Exhibit 1
SAXON CAPITAL ACQUISITION CORP.
28,000,000 SHARES OF COMMON STOCK
PURCHASE AGREEMENT
JUNE 29, 2001
PURCHASE AGREEMENT
June 29, 2001
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Saxon Capital Acquisition Corp., a Delaware corporation (the
"Company"), proposes to sell to you (the "Initial Purchaser") an aggregate of
28,000,000 shares (the "Shares") of the Company's common stock, par value $0.01
per share (the "Common Stock").
The sale of the Shares to you will be made without registration of the
Shares under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations thereunder (the "Securities Act Regulations"), in
reliance upon the exemption from the registration requirements of the Securities
Act provided by Section 4(2) thereof. You have advised the Company that you will
make offers and sales ("Exempt Resales") of the Shares purchased by you
hereunder in accordance with Section 3 hereof on the terms set forth in the
Final Memorandum (as defined below), as soon as you deem advisable after this
Agreement has been executed and delivered.
Simultaneously with the sale of the Shares pursuant to this Agreement,
the Company will consummate the purchase (the "Saxon Acquisition") of all of the
issued and outstanding capital stock of Saxon Capital, Inc. (including its
wholly-owned subsidiaries, "Saxon") from Dominion Capital, Inc. ("DCI").
The Company also proposes to issue to the Initial Purchaser, in its
individual capacity, the warrants to purchase up to an aggregate of 1,200,000
shares of Common Stock as referred to in Section 1(b) hereof.
In connection with the sale of the Shares, the Company has prepared a
preliminary offering memorandum, dated June 8, 2001 (the "Preliminary
Memorandum"), and a final offering memorandum, dated July 2, 2001 (the "Final
Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum sets
forth certain information concerning the Company, Saxon and the Shares. The
Company hereby confirms that it has authorized the use of the Preliminary
Memorandum and the Final Memorandum in connection with the offering and resale
of the Shares by the Initial Purchaser and by all dealers to whom Shares may be
sold. Any references to the Preliminary Memorandum or the Final Memorandum shall
be deemed to include all exhibits and annexes thereto.
It is understood and acknowledged that holders (including subsequent
transferees) of the Shares and of the Warrant Shares (as defined below) will
have the registration rights set forth in the registration rights agreement
between the Company and the Initial Purchaser (the "Registration Rights
Agreement"), to be dated as of July 6, 2001, for so long as such securities
constitute "Registrable Shares" (as defined in the Registration Rights
Agreement).
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Pursuant to the Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "Commission"), under the
circumstances set forth therein, (i) a registration statement on Form S-1 under
the Securities Act for the initial public offering of the Company's common stock
which includes the resale by holders of the Shares and the Warrant Shares and/or
(ii) a shelf registration statement on Form S-1 or such other appropriate form
pursuant to Rule 415 under the Securities Act relating to the resale by holders
of the Shares and the Warrant Shares, and to use its best efforts to cause any
such registration statement to be declared effective.
The Company and the Initial Purchaser agree as follows:
1. SALE AND PURCHASE:
(a) SHARES. Upon the basis of the warranties and
representations and other terms and conditions herein set forth, the
Company agrees to issue and sell to the Initial Purchaser and the
Initial Purchaser agrees to purchase from the Company an aggregate of
28,000,000 Shares at a purchase price of $9.30 per share.
(b) WARRANTS. At the Closing Time (as defined below), the
Company agrees to issue to the Initial Purchaser (for its own account),
warrants (the "Warrants") to purchase an aggregate of 1,200,000 shares
of Common Stock (the "Warrant Shares") at a price per Warrant Share
equal to $10.00 (the purchase price per share paid by the investors for
the Shares sold pursuant to this Agreement). The Warrants will be
issued pursuant to an agreement (the "Warrant Agreement") between the
Company and the Initial Purchaser and will be exercisable at any time
and from time to time immediately upon issuance up to the fifth
anniversary thereof.
2. PAYMENT AND DELIVERY: Payment of the purchase price for the
Shares shall be made to the Company by wire transfer of immediately available
funds at the office of Xxxxxx, Xxxx & Xxxxxxxx LLP, 0000 Xxxxxxxxxxx Xxxxxx,
X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000 (unless another place shall be agreed
upon by the Initial Purchaser and the Company) against delivery of the
certificates for the Shares to you for your account. Such payment and delivery
shall be made at 10:00 a.m., New York City time, on the third (fourth, if
pricing occurs after 4:30 p.m. New York City time) business day after the date
hereof (unless another time, not later than ten business days after such date,
shall be agreed to by the Initial Purchaser and the Company). The time at which
such payment and delivery are actually made is hereinafter sometimes called the
"Closing Time". Certificates for the Shares shall be delivered to the Initial
Purchaser in definitive form registered in such names and in such denominations
as the Initial Purchaser shall specify.
