Exhibit 1.6
4,000,000 Shares
XXXXXXXXX MORTGAGE, INC.
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
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November 12, 2001
Credit Suisse First Boston Corporation
ABN AMRO Rothschild LLC
X.X. Xxxxxxx & Sons, Inc.
RBC Xxxx Xxxxxxxx Inc.
c/o Credit Suisse First Boston Corporation
As representatives of the several Underwriters,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Ladies and Gentlemen:
1. Introductory. Xxxxxxxxx Mortgage, Inc., a Maryland
corporation ("Company"), proposes to issue and sell 4,000,000 shares ("Firm
Securities") of its common stock, par value $0.01 per share ("Securities"), to
the several underwriters named on Schedule A annexed hereto ("Underwriters"),
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for whom Credit Suisse First Boston Corporation ("CSFBC"), ABN AMRO Rothschild
LLC, X.X. Xxxxxxx & Sons, Inc. and RBC Xxxx Xxxxxxxx Inc. are acting as
representatives ("Representatives"), and also proposes to issue and sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
600,000 additional shares ("Optional Securities") of its Securities as set forth
below. The Firm Securities and the Optional Securities are herein collectively
called "Offered Securities."
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, "Act"), with the Securities and Exchange Commission
("Commission") a registration statement on Form S-3, (File No. 333-61966),
including a prospectus ("Rule 429 Registration Statement"), with respect to the
Offered Securities, which amends pursuant to Rule 429 of the Act the Company's
earlier registration statement on Form S-3 (File No. 333-16799) ("Initial
Registration Statement") and which incorporates by reference documents which the
Company has filed or will file in accordance with the provisions of the
Ex. 1.6-1
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, "Exchange Act"). The Company has prepared a prospectus
supplement ("Prospectus Supplement") to the prospectus included as part of the
Rule 429 Registration Statement setting forth the terms of the offering, sale
and plan of distribution of the Offered Securities and additional information
concerning the Company and its business. The Company has furnished to the
Representatives, for use by the Underwriters and by dealers, copies of one or
more preliminary prospectuses, containing the prospectus included as part of the
Rule 429 Registration Statement, as supplemented by a preliminary Prospectus
Supplement, and including the documents incorporated in such prospectus by
reference (each, "Preliminary Prospectus"), relating to the Offered Securities.
Except where the context otherwise requires, the Rule 429 Registration
Statement, as amended when it became effective, including all documents filed as
part thereof or incorporated by reference therein, and including any information
contained in a Prospectus (as defined below) subsequently filed with the
Commission pursuant to Rule 424(b) under the Act, is herein called the
"Registration Statement," the Registration Statement and the Initial
Registration Statement, as amended when it became effective, are herein
collectively called the "Registration Statements" and the prospectus, including
all documents incorporated therein by reference, included in the Registration
Statement, as supplemented by the Prospectus Supplement, in the form filed by
the Company with the Commission pursuant to Rule 424(b) under the Act on or
before the second business day following the date of this Underwriting Agreement
("Agreement") (or on such other day as the parties may mutually agree), is
herein called the "Prospectus." Any reference herein to the Registration
Statements, the Prospectus, any Preliminary Prospectus or any amendment or
supplement thereto shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration
Statements, the Prospectus or any Preliminary Prospectus shall be deemed to
refer to and include the filing after the execution hereof of any document with
the Commission deemed to be incorporated by reference therein. For purposes of
this Agreement, all references to the Registration Statements, the Prospectus,
any Preliminary Prospectus or to any amendment or supplement thereto shall be
deemed to include any copy filed with the Commission pursuant to its Electronic
Data Gathering Analysis and Retrieval System ("XXXXX"), and such copy shall be
identical in content to any Prospectus or Preliminary Prospectus delivered to
the Underwriters for use in connection with the offering of the Offered
Securities. No document has been or will be prepared or distributed in reliance
on Rule 434 under the Act.
The Company hereby agrees with the Underwriters as follows:
2. Representations and Warranties of the Company and the
Manager. The Company and, where applicable, the Manager (as defined below)
represent and warrant to, and agree with, the several Underwriters that:
(a) The Company meets the requirements for use of Form S-3
under the Act. The Registration Statements have been filed with the
Commission and have been declared effective under the Act. The Company
has not received, and has no notice of, any order of the Commission
preventing or suspending the use of the Registration Statements, or
threatening or instituting proceedings for that purpose. Any statutes,
regulations, contracts or
Ex. 1.6-2
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement have been so described or filed. The Prospectus
Supplement has been or will be so prepared and will be filed pursuant
to Rule 424(b) of the Act on or before the second business day
following the date of this Agreement or on such other day as the
parties may mutually agree. The Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to the requirements
of the Act. Copies of the Registration Statements, the Preliminary
Prospectus and the Prospectus, any amendments or supplements thereto
and all documents incorporated by reference therein that were filed
with the Commission on or prior to the date of this Agreement
(including one fully executed copy of each of the Registration
Statements and of each amendment thereto for the Underwriters) have
been delivered to the Underwriters and their counsel. Neither the
Company nor the Manager has distributed any offering material in
connection with the offering or sale of the Offered Securities other
than the Registration Statement, the Preliminary Prospectus, the
Prospectus or any other materials, if any, permitted by the Act.
(b) Each part of the Registration Statement, when such part
became or becomes effective or was or is filed with the Commission, and
the Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission and at the First Closing Date (as
defined below) and, if applicable, at the Optional Closing Date (as
defined below), conformed or will conform in all material respects with
the requirements of the Act. Each part of the Registration Statement,
when such part became or becomes effective or when it was or is filed
with the Commission, did not or will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission and at the First Closing Date and,
if applicable, at the Optional Closing Date, did not or will not
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the foregoing shall not apply to statements in, or omissions from,
any such document in reliance upon, and in conformity with, written
information concerning the Underwriters that was furnished in writing
to the Company by the Representatives, on behalf of the Underwriters,
specifically for use in the preparation thereof.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus or any amendment or supplement
thereto, when they became or become effective under the Act or were or
are filed with the Commission under the Act or the Exchange Act, as the
case may be, conformed or will conform in all material respects with
the requirements of the Act and the Exchange Act, as applicable.
(d) The consolidated financial statements of the Company and
the Subsidiaries (as defined below), together with the related
schedules and notes thereto, set forth or included or incorporated by
reference in the Registration Statement and Prospectus fairly present
the financial condition of the Company and the Subsidiaries as of the
dates indicated
Ex. 1.6-3
and the results of operations, changes in financial position,
shareholders' equity and cash flows for the periods therein specified
are in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise stated therein). The selected financial and statistical data
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information shown therein and, to the
extent based upon or derived from the financial statements, have been
compiled on a basis consistent with the financial statements presented
therein. Any pro forma financial statements of the Company and the
Subsidiaries, and the related notes thereto, included or incorporated
by reference in the Registration Statement and the Prospectus present
fairly the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the basis
described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein. No
other financial statements are required to be set forth or to be
incorporated by reference in the Registration Statement or the
Prospectus under the Act.
(e) The Preliminary Prospectus was, and the Prospectus
delivered to the Underwriters for use in connection with this offering
will be, identical to the versions of the Preliminary Prospectus and
Prospectus, respectively, created to be transmitted to the Commission
for filing via XXXXX, except to the extent permitted by Regulation S-T.
(f) The Company has been duly formed and incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Maryland, is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction, each of which
is listed on Schedule B annexed hereto, in which its ownership or lease
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of property or assets or the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
material adverse effect ("Material Adverse Effect") on the business,
assets, properties, prospects, financial condition or results of
operation of the Company and the Subsidiaries taken as a whole, and has
full corporate power and authority necessary to own, hold, lease and/or
operate its assets and properties, to conduct the business in which it
is engaged and as described in the Prospectus and to enter into and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The Company is in compliance in all
material respects with the laws, orders, rules, regulations and
directives issued or administered by such jurisdictions. Complete and
correct copies of the articles of incorporation and of the bylaws of
the Company and all amendments thereto have been delivered to CSFBC
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 First Closing Date or, if applicable, the Optional Closing Date.
(g) The Company has no "subsidiaries" (as such term is defined
in Rule 1-02 of Regulation S-X promulgated under the Act) other than
Xxxxxxxxx Mortgage Funding Corporation ("Funding I"), Xxxxxxxxx
Mortgage Acceptance Corporation ("Acceptance I"), Xxxxxxxxx Mortgage
Home Loans, Inc. ("TMHL"), Xxxxxxxxx Mortgage Funding Corporation II
("Funding II") and Xxxxxxxxx Mortgage Acceptance Corporation II
Ex. 1.6-4
("Acceptance II") (each "Subsidiary" and, collectively,
"Subsidiaries"). Each of the Subsidiaries has been duly formed and
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, is duly qualified to do
business and is in good standing as a foreign corporation in each
jurisdiction, each of which is listed on Schedule C annexed hereto, in
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which its ownership or lease of property or assets or the conduct of
its business requires such qualification, except where the failure to
so qualify would not have a Material Adverse Effect, and has full
corporate power and authority necessary to own, hold, lease and/or
operate its assets and properties, to conduct the business in which it
is engaged and as described in the Prospectus and to enter into and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. Each of the Subsidiaries is in
compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by such
jurisdictions. Complete and correct copies of the certificates of
incorporation and of the bylaws of the Subsidiaries and all amendments
thereto have been delivered to CSFBC 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 First Closing Date or,
if applicable, the Optional Closing Date.
