwriters"), for whom
Friedman, Billings, Xxxxxx & Co., Inc. ("FBR") and Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated ("Xxxxxxx Xxxxx") are acting as representative(s) (the
"Representatives"), with respect to the sale by the Company and the Selling
Stockholders, acting severally and not jointly, of an aggregate of shares (the
"Firm Shares") of Common Stock, $0.01 par value (the "Common Stock"), of the
Company in the respective number of shares set forth opposite the names of the
Company and each such Selling Stockholder in Schedule I hereto, and the purchase
by the Underwriters, acting severally and not jointly, of the respective number
of shares of Common Stock set forth opposite the names of the Underwriters in
Schedule II hereto. In addition, solely for the purpose of covering
over-allotments, the Company proposes to grant to the Underwriters the option to
purchase from the Company up to an additional shares of Common Stock (the
"Additional Shares"). The Firm Shares and the Additional Shares are hereinafter
collectively sometimes referred to as the "Shares." The Shares are described in
the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-11 (File No. 333-125556)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each thereof, being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statement, as amended when it became or becomes
effective, including all documents filed as a part thereof, and including any
information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 424(b) under the Act and deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430(A) under the Act and
also including any registration statement filed pursuant to Rule 462(b) under
the Act, is herein called the "Registration Statement," and the prospectus, in
the form filed by the Company with the Commission pursuant to Rule 424(b) under
the Act on or before the second business day after the date hereof (or such
earlier time as may be required under the Act) or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the time it became effective, is herein called the "Prospectus." As used herein,
"business day" shall mean a day on which the New York Stock Exchange is open for
trading.
Each Selling Stockholder has executed and delivered a Custody
Agreement and an Irrevocable Power of Attorney of Selling Stockholder in the
forms attached hereto as Exhibit A (collectively, the "Custody Agreement and
Power of Attorney") pursuant to which each Selling
Stockholder party thereto has placed the certificates relating to the Shares to
be sold by it pursuant to this Agreement in custody and appointed the persons
designated therein as attorneys-in-fact (the "Attorneys-in-Fact") with the
authority to execute and deliver this Agreement on behalf of such Selling
Stockholder and to take certain other actions with respect thereto and hereto.
The Company, the Selling Stockholders and the
Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the respective Underwriters, and each Selling
Stockholder agrees, severally and not jointly, to sell to the Underwriters, the
number of Firm Shares set forth in Schedule I opposite the Company's and each
such Selling Stockholder's name and each Underwriter agrees, severally and not
jointly, to purchase from the Company and the Selling Stockholders the number of
Firm Shares set forth in Schedule II opposite such Underwriter's name, subject
to adjustment in accordance with Section 11 hereof, in each case at a purchase
price of $ per Share. The Company and the Selling Stockholders are advised by
you that the Underwriters intend (i) to make a public offering of their
respective portions of the Firm Shares as soon after the effective date of the
Registration Statement as in your judgment is advisable and (ii) initially to
offer the Firm Shares upon the terms set forth in the Prospectus. You may from
time to time increase or decrease the public offering price after the initial
public offering to such extent as you may determine.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
purchased by each of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company and the Selling Stockholders for the Firm Shares. This option may
be exercised by Xxxxxxx Xxxxx on behalf of the several Underwriters at any time
and from time to time on or before the thirtieth day following the date of the
Agreement, by written notice to the Company. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised,
and the date and time when the Additional Shares are to be purchased (such date
and time being herein referred to as the "additional time of purchase");
provided, however, that the additional time of purchase shall not be earlier
than the time of purchase (as defined below) nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares
that bears the same proportion to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule II hereto bears to the total number of Firm Shares
(subject, in each case, to such adjustment as you may determine to eliminate
fractional shares), subject to adjustment in accordance with Section 11 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company and each of the Selling Stockholders by
Federal Funds wire transfer to the account specified by the Company and the
Custodian pursuant to each Selling Stockholder's Power of Attorney and Custody
Agreement, as the case may be, against delivery of the certificates for the Firm
Shares to you through the facilities of The Depository Trust Company ("DTC") for
the respective accounts of the Underwriters. Such payment and delivery shall be
made at 10:00 A.M., New York City time, on , 2005 (unless another time
shall be agreed to by you, the Company and the Selling Stockholders or unless
postponed in accordance with the provisions of Section 11 hereof). The time at
which such payment and delivery are to be made is hereinafter sometimes called
"the time of purchase." Electronic
-2-
transfer of the Firm Shares shall be made to you at the time of purchase in such
names and in such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic transfer of the Additional
Shares shall be made to you at the additional time of purchase in such names and
in such denominations as you shall specify.
Deliveries of the documents described in Section 9 hereof with
respect to the purchase of the Shares shall be made at the offices of Xxxxxxxx
Chance US LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 A.M., New
York City time, on the date of the closing of the purchase of the Firm Shares or
the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has been declared effective
under the Act; no stop order of the Commission preventing or suspending
the use of any Preliminary Prospectus or the effectiveness of the
Registration Statement has been issued and no proceedings for such
purpose have been instituted or, to the Company's knowledge, are
contemplated by the Commission; each Preliminary Prospectus, at the
time of filing thereof, complied in all material respects with the
requirements of the Act and the last Preliminary Prospectus distributed
in connection with the offering of the Shares did not, as of its date,
and does not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; the Registration Statement complied
when it became effective, complies and will comply, at the time of
purchase and any additional time of purchase, in all material respects
with the requirements of the Act and the Prospectus will comply, as of
its date and at the time of purchase and any additional times of
purchase, in all material respects with the requirements of the Act and
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
have been and will be so described or filed; the conditions to the use
of Form S-11 have been satisfied; the Registration Statement did not
when it became effective, does not and will not, at the time of
purchase and any additional time of purchase, 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 will not, as of its date and at the time
of purchase and any additional time of purchase, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no warranty or representation
with respect to any statement contained in the Preliminary Prospectus,
the Registration Statement or the Prospectus in reliance upon and in
conformity with information concerning an Underwriter and furnished in
writing by or on behalf of such Underwriter through you to the Company
expressly for use in any Preliminary Prospectus, the Registration
Statement or the Prospectus; and the Company has not distributed and
will not distribute any offering material in connection with the
offering or sale of the Shares other than the Registration Statement,
the then most recent Preliminary Prospectus and the Prospectus;
(b) as of the date of this Agreement, the Company has an
authorized and outstanding capitalization as set forth under the
heading "Actual" in the section of the Registration Statement and the
Prospectus entitled "Capitalization" and, as of the time of purchase
and the additional
-3-
time of purchase, as the case may be, the Company shall have an
authorized and outstanding capitalization as set forth under the
heading "As Adjusted" in the section of the Registration Statement and
the Prospectus entitled "Capitalization;" all of the issued and
outstanding shares of the Common Stock have been duly authorized and
validly issued and are fully paid and non-assessable, have been issued
in compliance with all federal and state securities laws and were not
issued in violation of any preemptive right, resale right, right of
first refusal or similar right;
(c) 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 to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as contemplated
herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
financial condition, results of operation or prospects of the Company
and the Subsidiaries (as hereinafter defined) taken as a whole (a
"Material Adverse Effect");
(e) the Company has no "significant subsidiaries" (as defined
in Rule 1-02(w) of Regulation S-X) other than, as of the time of
purchase, MortgageIT, Inc. ("MIT") and MortgageIT SPV I, (collectively,
the "Subsidiaries"); except with respect to Next At Bat Lending, Inc.,
MHL Funding Corp., Home Closer LLC, MortgageIT Capital Trust I and
MortgageIT Capital Trust II, as of the time of purchase, the Company
will own, directly or indirectly, all of the issued and outstanding
capital stock of each of the Subsidiaries; other than the capital stock
of the Subsidiaries, the Company does not own and will not own as of
the time of purchase, 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; complete and correct copies of the
certificates of incorporation and the by-laws of the Company and the
Subsidiaries and all amendments thereto have been delivered to you, and
except as set forth in the exhibits to the Registration Statement no
changes therein will be made subsequent to the date hereof and prior to
the time of purchase or, if later, the additional time of purchase;
each Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus; each Subsidiary is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified and in good standing would
not, individually or in the aggregate, have a Material Adverse Effect;
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 (except as otherwise described in this
Section 3(e)) will be owned, directly or indirectly, as of the time of