3. OFFERING OF THE SHARES; RESTRICTIONS ON TRANSFER:
(a) The Initial Purchaser represents and warrants to and
agrees with the Company that (i) it has not solicited and will not
solicit any offer to buy or offer to sell the Shares by means of any
form of general solicitation or general advertising (within the meaning
of Regulation D under the Securities Act ("Regulation D")), and, with
respect to Shares sold in reliance on Regulation S under the Securities
Act ("Regulation S"), by
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means of any directed selling efforts and (ii) it has solicited and
will solicit offers to buy the Shares only from, and has offered and
will offer, sell or deliver the Shares only to, (A) persons ("QIBs")
who it reasonably believes to be "qualified institutional buyers"
(as defined in Rule 144A under the Securities Act) or, if any such
person is buying for one or more institutional accounts for which
such person is acting as fiduciary or agent, only when such person
has represented to it that each such account is a qualified
institutional buyer to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A, and, in each case,
in transactions under Rule 144A and who provide to it a certificate
in the form of Exhibit A hereto, (B) persons ("Accredited Investors")
who it reasonably believes to be "accredited investors" (as defined
in Rule 501(a) of Regulation D), and who provide to it a letter in
the form of Exhibit B-1 or Exhibit B-2 hereto, or (C) persons (each
a "Regulation S Purchaser") to whom, and under circumstances which,
it reasonably believes offers and sales of Shares may be made
without registration under the Securities Act in reliance on
Regulation S thereunder, and who provide to it a letter in the form
of Exhibit C hereto (such persons specified in clauses (A), (B) and
(C) being referred to herein as the "Eligible Purchasers"). The
Initial Purchaser represents and warrants that it is familiar with
the rules and restrictions set forth in Regulation S and that it has
not undertaken any activity for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market for any Shares being offered in reliance on Regulation S. The
Initial Purchaser further represents and warrants that, in the case
of any sale of Shares to a distributor, a dealer (as defined in
Section 2(12) of the Securities Act) or a person receiving a selling
concession, fee or other remuneration, prior to the expiration of
the 40-day restricted period set forth in Rule 903(c)(2) of
Regulation S, it will send a confirmation or other notice to the
purchaser stating that the purchaser is subject to the same
restrictions on offers and sales that apply to a distributor.
(b) The Initial Purchaser represents and warrants that:
(i) it has not offered or sold and will not offer or sell any Shares to
persons in the United Kingdom prior to the expiration of the period six
months from the date of the issuance of the Shares, except to persons
whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted
and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995
or the Financial Services Xxx 0000; (ii) it has complied, and will
comply, with all applicable provisions of the Financial Services Xxx
0000 with respect to anything done by it in relation to the Shares in,
from or otherwise involving the United Kingdom; (iii) it has only
issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Shares to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements)(Exemptions)
Order 1995 or is a person to whom such document may otherwise lawfully
be issued or passed on; (iv) it has not offered or sold and will not
offer or sell any shares to persons in Germany, except to such persons
or in such circumstances which have not resulted or will not result in
an offer to the public in Germany within the meaning of the German
Sales Prospectus Act; and (v) it has not offered or sold and will not
offer or sell any Shares to persons in Switzerland, except to persons
to whom a copy of the Preliminary Memorandum or the Final Memorandum
has been made available in accordance with Article 156 of the
International Private Law Act.
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(c) The Initial Purchaser represents and warrants to the
Company that no action is being taken or is contemplated that would
permit an offering or sale of the Shares or possession or distribution
of the Preliminary Memorandum or the Final Memorandum or any other
offering material relating to the Shares in any jurisdiction where, or
in any other circumstances in which, action for those purposes is
required (other than in jurisdictions where such action has been duly
taken by counsel for the Initial Purchaser).
