$100,000,000
DYNEX CAPITAL, INC.
7.875% Senior Notes due July 15, 2002
UNDERWRITING AGREEMENT
----------------------
July 14, 1997
PAINEWEBBER INCORPORATED
XXXXX XXXXXX INC.
c/o PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Dynex Capital, Inc., a Virginia corporation (the "Company"), proposes
to issue and sell $100,000,000 principal amount of its 7.875% Senior Notes due
July 15, 2002 (the "Securities").
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The Securities are to be issued pursuant to an Indenture by and between the
Company and Texas Commerce Bank National Association, as trustee, dated as of
July 14, 1997 (the "Indenture"). This is to confirm the agreement concerning the
purchase of the Securities from the Company by the Underwriters named in
Schedule 1 hereto (the "Underwriters").
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 and any amendments
thereto with respect to the Securities have (i) been prepared by the
Company in conformity in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, (ii) been filed
with the Commission under the Securities Act; (iii) become effective
under the Securities Act; and the Indenture shall have been qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). Copies of such registration statement and any amendments thereto
have been delivered by the Company to PaineWebber Incorporated
("PaineWebber") on behalf of the Underwriters. As used in this
Agreement, "Effective Time" means the date and the time as of which
such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time; "Preliminary
Prospectus" means each prospectus included in such registration
statement, or amendments thereof, before it became effective under the
Securities Act which omits certain information pursuant to Rule 430A
under the Rules and Regulations and any prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement"
means such registration statement, as amended at the Effective Time,
including all documents incorporated by reference therein at such time
and all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 5(a) hereof and deemed to be a part of the
registration statement as of the Effective Time pursuant to paragraph
(b) of Rule 430A of the Rules and Regulations; and "Prospectus" means
such final prospectus and any amendment or supplement thereto, as first
filed with the Commission pursuant to paragraph (2) of Rule 424(b) of
the Rules and Regulations. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
Reference made herein to any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Securities Act, as of the date of such Preliminary Prospectus or
the Prospectus, as the case may be, and any reference to any amendment
or supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any document filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), after the date
of such Preliminary Prospectus or the Prospectus, as the case may be,
and incorporated by reference in such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference to any amendment to
the Registration Statement shall be deemed to include any annual report
of the Company filed with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act after the Effective Time that is incorporated
by reference in the Registration Statement. The Commission has not
issued any order preventing or suspending the use of any Preliminary
Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements thereto will, when they
become effective or are filed with the Commission, as the case may be,
conform in all material respects to the requirements of the Securities
Act, and the Rules and Regulations, and do not
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and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) 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; provided that
no representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus, including
any amendments or supplements thereto, in reliance upon and in
conformity with written information furnished to the Company through
PaineWebber by or on behalf of any Underwriter specifically for
inclusion therein; and the Indenture will conform in all material
respects with the requirements of the Trust Indenture Act, and the
applicable rules and regulations thereunder.
(c) The documents incorporated by reference in the Prospectus,
including any amendments or supplements thereto, when they became
effective or were filed, as the case may be, with the Commission
conformed in all material respects to the requirements of the
Securities Act or Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
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; and any further documents so filed
and incorporated by reference in the Prospectus, including any
amendments or supplements thereto, when such documents became effective
or are filed, as the case may be, with the Commission will conform in
all material respects to the requirements of the Securities Act of
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(d) The Company and each of its subsidiaries and affiliates
(as those terms are defined in Section 15 hereof) have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification except where the failure to so qualify
would not have a material adverse effect on the consolidated financial
position, shareholders' equity, results of operations, business or
prospects of the Company and its subsidiaries and affiliates, taken as
a whole (hereinafter "Material Adverse Effect"), and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged.
(e) The Company has an authorized capitalization as set forth
in the Prospectus, including any amendments or supplements thereto, and
all of the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus,
including any amendments or supplements thereto; and all of the issued
shares of capital stock of each subsidiary and affiliate of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(f) The execution, delivery and performance of this Agreement
and the Indenture by the Company, the consummation of the transactions
contemplated hereby and thereby, the compliance by the Company with the
provisions of the
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Indenture and the Securities and the issuance and delivery of the
Securities by the Company will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
subsidiaries or affiliates is a party or by which the Company or any of
its subsidiaries or affiliates is bound or to which any of the property
or assets of the Company or any of its subsidiaries or affiliates is
subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of its
subsidiaries or affiliates or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or affiliates
or any of their properties or assets, except, as to each case, where
such breach, violation or default would not have a Material Adverse
Effect; and except for the registration of the Securities under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Trust
Indenture Act or the Exchange Act, and applicable state or foreign
securities laws in connection with the purchase and distribution of the
Securities by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement and the Indenture by the Company and the
consummation of the transactions contemplated hereby and thereby.