purchase, by the Company subject to no security interest, other
encumbrance or adverse claims except for any security interest of
Technology Investment Capital Corp. pursuant to the Note Purchase
Agreement between TICC and MIT (the "TICC Lien"); and 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;
(f) the Shares to be purchased by the Underwriters from the
Company have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and
-4-
non-assessable and free of statutory and contractual preemptive rights,
resale rights, rights of first refusal and similar rights;
(g) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus and the certificates
to be used to evidence the Shares will be, as of the time of purchase,
in due and proper form and the holders of the Shares will not be
subject to personal liability by reason of being such holders;
(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) neither the Company nor any of the Subsidiaries is in
breach or violation of or in default under (nor has any event occurred
which with notice, lapse of time or both would result in any breach of,
constitute a default under or give the holder of any indebtedness (or a
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a part of such
indebtedness under) (1) its respective charter or by-laws, or (2) any
indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or (3) any license, lease, contract or
other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their
properties may be bound or affected, except, in the case of clauses (2)
and (3), for such breaches, violations or defaults which would not
individually or in the aggregate have a Material Adverse Effect, and
the execution, delivery and performance of this Agreement by the
Company, the issuance and sale of the Shares to be sold by the Company,
and the consummation of the transactions contemplated hereby by the
Company will not conflict with, result in any breach or violation of or
constitute a default under (nor constitute any event which with notice,
lapse of time or both would result in any breach of or constitute a
default under) the charter or by-laws of the Company or any of the
Subsidiaries, or any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of
their respective properties may be bound or affected, or 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;
(j) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Shares to be sold by the Company, or
the consummation by the Company of the transactions contemplated hereby
other than registration of the Shares under the Act, which has been or
will be effected, and any necessary qualification under the securities
or blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters or under the rules and regulations of
the NASD;
(k) except as set forth in the Registration Statement and the
Prospectus, (i) no person has the right, contractual or otherwise, to
cause the Company to issue or sell to it any shares of Common Stock or
shares of any other capital stock or other equity interests of the
Company, (ii) no person has any preemptive rights, resale rights,
rights of first refusal or other rights to purchase any shares of
Common Stock or shares of any other capital stock or other equity
interests of the Company or, except for the TICC Lien, the
Subsidiaries, and (iii) no person has the right to act as an
underwriter or as a financial advisor to the Company or the
Subsidiaries in connection with the offer and sale of the Shares to be
sold by the Company, in the case of each of the foregoing clauses (i),
(ii) and (iii), whether as a result of the filing or effectiveness of
the Registration Statement or the sale of the Shares to be sold by the
Company as contemplated thereby or otherwise; and, except as set forth
in the Registration Statement and the Prospectus, no
-5-
person has the right, contractual or otherwise, to cause the Company or
the Subsidiaries to register under the Act any shares of Common Stock
or shares of any other capital stock or other equity interests of the
Company or the Subsidiaries, or to include any such shares or interests
in the Registration Statement or the offering contemplated thereby,
whether as a result of the filing or effectiveness of the Registration
Statement or the sale of the Shares as contemplated thereby or
otherwise;
(l) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign
law, regulation or rule, and has obtained all necessary authorizations,
consents and approvals from other persons, in order to conduct its
respective business, except for such licenses, authorizations,
consents, approvals or filings, the failure of which to obtain or make
would not, individually or in the aggregate, have a Material Adverse
Effect; neither the Company nor any of the Subsidiaries is in violation
of, or in default under, or has received notice of any proceedings
relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment
applicable to the Company or any of the Subsidiaries, except where such
violation, default, revocation or modification would not, individually
or in the aggregate, have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions, contracts, licenses,
agreements, leases or documents of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement have been so described or filed
as required;
(n) there are no actions, suits, claims, investigations or
proceedings pending or to the Company's knowledge, threatened or, to
the Company's knowledge, contemplated to which the Company or any of
the Subsidiaries or any of their respective directors or officers is a
party or of which any of their respective properties is subject at law
or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency, except any such action, suit, claim, investigation or
proceeding which is described in the Registration Statement or would
not result in a judgment, decree or order having, individually or in
the aggregate, a Material Adverse Effect or preventing consummation of
the transactions contemplated hereby;
(o) BDO Xxxxxxx, LLP, whose report on the consolidated
financial statements of the Company and the Subsidiaries is filed with
the Commission as part of the Registration Statement and the
Prospectus, are independent public accountants as required by the Act;
(p) the audited financial statements included in the
Registration Statement and the Prospectus, together with the related
notes and schedules, present fairly the consolidated financial position
of the Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and
the Subsidiaries for the periods specified and have been prepared in
compliance with the requirements of the Act and in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved; any pro forma financial statements or data
included in the Registration Statement and the Prospectus comply with
the requirements of Regulation S-X of the Act and the assumptions used
in the preparation of such pro forma financial statements and data are
reasonable, the pro forma adjustments used therein are appropriate to
give effect to the transactions or circumstances described therein and
the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements and data; the other
financial and statistical data set forth in the Registration Statement
and the Prospectus are accurately presented and prepared on a
-6-
basis consistent with the financial statements and books and records of
the Company; there are no financial statements (historical or pro
forma) that are required to be included in the Registration Statement
and the Prospectus that are not included as required; the Company and
the Subsidiaries do not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations), not
disclosed in the Registration Statement and the Prospectus; and all
disclosures contained in the Registration Statement or the Prospectus
regarding "non-GAAP financial measures" (as such term is defined by the
rules and regulations of the Commission) comply with Regulation G of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and Item 10 of Regulation S-K under the Act, to the extent applicable.
(q) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been (i) any material adverse change, or any development involving
a prospective material adverse change, in the business, properties,
management, financial condition or results of operations of the Company
and the Subsidiaries taken as a whole, (ii) any transaction which is
material to the Company and the Subsidiaries taken as a whole, (iii)
any obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or the Subsidiaries, which is
material to the Company and the Subsidiaries taken as a whole, (iv) any
change in the capital stock or material change in the outstanding
indebtedness of the Company or the Subsidiaries or (v) any dividend or
distribution of any kind declared, paid or made on the capital stock of
the Company or the Subsidiaries;
(r) the Company has obtained for the benefit of the
Underwriters the agreement (a "Lock-Up Agreement"), in the form set
forth as Exhibit B hereto, of each of its directors and executive
officers, Xxxx XxXxxxx, Xxxx Xxxxxxxxxx, Xxxx Xxxxxxxxx, Diamond Hill
Investments, L.P., AE & JE Associates, LLC and ING Capital LLC;
(s) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(t) the Company and each of the Subsidiaries has good and
marketable title to all property (real and personal) described the
Registration Statement and in the Prospectus as being owned by each of
them, free and clear of all liens, claims, security interests or other
encumbrances, except as otherwise described in the Registration
Statement and except for such liens, claims, security interests or
other encumbrances as would not, individually or in the aggregate, have
a Material Adverse Effect; all the property described in the
Registration Statement and the Prospectus as being held under lease by
the Company or a Subsidiary is held thereby under valid, subsisting and
enforceable leases;
(u) the Company and the Subsidiaries own, or have obtained
valid and enforceable licenses for, or other rights to use, the
inventions, patent applications, patents, trademarks (both registered
and unregistered), tradenames, copyrights, trade secrets and other
proprietary information described in the Registration Statement and the
Prospectus (collectively, "Intellectual Property") as being owned or
licensed by them or which are necessary for the conduct of their
respective businesses, except where the failure to own, license or have
such rights would not, individually or in the aggregate, have a
Material Adverse Effect; except in such circumstances where there would
not, individually or in the aggregate, be a Material Adverse Effect,
(i) there are no third parties who have or, to the Company's knowledge,
will be able to establish rights to any Intellectual Property, except
for the ownership rights of the owners of the Intellectual Property
which is licensed to the Company; (ii) there is no infringement by
third parties of any Intellectual
-7-
Property; (iii) there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any Intellectual Property,
and the Company is unaware of any facts which could form a reasonable
basis for any such claim; (iv) there is no pending or, to the knowledge
of the Company, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any Intellectual Property, and the
Company is unaware of any facts which could form a reasonable basis for