(d) The Initial Purchaser agrees with the Company that it
may arrange for the private offer and sale of a portion of the Shares
to a limited number of QIBs in the United States (which may include
affiliates of the Initial Purchaser), in accordance with Rule 144A and
to a limited number of Accredited Investors otherwise under
restrictions and other circumstances designed to preclude a
distribution of the Shares that would require registration of the
Shares under the Securities Act. Such Shares are referred to as
"Restricted Shares."
(e) The Initial Purchaser agrees with the Company that
the Shares may be resold or otherwise transferred by the holders
thereof only if such Shares are registered under the Securities Act or
if an exemption from registration is available. The Initial Purchaser
hereby establishes and agrees that it has observed and will observe the
following procedures in connection with offers, sales and subsequent
resales or other transfers of any Restricted Shares placed by the
Initial Purchaser:
(i) SALES ONLY TO CERTAIN INVESTORS. Initial
offers and sales of the Shares will be made only in Exempt
Resales by the Initial Purchaser to investors that the Initial
Purchaser reasonably believes to be QIBs and to Regulation S
Purchasers or Accredited Investors.
(ii) NO GENERAL SOLICITATION. The Shares will be
offered only by approaching prospective purchasers on an
individual basis. No general solicitation or general
advertising within the meaning of Rule 502(c) under the
Securities Act will be used in connection with the offering of
such Shares.
(iii) RESTRICTIONS ON TRANSFER. The Final
Memorandum shall state that the Shares have not been and will
not be registered under the Securities Act, and that no resale
or other transfer of any Shares or any interest therein prior
to the date that is two years (or such shorter period as is
prescribed by Rule 144(k) under the Securities Act as then in
effect) after the later of the original issuance of such Share
and the last date on which the Company or any "affiliate" (as
defined in Rule 144 under the Securities Act) of the Company
was the owner of such Share may be made by a purchaser of a
Share except as follows:
(A) to the Company;
(B) to a QIB or a person who the seller
reasonably believes is a QIB in a transaction meeting
the requirements of Rule 144A;
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(C) outside the U.S. in accordance with
Rule 904 (or, if made by any distributor or any
affiliate of the Company, the Initial Purchaser or
any other distributor, Rule 903) of Regulation S;
(D) pursuant to the exemption provided
by Rule 144 under the Securities Act (if available);
(E) pursuant to another available
exemption from registration under the Securities Act;
(F) pursuant to an effective
registration statement under the Securities Act; or
(G) to an Accredited Investor that is
purchasing for his, her or its own account or for the
account of an Accredited Investor;
in each case in accordance with any applicable
federal securities laws and the securities laws of any state
of the United States or other jurisdiction.
(f) The Initial Purchaser agrees with the Company that
each initial resale of Shares by the Initial Purchaser (and each
purchase of Shares from the Company by the Initial Purchaser) in
accordance with this Section 3 shall be deemed to have been made on the
basis of and in reliance on the representations, warranties, covenants
and agreements (including, without limitation, agreements with respect
to indemnification and contribution) of the Company herein contained.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY: The Company
represents and warrants to the Initial Purchaser that, as of the date of this
Agreement:
(a) the Shares satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act;
(b) the Company had, at the date indicated, the duly
authorized and outstanding capitalization set forth in the Final
Memorandum under the caption "Capitalization"; all of the issued and
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable and
free of pre-emptive rights; the Company is a corporation duly organized
and validly existing under the laws of the State of Delaware, with full
power and authority to own its properties and conduct its business
(including the business of Saxon upon consummation of the Saxon
Acquisition) as described in the Final Memorandum, and to execute and
deliver this Agreement, the Registration Rights Agreement, the Warrant
Agreement and the Warrants and to consummate the transactions
contemplated hereby and thereby (including the issuance and sale of the
Shares and the Warrant Shares); the Company has reserved and kept
available for issuance upon exercise of the Warrants, such number of
authorized but unissued shares of Common Stock as are sufficient to
permit the exercise in full of the Warrants; all of the issued and
outstanding shares of capital stock of Saxon will be, upon consummation
of the Saxon Acquisition, owned by the Company, free and
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clear of any adverse claims; other than the ownership of Saxon upon
the consummation of the Saxon Acquisition, the Company has no
subsidiaries;
(c) the Company is duly qualified or licensed by, and is
in good standing in, each jurisdiction in which it conducts its
business or in which it owns or leases real property or maintains an
office and in which such qualification or licensing is necessary, and
in which the failure, individually or in the aggregate, to be so
qualified or licensed could have a material adverse effect on the
operations, business or condition of the Company; except as disclosed
in the Final Memorandum or otherwise restricted by Delaware law, upon
the consummation of the Saxon Acquisition, no subsidiary (other than