(h) Other than the Subsidiaries, the Company does not own,
directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other
entity. All of the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable, and are wholly owned by the Company, directly
or through TMHL, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or other equity or adverse claims. The
Company directly owns 100% of each of Funding I, Acceptance I and TMHL.
Funding II and Acceptance II are wholly owned by TMHL. No options,
warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligation into shares of
capital stock or ownership interests in the Subsidiaries are
outstanding.
(i) Xxxxxxxxx Mortgage Advisory Corporation ("Manager") has
been duly formed and incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction, each of which is listed on Schedule D
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annexed hereto, in which its ownership or lease of property or assets
or the conduct of its business requires such qualification, and has
full corporate power and authority necessary to own, hold, lease and/or
operate its assets and properties, to conduct the business in which it
is engaged and as described in the Prospectus and to enter into this
Agreement, and the Manager is in compliance in all material respects
with the laws, orders, rules, regulations and directives issued or
administered by such jurisdictions. Complete and correct copies of the
certificate of incorporation and of the bylaws of the Manager and all
amendments thereto have been delivered to CSFBC and no changes therein
will be made subsequent to the date hereof and prior to the First
Closing Date or, if applicable, the Optional Closing Date. The Manager
has no "subsidiaries" (as such term is defined in Rule 1-02 of
Regulation S-X promulgated under the Act).
Ex. 1.6-5
(j) TMA Mortgage Funding Trust I and TMA Mortgage Funding
Trust II (collectively, "Trusts") have each been duly formed and are
validly existing as business trusts under the Delaware Business Trust
Act, in good standing under the laws of Delaware, with full authority
to perform all functions (i) which business trusts are authorized to
perform and (ii) which are described in the Prospectus. The trustee for
each of the Trusts is the Wilmington Trust Company.
(k) Neither the Company, any of the Subsidiaries, any of the
Trusts nor the Manager is in breach of, or in default under (nor has
any event occurred which with notice, lapse of time or both would
result in any breach of, or constitute a default under), (i) their
respective charters, bylaws or organizational documents, as the case
may be, or (ii) any obligation, agreement, covenant or condition
contained in any contract, license, repurchase agreement, management
agreement, indenture, mortgage, deed of trust, bank loan or credit
agreement, note, lease or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Company, any of
the Subsidiaries, any of the Trusts or the Manager is a party or by
which the Company, the Subsidiaries, any of the Trusts, the Manager or
any of their respective assets or properties may be bound or affected.
Except as set forth in Schedule E annexed hereto, to the best knowledge
of the Company and the Manager, no other party under any contract or
other agreement to which the Company or any of the Subsidiaries is a
party is in default in any respect thereunder. The execution, delivery
and performance of this Agreement, the issuance and sale of the Offered
Securities and the consummation of the transactions contemplated hereby
will not conflict with, or result in any breach of or constitute a
default under (nor constitute any event which with notice, lapse of
time or both would result in any breach of, or constitute a default
under), (i) any provision of the charter, bylaws or organizational
documents, as the case may be, of the Company, any of the Subsidiaries,
any of the Trusts or the Manager, (ii) any provision of any contract,
license, repurchase agreement, management agreement, indenture,
mortgage, deed of trust, bank loan or credit agreement, note, lease or
other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Company, any of the Subsidiaries,
any of the Trusts or the Manager is a party or by which the Company,
any of the Subsidiaries, any of the Trusts or the Manager, or any of
their respective assets or properties may be bound or affected or, with
respect to the Manager, which would have a Material Adverse Effect on
the ability of the Manager to perform its obligations under the
Management Agreement (as defined below), or (iii) any federal, state,
local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any of the Subsidiaries or the
Trusts.
(l) As of September 30, 2001, as of the date of this Agreement
and as of the First Closing Date, the Company had, has or will have an
authorized, issued and outstanding capitalization as set forth under
the headings "Historical," and "As adjusted for this offering,"
respectively, in the section of the Prospectus Supplement entitled
"Capitalization." All of the issued and outstanding shares of capital
stock, including the Securities, of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable,
have been issued in compliance with all federal and state securities
laws and were
Ex. 1.6-6
not issued in violation of any preemptive right, resale right, right of
first refusal or similar right.
(m) This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of
the Company enforceable in accordance with its terms, except to the
extent that (i) enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general equitable principles and
(ii) the indemnification and contribution provisions of Section 7
hereof may be limited by federal or state securities laws and public
policy considerations in respect thereof.
(n) The capital stock of the Company, including the
Securities, conforms in all material respects to the description
thereof contained in the Registration Statement and Prospectus and such
description conforms to the rights set forth in the instruments
defining the same. The certificates for the Offered Securities are in
due and proper form and the holders of the Offered Securities will not
be subject to personal liability by reason of being such holders.
(o) The Offered Securities have been duly and validly
authorized by the Company for issuance and sale pursuant to this
Agreement and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued and fully paid and
non-assessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim, and will be registered pursuant to
Section 12 of the Exchange Act.
(p) No approval, authorization, consent or order of or filing
with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Offered Securities or the
consummation by the Company of the transaction contemplated hereby
other than (i) registration of the Offered Securities under the Act,
(ii) any necessary qualification under the securities or blue sky laws
of the various jurisdictions in which the Offered Securities are being
offered by the Underwriters, or (iii) such approvals as have been
obtained in connection with the approval of the listing of the Offered
Securities on The New York Stock Exchange.
Ex. 1.6-7
(q) No person, as such term is defined in Rule 1-02 of
Regulation S-X promulgated under the Act ("Person"), has the right,
contractual or otherwise, to cause the Company to issue to it any
shares of capital stock or other securities of the Company upon the
issue and sale of the Offered Securities to the Underwriters hereunder,
nor does any Person have preemptive rights, co-sale rights, rights of
first refusal or other rights to purchase or subscribe for any of the
Offered Securities or any securities or obligations convertible into or
exchangeable for, or any contracts or commitments to issue or sell any
of, the Offered Securities or any such options, rights or convertible
securities or obligations, other than those that have been expressly
waived prior to the date hereof.
(r) PricewaterhouseCoopers LLP and McGladrey & Xxxxxx, LLP,
whose reports on the consolidated financial statements of the Company
are filed with the Commission as part of the Registration Statement and
Prospectus, are and, during the periods covered by their reports, were
independent public accountants as required by the Act.
(s) Each of the Company, the Subsidiaries, the Trusts and the
Manager has all necessary licenses, permits, authorizations, consents
and approvals and has made all necessary filings required under any
federal, state, local or foreign law, regulation or rule, and has
obtained all necessary permits, authorizations, consents and approvals
from other Persons, in order to conduct its business as described in
the Prospectus. Each of the Company, the Subsidiaries, the Trusts and
the Manager has obtained accreditation or certification required by any
applicable law from any governmental agency or authority in order to
provide the products and services which it currently provides or which
it proposes to provide as set forth in the Prospectus. Neither the
Company, any of the Subsidiaries, any of the Trusts nor the Manager is
in violation of, or in default under, any such license, permit,
authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment
applicable to the Company, any of the Subsidiaries, any of the Trusts
or the Manager.
(t) The descriptions in the Registration Statement and the
Prospectus of the legal or governmental proceedings, contracts, leases
and other legal documents therein described present fairly the
information required to be shown, and there are no legal or
governmental proceedings, contracts, leases, or other documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
which are not described or filed as required. All agreements between
the Company, any of the Subsidiaries, any of the Trusts or the Manager,
as the case may be, and third parties expressly referenced in the
Prospectus are legal, valid and binding obligations of the Company, the
Subsidiaries, the Trusts or the Manager, as the case may be,
enforceable in accordance with their respective terms, except to the
extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and by general equitable principles.
(u) There are no actions, suits, claims, investigations,
inquiries or proceedings pending or, to the best of the Company's
knowledge, threatened to which the Company, any
Ex. 1.6-8
of the Subsidiaries, any of the Trusts or the Manager or any of their
respective officers or directors is a party or of which the properties
or other assets of any such entity is subject at law or in equity, or
before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which could
result in a judgment, decree or order.