any such claim; (v) there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others that
the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the
Company is unaware of any facts which could form a reasonable basis for
any such claim; (vi) there is no patent or patent application that
contains claims that interfere with the issued or pending claims of any
of the Intellectual Property; and (vii) to the knowledge of the
Company, there is no prior art that may render any patent application
owned by the Company of the Intellectual Property unpatentable that has
not been disclosed to the U.S. Patent and Trademark Office;
(v) neither the Company nor any of the Subsidiaries is engaged
in any unfair labor practice; except for matters which are described in
the Registration Statement or would not, individually or in the
aggregate, have a Material Adverse Effect, (i) there is (A) no unfair
labor practice complaint pending or, to the Company's knowledge,
threatened against the Company or any of the Subsidiaries before the
National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements is
pending or to the Company's knowledge, threatened, (B) no strike, labor
dispute, slowdown or stoppage pending or, to the Company's knowledge,
threatened against the Company or any of the Subsidiaries and (C) no
union representation dispute currently existing concerning the
employees of the Company or any of the Subsidiaries, and (ii) to the
Company's knowledge, (A) no union organizing activities are currently
taking place concerning the employees of the Company or any of the
Subsidiaries and (B) there has been no violation of any federal, state,
local or foreign law relating to discrimination in the hiring,
promotion or pay of employees, any applicable wage or hour laws or any
provision of the Employee Retirement Income Security Act of 1974
("ERISA") or the rules and regulations promulgated thereunder
concerning the employees of the Company or any of the Subsidiaries;
(w) each of the Company and the Subsidiaries are in compliance
with Environmental Laws (as defined below) and is in compliance with
the material terms of any required permits, licenses, authorizations
and approvals required under, Environmental Laws, except to the extent
that failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, have a Material
Adverse Effect; there are no past or present or, to the Company's
knowledge reasonably anticipated future events, conditions,
circumstances, activities, practices, actions, omissions or plans that
could reasonably be expected to give rise to any material costs or
liabilities to the Company or the Subsidiaries under, or to interfere
with or prevent compliance by the Company or the Subsidiaries with,
Environmental Laws; except as would not, individually or in the
aggregate, have a Material Adverse Effect, and except that no
representation is made with respect to any property that relates to
loan originations and loans held for sale, other than properties on
which the Company or any Subsidiary has foreclosed and currently holds
as an asset ("Foreclosure Property"), neither the Company nor any of
the Subsidiaries (i) is the subject of any investigation, (ii) has
received any notice or claim, (iii) is a party to or affected by any
pending or threatened action, suit or proceeding, (iv) is bound by any
judgment, decree or order or (v) has entered into any agreement, in
each case relating to any alleged violation of any Environmental Law or
any actual or alleged release or, to the knowledge of the Company,
threatened release or cleanup at any location of any Hazardous
Materials (as defined below) (as used herein, "Environmental Law" means
any federal, state, local or foreign
-8-
law, statute, ordinance, rule, regulation, order, decree, judgment,
injunction, or other binding requirement, or common law, relating to
health, safety or the protection, cleanup or restoration of the
environment or natural resources, including those relating to the
distribution, processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of
Hazardous Materials, and "Hazardous Materials" means any material
(including, without limitation, pollutants, contaminants, hazardous or
toxic substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law);
(x) except with respect to any property, other than a
Foreclosure Property, that relates to loan originations and loans held
for sale as to which no representation is made, in the ordinary course
of its business, the Company and each of the Subsidiaries conducts a
periodic review of the effect of the Environmental Laws on its
business, operations and properties, in the course of which it
identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
cleanup, closure of properties or compliance with the Environmental
Laws or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties);
(y) all tax returns required to be filed by the Company and
each of the Subsidiaries have been filed, and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have
been paid, other than those being contested in good faith and for which
adequate reserves have been provided;
(z) the Company and each of the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses
as the Company deems adequate and as previously disclosed to the
Underwriters; such insurance insures against such losses and risks to
an extent which is adequate in accordance with customary industry
practice to protect the Company and the Subsidiaries and their
businesses; all such insurance is fully in force on the date hereof and
will be fully in force at the time of purchase and any additional time
of purchase;
(aa) neither the Company nor any of the Subsidiaries has
sustained since the date of the last audited financial statements
included in the Registration Statement and the Prospectus any loss or
interference with its respective business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree;
(bb) none of the Company or any of the Subsidiaries has sent
or received any communication regarding termination of, or intent not
to renew, any of the contracts or agreements referred to or described
in, or filed as an exhibit to, the Registration Statement, and no such
termination or non-renewal has been threatened by the Company or any of
the Subsidiaries or, to the Company's or any of the Subsidiaries'
knowledge, any other party to any such contract or agreement;
(cc) the Company and each of the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
-9-
(dd) the Company has established disclosure controls and
procedures (as such term is defined in Rule 13a-14 and 15d-14 under the
Exchange Act); such disclosure controls and procedures are designed to
ensure that material information relating to the Company, including its
consolidated subsidiaries, is made known to the Company's Chief
Executive Officer and its Chief Financial Officer by others within
those entities; the Company's auditors and the audit committee of the
Board of Directors have been advised of: (i) any significant
deficiencies in the design of internal controls which could adversely
affect the Company's, including its consolidated subsidiaries' ability
to record, process, summarize, and report financial data; and (ii) any
fraud, whether or not material, that involves management or other
employees who have a role in the Company's internal controls; any
material weaknesses in internal controls have been identified for the
Company's auditors; and except as disclosed in the Company's filings
made pursuant to the Exchange Act, there have been no significant
changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses;
(ee) the Company and the Subsidiaries have provided you true,
correct, and complete copies of all documentation pertaining to any
extension of credit in the form of a personal loan made, directly or
indirectly, by the Company to any director or executive officer of the
Company or any Subsidiary, or to any family member or affiliate of any
director or executive officer of the Company or any Subsidiary since
January 1, 2003 or that is outstanding; and, except as disclosed in the
Prospectus, none of the Company or any Subsidiary has, directly or
indirectly, (i) extended credit, arranged to extend credit, or renewed
any extension of credit, in the form of a personal loan, to or for any
director or executive officer of the Company or any Subsidiary, or to
or for any family member or affiliate of any director or executive
officer of the Company or any Subsidiary; or (ii) made any material
modification, including any renewal thereof, to any term of any
personal loan to any director or executive officer of the Company or
any Subsidiary, or any family member or affiliate of any director or
executive officer;
(ff) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources that the Company and the Subsidiaries believe to be reliable
and accurate, and the Company has obtained the written consent to the
use of such data from such sources to the extent required;
(gg) neither the Company nor any of the Subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or the
Subsidiaries has made any payment of funds of the Company or the
Subsidiaries or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of
a character required to be disclosed in the Registration Statement or
the Prospectus;
(hh) neither the Company nor any of the Subsidiaries nor to
the Company's knowledge has any of their respective directors,
officers, affiliates or controlling persons has taken, directly or
indirectly, any action designed, or which has constituted or might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares;
(ii) to the Company's and the Subsidiaries' knowledge, there
are no affiliations or associations between any member of the NASD and
any of the Company's and the Subsidiaries' officers, directors or 5% or
greater securityholders, except as set forth in the Registration
Statement and the Prospectus;
-10-
(jj) the Company, the Subsidiaries and any of the officers and
directors of the Company and any of the Subsidiaries, in their
capacities as such, are, and at the time of purchase and any additional
date of purchase will be, in compliance in all material respects with
the provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations promulgated thereunder;
(kk) commencing with its taxable year ended December 31, 2004,
the Company has been organized and operated in conformity with the
requirements for qualification and taxation as a real estate investment
trust (a "REIT") under the Internal Revenue Code 1986, as amended (the
"Code"), and its current and proposed method of operation will enable
it to continue to meet the requirements for qualification and taxation
as a REIT under the Code; and
(ll) each Subsidiary that is a partnership or a limited
liability company has been properly classified either as a partnership
or as an entity disregarded as separate from the Company for Federal
income tax purposes throughout the period from its formation through
the date hereof.
In addition, any certificate signed by any officer of the
Company or any of the Subsidiaries and delivered to the Underwriters or counsel
for the Underwriters in connection with the offering of the Shares shall be
deemed to be a representation and warranty by the Company or Subsidiary, as the
case may be, as to matters covered thereby, to each Underwriter.