special purpose subsidiaries formed solely for the purposes of issuing
mortgage-backed securities and entering into warehouse agreements,
repurchase facilities and similar financing facilities) will be
prohibited or restricted, directly or indirectly, from paying dividends
to the Company, or from making any other distribution with respect to
such subsidiary's capital stock or from repaying to the Company or any
other subsidiary any amounts which may from time to time become due
under any loans or advances to such subsidiary from the Company or such
other subsidiary, or from transferring any such subsidiary's property
or assets to the Company or to any other subsidiary;
(d) the Company has good and marketable title in fee
simple to all real property, if any, and good title to all personal
property owned by it, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances, mortgages and
defects, except such as are disclosed in the Final Memorandum or such
as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such
property by the Company; any real property and buildings or material
personal property held under lease by the Company are held under valid,
existing and enforceable leases, with such exceptions as are disclosed
in the Final Memorandum or are not, individually or in the aggregate,
material to the Company and do not interfere with the use made or
proposed to be made of such property and buildings or material personal
property by the Company;
(e) the Company owns or possesses such licenses or other
rights to use all patents, trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how (collectively
"Intangibles"), as are necessary to entitle the Company to conduct its
business, and the Company has not received written notice of any
infringement of or conflict with (and the Company knows of no such
infringement of or conflict with) asserted rights of others with
respect to any Intangibles which could have a material adverse effect
on the operations, business or condition of the Company;
(f) the Company has not violated, or received notice of
any violation with respect to, any applicable environmental, safety or
similar law applicable to the business of the Company, nor any federal
or state law relating to discrimination in the hiring, promotion or pay
of employees, nor any applicable federal or state wages and hours law,
nor any provisions of the Employee Retirement Income Security Act or
the rules and regulations promulgated thereunder, nor any federal or
state law precluding the denial of credit due to the neighborhood in
which a property is situated, which violation could have
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a material adverse effect on the operations, business, condition,
prospects or property of the Company;
(g) neither the Company nor any officer or director
purporting to act on behalf of the Company has at any time (i) made any
contributions to any candidate for political office, or failed to
disclose fully any such contributions, in violation of law, (ii) made
any payment to any state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public
duties, other than payments required or allowed by applicable law,
(iii) made any payment outside the ordinary course of business to any
investment officer or loan broker or person charged with similar duties
of any entity to which the Company sells or from which the Company buys
loans or servicing arrangements for the purpose of influencing such
agent, officer, broker or person to buy loans or servicing arrangements
from or sell loans to the Company, or (iv) engaged in any transactions,
maintained any bank account or used any corporate funds except for
transactions, bank accounts and funds which have been and are reflected
in the normally maintained books and records of the Company;
(h) except as otherwise disclosed in the Final
Memorandum, there are no outstanding loans or advances or guarantees of
indebtedness by the Company or any subsidiary to or for the benefit of
any of the officers or directors of the Company or any subsidiary or
any of the members of the families of any of them;
(i) except with respect to the Initial Purchaser, the
Company has not incurred any liability for any finder's fees or similar
payments in connection with the transactions herein contemplated;
(j) the Company is not in breach of, or in default under
(nor has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), its certificate of
incorporation or by-laws or in the performance or observance of any
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, bank loan or credit agreement or
other agreement or instrument to which the Company is a party or by
which it is bound, except for such breaches or defaults which would not
have a material adverse effect on the operations, business or condition
of the Company, and the execution, delivery and performance by the
Company of this Agreement, the Registration Rights Agreement, the
Warrant Agreement, the Warrants and the issuance of the Shares and the
Warrant Shares and consummation of the transactions contemplated hereby
and thereby 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 constitute a breach of, or default under),
(i) any provision of the certificate of incorporation or by-laws of the
Company or (ii) any provision of any license, indenture, mortgage, deed
of trust, bank loan or credit agreement or other agreement or
instrument to which the Company is a party or by which its properties
may be bound or affected, or under any federal, state, local or foreign
law, regulation or rule or any decree, judgment, permit or order
applicable to the Company, except in the case of this clause (ii) for
such breaches or defaults which have been validly waived or would not