(v) During the period of at least the last 24 calendar months
prior to the date of this Agreement, the Company has timely filed with
the Commission all documents and other material required to be filed
pursuant to Sections 13, 14 and 15(d) under the Exchange Act. During
the period of at least the last 36 calendar months preceding the filing
of the Registration Statement, the Company has filed all reports
required to be filed pursuant to Sections 13, 14 and 15(d) under the
Exchange Act. As of the date of this Agreement, the aggregate market
value of the Company's voting stock held by nonaffiliates of the
Company was equal to or greater than $150 million.
(w) Except as disclosed in the Prospectus (excluding any
disclosure contained in any amendment or supplement to, or incorporated
by reference into, the Prospectus after the date of this Agreement),
since the date of the latest audited financial statements included in
the Prospectus there has been no material adverse change, nor any
development or event involving a prospective material adverse change in
the condition (financial or otherwise), business, net worth,
properties, assets or results of operations of the Company, the
Subsidiaries and the Trusts, taken as a whole. Subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been (i) any transaction
which is material to the Company, the Subsidiaries and the Trusts,
except transactions in the ordinary course of business, (ii) any
obligation, direct or contingent, which is material to the Company, the
Subsidiaries and the Trusts taken as a whole, incurred by the Company,
the Subsidiaries or the Trusts, except obligations incurred in the
ordinary course of business, (iii) any change in the capital stock or
outstanding indebtedness of the Company or the Subsidiaries, or (iv)
except for regular quarterly dividends on the Securities and the 9.68%
Cumulative Convertible Series A Preferred Stock in amounts per share
that are consistent with past practice, any dividend or distribution of
any kind declared, paid or made by the Company on any class of its
capital stock. Neither the Company, any of the Subsidiaries nor the
Trusts has any material contingent obligation which is not disclosed in
the Registration Statement or Prospectus.
(x) There are no Persons with registration or other similar
rights to have any equity or debt securities, including securities
which are convertible into or exchangeable for equity securities,
registered pursuant to the Registration Statement or otherwise
registered by the Company under the Act.
(y) Neither the Company nor any of the Subsidiaries has
defaulted on any installment on indebtedness for borrowed money or on
any rental on one or more long term leases, which defaults would have a
Material Adverse Effect on the financial position of the Company or any
of the Subsidiaries. Since it first became a publicly-registered
entity, the
Ex. 1.6-9
Company has not filed a report pursuant to Section 13(a) or 15(d) of
the Exchange Act indicating that it (i) has failed to pay any dividend
or sinking fund installment on preferred stock or (ii) has defaulted on
any installment on indebtedness for borrowed money or on any rental on
one or more long term leases, which defaults would have a Material
Adverse Effect on the financial position of the Company or any of the
Subsidiaries.
(z) Each of the Company, the Subsidiaries, the Trusts, the
Manager and each of their respective officers, directors and
controlling Persons has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Securities to facilitate the sale of
the Offered Securities, or (ii) since the filing of the Registration
Statement (except pursuant to the Company's dividend reinvestment and
stock purchase plan ("DRSPP")) (A) sold, bid for, purchased, or paid
anyone any compensation for soliciting purchases of, the Offered
Securities or (B) paid or agreed to pay to any Person any compensation
for soliciting another to purchase any other securities of the Company.
(aa) The Offered Securities have been approved for listing on
The New York Stock Exchange, subject to official notice of issuance.
(bb) Except as set forth in Schedule F annexed hereto, neither
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the Company nor any of the Subsidiaries, the Trusts or affiliates
(including the Manager) (i) is required to register as a "broker" or
"dealer" in accordance with the provisions of the Exchange Act or (ii)
directly or indirectly through one or more intermediaries, controls or
has any other association with (within the meaning of Article I of the
Bylaws of the National Association of Securities Dealers ("NASD")) any
member firm of the NASD.
(cc) The Company has not relied upon the Underwriters or their
legal counsel for any legal, tax or accounting advice in connection
with the offering and sale of the Offered Securities.
(dd) Any certificate signed by any officer of the Company
delivered to CSFBC or to counsel for the Underwriters pursuant to or in
connection with this Agreement shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered
thereby.
(ee) As of the date of this Agreement, the investment
portfolio (other than cash and cash equivalents) of the Company
consists of adjustable-rate mortgage securities and adjustable-rate
mortgage loans. As of the date of this Agreement, the derivative
financial instruments held by the Company consist solely of interest
rate cap agreements, interest rate options contracts and interest rate
swap agreements. As of the date of this Agreement and except as
otherwise disclosed in the Prospectus, the Company has no plan or
intention to materially alter its stated investment policies and
operating policies and strategies, as such are described in the
Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 2001, including making any change to any stated investment
percentages or
Ex. 1.6-10
guidelines or the stated equity-to-assets ratio currently employed by
the Company and the Subsidiaries. The Company, the Subsidiaries and the
Trusts have good and marketable title to all properties and assets
owned, directly or indirectly, by the Company, the Subsidiaries and the
Trusts, in each case free and clear of any security interests, liens,
encumbrances, equities, claims and other defects (except for any
security interest, lien, encumbrance or claim that may otherwise exist
under any applicable repurchase agreement), except such as do not
interfere with the use made or proposed to be made of such property or
asset by the Company and the Subsidiaries. The Company, the
Subsidiaries and the Trusts do not own any real property. Any real
property and buildings held under lease by the Company, the
Subsidiaries and the Trusts are held under valid, existing and
enforceable leases, with such exceptions as are disclosed in the
Prospectus or are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company,
the Subsidiaries and the Trusts.
(ff) Each of the Company, the Subsidiaries and the Trusts has
filed all federal, state and foreign income and franchise tax returns
required to be filed on or prior to the date hereof and has paid taxes
shown as due thereon (or that are otherwise due and payable), other
than taxes which are being contested in good faith and for which
adequate reserves have been established in accordance with generally
accepted accounting principles. Neither the Company nor any of the
Subsidiaries nor the Manager has knowledge, after due inquiry, of any
tax deficiency which has been asserted or threatened against the
Company, any of the Subsidiaries or any of the Trusts. To the knowledge
of the Company, the Subsidiaries and the Manager, there are no tax
returns of the Company, the Subsidiaries or the Trusts that are
currently being audited by federal, state or local taxing authorities
or agencies which would have a Material Adverse Effect.
(gg) The Company and each of the Subsidiaries owns or
possesses adequate license or other rights to use all patents,
trademarks, service marks, trade names, copyrights, software and design
licenses, trade secrets, manufacturing processes, other intellectual
property rights and know-how (collectively, "Intellectual Property")
necessary to entitle the Company, the Subsidiaries and the Trusts to
conduct their business as described in the Prospectus, and the Company
and the Subsidiaries have not received notice of infringement of or
conflict with (and the Company and the Subsidiaries know of no such
infringement of or conflict with) asserted rights of others with
respect to any Intellectual Property which could have a Material
Adverse Effect.
(hh) TMHL owns or possesses adequate and validly issued
licenses, or is otherwise authorized by law, to originate loans as a
mortgage lender in all states in which TMHL has originated or is
currently originating loans. As of the date of this Agreement, TMHL is
licensed, or is otherwise authorized by law, to originate loans in each
of the jurisdictions set forth on Schedule G annexed hereto. To the
----------
knowledge of the Company and the Manager, all third-party service
providers used, employed, hired or otherwise contracted to by the
Company or any of the Subsidiaries have obtained all necessary licenses
or other relevant
Ex.1.6-11
authorization to do business in all jurisdictions in which such third-
party service providers do business on behalf of the Company or the
Subsidiaries.
(ii) Each of the Company, the Subsidiaries, the Trusts and the
Manager maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles as applied in the United States and to maintain asset
accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(jj) Each of the Company, the Subsidiaries and the Trusts is
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in
the business in which it is engaged. Neither the Company, any of the
Subsidiaries, any of the Trusts nor the Manager has been refused any
insurance coverage which has been sought and applied for and has no
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
(kk) Neither the Company, any of the Subsidiaries, any of the
Trusts nor the Manager is in violation, and has not received notice of
any violation with respect to, any applicable local, state or federal
environmental, safety or similar law applicable to the business of the
Company, the Subsidiaries and the Trusts. Each of the Company, the
Subsidiaries, the Trusts and the Manager has received all permits,
licenses or other approvals required of it under applicable federal and
state occupational safety and health and environmental laws and
regulations to conduct its business, and each of the Company, the
Subsidiaries, the Trusts and the Manager is in compliance with all
terms and conditions of any such permit, license or approval, except
any such violation of law or regulation, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which could
not, singly or in the aggregate, have a Material Adverse Effect.
(ll) Neither the Company nor any of its Subsidiaries, Trusts
or affiliates has incurred any liability for any finder's fees or
similar payments in connection with the transactions herein
contemplated, except as may otherwise exist with respect to the
Underwriters pursuant to this Agreement.
(mm) There are no existing or threatened labor disputes with
the employees of the Company, any of the Subsidiaries or the Manager
which are likely to have individually or in the aggregate a Material
Adverse Effect.