(g) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities registered pursuant to the Registration Statement or in any
securities registered pursuant to any other registration statement
filed by the Company under the Securities Act.
(h) The Indenture has been duly authorized and, when executed
by the proper officers of the Company (assuming the due execution and
delivery thereof by the trustee under the Indenture (the "Trustee"))
and delivered by the Company, will have been duly executed and
delivered by the Company and the Trustee and will constitute the valid
and legally binding obligation of the Company, enforceable in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing; the Securities have been duly authorized, and, upon payment
therefor as provided herein, will be validly issued and outstanding,
and will constitute the valid and legally binding obligations of the
Company, enforceable in accordance with their terms and entitled to the
benefits of the Indenture; and the Securities, the Indenture and the
capital stock of the Company will conform in all material respects to
the descriptions thereof contained in the Registration Statement and
the Prospectus, including any amendments or supplements thereto.
(i) Neither the Company nor any of its subsidiaries or
affiliates has sustained, since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus, including any amendments or supplements thereto, any
material loss or interference with its 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,
which would have a Material Adverse Effect, otherwise than as set forth
or contemplated in the Prospectus, including any amendments or
supplements thereto; and, since such date, there has not been any
change in the capital stock or long-term debt of the
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Company or any of its subsidiaries or affiliates (otherwise than as set
forth or contemplated in the Prospectus, including any amendments or
supplements thereto) or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries or affiliates, which would have a
Material Adverse Effect, otherwise than as set forth or contemplated in
the Prospectus, including any amendments or supplements thereto.
(j) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus, including any
amendments or supplements thereto, present fairly the financial
condition, results of operations and cash flows of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved, except as otherwise stated in the Registration
Statement.
(k) KPMG Peat Marwick LLP ("KPMG Peat Marwick"), who have
certified certain financial statements of the Company and whose report
appears in the Prospectus or is incorporated by reference therein, and
who delivered the initial letter referred to in Section 7(e) hereof,
were independent public accountants as required by the Securities Act
and the Rules and Regulations during the periods covered by the
financial statements on which they reported contained or incorporated
in the Prospectus.
(l) Except as described in the Prospectus, including any
amendments or supplements thereto, there are no legal or governmental
proceedings pending, or to the knowledge of the Company threatened, to
which the Company or any of its subsidiaries or affiliates is a party
or of which any property or assets of the Company or any of its
subsidiaries or affiliates is the subject which, if determined
adversely to the Company or any of its subsidiaries or affiliates,
would have a Material Adverse Effect.
(m) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(i) is in violation of its charter or by-laws, (ii) is in default, and
no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its properties or assets is subject or
(iii) is in violation of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its property
or to the conduct of its business, except, as to each case, where such violation
or default would not have a Material Adverse Effect.
(o) Neither the Company nor any subsidiary or affiliate is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the
rules and regulations of the Commission thereunder.
(p) The Company has elected to be treated as a real estate
investment trust ("REIT") for federal income tax purposes. The Company
has complied, and intends
6
to comply in the future, with the requirements for qualification as a
REIT under the Internal Revenue Code of 1986, as amended (the "Code").
2. Purchase of the Securities by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell to each of the
Underwriters, severally and not jointly, and each of the Underwriters, severally
and not jointly, agrees to purchase the principal amount of Securities set
opposite that Underwriter's name in Schedule 1 hereto at a purchase price equal
to 98.775% of the principal amount thereof, plus accrued interest from July 15,
1997 to the Delivery Date (as defined in Section 4).
The Company shall not be obligated to deliver any Securities, except
upon payment for all the Securities to be purchased hereunder, as provided
herein.
3. Offering of Securities by the Underwriters. Upon authorization by
the Underwriters of the release of the Securities, the several Underwriters
propose to offer the Securities for sale upon the terms and conditions set forth
in the Prospectus or the amendment or supplement thereto.