have a material adverse effect on the operations, business or condition
of the Company;
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(k) the Shares and the Warrant Shares have been duly
authorized by the Company and, when issued by the Company and delivered
against payment therefor as contemplated by this Agreement and the
Warrant Agreement, respectively, will be validly issued, fully paid and
non-assessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim, and the issuance and sale of the
Shares, the Warrant Shares and the Warrants by the Company is not
subject to preemptive or other similar rights arising by operation of
law, under the certificate of incorporation or by-laws of the Company,
under any agreement to which the Company or any of its subsidiaries is
a party or otherwise;
(l) each of this Agreement and the Warrant Agreement have
been, and the Registration Rights Agreement and the Warrants at the
Closing Time will be, duly authorized, executed and delivered by the
Company and are or will be legal, valid and binding agreements of the
Company enforceable in accordance with their respective terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally, and by general
principles of equity, and except to the extent that the indemnification
provisions hereof or thereof may be limited by federal or state
securities laws and public policy considerations in respect thereof;
(m) the Shares, the Warrants and Warrant Shares, the
Warrant Agreement and the Registration Rights Agreement conform in all
material respects to the description thereof contained in the Final
Memorandum; the form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements and with any applicable requirements of the certificate of
incorporation and by-laws of the Company;
(n) assuming (i) the accuracy of the Initial Purchaser's
representations and warranties set forth in Section 3 of this Agreement
and (ii) that the purchasers who buy the Shares in Exempt Resales are
either QIBs (or persons who the Initial Purchaser reasonably believes
are QIBs), Regulation S Purchasers or Accredited Investors, the sale of
the Shares and the Warrant Shares to the Initial Purchaser as
contemplated hereby and the Exempt Resales are exempt from the
registration requirements of the Securities Act;
(o) assuming (i) the accuracy of the Initial Purchaser's
representations and warranties set forth in Section 3 of this Agreement
and (ii) that the purchasers who buy the Shares in Exempt Resales are
either QIBs (or persons who the Initial Purchaser reasonably believes
are QIBs), Regulation S Purchasers or Accredited Investors, no
approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the Company's
execution, delivery and performance of this Agreement, the Warrant
Agreement and the Warrants and the Registration Rights Agreement, its
consummation of the transactions contemplated hereby and thereby, and
its sale and delivery of the Shares, the Warrants and the Warrant
Shares, other than (A) such as have been obtained or made, or will have
been obtained or made at the Closing Time, (B) any necessary or
advisable qualification (which the Initial Purchaser shall request)
under the securities or blue sky laws of the various jurisdictions in
which the Shares are being
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offered by the Initial Purchaser, (C) with or by federal or state
securities regulatory authorities in connection with or pursuant to
the Registration Rights Agreement, including without limitation the
filing of the registration statement(s) required thereby with the
Commission, and (D) the filing of a Form D with the Commission;
(p) the Company has all necessary licenses,
authorizations, consents and approvals and has made all necessary
filings required under any federal, state or local law, regulation or
rule, and has obtained all necessary authorizations, consents and
approvals from other persons, required in order to conduct its
business, except to the extent that any failure to have any such
licenses, authorizations, consents or approvals, to make any such
filings or to obtain any such authorizations, consents or approvals
would not, alone or in the aggregate, have a material adverse effect on
the operations, business, properties, prospects, results of operations
or condition of the Company; the Company is not in violation of, or in
default under, any such license, authorization, consent or approval or
any federal, state, local or foreign law, regulation or rule or any
decree, order or judgment applicable to the Company the effect of which
could be material and adverse to the operations, business, properties,
prospects or condition of the Company;
(q) the Final Memorandum contains accurate summaries of
all material contracts, agreements, instruments and other documents of
the Company that would be required to be described in a prospectus
included in a registration statement on Form S-1 under the Securities
Act; the copies of all contracts, agreements, instruments and other
documents (including governmental licenses, authorizations, permits,
consents and approvals and all amendments or waivers relating to any of
the foregoing) that have been previously furnished to the Initial
Purchaser or its counsel are complete and genuine and include all
material collateral and supplemental agreements thereto;
(r) there are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against the Company or
any of its properties, at law or in equity, or before or by any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency which could result in a judgment,
decree or order having a material adverse effect on the operations,
business, condition, prospects or property of the Company;
(s) no securities of the Company are of the same class
(within the meaning of Rule 144A under the Securities Act) as the