4. Representations and Warranties of the Selling Stockholders.
Each Selling Stockholder, severally and not jointly, represents and warrants
(as to itself only) to the Underwriters that:
(a) such Selling Stockholder has full power and authority to
enter into this Agreement, and the Custody Agreement and Power of
Attorney. All authorizations and consents necessary for the execution
and delivery by such Selling Stockholder of the Custody Agreement and
Power of Attorney and for the execution of this Agreement on behalf of
such Selling Stockholder, have been given. Each of the Custody
Agreement and Power of Attorney and this Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder and constitutes a valid and binding agreement of such
Selling Stockholder and is enforceable against such Selling Stockholder
in accordance with the terms thereof and hereof, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, and by general
equitable principles, and except to the extent that the indemnity and
contribution provisions of Section 12 hereof may be limited by federal
or state securities laws and public policy considerations in respect
thereof;
(b) such Selling Stockholder now has, and at the time of
purchase will have, (A) valid title to the Shares to be sold by such
Selling Stockholder hereunder, free and clear of all liens,
encumbrances and claims whatsoever (other than pursuant to the Custody
Agreement and Power of Attorney), and (B) full legal right and power,
and all authorizations and approvals required by law, to sell, transfer
and deliver such Shares to the Underwriters hereunder and to make the
representations, warranties and agreements made by such Selling
Stockholder herein. Upon the delivery of and payment for such Shares
hereunder, such Selling Stockholder will deliver to the Underwriters
(assuming no such Underwriter has notice of any "adverse claim," within
the meaning of Section 8-105 of the New York Uniform Commercial Code,
to such Shares) good and marketable title thereto, free and clear of
any adverse claim within the meaning of Section 8-102 of the New York
Uniform Commercial Code;
-11-
(c) at the time of purchase, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection
with the sale and transfer of the Shares to be sold by such Selling
Stockholder to the Underwriters hereunder will have been fully paid or
provided for by such Selling Stockholder and all laws imposing such
taxes will have been fully complied with;
(d) the performance of this Agreement and the Custody
Agreement and Power of Attorney and the consummation of the
transactions contemplated herein and therein will not (A) 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
constitute a breach of, or default under), any provision of any
license, indenture, mortgage, deed of trust, loan or credit agreement
or other agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder's properties may be bound or
affected, or under any federal, state, local or foreign law, regulation
or rule or any decree, judgment or order applicable to the Selling
Stockholder; or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of such Selling
Stockholder; or (B) result in any violation of the provisions of the
charter or bylaws or other organizational instrument of such Selling
Stockholder, if applicable, or any applicable treaty, law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over such Selling Stockholder or any of its properties;
(e) no approval, authorization, consent or order of or filing
with any federal, state or local governmental or regulatory commission,
board, body, authority or agency is required in connection with the
Selling Stockholder's execution, delivery and performance of this
Agreement and the Custody Agreement and Power of Attorney, its
consummation of the transactions contemplated herein and therein, and
its sale and delivery of the Shares to be sold by such Selling
Stockholder, other than (A) such as have been obtained, or will have
been obtained at the time of purchase or the additional time of
purchase, as the case may be, under the Securities Act and the Exchange
Act, (B) such approvals as have been obtained in connection with the
approval of the quotation of the Shares on the NYSE, (C) any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters
and (D) the approval of the NASD of the fairness and reasonableness of
the proposed terms and conditions of the underwriting and sale of the
Shares by the Underwriters;
(f) such Selling Stockholder is not prompted to sell Shares by
any information concerning the Company or any Subsidiary which is not
set forth in the Registration Statement or the Prospectus;
(g) all information with respect to such Selling Stockholder
contained in the Registration Statement and the Prospectus (as amended
or supplemented, if the Company shall have filed with the Commission
any amendment or supplement thereto) complied and will comply in all
material respects with all applicable provisions of the Securities Act
and the Securities Act Regulations, contains and will contain all
statements of material fact required to be stated therein in accordance
with the Securities Act and the Securities Act Regulations, and does
not 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 in
order to make the statements therein not misleading; provided, however,
that the Selling Stockholder makes no warranty or representation with
respect to any statement contained in the Registration Statement or the
Prospectus in reliance upon and in conformity with the information
concerning the Underwriters and furnished in writing by or on behalf of
the Underwriters through you to the Company expressly for use in the
Preliminary Prospectus, the Registration Statement or the Prospectus
or pursuant to any employee benefit plan described in the Registration
Statement and the Prospectus;
-12-
(h) other than as permitted by the Securities Act and the
Securities Act Regulations, such Selling Stockholder has not
distributed and will not distribute any Preliminary Prospectus, the
Prospectus or any other offering material in connection with the
offering and sale of the Shares. Neither such Selling Stockholder, nor
to such Selling Stockholder's knowledge, any of such Selling
Stockholder's directors, officers, affiliates or controlling persons
has taken, directly or indirectly, any action designed, or which has
constituted, or which might reasonably be expected to cause or result
in, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares;
(i) certificates in negotiable form for the Shares to be sold
hereunder by such Selling Stockholder have been placed in custody, for
the purpose of making delivery of such Shares under this Agreement and
under the Custody Agreement and Power of Attorney which appoints
American Stock Transfer & Trust Company, as custodian (the
"Custodian"), for such Selling Stockholder; such Selling Stockholder
agrees that the Shares represented by the certificates held in custody
for him or it under the Custody Agreement and Power of Attorney are for
the benefit of and coupled with and subject to the interest hereunder
of the Custodian, the Attorneys-in-Fact, the Underwriters, each other
Selling Stockholder and the Company; that the arrangements made by such
Selling Stockholder for such custody and the appointment of the
Custodian and the Attorneys-in-Fact by such Selling Stockholder are
irrevocable; and that the obligations of such Selling Stockholder
hereunder shall not be terminated by operation of law, whether by the
death, disability, incapacity or liquidation of any Selling Stockholder
or the occurrence of any other event; if any Selling Stockholder should
die, become disabled or incapacitated or be liquidated or if any other
such event should occur before the delivery of the Shares hereunder,
certificates for the Shares shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement and actions
taken by the Attorneys-in-Fact and the Custodian pursuant to the
Custody Agreement and Power of Attorney shall be as valid as if such
death, liquidation, incapacity or other event had not occurred,
regardless of whether or not the Custodian or the Attorneys-in-Fact, or
either of them, shall have received notice thereof;
(j) such Selling Stockholder has not relied upon the
Representatives or legal counsel for the Representatives for any legal,
tax or accounting advice in connection with the offering and sale of
the Shares;
(k) such Selling Stockholder does not have any registration or
other similar rights to have any equity or debt securities registered
for sale by the Company under the Registration Statement or included in
the offering contemplated by this Agreement, except for such rights as
are described in the Prospectus;
(l) such Selling Stockholder does not have, or has waived
prior to the date hereof, any preemptive right, co-sale right or right
of first refusal or other similar right to purchase any of the Shares
that are to be sold by the Company or any of the other Selling
Stockholders to the Underwriters pursuant to this Agreement; and such
Selling Stockholder does not own any warrants, options or similar
rights to acquire, and does not have any right or arrangement to
acquire, any capital stock, right, warrants, options or other
securities from the Company, other than those described in the
Registration Statement and the Prospectus;
(m) there are no contracts, agreements or understandings
between such Selling Stockholder and any person that would give rise to
a valid claim against such Selling Stockholder or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection
with this offering; and
-13-
(n) other than the Dawntreader Funds, Xxxxxxx X. Xxxxxxx, Xxxx
Xxxxxxxxxx, Xxxxx X. Xxxxxx, Wit VC Fund I LP and ING Capital LLC, such
Selling Stockholder is not a member of or an affiliate of or associated
with any member of the NASD.
In addition, any certificate signed by any officer of a
Selling Stockholder and delivered to the Underwriters or counsel for the
Underwriters in connection with the offering of the Shares shall be deemed to be
a representation and warranty by such Selling Stockholder, as to matters covered
thereby, to each Underwriter.
5. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states or other
jurisdictions as you may designate as of the date of this Agreement and
to maintain such qualifications in effect so long as you may request
for the distribution of the Shares; provided that the Company shall not
be required to qualify as a foreign corporation or to consent to the
service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as
soon as practicable after the Registration Statement becomes effective,
and thereafter from time to time to furnish to the Underwriters, as
many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may reasonably request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver
a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the
Company will prepare, at its expense, promptly upon request such
amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or any post-effective
amendment thereto to be declared effective before the offering of the
Shares may commence, the Company will endeavor to cause the
Registration Statement or such post-effective amendment to become
effective as soon as possible and the Company will advise you promptly
and, if requested by you, will confirm such advice in writing, (i) when
the Registration Statement and any such post-effective amendment
thereto has become effective, and (ii) if Rule 430A under the Act is
used, when the Prospectus is filed with the Commission pursuant to Rule
424(b) under the Act (which the Company agrees to file in a timely
manner under such Rule);
(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for,
or the entry of a stop order, suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to use its
best efforts to obtain the lifting or removal of such order as soon as
possible; to advise
-14-
you promptly of any proposal to amend or supplement the Registration
Statement or the Prospectus and to provide you and Underwriters'
counsel copies of any such documents for review and comment a
reasonable amount of time prior to any proposed filing and to file no
such amendment or supplement to which you shall object reasonably in
writing providing an explanation including any legal justification;
(e) subject to Section 5(d) hereof, to file promptly all
reports and any definitive proxy or information statement required to
be filed by the Company with the Commission in order to comply with the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Shares;
(f) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act;
(g) to advise the Underwriters promptly of the happening of
any event within the time during which a prospectus relating to the
Shares is required to be delivered under the Act which in the judgment
of the Company, after receiving advice from outside securities law
counsel of national reputation, could require the making of any change
in the Prospectus then being used so that the Prospectus would not
include an untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and,
during such time, subject to Section 5(d) hereof, to prepare and
furnish, at the Company's expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be necessary to
reflect any such change;
(h) to make generally available to its security holders, and
to deliver to you (but expressly not your analysts covering the Company
or REITs generally), an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period
of twelve months beginning after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act) as soon as is
reasonably practicable after the termination of such twelve-month
period;
(i) to furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a
consolidated balance sheet and statements of income, stockholders'
equity and cash flow of the Company and the Subsidiaries for such
fiscal year, accompanied by a copy of the certificate or report thereon
of nationally recognized independent certified public accountants);
(j) to furnish to you copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto) and sufficient copies of the foregoing
(other than exhibits) for distribution of a copy to each of the other
Underwriters;
(k) to furnish to you promptly and, upon written request, to
each of the other Underwriters for a period of five years from the date
of this Agreement (i) copies of any reports or other communications
which the Company has sent to its stockholders or shall from time to
time publish or publicly disseminate, (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, (iii) copies of documents or reports filed with any
national securities exchange on which any class of securities of the
Company is listed, and (iv) such other information as you may
reasonably request regarding the Company or the Subsidiaries; provided
however that any report which upon filing will be available through
XXXXX shall be deemed furnished in accordance with this Section 5(k);
-15-
(l) to furnish to you (but expressly not your analysts
covering the Company or REITs generally), as early as practicable prior
to the time of purchase and any additional time of purchase, as the
case may be, but not later than two business days prior thereto, a copy
of the latest available unaudited interim and monthly consolidated
financial statements, if any, of the Company and the Subsidiaries which
have been read by the Company's independent certified public
accountants, as stated in their letter to be furnished pursuant to
Section 9(d) hereof;
(m) to apply the net proceeds from the sale of the Shares by
the Company in the manner set forth under the caption "Use of Proceeds"
in the Prospectus;
(n) to pay all costs, expenses, fees and taxes in connection
with (i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or
supplements thereto, and the printing and furnishing of copies of each
thereof to the Underwriters and to dealers (including costs of mailing
and shipment), (ii) the registration, issue, sale and delivery of the
Shares to be sold by the Company including any stock or transfer taxes
and stamp or similar duties payable upon the sale, issuance or delivery
of such Shares to the Underwriters, (iii) the producing, word
processing and/or printing of this Agreement, any Agreement Among
Underwriters, any dealer agreements, any Powers of Attorney and any
closing documents (including compilations thereof) and the reproduction
and/or printing and furnishing of copies of each thereof to the
Underwriters and (except closing documents) to dealers (including costs
of mailing and shipment), (iv) the qualification of the Shares for
offering and sale under state or foreign laws and the determination of
their eligibility for investment under state or foreign law as
aforesaid (including the legal fees and filing fees and other
disbursements of counsel for the Underwriters) and the printing and
furnishing of copies of any blue sky surveys or legal investment
surveys to the Underwriters and to dealers, (v) the listing of the
Shares to be sold by the Company on the New York Stock Exchange, Inc.,
(vi) any filing for review of the public offering of the Shares by the
NASD, including the legal fees and filing fees and other disbursements
of counsel to the Underwriters, which fees and disbursements, together
with the legal fees and disbursements of counsel for the Underwriters
described in clause (iv), shall not exceed $7,000.00, (vii) the fees
and disbursements of any transfer agent or registrar for the Shares,
(viii) the costs and expenses of the Company relating to presentations
or meetings undertaken in connection with the marketing of the offering
and sale of the Shares to prospective investors and the Underwriters'
sales forces, including, without limitation, expenses associated with
the production of road show slides and graphics, fees and expenses of
any consultants engaged in connection with the road show presentations,
travel, lodging and other expenses incurred by the officers of the
Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show, and (ix) the performance of
the Company's other obligations hereunder;
(o) not to sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose
of or agree to dispose of, directly or indirectly, any Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common
Stock, or file or cause to be declared effective a registration
statement under the Act relating to the offer and sale of any shares of
Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or other rights to purchase Common Stock
or any other securities of the Company that are substantially similar
to Common Stock for a period of 90 days after the date hereof (the
"Lock-Up Period"), without the prior written consent of the
Representatives, except for (i) the registration of the Shares and the
sales to the Underwriters pursuant to this Agreement, (ii) issuances of
Common Stock upon the exercise of options or warrants disclosed as
outstanding in the Registration Statement and the
-16-
Prospectus, (iii) the issuance of restricted stock and stock options
not transferable or exercisable during the Lock-Up Period pursuant to
incentive stock plans described in the Registration Statement and the
Prospectus, (iv) the issuance of Common Stock pursuant to a dividend
reinvestment plan, and (v) the registration on Form S-8 of shares of
Common Stock issuable under the Amended Long-Term Incentive Plan;
(p) to file a supplemental listing application relating to the
listing of the Shares to be sold by the Company on the New York Stock
Exchange; and
(q) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the
Common Stock.
6. Certain Covenants of the Selling Stockholders. Each Selling
Stockholder, severally and not jointly, hereby agrees with each Underwriter:
(a) to deliver to the Representative prior to the time of
purchase a properly completed and executed United States Treasury
Department Form W-8 (if the Selling Stockholder is a non-United States
person, within the meaning of the Code) or Form W-9 (if the Selling
Stockholder is a United States person, within the meaning of the Code);
(b) if, at any time prior to the date on which the
distribution of the Shares as contemplated herein and in the Prospectus
has been completed, as determined by the Representatives, such Selling
Stockholder has knowledge of the occurrence of any event as a result of
which the Prospectus or the Registration Statement, in each case as
then amended or supplemented, would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, such Selling Stockholder will promptly
notify the Company and the Representative; and
(c) such Selling Stockholder agrees to deliver to the Company
or the Underwriters such documentation as the Company or the
Underwriters or any of their respective counsel may reasonably request
in order to effectuate any of the provisions of this Agreement.
Each executive officer and director of the Company, Diamond Hill
Investments, L.P., AE & JE Associates and ING Capital LLC, hereby agreed with
each underwriter to furnish to the Representatives, prior to the time of
purchase, a Lock-up Agreement, substantially in the form of Exhibit B hereto.
7. Reimbursement of Underwriters' Expenses by the Company. If the
Shares are not delivered for any reason other than the termination of this
Agreement pursuant to subsection (y)(i), (iii), (iv) or (v) of the second
paragraph of Section 10 hereof or the fifth paragraph of Section 11 hereof or
the default by one or more of the Underwriters in its or their respective
obligations hereunder, the Company shall, in addition to paying the amounts
described in Section 5(n) hereof, reimburse the Underwriters for all of their
out-of-pocket expenses, including the fees and disbursements of their counsel.
8. Expenses of the Selling Stockholders. The Selling Stockholders agree
with each Underwriter to pay (directly or by reimbursement) all fees and
expenses incident to the performance of their obligations under this Agreement
which are otherwise specifically provided for herein, including, but not limited
to, (A) fees and expenses of counsel and other advisors for such Selling
Stockholders not paid by the Company and (B) expenses and taxes incident to the
sale and delivery of the Shares to be sold by such Selling Stockholder to the
Underwriters hereunder (which taxes, if any, may be deducted by the Custodian).