4. Delivery of and Payment for the Securities. Delivery of and payment
for the Securities shall be made at the office of PaineWebber Incorporated, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York City
time, on the fifth full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the
Underwriters and the Company. This date and time are sometimes referred to as
the "Delivery Date." On the Delivery Date, the Company shall deliver the
Securities, through the facilities of The Depository Trust Company ("DTC") to
PaineWebber for the account of each Underwriter against payment to or upon the
order of the Company of the purchase price by wire transfer in federal funds
(immediately available funds). Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Securities
shall be in the form of a global certificate and registered in the name of Cede
& Co. or any other nominee of DTC, and beneficial interests therein shall be in
such names and in such denominations as PaineWebber shall request in writing not
less than two full business days prior to the Delivery Date. For the purpose of
expediting the checking of the global certificates, the Company shall make the
global certificates available for inspection by PaineWebber in New York, New
York, not later than 2:00 P.M., New York City time, on the business day prior to
the Delivery Date.
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5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus, including any amendment or
supplement thereto, in a form approved by the Underwriters and to file
such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus prior to
the Delivery Date except as permitted herein; to advise the
Underwriters, promptly after it receives notice thereof, of the time
when the Registration Statement or any amendment thereto, has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Underwriters prior to the Delivery Date with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus, including any
amendments or supplements thereto, and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Securities; to advise the Underwriters, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, including any amendment or supplement
thereto, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) To furnish promptly to each of the Underwriters and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding
exhibits other than this Agreement and the Indenture), (ii) each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus and (iii) any document incorporated by reference in the
Prospectus (excluding exhibits thereto); and, (A) if the delivery of a
prospectus is required at any time prior to the expiration of twelve
months after the Effective Time in connection with the offering or sale
of the Securities and if at such time any events shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Underwriters and, upon their
request, to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Underwriters may from time to time reasonably request of
an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance; and (B)
in case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Securities at any time twelve
months or more after the Effective Time, upon the request of the
Underwriter but at
8
the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as such Underwriter may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of
the Securities Act;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Underwriters, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission prior to the Delivery
Date any (i) Preliminary Prospectus, (ii) amendment to the Registration
Statement or supplement to the Prospectus, any document incorporated by
reference in the Prospectus or (iii) any Prospectus pursuant to Rule
424 of the Rules and Regulations, to furnish a copy thereof to the
Underwriters and their counsel and not to file any such document to
which the Underwriters shall reasonably object after having been given
reasonable notice of the proposed filing thereof;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to
the Underwriters an earning statement of the Company and its
subsidiaries and affiliates (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date,
to furnish to the Underwriters, copies of all materials furnished by
the Company to its shareholders and all public reports and all reports
and financial statements furnished by the Company to the principal
national securities exchange upon which the shares of the common stock,
par value $0.01 per share (the "Common Stock") of the Company may be
listed pursuant to requirements of or agreements with such exchange or
to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Underwriters may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Securities; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
(i) From the date hereof until the Delivery Date, not to offer
or sell, or cause to be offered and sold, in the United States of
America, without the prior consent of the Representatives, any debt
securities which are substantially similar to the Securities;
(j) To apply the net proceeds from the sale of the Securities
being sold by the Company as set forth in the Prospectus; and
(k) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary or affiliate shall become an
"investment company" within the meaning of such term under the 1940 Act
and rules and regulations of the Commission thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Securities and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any pre-effective
or post-effective amendments thereto (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, or any document incorporated by reference
9
therein, all as provided in this Agreement; (d) the costs of reproducing and
distributing this Agreement; (e) the costs of distributing the terms of the
agreement relating to the organization of the underwriting syndicate and selling
group to the members thereof by mail, telex or other means of communication; (f)
the fees and expenses of the Trustee and its counsel; (g) any applicable listing
or other fees; (h) the fees and expenses of filings, if any, with foreign
securities administrators and of qualifying the Securities under the securities
laws of the several jurisdictions as provided in Section 5(h) and of preparing,
printing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the Underwriters); (i) the fees paid to rating agencies
in connection with the rating of the Securities; and (j) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement; provided that except as provided in this Section 6 and in
Section 11, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Securities
which they may sell and the expenses of advertising any offering of the
Securities made by the Underwriters.