Ex. 1.6-12
(nn) Neither the Company nor any of the Subsidiaries or Trusts
nor, to the knowledge of the Company and the Manager, any employee or
agent of the Company, the Subsidiaries or Trusts, has made any payment
of funds of the Company or any of the Subsidiaries or received or
retained any funds in violation of any law, rule or regulation or of a
character required to be disclosed in the Prospectus. No relationship,
direct or indirect, exists between or among the Company, any of the
Subsidiaries or Trusts or the Manager, on the one hand, and the
directors, officers and stockholders of the Company, any of the
Subsidiaries or Trusts or the Manager, on the other hand, which is
required by the Act to be described in the Registration Statement and
the Prospectus that is not so described.
(oo) The Company, for all taxable years commencing with the
taxable year ended December 31, 1993, and each of the Subsidiaries,
since its respective date of inception, have been, and upon the sale of
Offered Securities will continue to be, organized and operated in
conformity with the requirements for qualification and taxation of the
Company as a "real estate investment trust" ("REIT") under Sections 856
through 860 of the Internal Revenue Code of 1986, as amended ("Code").
The proposed method of operation of the Company and each of the
Subsidiaries as described in the Prospectus will enable the Company to
continue to meet the requirements for qualification and taxation as a
REIT under the Code, and no actions have been taken (or not taken which
are required to be taken) which would cause such qualification to be
lost. The Company intends to continue to operate in a manner which
would permit it to qualify as a REIT under the Code. The Company has no
intention of changing its operations or engaging in activities which
would cause it to fail to qualify, or make economically undesirable its
continued qualification, as a REIT.
(pp) Neither the Company nor any of the Subsidiaries is and,
after giving effect to the offering and sale of the Offered Securities,
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 ("Investment Company Act").
(qq) The Manager has full legal right, power and authority to
perform its duties in accordance with and under the Management
Agreement, dated July 15, 1999, between the Company and the Manager, as
amended on October 17, 2000 ("Management Agreement"), and to consummate
the transactions contemplated therein. The Management Agreement has
been duly authorized, executed and delivered by the Manager and
constitutes a valid and binding agreement of the Manager, enforceable
in accordance with its terms, except to the extent that enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and by general
equitable principles. To the knowledge of the Company and the Manager,
there is no breach of, or default under (nor has any event occurred
with which notice, lapse of time, or both would constitute a breach of,
or default under), the Management Agreement by the Manager.
(rr) No relationship, direct or indirect, exists between or
among the Company or any of the Subsidiaries or the Trusts, on the one
hand, and the Manager or the directors, officers, stockholders or
trustees of the Company, any of the Subsidiaries or the Trusts or the
Ex. 1.6-13
Manager, on the other hand, which is required by the Act or the rules
of the NASD to be described in the Registration Statement and the
Prospectus which is not so described. Except as otherwise disclosed in
the Prospectus, there are no material outstanding loans or advances or
material guarantees of indebtedness by the Company or any of the
Subsidiaries or the Trusts to or for the benefit of any of the officers
or directors of the Company, any of the Subsidiaries or the Manager or
any of the members of the families of any of them.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $15.31 per share, the respective
numbers of shares of Firm Securities set forth opposite the names of the
Underwriters in Schedule A annexed hereto.
----------
The Company will deliver the Firm Securities to the Representatives in
book entry form through the facilities of The Depository Trust Company ("DTC")
for the respective accounts of the Underwriters, against payment of the purchase
price in Federal (same day) funds by wire transfer to an account of the Company
at CTC NJ/Xxxxxxxxx in Princeton, New Jersey, in connection with the closing of
such transactions, at the office of Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York time, on November 16,
2001, or at such other time not later than seven full business days thereafter
as CSFBC and the Company determine, such time being herein referred to as the
"First Closing Date." For purposes of Rule 15c6-1 under the Securities Exchange
Act of 1934, the First Closing Date (if later than the otherwise applicable
settlement date) shall be the settlement date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering.
Prior to the First Closing Date, the Company will also deliver the form of fully
registered global certificate that will be deposited with DTC for the Firm
Securities that the several Underwriters have agreed to purchase hereunder.
In addition, upon written notice from CSFBC given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectus (or,
if such 30th day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the NYSE is open for trading), the Underwriters may
purchase all or less than all of the Optional Securities at the purchase price
per share to be paid for the Firm Securities. The Underwriters shall not be
under any obligation to purchase any of the Optional Securities prior to the
exercise of such option. The Company agrees to sell to the Underwriters the
number of shares of Optional Securities specified in such notice and the
Underwriters agree, severally and not jointly, to purchase such Optional
Securities. Such Optional Securities shall be purchased for the account of each
Underwriter in the same proportion as the number of shares of Firm Securities
set forth opposite such Underwriter's name bears to the total number of shares
of Firm Securities (subject to adjustment by CSFBC to eliminate fractions) and
may be purchased by the Underwriters only for the purpose of covering
over-allotments made in connection with the sale of the Firm Securities. No
Optional Securities shall be sold or delivered unless the Firm Securities
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Optional Securities or any portion thereof may be exercised from
time to time and to
Ex. 1.6-14
the extent not previously exercised may be surrendered and terminated at any
time upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date," which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives in book entry form through the facilities of DTC on each
Optional Closing Date for the respective accounts of the several Underwriters,
against payment of the purchase price therefor in Federal (same day) funds by
wire transfer to an account of the Company, in connection with the closing of
the transactions, at the above office of Xxxxxxxx Chance Xxxxxx & Xxxxx LLP.
Prior to each Optional Closing Date, the Company will also deliver the form of
fully registered global certificate that will be deposited with DTC for the
Optional Securities that the several Underwriters have agreed to purchase
hereunder.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company hereby
covenants and agrees with the several Underwriters that:
(a) The Company will furnish such information as may be
required and otherwise will cooperate in qualifying the Offered
Securities for offering and sale under the securities or blue sky laws
of such jurisdictions (both domestic and foreign) as CSFBC may
designate and maintain such qualifications in effect so long as
required for the distribution of the Offered Securities, 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 Offered Securities). The Company will promptly advise
CSFBC of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Offered Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(b) The Company will prepare the Prospectus in a form approved
by the Underwriters and file such Prospectus with the Commission
pursuant to Rule 424(b) under the Act not later than 10:00 A.M. (New
York City time) on or before the second business day following the date
of this Agreement or on such other day as the parties may mutually
agree and will furnish promptly (and with respect to the initial
delivery of such Prospectus, not later than 10:00 A.M. (New York City
time) on or before the second business day following the date of this
Agreement or on such other day as the parties may mutually agree) to
the Underwriters copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendments
or supplements thereto after the effective date of the Registration
Statement) in such quantities and at such locations as the Underwriters
may reasonably request for the purposes contemplated by the Act, which
Ex. 1.6-15
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the version created to be transmitted
to the Commission for filing via XXXXX, except to the extent permitted
by Regulation S-T.
(c) The Company will advise CSFBC immediately, confirming such
advice in writing, of (i) the receipt of any comments from the
Commission relating to the Registration Statements or the Prospectus
or, prior to the termination of the underwriting syndicate contemplated
in this Agreement, any other filing of the Company under the Act or the
Exchange Act, (ii) any request by the Commission for amendments or
supplements to the Prospectus or, prior to the termination of the
underwriting syndicate contemplated in this Agreement, the Registration
Statements, or for additional information with respect thereto, (iii)
the issuance by the Commission of any stop order suspending the
effectiveness of any one of the Registration Statements or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, (iv) the suspension of the qualification of the Offered
Securities for offering or sale in any jurisdiction, (v) the
initiation, threatening or contemplation of any proceedings for any of
such purposes and, if the Commission or any other governmental agency
or authority should issue any such order, the Company will make every
reasonable effort to obtain the lifting or removal of such order as
soon as possible. The Company will advise CSFBC promptly of any
proposal to amend or supplement the Prospectus or, prior to the
termination of the underwriting syndicate contemplated in this
Agreement, the Registration Statements, including by filing any
documents that would be incorporated therein by reference, will afford
CSFBC a reasonable opportunity to comment on any such proposed
amendment or supplement and will not file any such amendment or
supplement to which CSFBC shall object in writing.
(d) The Company will advise CSFBC promptly and, if requested
by CSFBC, will confirm such advice in writing when, prior to the
termination of the underwriting syndicate contemplated in the
Agreement, any post-effective amendment to any one of the Registration
Statements becomes effective under the Act.
(e) The Company will furnish to CSFBC and, upon request, to
each of the other Underwriters for a period of five years from the date
of this Agreement (i) copies of any reports or other communications
which the Company shall send to its stockholders or shall from time to
time publish or publicly disseminate, (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar form as may be designated by the
Commission, (iii) if different than the items contained in clauses (i)
and (ii) above, copies of documents or reports filed with any national
securities exchange on which any class of securities of the Company is
listed (other than correspondence or other similar communications), and
(iv) such other information as CSFBC may reasonably request regarding
the Company or any of the Subsidiaries, in each case as soon as such
communications, documents or information become available.