-17-
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and each of the Selling Stockholders
hereunder and under the Custody Agreement and Power of Attorney on the date
hereof, at the time of purchase and, if applicable, at the additional time of
purchase, the performance by the Company and each of the Selling Stockholders of
their respective obligations hereunder and under the Custody Agreement and Power
of Attorney and to the following additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
Xxxxxx Xxxxx LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form and substance satisfactory to Xxxxxxxx
Chance US LLP, counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing with the
State Department of Assessments and Taxation of Maryland, with
full corporate power and corporate authority to own, lease and
operate its properties and conduct its business as described
in the Registration Statement and the Prospectus, to execute
and deliver this Agreement and to issue, sell and deliver the
Shares to be sold by the Company as contemplated herein;
(ii) each of the Subsidiaries has been duly
incorporated and is validly existing as a corporation or
limited liability company in good standing (with respect to
those states that recognize the concept of good standing)
under the laws of its jurisdiction of incorporation, with full
corporate or limited liability company power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus;
(iii) each of the Company and the Subsidiaries is
duly qualified to do business as a foreign corporation and
(with respect to those states that recognize the concept of
good standing) the Company is in good standing in the state of
New York and MIT is in good standing in the states of Arizona,
California, Colorado, Florida, Georgia, Illinois, Nevada,
Texas and Washington, which are the only states where we have
been advised that the inability of the Company and the
Subsidiaries to conduct business would amount to a material
liability or disability to the Company and its Subsidiaries,
taken as a whole (in rendering such opinion such counsel may
state that its opinion that a particular entity is qualified
to do business is based solely upon certificates provided by
agencies of those states and is limited to the meaning
ascribed to such certificates by each applicable state
agency);
(iv) this Agreement has been duly authorized,
executed and delivered by the Company;
(v) the Shares to be sold by the Company have been
duly authorized and, upon issuance will be validly issued,
fully paid and non-assessable;
(vi) the Company has an authorized capitalization as
set forth in the Registration Statement and the Prospectus;
all of the issued and outstanding shares of capital stock of
the Company have been duly authorized and validly issued, are
fully paid and non-assessable and are free of statutory
preemptive rights and, to such counsel's knowledge,
contractual preemptive rights, resale rights, rights of first
refusal and similar
-18-
rights; the Shares are free of statutory preemptive rights
and, to such counsel's knowledge, contractual preemptive
rights, resale rights, rights of first refusal and similar
rights; the certificates for the Shares to be sold by the
Company are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of
being such holders;
(vii) all of the outstanding shares of capital stock
or ownership interests of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and
non-assessable and, except as otherwise stated in the
Registration Statement and the Prospectus, are owned by the
Company, in each case subject to no security interest, other
encumbrance or adverse claim other than the TICC Lien; and to
such counsel's knowledge, no options, warrants or other rights
to purchase, agreements or other obligations to issue or other
rights to convert any obligation into shares of capital stock
or ownership interests in the Subsidiaries are outstanding;
(viii) the capital stock of the Company, including
the Shares, conforms as to legal matters to the description
thereof contained in the Registration Statement and the
Prospectus;
(ix) (A) the Registration Statement and the
Prospectus (except as to the financial statements and
schedules and other financial data contained therein, as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act; and
(B) the conditions to the use of Form S-11 have been
satisfied;
(x) the Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened
under the Act and any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424 under the Act has
been made in the manner and within the time period required by
such Rule 424;
(xi) no approval, authorization, consent or order of
or filing with any federal, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the issuance and sale of the
Shares by the Company and consummation by the Company of the
transactions contemplated hereby and by the Prospectus other
than those that have been obtained or made (except such
counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of
the various jurisdictions in which the Shares are being
offered by the Underwriters);
(xii) the execution, delivery and performance of this
Agreement by the Company, the issuance and sale of the Shares
by the Company and the consummation by the Company of the
transactions contemplated hereby and by the Prospectus do not
and will not conflict with, result in any breach or violation
of or constitute a default under (nor constitute any event
which with notice, lapse of time or both would result in any
breach or violation of or constitute a default under) the
charter or by-laws of the Company or any of the Subsidiaries,
or any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument that is
material to the Company and the Subsidiaries, taken as a
whole, to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their respective
properties may be bound or affected, or any federal, state,
-19-
local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of the
Subsidiaries;
(xiii) to such counsel's knowledge, neither the
Company nor any of the Subsidiaries is in breach or violation
of or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach of,
or constitute a default under, or give the holder of any
indebtedness (or a person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of
all or a part of such indebtedness under) (1) its respective
charter or by-laws, or (2) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of
indebtedness, or (3) any license, lease, contract or other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of
their respective properties may be bound or affected, except,
in the case of clauses (2) and (3), where such conflict,
breach or default would not have a material adverse effect on
the business, properties, financial condition or results of
operation of the Company and the Subsidiaries taken as a
whole, or 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;
(xiv) to such counsel's knowledge, there are no
affiliate transactions, off-balance sheet transactions,
contracts, licenses, agreements, leases or documents of a
character which are required to be described in the
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which have not been so
described or filed;
(xv) to such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending,
threatened or contemplated to which the Company or any of the
Subsidiaries or any of their respective directors or officers
is a party or to which any of their respective properties is
subject at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board,
body, authority or agency which are required to be described
in the Registration Statement or the Prospectus but are not so
described;
(xvi) the Company is not and, after giving effect to
the offering and sale of the Shares to be sold by the Company,
and the application of the proceeds thereof as described in
the Prospectus will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms
are defined in the Investment Company Act;
(xvii) the information in the Registration Statement
and the Prospectus under the headings "Risk Factors--Risks
Related to Government Regulation," "Our Company--Legal
Proceedings," "Description of Capital Stock," "Certain
Provisions of Maryland Law and Our Articles of Incorporation
and Bylaws" and "Federal Income Tax Consequences of Our Status
as a REIT", insofar as such statements constitute a summary of
documents or matters of law, and those statements in the
Registration Statement and the Prospectus that are
descriptions of contracts, agreements or other legal documents
or of legal proceedings, or refer to statements of law or
legal conclusions, are accurate in all material respects and
present fairly the information required to be shown;
(xviii) except as otherwise described in the
Registration Statement and the Prospectus, no person has the
right, pursuant to the terms of any contract, agreement or
other instrument described in or filed as an exhibit to the
Registration Statement or otherwise known to such counsel, to
cause the Company or the Subsidiaries to register
-20-
under the Act any shares of Common Stock or shares of any
other capital stock or other equity interest of the Company or
the Subsidiaries, or to include any such shares or interest in
the Registration Statement or the offering contemplated
thereby, whether as a result of the filing or effectiveness of
the Registration Statement or the sale of the Shares as
contemplated thereby or otherwise; and
(xix) (a) commencing with its taxable year ended
December 31, 2004, the Company has been organized and operated
in conformity with the requirements for qualification and
taxation as REIT under the Code and its current and proposed
method of operation will enable the Company to continue to
meet the requirements for qualification and taxation as a REIT
under the Code and (b) any Subsidiary that is a partnership or
limited liability company will be classified as a partnership
or an entity disregarded as separate from the Company for
Federal income tax purposes and not as (a) an association
taxable as a corporation or (b) a "publicly traded
partnership" taxable as a corporation under Section 7704(a) of
the Code.
In addition, such counsel shall state that such
counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent
public accountants of the Company and representatives of the
Underwriters including their counsel at which the contents of the
Registration Statement and the Prospectus were discussed and, although
such counsel is not passing upon and does not assume responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus (except as and to the
extent stated in subparagraphs (vi), (viii) and (xvii) above), on the
basis of the foregoing nothing has come to the attention of such
counsel that causes them to believe that the Registration Statement or
any amendment thereto at the time such Registration Statement or
amendment became effective contained 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, or that the
Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at the time of purchase or the additional time of
purchase, as the case may be, contained 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, in light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to
the financial statements and schedules and other financial data
included in the Registration Statement or the Prospectus).
(b) ING Capital LLC, the Dawntreader Funds and Sandler Capital
shall furnish to you at the time of purchase an opinion of counsel
reasonably acceptable to the Representatives, addressed to the
Underwriters, and dated the time of purchase with reproduced copies for
the other Underwriters and in form and substance satisfactory to
Xxxxxxxx Chance US LLP, counsel for the Underwriters, covering the
opinions set forth in paragraphs i, iii, iv and v below. The remaining
Selling Stockholders shall furnish to you at the time of purchase an
opinion of Xxxxxx Xxxxx LLP, counsel to such Selling Stockholders,
addressed to the Underwriters, and dated the time of purchase with
reproduced copies for the other Underwriters, and in the form and
substance reasonably satisfactory to Xxxxxxxx Chance US LLP, counsel
for the Underwriters, covering the opinions set forth in paragraph ii
below.
i. such Selling Stockholder has, (A) valid title to
the Shares to be sold by such Selling Stockholder hereunder, free and clear of
all liens, encumbrances and claims whatsoever (other than pursuant to the
Custody Agreement and Power of Attorney), and (B) full legal right and power,
and all authorizations and approvals required by law, to sell, transfer and
deliver such Shares to the Underwriters; upon the sale and delivery of the
Shares by each Selling Stockholder against receipt of payment therefor, in each
case in accordance with the terms of this Agreement and the Custody Agreement
and Power of Attorney, the Underwriters (assuming no Underwriter has notice of
any "adverse claim," within the meaning of Section 8-105 of the New York Uniform
Commercial Code to
-21-
such Shares) will acquire good and marketable title to such Shares, free and
clear of any pledge, lien, encumbrance, security interest, or other claim;
ii. we are of the opinion that, assuming (a) no
Underwriter has notice of any "adverse claim," within the meaning of Section
8-105 of the New York Uniform Commercial Code ("NYUCC") with respect to the
remaining Selling Stockholder Shares and (b) payment is made for the remaining
Selling Stockholder Shares by the Underwriters in accordance with the
Underwriting Agreement, then, upon delivery to you of the stock certificates
registered in the name of the remaining Selling Stockholders and evidencing
shares of Common Stock indorsed to you or in blank by an effective
endorsement, you will acquire such shares free of any adverse claim under
Section 8-103 of the NYUCC.
iii. the execution, delivery and performance of this
Agreement and the Custody Agreement and Power of Attorney by or on behalf of
such Selling Stockholder and the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby and by the Prospectus do not and
will not conflict with, result in any breach or violation of or constitute a
default under (nor constitute any event which with notice, lapse of time or both
would result in any breach or violation of or constitute a default under) the
charter or by-laws of such Selling Stockholder, if applicable, or any indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or instrument
that is material to such Selling Stockholder, taken as a whole, to which such
Selling Stockholder is a party or by which any of them or any of their
respective properties may be bound or affected, or any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
such Selling Stockholder;
iv. this Agreement has been duly authorized, executed
and delivered by such Selling Stockholder; the Custody Agreement and Power of
Attorney have been duly authorized, executed and delivered by such Selling
Stockholder and each is a legal, valid and binding agreement of such Selling
Stockholder enforceable in accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity, and except
that enforceability of the indemnity and contribution provisions set forth in
Section 12 of this Agreement may be limited by the federal or state securities
laws of the United States or public policy underlying such laws; and
v. no approval, authorization, consent or order of or
filing with any federal or state governmental or regulatory commission, board,
body, authority or agency is required in connection with the execution, delivery
and performance of this Agreement and the Custody Agreement and Power of
Attorney, the consummation of the transaction contemplated herein and therein,
and the sale and delivery of the Shares by such Selling Stockholder as
contemplated herein and therein, other than such as have been obtained or made
under the Securities Act, the Securities Act Regulations, the Exchange Act and
the Exchange Act Regulations, and except that such counsel need express no
opinion as to any necessary qualification under the state securities or blue sky
laws of the various jurisdictions in which the Shares are being offered by the
Underwriters.