7 . Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on the
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Registration Statement shall have become effective and
the Indenture shall have been qualified under the Trust Indenture Act
and the Underwriters shall have received notice thereof, not later than
the first full business day following the date of this Agreement or
such later date as shall be consented to in writing by the
Underwriters; the Prospectus, including any amendment or supplement
thereto, shall have been timely filed with the Commission in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or
the Prospectus, including any amendment or supplement thereto, or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Delivery Date that the Registration
Statement or the Prospectus, including any amendment or supplement
thereto, contains an untrue statement of a fact which, in the opinion
of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, is
material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Indenture, the Securities, the Registration Statement, the Prospectus,
including any amendments or supplements thereto, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all material respects to counsel for
the Underwriters, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to
enable them to pass upon such matters.
(d) Xxxxxxx, Baetjer and Xxxxxx, LLP, as counsel to the
Company, shall have furnished to the Underwriters the following:
(i) their written opinion addressed to the
Underwriters, and dated the Delivery Date, in form and
substance reasonably satisfactory to the Underwriters to the
effect that:
(A) The Company and each of Multi-Family
Finance Corporation, Issuer Holding Corporation and
Merit Securities Corporation (individually, a
"Subsidiary" and, collectively, the "Subsidiaries"),
and each of MSC I, L.P.,
10
Dynex Holding, Inc. and Multi-Family Capital Markets,
Inc. (individually, an "Affiliate" and, collectively,
the "Affiliates") has been duly incorporated or
organized and is validly existing as a corporation or
limited partnership, as applicable, in good standing
under the laws of its respective jurisdiction of
organization and is in good standing as a foreign
corporation or limited partnership, as applicable, in
each jurisdiction in which its respective ownership
or lease of property or the conduct of its respective
business requires such qualification (other than
those jurisdictions in which the failure to so
qualify would not have a Material Adverse Effect),
and has all corporate or partnership, as applicable,
power and authority necessary to own or hold its
respective properties and conduct the business in
which it is engaged, as described in the Prospectus,
or any amendment or supplement thereto;
(B) The Company has an authorized
capitalization as set forth in the Prospectus,
including any amendment or supplement thereto, and
all of the issued shares of capital stock of the
Company have been duly and validly authorized and
issued, are fully paid and non-assessable and conform
to the description thereof contained in the
Prospectus; and, to such counsel's knowledge, all of
the issued shares of capital stock or partnership
interests, as applicable, of each Subsidiary and each
Affiliate of the Company have been duly and validly
authorized and issued and are fully paid and
non-assessable. To such counsel's knowledge, all of
the issued shares of capital stock of each Subsidiary
are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or
claims;
(C) There are no preemptive or other rights
to subscribe for or purchase, nor any restriction
upon the voting or transfer of, any shares of the
Common Stock, pursuant to the Company's charter or
by-laws or any agreement or other instrument known to
such counsel, except as set forth in the Prospectus,
or any amendment or supplement thereto;
(D) The Registration Statement was declared
effective under the Securities Act, the Prospectus,
including any amendment or supplement thereto, was
filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date
specified therein and no stop order suspending the
effectiveness of the Registration Statement has been
issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened
by the Commission;
(E) The Registration Statement and the
Prospectus and any further amendments or supplements
thereto made by the Company prior to the Delivery
Date (other than the financial statements, schedules
and other financial data therein, as to which such
counsel need express no opinion) comply as to form in
all material respects with the requirements of the
Securities Act and the applicable rules and
regulations under said Act; and the documents
incorporated by reference in the Prospectus and any
further amendment or supplement to any such
incorporated documents made by the Company prior to
such Delivery Date (other than the financial
statements, schedules and other financial data
therein, as to which such counsel need express no
opinion), when they became effective or were filed,
as the case may be, with the Commission complied as
to form in all material respects with the
requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of
the Commission thereunder; and the Indenture conforms
in all material respects to the requirements under
the Trust Indenture Act and the applicable rules and
regulations thereunder;
11
(F) The Securities, the Indenture and the
capital stock of the Company conform in all material
respects to the statements concerning them in the