(f) The Company will advise the Underwriters promptly of the
happening of any event known to the Company, the Subsidiaries or the
Manager within the time during which
Ex. 1.6-16
a Prospectus relating to the Offered Securities is required to be
delivered under the Act which would require the making of any change in
the Prospectus then being used, or in the information incorporated by
reference therein, so that the Prospectus would not include an untrue
statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend or supplement the Prospectus
to comply with any law. If within the time during which a Prospectus
relating to the Offered Securities is required to be delivered under
the Act any event shall occur or condition shall exist which, in the
reasonable opinion of the Company, CSFBC or their respective counsel,
would require the making of any change in the Prospectus then being
used, or in the information incorporated by reference therein, so that
the Prospectus would not include an untrue statement of material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the Prospectus to comply
with any law, the Company will promptly prepare and furnish to the
Underwriters copies of the proposed amendment or supplement before
filing any such amendment or supplement with the Commission and
thereafter promptly furnish, at the Company's own expense, to the
Underwriters and to dealers copies in such quantities and at such
locations as CSFBC may from time to time reasonably request of an
appropriate amendment to the Registration Statements or supplement to
the Prospectus so that the Prospectus as so amended or supplemented
will not, in the circumstances when it is so delivered, be misleading
or so that the Prospectus will comply with the law. Neither CSFBC's
consent to, nor the Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth
in Section 6 hereof.
(g) The Company will make generally available to its
stockholders as soon as practicable, and in the manner contemplated by
Rule 158 of the Act but in any event not later than 15 months after the
end of the Company's current fiscal quarter, an earnings statement
(which need not be audited) covering a 12-month period beginning after
the date upon which the Prospectus Supplement is filed pursuant to Rule
424(b) under the Act that shall satisfy the provisions of Section 11(a)
of the Act and Rule 158 thereunder.
(h) The Company will furnish to CSFBC a signed copy of the
Registration Statements, as initially filed with the Commission, and of
all amendments thereto (including all exhibits thereto and documents
incorporated by reference therein) and such number of conformed copies
of the foregoing (other than exhibits) as CSFBC may reasonably request.
(i) The Company will apply the net proceeds from the sale of
the Offered Securities in the manner set forth under the caption "Use
of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to furnish to CSFBC,
not less than two business days before a filing with the Commission
during the period referred to in paragraph (f) above, a copy of any
document proposed to be filed pursuant to Section 13, 14 or 15(d) of
Ex. 1.6-17
the Exchange Act and during such period to file all such documents in a
manner and within the time periods required by the Exchange Act.
(k) The Company will furnish to CSFBC, as early as practicable
prior to the First Closing Date and the Optional Closing Date, as the
case may be, but not later than two business days prior thereto, a copy
of the latest available unaudited interim consolidated financial
statements of the Company, the Subsidiaries and the Trusts which have
been read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(a) hereof.
(l) Neither the Company nor the Subsidiaries nor the Manager
will sell, offer, contract to sell, pledge, grant any option to
purchase or otherwise dispose of, directly or indirectly, or file with
the Commission a registration statement under the Act relating to, any
shares of capital stock, or any securities convertible into, or
exercisable, exchangeable or redeemable for shares of capital stock, or
publicly disclose the intention to make any such offer, sale, contract
to sell, pledge, disposition or filing, for a period of 90 days after
the date hereof, without the prior written consent of CSFBC. The
foregoing sentence shall not apply to (i) the Offered Securities to be
sold hereunder, (ii) any Securities issued by the Company upon the
exercise of an option outstanding on the date hereof and referred to in
the Prospectus, (iii) Securities issued pursuant to the DRSPP or (iv)
the grant of awards pursuant to the Company's Amended and Restated 1992
Stock Option and Incentive Plan ("Plan") or issuances pursuant to the
exercise of employee stock options or other awards, including
restricted stock awards approved under an amendment to the Plan on July
17, 2001.
(m) The Company will use its best efforts to cause each
officer and director of the Company to furnish to CSFBC, prior to the
time of purchase, a letter or letters, substantially in the form of
Exhibit A annexed hereto, pursuant to which each such Person shall
---------
agree not to sell, offer, contract to sell, pledge, grant any option to
purchase or otherwise dispose of, directly or indirectly, any shares of
capital stock, or any securities convertible into, or exercisable,
exchangeable or redeemable for shares of capital stock of the Company
for a period of 90 days after the date hereof, without the prior
written consent of CSFBC.
(n) The Company will use its best efforts to cause the Offered
Securities to be listed on The New York Stock Exchange and to maintain
such listing and to file with The New York Stock Exchange all documents
and notices required by The New York Stock Exchange of companies that
have securities that are listed on The New York Stock Exchange.
(o) The Company will engage and maintain, at its expense, a
registrar and transfer agent for the Offered Securities.
(p) The Company will pay all expenses, fees and taxes (other
than any transfer taxes and fees and disbursements of counsel for the
Underwriters, except as set forth under Section 9 hereof or (iii) or
(iv) below) in connection with (i) the preparation and filing of the
Registration Statements, each Preliminary Prospectus, the Prospectus,
and any amendments
Ex. 1.6-18
or supplements thereto, and the printing and furnishing of copies of
each thereof to the Underwriters and to dealers (including costs of
mailing and shipment), (ii) the issuance, sale and delivery of the
Offered Securities by the Company, (iii) as relating to the offering by
the Company of the Offered Securities: the word processing and printing
of this Agreement, any agreement among the Underwriters, dealer
agreements, statements of information, custody agreement or powers of
attorney, as applicable, and the reproduction and printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (iv) the qualification of
the Offered Securities for offering and sale under state laws and the
determination of their eligibility for investment under state law as
aforesaid (including the legal fees and filing fees and other
disbursements of counsel to the Underwriters) and the printing and
furnishing of copies of any blue sky surveys or legal investment
surveys to the Underwriters and to dealers, (v) any listing of the
Offered Securities on The New York Stock Exchange and any registration
thereof under the Exchange Act, (vi) the filing, if any, for review of
the public offering of the Offered Securities by the NASD, and (vii)
the performance of the Company's other obligations hereunder.
(q) Prior to termination of the underwriting syndicate
contemplated by this Agreement, neither the Company nor the
Subsidiaries nor the Manager will (i) take, directly or indirectly, any
action designed to stabilize or manipulate the price of any security of
the Company, or which may cause or result in, or which might in the
future reasonably be expected to cause or result in, the stabilization
or manipulation of the price of any security of the Company, to
facilitate the sale or resale of any of the Offered Securities, (ii)
sell, bid for, purchase or pay any Person (other than as contemplated
by the provisions hereof) any compensation for soliciting purchases of
the Offered Securities, or (iii) pay or agree to pay to any Person any
compensation for soliciting any order to purchase any other securities
of the Company.
(r) The Company will comply with all requirements imposed upon
it by the Act and the Exchange Act as from time to time in force, so
far as necessary to permit the continuance of sales of, or dealings in,
the Offered Securities as contemplated by the provisions hereof and the
Prospectus.
(s) The Company will not invest in futures contracts, options
on futures contracts or options on commodities unless the Company is
exempt from the registration requirements of the Commodity Exchange
Act, as amended, or otherwise complies with the Commodity Exchange Act,
as amended. In addition, the Company will not engage in any activities
which might be subject to the Commodity Exchange Act, as amended,
unless such activities are exempt from that Act or otherwise comply
with that Act or with an applicable no-action letter to the Company
from the Commodities Futures Trading Commission.
(t) The Company will comply with all of the provisions of any
undertakings in the Registration Statements.
Ex. 1.6-19
(u) The Company and the Subsidiaries have been organized and
operated in conformity with the requirements for qualification and
taxation of the Company as a REIT under the Code, and the Company's
proposed methods of operation will enable the Company to continue to
meet the requirements for qualification and taxation as a REIT under
the Code for subsequent taxable years.
(v) The Company will not be or become, at any time prior to the
expiration of three years after the date of the Agreement, an
"investment company," as such term is defined in the Investment Company
Act.
(w) The Company has retained PricewaterhouseCoopers LLP (for all
periods after January 1, 1999) and McGladrey & Xxxxxx, LLP (for the
year ended December 31, 1998) as its qualified accountants and
qualified tax experts (i) to test procedures and conduct annual
compliance reviews designed to determine compliance with the REIT
provisions of the Code and the Company's exempt status under the
Investment Company Act and (ii) to otherwise assist the Company in
monitoring appropriate accounting systems and procedures designed to
determine compliance with the REIT provisions of the Code and the
Company's exempt status under the Investment Company Act.