(c) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, the favorable opinion
of Xxxxxxxx Chance US LLP, counsel for the Underwriters, dated the time
of purchase or the additional time of purchase, as the case may be, as
to the matters referred to in subparagraphs (iv), (v), (viii) (with
respect to the Shares only), (ix)(A), (x) and the last subparagraph of
Section 9(a).
-22-
(d) BDO Xxxxxxx, LLP shall furnish to you on the date hereof,
the time of purchase and, if applicable, the additional time of
purchase, and addressed to the Underwriters (with reproduced copies for
each of the Underwriters), letters in the forms heretofore approved by
Xxxxxxx Xxxxx and FBR containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(e) No Prospectus or amendment or supplement to the
Registration Statement or the Prospectus shall have been filed to which
you object in writing.
(f) The Registration Statement shall become effective not
later than 5:30 P.M. New York City time, on the date of this Agreement
and, if Rule 430A under the Act is used, the Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) under the Act at or
before 5:30 P.M., New York City time, on the second full business day
after the date of this Agreement.
(g) Prior to the time of purchase, and, if applicable, the
additional time of purchase, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto
shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and (iii) the Prospectus
and all amendments or supplements thereto shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they are made, not
misleading.
(h) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may
be, no material adverse change or any development involving a
prospective material adverse change in the business, properties,
management, financial condition or results of operations of the Company
and the Subsidiaries taken as a whole shall occur or become known.
(i) The Company will, at the time of purchase and, if
applicable, at the additional time of purchase, deliver to you a
certificate of its Chief Executive Officer and Chief Financial Officer
in the form attached as Exhibit C hereto.
(j) You shall have received signed Lock-up Agreements referred
to in Section 3(r) hereof.
(k) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the
time of purchase and, if applicable, the additional time of purchase,
as you may reasonably request.
(l) The Shares to be sold by the Company shall have been
approved for listing on the New York Exchange, subject only to notice
of issuance at or prior to the time of purchase or the additional time
of purchase, as the case may be.
(m) Each Selling Stockholder will at the time of purchase
deliver, or have delivered on his, her or its behalf, to you a
certificate in the form attached as Exhibit D hereto.
-23-
10. Effective Date of Agreement; Termination. This Agreement shall
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
Until the time of purchase, the obligations of the several
Underwriters hereunder shall be subject to termination in the absolute
discretion of FBR or Xxxxxxx Xxxxx or any group of Underwriters (which may
include FBR or Xxxxxxx Xxxxx) which has agreed to purchase in the aggregate at
least 50% of the Firm Shares, if (x) since the time of execution of this
Agreement or the earlier respective dates as of which information is given in
the Registration Statement and the Prospectus, there has been any material
adverse change or any development involving a prospective material adverse
change in the business, properties, management, financial condition or results
of operation of the Company and the Subsidiaries taken as a whole, which would,
in FBR's or Xxxxxxx Xxxxx'x judgment or in the judgment of such group of
Underwriters, make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus, or (y) there
shall have occurred: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) an outbreak or
escalation of hostilities or acts of terrorism involving the United States or a
declaration by the United States of a national emergency or war; or (v) any
other calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event
specified in clause (iv) or (v) in FBR's or Xxxxxxx Xxxxx'x judgment or in the
judgment of such group of Underwriters makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares on the terms and
in the manner contemplated in the Registration Statement and the Prospectus.
If Xxxxxxx Xxxxx or FBR or any group of Underwriters elects to
terminate this Agreement as provided in this Section 10, the Company and each
other Underwriter shall be notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company or any Selling Stockholder shall be unable to comply with any of the
terms of this Agreement, the Company and the Selling Stockholders shall not be
under any obligation or liability under this Agreement (except to the extent
provided in Sections 5(n), 7, 8 and 12 hereof), as applicable, and the
Underwriters shall be under no obligation or liability to the Company and the
Selling Stockholders under this Agreement (except to the extent provided in
Section 12 hereof) or to one another hereunder.
11. Increase in Underwriters' Commitments. Subject to Sections 9 and 10
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 9 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 10
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or,
-24-
in the event no such designation is made, such Shares shall be taken up and paid
for by all non-defaulting Underwriters pro rata in proportion to the aggregate
number of Firm Shares set opposite the names of such non-defaulting Underwriters
in Schedule II.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares to be sold by the Company hereunder
unless all of the Firm Shares to be sold by the Company are purchased by the
Underwriters (or by substituted Underwriters selected by you with the approval
of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 11 with like effect
as if such substituted Underwriter had originally been named in Schedule II.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if none
of the non-defaulting Underwriters, the Company or the Selling Stockholders
shall make arrangements within the five business day period stated above for the
purchase of all the Firm Shares which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall terminate without further act
or deed and without any liability on the part of the Company and the Selling
Stockholders to any non-defaulting Underwriter and without any liability on the
part of any non-defaulting Underwriter to the Company and the Selling
Stockholders. Nothing in this paragraph, and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
12. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any person
who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons, from and against any loss, damage,
expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any
such person may incur under the Act, the Exchange Act, the common law
or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus
(the term Prospectus for the purpose of this Section 12 being deemed to
include any Preliminary Prospectus, the Prospectus and the Prospectus
as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact
required to be stated in either such Registration Statement or such
Prospectus or necessary to make the statements made therein not
misleading, except insofar as any such loss, damage, expense, liability
or claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in and in conformity with
information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use
in such Registration Statement
-25-
or such Prospectus or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or
such Prospectus or necessary to make such information not misleading,
(ii) any untrue statement or alleged untrue statement made by the
Company in Section 3 hereof or the failure by the Company to perform
when and as required any agreement or covenant contained herein, or
(iii) any untrue statement or alleged untrue statement of any material
fact contained in any audio or visual materials provided by the Company
or based upon written information furnished by or on behalf of the
Company including, without limitation, slides, videos, films or tape
recordings used in connection with the marketing of the Shares.
If any action, suit or proceeding (each, a
"Proceeding") is brought against an Underwriter or any such person in
respect of which indemnity may be sought against the Company pursuant
to the foregoing paragraph, such Underwriter or such person shall
promptly notify the Company in writing of the institution of such
Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify the Company shall not relieve
the Company from any liability which the Company may have to any
Underwriter or any such person or otherwise. Such Underwriter or such
person shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or of such person unless the employment of
such counsel shall have been authorized in writing by the Company in
connection with the defense of such Proceeding or the Company shall not
have, within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Company (in
which case the Company shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company
shall not be liable for any settlement of any Proceeding effected
without its written consent but if settled with the written consent of
the Company, the Company agree to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable
for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 45 business
days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall not have fully reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not
include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
-26-
(b) Each of the Selling Stockholders, severally but not jointly, agrees
to indemnify, defend and hold harmless each Underwriter, its partners,
directors and officers, and any person who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing
persons, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or
severally, any such Underwriter or any such person may incur under the
Act, the Exchange Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of
this Section 12 being deemed to include any Preliminary Prospectus, the
Prospectus and the Prospectus as amended or supplemented by the
Company), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the
statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material
fact contained in and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in such Registration
Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection
with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading, or (ii) any untrue statement or alleged untrue statement
made by the Selling Stockholder in Section 4 hereof or in the
representations and warranties contained in the Custody Agreement and
Power of Attorney or the failure by the Selling Stockholder to perform
when and as required any agreement or covenant contained herein or
therein; provided that, each Selling Stockholder shall only be liable
for any such loss, claim, damage, liability or action that arises out
of or is based upon, information relating to the Selling Stockholder
for use in any such Registration Statement or Prospectus; provided,
further, that the maximum amount of each Selling Stockholder's
liability for indemnification obligations hereunder shall be limited to
an amount equal to the aggregate gross proceeds received by such
Selling Stockholder from the sale of Shares sold by such Selling
Stockholder.