Registration Statement and the Prospectus, or any
amendment or supplement thereto; and the provisions
of the contracts, agreements and instruments (as the
same may be in effect on the Delivery Date)
summarized under the caption "Description of the
Notes" conform in all material respects to the
descriptions thereof in the Prospectus, or any
amendment or supplement thereto;
(G) To such counsel's knowledge and other
than as described in the Prospectus or any amendment
or supplement thereto, there are no legal or
governmental proceedings pending to which the Company
or any of its subsidiaries or affiliates is a party
or of which any property of the Company or any of its
subsidiaries or affiliates is the subject which, if
determined adversely to the Company or any of its
subsidiaries or affiliates, would or could reasonably
be expected to have a Material Adverse Effect; and,
to such counsel's knowledge, no such proceedings are
threatened by governmental authorities or by others;
(H) The statements contained in the
Prospectus under the caption "Federal Income Tax
Considerations," insofar as they describe federal
statutes, rules and regulations, constitute a fair
summary thereof and the opinion of such counsel filed
as Exhibit 8.1 to the Registration Statement is
confirmed and the Underwriters may rely upon such
opinion as if it were addressed to them;
(I) To the best of such counsel's knowledge,
there are no contracts or other documents which are
required to be described in the Prospectus, including
any amendment or supplement thereto, or filed as
exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which
have not been described or filed as exhibits to the
Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations;
(J) This Agreement has been duly authorized,
executed and delivered by the Company;
(K) The Indenture has been duly authorized,
executed and delivered by the Company and (assuming
due execution and delivery by the Trustee)
constitutes a valid and binding agreement of the
Company enforceable against the Company in accordance
with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or
affecting creditors' rights generally, general
equitable principles (whether considered in a
proceeding in equity or at law) or an implied
covenant of good faith and fair dealing;
(L) The Securities have been duly authorized
by the Company, and, when duly executed,
authenticated, issued and delivered as provided in
the Indenture, will be duly and validly issued and
outstanding, and will constitute valid and binding
obligations of the Company entitled to the benefits
of the Indenture and enforceable in accordance with
their terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or
affecting creditors' rights generally, general
equitable principles (whether considered
12
in a proceeding in equity or at law) or an implied
covenant of good faith and fair dealing;
(M) The issue and sale of the Securities
being delivered on such Delivery Date by the Company,
the compliance by the Company with all of the
provisions of this Agreement and the Indenture and
the consummation of the transactions contemplated
hereby and thereby will not conflict with or result
in a breach or violation of any of the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel
to which the Company or any of its subsidiaries or
affiliates is a party or by which the Company or any
of its Subsidiaries or Affiliates is bound or to
which any of the property or assets of the Company or
any of its Subsidiaries or Affiliates is subject,
except, where such breach, violation or default may
be disclosed in the Prospectus or, singly or in the
aggregate, would not or could not be reasonably be
expected to have a Material Adverse Effect or would
not prohibit or adversely affect the consummation of
the transactions contemplated by this Agreement and
the Indenture; nor will such actions result in any
violation of the provisions of the charter or by-laws
of the Company or any of its Subsidiaries or
Affiliates or any statute or any order, rule,
regulation or judgment known to such counsel of any
court or governmental agency or body having
jurisdiction over the Company or any of its
Subsidiaries or Affiliates or any of their properties
or assets; and, except for the registration of the
Securities under the Securities Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange
Act or the Trust Indenture Act and applicable state
or foreign securities laws in connection with the
purchase and distribution of the Securities by the
Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such
court or governmental agency or body is required for
the execution, delivery and performance of this
Agreement and the Indenture by the Company and the
consummation of the transactions contemplated hereby
and thereby;
(N) Neither the Company nor any subsidiary
or affiliate is an "investment company" within the
meaning of such term under the 1940 Act and the rules
and regulations of the Commission thereunder; and
(O) The issuance or sale of the Securities
and the application by the Company of the net
proceeds thereof as set forth in the Prospectus will
not violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
(ii) a letter addressed to the Underwriters and dated
such Delivery Date authorizing the Underwriters to rely on the
opinions expressed in the opinion letter filed as Exhibit 5.1
to the Registration Statement, subject to all of the
assumptions, qualifications, limitations and exceptions set
forth therein.