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Offered
Securities under this Agreement will be subject, in the Representatives' sole
discretion, to the accuracy of the representations and warranties on the part of
the Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the satisfaction of each of the following
additional conditions precedent:
(a) On or prior to the date of this Agreement, the
Representatives shall have received letters, dated, respectively, the
date of delivery thereof and addressed to the Underwriters (with
reproduced copies for each of the Underwriters), of
PricewaterhouseCoopers LLP and McGladrey & Xxxxxx, LLP, in each case,
in the forms heretofore approved by CSFBC relating to the financial
statements, including any pro forma financial statements of the Company
and the Subsidiaries and such other matters customarily covered by
comfort letters issued in connection with a registered public offering.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition
to the obligations of the Underwriters that (i) such letters shall be
accompanied by a written explanation of the Company as to the
significance thereof, unless CSFBC deems such explanation unnecessary,
and (ii) such changes, decreases or increases do not, in the sole
judgment of CSFBC, make it impractical or inadvisable to proceed with
the purchase and delivery of the Offered Securities as contemplated by
the Registration Statements and the Prospectus.
(b) The Prospectus shall have been filed with the Commission
in accordance with the Act and Section 5(b) of this Agreement. No stop
order suspending the effectiveness of
Ex. 1.6-20
the Registration Statements or of any part thereof shall have been
issued and no proceedings for that purpose shall have been instituted
or threatened or, to the knowledge of the Company (after due inquiry)
or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of this Agreement, there shall
not have occurred (i) any change, or any development or event involving
a prospective change, in the condition (financial or other), business,
properties or results of operations of the Company and its Subsidiaries
taken as one enterprise which, in the judgment of a majority in
interest of the Underwriters, including the Representatives, is
material and adverse and makes it impractical or inadvisable to proceed
with completion of the public offering or the sale of and payment for
the Offered Securities; (ii) any downgrading in the rating of any debt
securities or preferred stock of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities or preferred stock of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
change in U.S. or international financial, political or economic
conditions or currency exchange rates or exchange controls as would, in
the judgment of a majority in interest of the Underwriters, including
the Representatives, be likely to prejudice materially the success of
the proposed issue, sale or disposition of the Offered Securities,
whether in the primary market or in respect of dealings in the
secondary market; (iv) any material suspension or material limitation
of trading in securities generally on The New York Stock Exchange, or
any setting of minimum prices for trading on such exchange, or any
suspension of trading of any securities of the Company on any exchange
or in the over-the-counter market; (v) any banking moratorium declared
by U.S. Federal or, New York authorities; (vi) any major disruption of
settlements of securities or (vii) any attack on, outbreak or
escalation of hostilities or acts of terrorism involving the United
States, any declaration of war by Congress or any other national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters, including the Representatives, the
effect of any such attack, outbreak, escalation, act, declaration,
calamity or emergency makes it impractical or inadvisable to proceed
with completion of the public offering or the sale of and payment for
the Offered Securities.
(d) No amendment or supplement to the Registration Statements
or Prospectus, including documents deemed to be incorporated by
reference therein, shall be filed to which the Underwriters object in
writing.
(e) Prior to the First Closing Date or any Optional Closing
Date, as the case may be, (i) the Registration Statements and all
amendments thereto, or modifications thereof, if any, shall not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and (ii) the Prospectus and all amendments or
supplements thereto, or modifications thereof, if any, shall not
contain an untrue statement of a material fact or omit to state a
material fact
Ex. 1.6-21
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made,
not misleading.
(f) Between the time of execution of this Agreement and the
First Closing Date or any Optional Closing Date, as the case may be, no
transaction which, in the sole discretion of CSFBC, is material and
unfavorable to the Company or the Subsidiaries or the Manager shall
have been entered into by the Company or any of the Subsidiaries.
(g) The Company shall have furnished to CSFBC such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statements and the Prospectus as of the
First Closing Date or any Optional Closing Date, as the case may be, as
CSFBC may reasonably request.
(h) The Offered Securities shall have been approved for listing
on The New York Stock Exchange, subject only to notice of issuance at
or prior to the First Closing Date or any Optional Closing Date, as the
case may be.
(i) The NASD shall not have raised any objection with respect
to the fairness and reasonableness of the underwriting terms and
arrangements.
(j) The Representatives shall have received an opinion in such
final form as shall be mutually agreeable to the parties, dated such
Closing Date of Xxxxxxx, Xxxxx & Xxxx, LLP, counsel for the Company, to
the effect that:
(i) 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 assets and properties and conduct its
business as described in the Prospectus, to execute and deliver
this Agreement and to issue, sell and deliver the Offered
Securities as herein contemplated.
(ii) The Subsidiaries and the Manager have been duly
incorporated and are validly existing as corporations in good
standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate their
assets and properties and conduct their business as described in
the Prospectus.
(iii) The Trusts have each been duly formed and are validly
existing as business trusts under the Delaware Business Trust Act
in good standing under the laws of Delaware, with full authority
to perform all functions (i) which business trusts are authorized
to perform and (ii) which are described in the Prospectus.
(iv) The Company, the Subsidiaries and the Manager are
duly licensed or qualified by each jurisdiction in which they
conduct their business, or own or lease real property or maintain
an office, in which the nature and conduct of the
Ex. 1.6-22
Company's, the Subsidiaries' or the Manager's business makes such
qualification and licensing necessary and in which the failure,
individually or in the aggregate, to be so licensed or qualified
could have a Material Adverse Effect on the Company.
(v) This Agreement has been duly authorized, executed and
delivered by the Company, is a valid and binding agreement of the
Company and, except for the indemnification and contribution
provisions thereof, as to which such counsel expresses no
opinion, is enforceable against the Company in accordance with
the terms thereof.
(vi) The Offered Securities have been duly authorized and,
when issued and delivered to and paid for by the Underwriters,
will be duly and validly issued and will be fully paid and non-
assessable.
(vii) The Company has an authorized capitalization as set
forth in the Prospectus. All of the outstanding shares of capital
stock of the Company and the shares to be paid for by the
Underwriters in accordance with the terms of this Agreement have
been and will be duly and validly authorized and issued, and are
and will be fully paid, non-assessable and free of statutory and
contractual preemptive rights under (i) the statutes, judicial
and administrative decisions and the rules and regulations of the
governmental agencies of the State of Maryland, (ii) the
Company's articles of incorporation or bylaws or (iii) any
instrument, document, contract or other agreement. The Offered
Securities, when issued, will be free of statutory and
contractual preemptive rights, resale rights, rights of first
refusal and similar rights. Except as disclosed in the
Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the
issuance of, and, to the best of such counsel's knowledge, no
commitment, plan or arrangement to issue, any shares of capital
stock of the Company or any security convertible into,
exercisable for, or exchangeable for shares of capital stock of
the Company. No holder of any security of the Company has the
right to require any security owned by such holder to be included
for registration in the Registration Statement. The certificates
for the Offered Securities (i) are in due and proper form, and
(ii) comply with all applicable statutory requirements, with any
applicable requirements of the Company's organizational documents
and with the requirements of The New York Stock Exchange. The
holders of the Offered Securities will not be subject to personal
liability by reason of being such holders.
(viii) The Company does not own or control, directly or
indirectly, any corporation, association or other entity other
than the Subsidiaries and the Trusts.
(ix) The capital stock of the Company, including the
Offered Securities, conforms to the description thereof contained
in the Registration Statement and Prospectus and such description
conforms to the rights set forth in the instruments
Ex. 1.6-23
defining the same. The form of certificate used to evidence the
Securities is in due and proper form and complies with all
applicable statutory requirements.
(x) Each part of the Registration Statement, when such
part became effective, and the Prospectus and any amendment or
supplement thereto (except as to the financial statements and
schedules and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need
not express an opinion) on the date of filing with the Commission
and at the Closing Date complied as to form in all material
respects with the requirements of the Act, the Exchange Act,
including, without limitation, Item 503 of Regulation S-K.
(xi) The Registration Statements have been declared
effective under the Act, the Prospectus Supplement has been filed
as required by this Agreement and, to the best of such counsel's
knowledge, after due inquiry, no stop order has been issued or
proceedings with respect thereto pending, contemplated or
threatened under the Act and any required filings of the
Prospectus and any supplement thereto pursuant to Rule 424 under
the Act have been made in the manner and within the time period
required by such Rule 424.
(xii) No approval, authorization, consent or order of or
filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the authorization, issuance,
transfer, sale and delivery of the Offered Securities and the
consummation by the Company of the transaction as contemplated by
this Agreement or with the taking by the Company of any action
contemplated thereby other than registration of the Offered
Securities under the Act and except as may be required under
state securities laws or by the bylaws and rules of the NASD in
connection with the purchase and distribution by the Underwriters
of the Offered Securities.