Shares and listed on a national securities exchange registered under
Section 6 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or quoted in a U.S. automated inter-dealer quotation
system;
(t) subsequent to the date of the Final Memorandum, and
except as may be otherwise stated in the Final Memorandum, there has
not been (A) any material adverse change, financial or otherwise, in
the business, properties, prospects, results of operations or
condition, present or prospective, of the Company, (B) any transaction,
other than in the ordinary course of business, which is material to the
Company, contemplated or entered into by the Company or any subsidiary,
(C) any obligation, contingent or otherwise, directly or indirectly
incurred by the Company or any subsidiary, other than in the ordinary
course of business, which is material to the Company or (D) any
dividend or
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distribution of any kind declared, paid or made by the Company on any
class of its capital stock;
(u) the Company is not, and upon the sale of the Shares
and the Warrants as herein contemplated and the application of the net
proceeds therefrom as described in the Final Memorandum under the
caption "Use of Proceeds", will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act");
(v) there are no persons with registration or other
similar rights to have any securities registered by the Company under
the Securities Act other than pursuant to the Registration Rights
Agreement;
(w) neither the Company nor, to the knowledge of the
Company, any of its directors, officers or controlling persons has
taken, directly or indirectly, any action intended, or which might
reasonably be expected, to cause or result, under the Securities Act,
the Exchange Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(x) the Company has not relied upon the Initial Purchaser
or legal counsel for the Initial Purchaser for any legal, tax or
accounting advice in connection with the offering and sale of the
Shares or the Warrant Shares; and
(y) any certificate signed by any officer of the Company
delivered to the Initial Purchaser or to counsel for the Initial
Purchaser pursuant to or in connection with this Agreement shall be
deemed a representation and warranty by the Company to the Initial
Purchaser as to the matters covered thereby.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY WITH RESPECT TO
SAXON: The Company further represents and warrants to the Initial Purchaser
that, as of the date of this Agreement:
(a) each of Saxon and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its respective jurisdiction of incorporation with
full corporate power and authority to own its respective properties and
to conduct its respective business as described in the Final
Memorandum; all of the issued and outstanding shares of capital stock
of Saxon and its subsidiaries have been duly and validly authorized and
issued and are fully paid and non-assessable and free of pre-emptive
rights;
(b) Saxon and its subsidiaries are duly qualified or
licensed by, and are in good standing in, each jurisdiction in which
they conduct their respective businesses or in which they own or lease
real property or maintain an office and in which such qualification or
licensing is necessary, and in which the failure, individually or in
the aggregate, to be so qualified or licensed could have a material
adverse effect on the operations, business, condition, prospects or
property of Saxon; except as disclosed in the Final Memorandum or
otherwise restricted by law of Saxon's state of incorporation, no
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subsidiary of Saxon (other than special purpose subsidiaries formed
solely for the purposes of issuing mortgage-backed securities and
entering into warehouse agreements, repurchase facilities and similar
financing facilities ) is prohibited or restricted, directly or
indirectly, from paying dividends to Saxon, or from making any other
distribution with respect to such subsidiary's capital stock or from
repaying to Saxon or any other subsidiary any amounts which may from
time to time become due under any loans or advances to such subsidiary
from Saxon or such other subsidiary, or from transferring any such
subsidiary's property or assets to Saxon or to any other subsidiary;
(c) Saxon and its subsidiaries have good and marketable
title in fee simple to all real property, if any, and good title to all
personal property owned by them, in each case free and clear of all
liens, security interests, pledges, charges, encumbrances, mortgages
and defects, except such as are disclosed in the Final Memorandum or
such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made
of such property by Saxon and the subsidiaries; any real property and
buildings or material personal property held under lease by Saxon or
any subsidiary are held under valid, existing and enforceable leases,
with such exceptions as are disclosed in the Final Memorandum or are
not, individually or in the aggregate, material to Saxon and do not
interfere with the use made or proposed to be made of such property and
buildings or material personal property by Saxon;
(d) Saxon and each subsidiary owns or possesses, or will
as of the Closing Time own or possess, such Intangibles as are
necessary to entitle Saxon and each subsidiary to conduct its business
as described in the Final Memorandum, and neither Saxon nor any
subsidiary, has received written notice of any infringement of or
conflict with (and the Company knows of no such infringement of or
conflict with) asserted rights of others with respect to any
Intangibles which could have a material adverse effect on the
operations, business, condition, prospects or property of Saxon;