In rendering such opinion, such counsel may (i) state that the
opinion is limited to matters governed by the federal laws of the
United States of America, the laws of the State of Maryland and the
laws of the Commonwealth of Virginia. Such counsel shall also have
furnished to the Underwriters a written statement, addressed to the
Underwriters and dated such Delivery Date, in customary form and
substance satisfactory to the Underwriters, to the effect that (x) such
counsel has acted as counsel to the Company in connection with the
preparation of the Registration Statement, and (y) based on the
foregoing, but without independent verification and subject to the
information contained in the Prospectus, no facts have come to the
attention of such counsel which lead them to believe that (I) the
13
Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus, as of its
date and as of the Delivery Date, contained or contains any untrue
statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading or (II) any document incorporated by reference in
the Prospectus or any further amendment or supplement to any such
incorporated document made by the Company prior to such Delivery Date,
when they became effective or were filed with the Commission, as the
case may be, contained, in the case of a registration statement which
became effective under the Securities Act, any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or in the case of other documents which were filed under
the Exchange Act with the Commission, any untrue statement of any
material fact or omitted to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing opinion and
statement may be qualified by statements to the effect that no opinion
is expressed as to financial statements, schedules or other financial
data and that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of any statements, financial or
otherwise, contained in the Registration Statement or the Prospectus
except as expressly provided in Sections 7(d)(i)(H) and 7(d)(i)(F)
herein.
(e) With respect to the letter of KPMG Peat Marwick delivered
to the Underwriters concurrently with the execution of this Agreement
(the "initial letter"), the Company shall have furnished to the
Underwriters a letter (the "bring-down letter") of such accountants,
addressed to the Underwriters and dated the Delivery Date, (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, including any
amendment or supplement thereto, as of a date not more than three days
prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and
other matters covered by the initial letter delivered and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(f) The Company shall have furnished to the Underwriters a
certificate, dated the Delivery Date, of its Chairman of the Board, its
President or a Vice President and chief financial officers stating
that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in Sections
7(a), 7(g) and 7(i) have been fulfilled;
(ii) No stop order suspending the effectiveness of the
Registration Statement, as amended, and no proceedings for
that purpose have been initiated or, to the knowledge of the
undersigned, threatened by the Commission as of the date
hereof; and
(iii) They have carefully examined the Registration Statement
and the Prospectus, including any amendments or supplements
thereto, and, in their opinion (A) as of the Effective Date,
the Registration Statement and Prospectus, including any
amendments or supplements thereto, and the documents
incorporated by reference therein, did not include any untrue
statement of a material fact and did not
14
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
(B) since the Effective Date, no event has occurred which
should have been set forth in a supplement or amendment to the
Registration Statement or Prospectus, and the documents
incorporated by reference therein, which has not been set
forth in the Prospectus, as amended or supplemented.
(g) (i) Neither the Company nor any of its subsidiaries or
affiliates shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus, or any amendment or supplement thereto, any loss or
interference with its 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, otherwise
than as set forth or contemplated in the Prospectus, or any amendment
or supplement thereto, or (ii) since such date there shall not have
been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries or affiliates or any change, in or affecting
the general affairs, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries and
affiliates otherwise than as set forth or contemplated in the
Prospectus, or any amendment or supplement thereto, the effect of
which, in any such case described in clause (i) or (ii), is, in the
judgment of the Underwriters, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being delivered on the Delivery Date on the
terms and in the manner contemplated herein or in the Prospectus, or
any amendment or supplement thereto.
(h) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, Inc. (the "NYSE"),
the American Stock Exchange or the over-the-counter market shall have
been suspended or minimum prices shall have been established on either
of such exchanges or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by
federal or state authorities, (iii) the United States shall have become
engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest
of the several Underwriters, impracticable or inadvisable to proceed
with the public offering or delivery of the Securities being delivered
on such Delivery Date on the terms and in the manner contemplated by
the Prospectus or any amendment or supplement thereto.
(i) Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any nationally recognized
statistical rating organization" as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Rules and Regulations,
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters.