(xiii) The execution, delivery and performance of this
Agreement by the Company and the Manager and the consummation by
the Company of the transactions contemplated thereby do not and
will not conflict with, or result in any breach of, or constitute
a default under (nor constitute any event which with notice,
lapse of time, or both, would result in any breach of or
constitute a default under, nor cause the time for performance of
any obligation to be accelerated under, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the
assets of the Company pursuant to the terms of) (i) any
provisions of the charter or bylaws of the Company, the
Subsidiaries or the Manager, (ii) any provision of any license,
indenture, mortgage, deed of trust, bank loan, loan agreement,
bond, debenture, note agreement, capital lease, repurchase
agreement, credit agreement or other evidence of indebtedness,
(iii) any lease, contract or other agreement or instrument to
which the Company, the Subsidiaries or the Manager is a party or
by which they or their assets or properties may be bound or
affected, (iv) any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to
the Company or any
Ex. 1.6-24
of the Subsidiaries, (v) any voting trust arrangement or any
contract or other agreement to which the Company or any of the
Subsidiaries is a party that restricts the ability of the Company
to issue securities and of which such counsel has knowledge, (vi)
any document filed as an exhibit to, or incorporated as an
exhibit by reference in, the Registration Statement, or (vii) any
existing obligation of the Company under any court or
administrative order, judgment or decree of which such counsel
has knowledge, or violate applicable provisions of any statute or
regulation in the State of Maryland, State of New Mexico or of
the United States.
(xiv) Neither the Company nor any of the Subsidiaries nor
the Manager is in violation of its charter or bylaws or in breach
of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach of, or
constitute a default under), any obligation, agreement, covenant
or condition contained in any contract, license, indenture,
mortgage, deed of trust, bank loan or credit agreement, note,
lease or any other agreement or instrument to which the Company,
the Subsidiaries, or the Manager is a party or by which it or its
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 Company or any of the Subsidiaries.
(xv) All descriptions in the Registration Statement and
Prospectus of statutes, regulations, legal and governmental
proceedings or contracts, instruments, leases, licenses and other
agreements (collectively, the "Documents") are accurate and
fairly present the information required to be shown and such
counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus or the
Registration Statement that are not described as required, or of
any Documents of a character required to be described in the
Registration Statement or Prospectus that are not described as
required and any Document required to be filed as an exhibit to
the Registration Statement has been filed as an exhibit thereto
or has been incorporated as an exhibit by reference in the
Registration Statement; and no default exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any Document filed or required
to be filed as an exhibit to the Registration Statement.
(xvi) To the best of 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 the Manager are subject or of which any of their
assets or properties are subject at law or in equity or before or
by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which are
required to be described in the Prospectus but are not so
described or which (i) seek to challenge the legality or
enforceability of this Agreement, (ii) seek to challenge the
legality or enforceability of any of the Documents filed, or
required to be filed, or incorporated by reference as exhibits to
the Registration Statement, (iii) seek damages or other remedies
with respect to any
Ex. 1.6-25
of the Documents filed, or required to be filed, as exhibits to
the Registration Statement, (iv) except as set forth in or
contemplated by the Registration Statement and the Prospectus,
seek money damages or seek to impose criminal penalties upon the
Company, the Subsidiaries or the Manager, or any of their
respective officers or directors in their capacities as such and
of which such counsel has knowledge or (v) seek to enjoin any of
the business activities of the Company, the Subsidiaries or the
Manager, or the transactions described in the Prospectus and of
which such counsel has knowledge.
(xvii) The documents incorporated by reference in the
Registration Statements and Prospectus, when they became
effective or were filed (or, if an amendment with respect to any
such document was filed when such amendment was filed) with the
Commission, complied as to form in all material respects with the
Exchange Act (except as to the financial statements and schedules
and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need
not express an opinion).
(xviii) Each of the Company and the Subsidiaries is not and
will not, upon consummation of the transactions contemplated by
this Agreement, be an "investment company," or a "promoter" or
"principal underwriter" for, a "registered investment company,"
as such terms are defined in the Investment Company Act, or a
"broker" within the meaning of Section 3(a)(4) of the Exchange
Act or a "dealer" within the meaning of Section 3(a)(5) of the
Exchange Act or required to be registered pursuant to Section
15(a) of the Exchange Act.
(xix) The Company, for all taxable years commencing with
the taxable year ended December 31, 1993, and each of the
Subsidiaries, since its respective date of inception, have been,
and upon the sale of Offered Securities will continue to be,
organized and operated in conformity with the requirements for
qualification and taxation of the Company as a REIT under
Sections 856 through 860 of the Code. The proposed method of
operation of the Company and each of the Subsidiaries as
described in the Prospectus will enable the Company to continue
to meet the requirements for qualification and taxation as a REIT
under the Code, and, to the knowledge of such counsel, no actions
have been taken (or not taken which are required to be taken)
which would cause such qualification to be lost. The disclosure
contained in the Prospectus under the caption "Federal Income Tax
Considerations," to the extent such information constitutes
matters of law, summaries of legal matters or legal conclusions,
has been reviewed by such counsel and is accurate in all material
respects.
(xx) The Offered Securities have been duly authorized for
listing by The New York Stock Exchange, subject to official
notice of issuance.
(xxi) To the best of such counsel's knowledge, neither the
Company nor the Subsidiaries nor the Manager is in violation of,
or in default with respect to, any law,
Ex. 1.6-26
rule, regulation, order, judgment or decree, except as may be
described in the Prospectus or such as in the aggregate do not
now have and will not in the future have a material adverse
effect upon the operations, business or assets of the Company,
the Subsidiaries or the Manager.
(xxii) Delivery of certificates for the Offered Securities
and/or transfer of the Offered Securities through the "FAST"
system of the DTC for the accounts of the Underwriters will
transfer valid and marketable title thereto to each Underwriter
that has purchased such Offered Securities in good faith and
without any notice of any adverse claim with respect thereto.
In addition, Xxxxxxx, Xxxxx & Xxxx, LLP shall state that they have
participated in conferences with officers and other representatives of the
Company and the Subsidiaries, representatives of the independent public
accountants of the Company and the Subsidiaries and representatives of the
Underwriters at which the contents of the Registration Statements and Prospectus
and related matters 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 Statements or
Prospectus (except as and to the extent stated in opinions number (ix) and (x)
above and as to matters of law, summaries of legal matters or legal conclusions
expressed in opinion number (xix) above), on the basis of the foregoing nothing
has come to such counsel's attention that causes such counsel to believe that
the Registration Statements or any amendment thereto at the time such
Registration Statements 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 Prospectus Supplement at the date of such Prospectus or
Prospectus Supplement, and at all times up to and including the Closing Date
contained or contains an untrue statement of a material fact or omitted or omits
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 such counsel need not express an opinion
with respect to the financial statements and schedules and other financial and
statistical data included in the Registration Statements or Prospectus).
(k) The Representatives shall have received from Xxxxxxxx Chance Xxxxxx &
Xxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to the incorporation of the Company, the validity of
the Offered Securities delivered on such Closing Date, the Registration
Statements, the Prospectus and other related matters as the Representatives may
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters. In
rendering such opinion, Xxxxxxxx Chance Xxxxxx & Xxxxx LLP may rely as to the
incorporation of the Company and all other matters governed by Maryland law upon
the opinion of Xxxxxxx, Xxxxx & Xxxx, LLP referred to above.
(l) The Representatives shall have received a certificate, dated such
Closing Date, of an executive officer and a principal financial or accounting
officer of the Company (one of which shall be Xxxxxxx Xxxxxxxxx) in which such
officers, to the best of their knowledge after reasonable investigation, shall
state that: the representations and warranties of the Company in this Agreement
Ex. 1.6-27
are true and correct; the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date; no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; and, subsequent to the
date of the most recent financial statements in the Prospectus, there has been
no material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Company, the Subsidiaries and the
Trusts taken as a whole except as set forth in or contemplated by the Prospectus
or as described in such certificate.
(m) CSFBC shall have received letters, each dated such Closing Date, of
PricewaterhouseCoopers LLP and McGladrey & Xxxxxx, LLP, each of which meets the
requirements of subsection (a) of this Section, except that the specified date
referred to in such subsection will be a date not more than three days prior to
such Closing Date for the purposes of this subsection.
(n) On or prior to the date of this Agreement, the Representatives
shall have received lockup agreements from each of the executive officers and
directors of the Company and the Manager, substantially in the form of Exhibit A
---------
annexed hereto, and such letter agreements shall be in full force and effect.
The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as the Representatives
reasonably request. The Representatives may in their sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter,
its partners, directors and officers and each Person, if any, who controls
such Underwriter within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related
Preliminary Prospectus, or arise out of or are based upon 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
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Ex. 1.6-28
Company by such Underwriter through the Representatives specifically for
use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such
in subsection (b) below.
Insofar as the foregoing indemnity agreement, or the representations
and warranties contained in Section 2(b), may permit indemnification for
liabilities under the Act of any person who is an Underwriter or a partner
or controlling person of an Underwriter within the meaning of Section 15 of
the Act and who, at the date of this Agreement, is a director, officer or
controlling person of the Company, the Company has been advised that in the
opinion of the Commission such provisions may contravene Federal public
policy as expressed in the Act and may therefore be unenforceable. In the
event that a claim for indemnification under such agreement or such
representations and warranties for any such liabilities (except insofar as
such agreement provides for the payment by the Company of expenses incurred
or paid by a director, officer or controlling person in the successful
defense of any action, suit or proceeding) is asserted by such a person,
the Company will submit to a court of appropriate jurisdiction (unless in
the opinion of counsel for the Company the matter has already been settled
by controlling precedent) the question of whether or not indemnification by
it for such liabilities is against public policy as expressed in the Act
and therefore unenforceable, and the Company will be governed by the final
adjudication of such issue.