If any Proceeding is brought against an Underwriter or any
such person in respect of which indemnity may be sought against a
Selling Stockholder pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the Selling
Stockholder in writing of the institution of such Proceeding and the
Selling Stockholder shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify the Selling Stockholder shall
not relieve the Selling Stockholder from any liability which the
Selling Stockholder may have to any Underwriter or any such person or
otherwise. Such Underwriter or such person shall have the right to
employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or
of such person unless the employment of such counsel shall have been
authorized in writing by the Selling Stockholder in connection with the
defense of such Proceeding or the Selling Stockholder shall not have,
within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or
-27-
parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in
conflict with those available to the Selling Stockholder (in which case
the Selling Stockholder shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the
Selling Stockholder and paid as incurred (it being understood, however,
the Selling Stockholder shall not be liable for the expenses of more
than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such
Proceeding). The Selling Stockholder shall not be liable for any
settlement of any Proceeding effected without their written consent but
if settled with the written consent of the Selling Stockholder, the
Selling Stockholder agree to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable
for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 45 business
days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall not have fully reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not
include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
(c) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company and each Selling Stockholder, their
respective directors and officers, and any person who controls the
Company or the Selling Stockholder within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons, from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or the Selling
Stockholder any such person may incur under the Act, the Exchange Act,
the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in
conformity with information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company
expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection
with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading.
If any Proceeding is brought against the Company, the
Selling Stockholder or any such person in respect of which indemnity
may be sought against any Underwriter pursuant to the foregoing
paragraph, the Company, the Selling Stockholder or such person shall
promptly notify such Underwriter in writing of the institution of such
Proceeding and such Underwriter shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses;
provided, however, that the omission to so notify such Underwriter
shall not relieve such Underwriter from any liability which such
Underwriter may have to the Company, the Selling Stockholder or any
such
-28-
person or otherwise. The Company, the Selling Stockholder or such
person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of
the Company, the Selling Stockholder or such person unless the
employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to defend such Proceeding
or such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different
from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified
party or parties, but such Underwriter may employ counsel and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), in any of which
events such fees and expenses shall be borne by such Underwriter and
paid as incurred (it being understood, however, that such Underwriter
shall not be liable for the expenses of more than one separate counsel
(in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No Underwriter
shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the
written consent of such Underwriter, such Underwriter agrees to
indemnify and hold harmless the Company, the Selling Stockholder and
any such person from and against any loss or liability by reason of
such settlement. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of
any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by
such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at
least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened Proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such Proceeding and does not include an admission of fault,
culpability, or a failure to act, by or on behalf of such indemnified
party.
(d) If the indemnification provided for in this Section 12 is
unavailable to an indemnified party under subsections (a), (b) and (c)
of this Section 12 or insufficient to hold an indemnified party
harmless in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling
Stockholders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, damages, expenses, liabilities or claims, as well as any other
relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received or anticipated
-29-
to be received by the Company and the Selling Stockholders and the
total underwriting discounts and commissions received or anticipated to
be received by the Underwriters, bear to the aggregate public offering
price of the Shares. The relative fault of the Company and the Selling
Stockholders on the one hand and of the Underwriters on the other shall
be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or the
Selling Stockholders or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, damages, expenses, liabilities and
claims referred to in this subsection shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending any
Proceeding.
(e) The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this Section 12 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in subsection (d) above. Notwithstanding the
provisions of this Section 12, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by such Underwriter and distributed to
the public were offered to the public exceeds the amount of any damage
which such Underwriter has otherwise been required to pay by reason of
such untrue statement or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant
to this Section 12 are several in proportion to their respective
underwriting commitments and not joint.
(f) The indemnity and contribution agreements contained in
this Section 12 and the covenants, warranties and representations of
the Company and the Selling Stockholders contained in this Agreement
shall remain in full force and effect regardless of any investigation
made by or on behalf of any Underwriter, its partners, directors or
officers or any person (including each partner, officer or director of
such person) who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, or by or on behalf of
the Company, the Selling Stockholders, their respective directors or
officers or any person who controls the Company or the Selling
Stockholders within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and shall survive any termination of this
Agreement or the issuance and delivery of the Shares. The Company, the
Selling Stockholders and each Underwriter agree promptly to notify each
other of the commencement of any Proceeding against it and, in the case
of the Company or any of the Selling Stockholders, as applicable,
against any of the Company's or any Selling Stockholder's officers or
directors in connection with the issuance and sale of the Shares, or in
connection with the Registration Statement or the Prospectus.
13. Information Furnished by the Underwriters. The statements set forth
in the last paragraph on the cover page of the Prospectus and the statements set
forth in the paragraph under the heading "Over-Allotment Option," in the first
paragraph under the heading "Commissions and Discounts" and in each of the
paragraphs, other than the last three paragraphs, under the heading "Price
Stabilization, Short Positions," in each case under the caption "Underwriting"
in the Prospectus constitute the only information furnished by or on behalf of
the Underwriters as such information is referred to in Sections 3, 4 and 12
hereof.
-30-
14. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, 0 Xxxxx Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000 and Friedman, Billings, Xxxxxx & Co., Inc., 0000 00xx
Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Syndicate Department, and if
to the Company, shall be sufficient in all respects if delivered or sent to the
Company at the offices of the Company at 00 Xxxxxx Xxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxx, and if to the Selling Stockholders,
shall be sufficient in all aspects if delivered or sent to Xxxx X. Xxxxxx and
Xxxx Xxxx, 00 Xxxxxx Xxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
15. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New York
without giving effect to choice of law or conflict of laws principles thereof.
The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
16. Submission to Jurisdiction. Except as set forth below, no Claim may
be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against Xxxxxxx Xxxxx or FBR or any
indemnified party. Each of Xxxxxxx Xxxxx, FBR, the Company and the Selling
Stockholders (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) waives all right to trial by jury in
any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company
and the Selling Stockholders agree that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and the Selling Stockholders and may be enforced in any
other courts to the jurisdiction of which the Company or the Selling
Stockholders is or may be subject, by suit upon such judgment.
17. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company and the Selling
Stockholders to the extent provided in Section 12 hereof the controlling
persons, directors and officers referred to in such section, and their
respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
18. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
19. Successors and Assigns. This Agreement shall be binding upon the
Underwriters, the Company and the Selling Stockholders and their successors
and assigns, and any successor or assign of any substantial portion of the
Company's, the Selling Stockholder's and any of the Underwriters' respective
businesses and/or assets.
20. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its Subsidiaries and the
Selling Stockholders shall remain operative and in full force and effect
regardless of
-31-
(i) any investigation made by or on behalf of any Underwriter or its Affiliates
or selling agents, any person controlling any Underwriter, its officers or
directors, or by or on behalf of the Company or its Subsidiaries, the Selling
Stockholders or any person who controls the Company and any Selling Stockholders
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and (ii) delivery of and payment of the Shares.
21. Arm's Length Relationship: No Fiduciary Duty. The Company and each
Selling Stockholder acknowledges and agrees that (i) the purchase and sale of
the Shares pursuant to this Agreement, including the determination of the public
offering price of the Shares and any related discounts and commissions, is an
arm's length commercial transaction between the Company and the Selling
Stockholders, on the one hand, and the several Underwriters, on the other hand,
(ii) in connection with the offering contemplated hereby and the process leading
to such transaction each Underwriter is and has been acting solely as a
principal and is not the agent or fiduciary of the Company, any Selling
Stockholder, or their respective stockholders, creditors, employees or any other
party, (iii) no Underwriter has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company or any Selling Stockholder with respect
to the offering contemplated hereby or the process leading thereto (in respect
of whether such Underwriter has advised or is currently advising the Company or
any such Selling Stockholder on other matters) and no Underwriter has any
obligation to the Company or any Selling Stockholder with respect to the
offering contemplated hereby except the obligations expressly set forth in this
Agreement, (iv) the Underwriters and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Company or any Selling Stockholder, and (v) the Underwriters have not
provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company and each Selling Stockholder has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate.
If the foregoing correctly sets forth the understanding among
the Company, the Selling Stockholders and the several Underwriters, please so
indicate in the space provided below for that purpose, whereupon this agreement
and your acceptance shall constitute a binding agreement among the Company, the
Selling Stockholders and the Underwriters, severally.
Very truly yours,
MORTGAGEIT HOLDINGS, INC.
By:
-------------------------------------------------
Name:
Title:
THE SELLING STOCKHOLDERS LISTED ON
SCHEDULE I TO THIS UNDERWRITING AGREEMENT
By:
-------------------------------------------------
Name:
Title: Attorney-In-Fact
-32-
Accepted and agreed to as of the
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule II
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
--------------------------------------
Name:
Title:
By: XXXXXXXX, BILLLINGS, XXXXXX & CO., INC.
By:
--------------------------------------
Name:
Title:
-33-