15
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
each of its directors, officers and employees, and each person, if any, who
controls any Underwriter within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Securities), to which
that Underwriter, or any such director, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse each Underwriter and
each such director, officer, employee or controlling person promptly upon demand
for any legal or other expenses reasonably incurred by that Underwriter or such
director, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or in any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company through PaineWebber by or on behalf
of any Underwriter specifically for inclusion therein; and provided further,
that such indemnity shall not inure to the benefit of any Underwriter or any
director, officer, employee or controlling person thereof on account of any
loss, claim, damage, liability or action asserted by a purchaser of Securities
from such Underwriter if such Underwriter failed to provide a copy of the
Prospectus, or any amendment or supplement, to such purchaser within the time
required by the Securities Act, and the untrue statement or alleged untrue
statement or any amendment or supplement thereto omission or alleged omission
shall have been corrected in the Prospectus, or such amendment or supplement
unless such failure resulted from non-compliance by the Company with Section
5(c) hereof. For purposes of the last proviso to the immediately preceding
sentence, the term "Prospectus" shall not be deemed to include the documents
incorporated therein by reference, and no Underwriter shall be obligated to send
or give any supplement or amendment to any document incorporated by reference in
any Preliminary Prospectus or the Prospectus to any person other than a person
to whom such Underwriter had delivered such incorporated document or documents
in response to a written request therefor. The foregoing indemnity agreement is
in addition to any liability which the Company may otherwise have to any
Underwriter or to any director, officer, employee or controlling person of that
Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company or any such director, officer or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company through PaineWebber by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the Company and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing
16
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer or controlling
person.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 8. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Underwriters shall have the right to employ, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, a
separate single firm of counsel to represent jointly the Underwriters and their
respective controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 8 if the Underwriters shall have
reasonably concluded that there may be defenses available to them which are
different from or additional to those available to the Company (in which case
the Company shall not have the right to direct the defense of such action on
behalf of the Underwriters), and in that event the fees and expenses of such
separate counsel shall be paid by the Company. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
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, 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 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. 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.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the
17
Underwriters on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Securities purchased under this
Agreement (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters with respect
to the Securities purchased under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 8(d) shall be deemed to include, for purposes
of this Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), no Underwriter
shall be required to contribute any amount in excess of the amount of the
underwriting discounts and commissions received by such Underwriter; it being
understood that this Section 8(d) shall not apply to the extent that a court of
competent jurisdiction finds that such Underwriter has wilfully violated the
provisions of the Securities Act, the Exchange Act or the rules and regulations
promulgated thereunder in connection with the sale of the Securities as
contemplated by this Agreement and the Indenture. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 8(d) are several in proportion to their respective
underwriting obligations and not joint.
(e) The Underwriters severally confirm that the statements with respect
to the public offering of the Securities set forth in the Prospectus in the
first sentence of the last paragraph of text on the cover page, in the first
paragraph on page S-2, concerning stabilization by the Underwriters, and in the
third and last paragraphs of text under the caption "Underwriting" are correct
and constitute the only information furnished in writing to the Company by or on
behalf of the Underwriters specifically for inclusion in the Prospectus.
9. Defaulting Underwriters. If, on the Delivery Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall have the right, but shall not be
obligated to purchase the Securities which the defaulting Underwriter agreed but
failed to purchase on such Delivery Date. If the remaining Underwriters do not
elect to purchase the principal amount which the defaulting Underwriter or
Underwriters agreed but failed to purchase, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or the Company,
except that the Company will continue to be liable for the payment of expenses
to the extent set forth in Sections 6 and 11.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Securities of a defaulting
or withdrawing Underwriter, either the other Underwriters or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment for the Securities if, prior to that time, the
events described in any of Section 7(g), 7(h) or
18
7(i) shall have occurred or if the Underwriters shall decline to purchase the
Securities for any reason permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If (a) the Company shall
fail to tender the Securities for delivery to the Underwriters for any reason
permitted under this Agreement or (b) the Underwriters shall decline to purchase
the Securities for any reason permitted under this Agreement (including the
termination of this Agreement pursuant to Section 10), the Company shall
reimburse the Underwriters for the fees and expenses of their counsel and for
such other out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Securities, and
upon demand the Company shall pay the full amount thereof to the Underwriters.
If this Agreement is terminated pursuant to Section 9 or otherwise by reason of
the default of one or more Underwriters, the Company shall not be obligated to
reimburse any defaulting Underwriter on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to PaineWebber Incorporated, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Finance Department (facsimile number: 212-713-1054); and
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Xxxx X. Xxxxxx (facsimile
number: 804-217-5861);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to
PaineWebber at its address listed in this Section 12. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
PaineWebber.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters and the Company and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Securities and shall remain in full
force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the NYSE
is open for trading and (b) "subsidiary" and "affiliate" have the respective
meanings set forth in Rule 405 of the Rules and Regulations.
19
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between
the Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
DYNEX CAPITAL, INC.
By: _________________________________
Name: ___________________________
Title: __________________________
Accepted:
PAINEWEBBER INCORPORATED
XXXXX XXXXXX INC.
By: PAINEWEBBER INCORPORATED
By: ________________________________
Authorized Representative
SCHEDULE 1
Principal
Underwriters Amount
------------ ------
PaineWebber Incorporated..................... $60,000,000
Xxxxx Xxxxxx Inc............................. 40,000,000
Total................................. $100,000,000
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