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company, its directors and officers and each Person, if
any who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related Preliminary Prospectus, or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that such
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 by such Underwriter through the
Representatives specifically for use therein, and will reimburse any legal
or other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; it being understood and agreed that
the only such information furnished by any Underwriter consists of the
following information in the Prospectus furnished on behalf of each
Underwriter: (i) the concession and reallowance figures appearing in the
fourth paragraph on page S-13 under the caption "Underwriting" and (ii) the
information appearing in the fourth and fifth paragraphs on pages S-14 and
S-15 and the first paragraph on page S-15 under the caption "Underwriting."
Ex. 1.6-29
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action 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 (i) includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of an
indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other 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 Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be
Ex. 1.6-30
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action
or claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each Person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed a Registration
Statement and to each Person, if any, who controls the Company within the
meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other Persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFBC and the
Company for the purchase of such Offered Securities by other Persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). In the event of any default by one or more Underwriters as
described in this Section 8, the Representatives shall have the right to
postpone the First Closing Date or the Optional Closing Date, as the case may
be, established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Optional
Securities, as the case may be. As used
Ex. 1.6-31
in this Agreement, the term "Underwriter" includes any Person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5(p) and the
respective obligations of the Company and the Underwriters pursuant to Section 7
shall remain in effect, and if any Offered Securities have been purchased
hereunder the representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect. If the purchase of the Offered
Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv), (v), (vi) or (vii) of
Section 6(c), the Company will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives c/o Credit Suisse First Boston, Eleven Madison Avenue, New
York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or, if to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 000
Xxxx Xxxxx Xxxxxx, Xxxxx Xx, Xxx Xxxxxx 00000, Attention: President (with a copy
to Xxxxxxx, Xxxxx & Xxxx, LLP, Attention: Xxxxxxx Xxxxxxx); provided, however,
that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other Person
will have any right or obligation hereunder.
12. Representation of Underwriters. CSFBC will act for the several
Underwriters in connection with this financing, and any action under this
Agreement taken by CSFBC will be binding upon all the Underwriters.
13. Construction. The section headings in this Agreement have been
inserted as a matter of convenience of reference and are not part of this
Agreement.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
Ex. 1.6-32
15. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
Ex. 1.6-33
If the foregoing is in accordance with the Company's, the Manager's and
the Underwriters' understanding of our agreement, kindly sign and return to the
Company one of the counterparts hereof, whereupon it will become a binding
agreement among the Company, the Manager and the several Underwriters in
accordance with its terms.
Very truly yours,
Xxxxxxxxx Mortgage, Inc.
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chief Executive Officer
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written, on behalf of
itself and the other several Underwriters
named in Schedule A
----------
Credit Suisse First Boston Corporation
By /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
Accepted and agreed to as of the date first
above written, only as to the representations
and warranties of the Manager as set forth in
Section 2 hereof
Xxxxxxxxx Mortgage Advisory Corporation
By /s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chief Executive Officer
Ex. 1.6-34
SCHEDULE A
Number of
Underwriter Firm Securities
----------- ---------------
Credit Suisse First Boston Corporation 1,591,600
ABN AMRO Rothschild LLC 622,800
X.X. Xxxxxxx & Sons, Inc. 622,800
RBC Xxxx Xxxxxxxx Inc. 622,800
CIBC World Markets Corp. 60,000
First Union Securities, Inc. 60,000
U.S. Bancorp Xxxxx Xxxxxxx Inc. 60,000
Xxxxxxxxxx & Co. Inc. 30,000
Flagstone Securities 30,000
Xxxxxx Xxxxxxxxxx Xxxxx LLC 30,000
Xxxxx, Xxxxxxxx & Xxxxx, Inc. 30,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated 30,000
Mesirow Financial, Inc. 30,000
Xxxxxx Xxxxxx & Company, Inc. 30,000
Xxxxxx/Hunter Incorporated 30,000
Xxxxxxx Xxxxx & Associates, Inc. 30,000
Xxxxxxx Xxxxxx Xxxxxx 30,000
Sandler X'Xxxxx & Partners, L.P. 30,000
Xxxxxxxxx Securities Corporation 30,000
-------------
Total 4,000,000
=============
Sch. A-1
SCHEDULE B
List of jurisdictions in which Xxxxxxxxx Mortgage, Inc.
is qualified as a foreign corporation
New Mexico
Sch. B - 1
SCHEDULE C
List of jurisdictions in which each subsidiary is qualified
as a foreign corporation
Subsidiaries of Xxxxxxxxx Mortgage, Inc.:
-----------------------------------------
Xxxxxxxxx Mortgage Acceptance Corporation - None
Xxxxxxxxx Mortgage Funding Corporation - None
Xxxxxxxxx Mortgage Home Loans, Inc. - California
Connecticut
Florida
Georgia
Idaho
Illinois
Kentucky
Louisiana
Maine
Massachusetts
Michigan
Minnesota
Montana
New Mexico
New York
North Dakota
Oregon*
Rhode Island
South Carolina
Vermont
Virginia
West Virginia
Wisconsin
(See Schedule G for jurisdictions in which Xxxxxxxxx Mortgage Home Loans, Inc.
is authorized or licensed to originate loans)
Subsidiaries of Xxxxxxxxx Mortgage Home Loans, Inc.:
---------------------------------------------------
Xxxxxxxxx Mortgage Acceptance Corporation II - None
Xxxxxxxxx Mortgage Funding Corporation II - None
*In the process of being renewed.
Sch. C - 1
SCHEDULE D
List of jurisdictions in which Xxxxxxxxx Mortgage Advisory Corporation
(the Manager) is qualified as a foreign corporation
New Mexico
Sch. D - 1
SCHEDULE E
Defaults of any party to any agreement to which
Xxxxxxxxx Mortgage, Inc. or any subsidiary is a party
None.
Sch. E - 1
SCHEDULE F
Requirements to register as broker/dealer;
Relationships with member firms of NASD
Xxxxxxxxx Securities Corporation, an affiliate of Xxxxxxxxx Mortgage, Inc., is
registered as a broker/dealer and is a member of the NASD.
Sch. F - 1
SCHEDULE G
Jurisdictions in which Xxxxxxxxx Mortgage Home Loans, Inc. ("TMHL")
is authorized or licensed to originate loans
States where TMHL has obtained licenses to lend:
-----------------------------------------------
Alaska Minnesota
California Nebraska
Connecticut North Carolina
Delaware North Dakota
Florida Oregon
Georgia South Dakota
Idaho Utah
Illinois Vermont
Iowa Virginia
Louisiana West Virginia
Maine Wisconsin
Maryland
Massachusetts
Michigan
States where licensing is not required:
--------------------------------------
Colorado Montana
Indiana South Carolina
Kentucky Wyoming
States with a license exemption:
-------------------------------
Arkansas Nevada
Mississippi New Mexico
Missouri Oklahoma
Texas
States in which applications are pending:
----------------------------------------
New York
Sch. G - 1
EXHIBIT A
November 12, 2001
Credit Suisse First Boston Corporation
ABN AMRO Rothschild LLC
X.X. Xxxxxxx & Sons, Inc.
RBC Xxxx Xxxxxxxx Inc.
as representatives of the several Underwriters,
c/o Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
In consideration of the agreement of Credit Suisse First Boston
Corporation ("CSFBC"), ABN AMRO Rothschild LLC, X.X. Xxxxxxx & Sons, Inc. and
RBC Xxxx Xxxxxxxx Inc. and certain other underwriters to underwrite a proposed
public offering (the "Offering") of shares (the "Offered Securities") of common
stock, par value $0.01 per share (the "Common Stock"), of Xxxxxxxxx Mortgage,
Inc., a Maryland corporation (the "Company"), as contemplated by a registration
statement on Form S-3 (File No. 333-61966), including a prospectus (the
"Registration Statement"), with respect to the Offered Securities, the
undersigned hereby agrees that the undersigned will not, for a period of 90 days
after the commencement of the public offering of such Offered Securities,
without the prior written consent of CSFBC, offer, sell, contract to sell,
pledge, grant any option to purchase or otherwise dispose of, directly or
indirectly, any shares of capital stock, or any securities convertible into, or
exercisable, exchangeable or redeemable for, shares of capital stock, except for
issuances of Common Stock upon the exercise of outstanding options and for
purchases of Common Stock through the Company's dividend reinvestment and stock
purchase plan.
Very truly yours,
By________________________________________
Name:
Title:
Ex. A - 1