(e) Saxon and each subsidiary owns, or will as of the
Closing Time own, free and clear of any liens, security interests,
pledges, charges or encumbrances, or has valid licenses or other rights
to use all material trade secrets, including know-how, inventions,
designs, processes, works of authorship, computer programs (with the
exception of commercially available software purchased and sold as
such) and technical data and information used in development,
manufacture, operation and sale of all products and services sold by
Saxon;
(f) Saxon and each subsidiary maintain 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 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;
12
(g) each of Saxon and its subsidiaries has filed on a
timely basis all necessary federal, state, local and foreign income and
franchise tax returns required to be filed through the date hereof and
has paid all taxes shown as due thereon (except where the failure so to
file or pay, individually or in the aggregate, would not have a
material adverse effect on the operations, business, condition,
prospects or property of Saxon); and no tax deficiency has been
asserted against any such entity, nor does any such entity know of any
basis for the assertion of any tax deficiency which if determined
adversely to any such entity, could have a material adverse effect on
the operations, business, condition, prospects or property of Saxon;
(h) neither Saxon nor any subsidiary has breached any
representation, warranty, covenant or agreement made by it in any
document with respect to any securitization in which Saxon or any
subsidiary was the seller, depositor, master servicer, servicer,
guarantor, credit support provider, sponsor or originator, which breach
could have a material adverse effect, financial or otherwise, in the
business, properties, prospects, results of operations or condition,
present or prospective, of Saxon or any subsidiary;
(i) the total unpaid principal balance of mortgage loans,
and all associated reserves, owned by Saxon and its subsidiaries which
are held for sale or investment and which are ineligible for
securitization in accordance with Saxon's securitization program as
implemented through the securitizations sponsored by Saxon or any of
its subsidiaries since January 1, 2000 does not exceed $30,000,000;
(j) each of Saxon and its subsidiaries maintains
insurance (issued by insurers of recognized financial responsibility)
of the types and in the amounts deemed reasonable and adequate for
their respective businesses, including, but not limited to, insurance
covering real and personal property owned or leased by Saxon and any
subsidiary against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against, all of which insurance is
in full force and effect;
(k) neither Saxon nor any subsidiary has violated, or
received notice of any violation with respect to, any applicable
environmental, safety or similar law applicable to the business of
Saxon or any of its subsidiaries, nor any federal or state law relating
to discrimination in the hiring, promotion or pay of employees, nor any
applicable federal or state wages and hours law, nor any provisions of
the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, nor any federal or state law
precluding the denial of credit due to the neighborhood in which a
property is situated, which violation could have a material adverse
effect on the operations, business, condition, prospects or property of
Saxon;
(l) neither Saxon nor any subsidiary nor any officer or
director purporting to act on behalf of Saxon or any subsidiary has at
any time (i) made any contributions to any candidate for political
office, or failed to disclose fully any such contributions, in
violation of law, (ii) made any payment to any state, federal or
foreign governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or
allowed by applicable law, (iii) made any payment
13
outside the ordinary course of business to any investment officer or
loan broker or person charged with similar duties of any entity to
which Saxon or any subsidiary sells or from which Saxon or any
subsidiary buys loans or servicing arrangements for the purpose of
influencing such agent, officer, broker or person to buy loans or
servicing arrangements from or sell loans to Saxon or any
subsidiary, or (iv) engaged in any transactions, maintained any bank
account or used any corporate funds except for transactions, bank
accounts and funds which have been and are reflected in the normally
maintained books and records of Saxon;
(m) except as otherwise disclosed in the Final Memorandum
and except for mortgage loans made in the ordinary course of business,
there are no outstanding loans or advances or guarantees of
indebtedness greater than $30,000 individually or $50,000 in the
aggregate by Saxon or any subsidiary to or for the benefit of any of
the officers or directors of Saxon or any subsidiary or any of the
members of the families of any of them;
(n) Saxon has not incurred any liability for any finder's
fees or similar payments in connection with the transactions herein
contemplated;
(o) each of the Preliminary Memorandum and the Final
Memorandum as of its date did not, and the Final Memorandum as of the
Closing Time will not, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no warranty or representation with
respect to any statement in or omission from the Preliminary Memorandum
or the Final Memorandum made in reliance upon and in conformity with
information concerning the Initial Purchaser and furnished in writing
by or on behalf of the Initial Purchaser to the Company expressly for
use therein;
(p) the Company has not authorized anyone to make any
representations regarding the offer and sale of the Shares, or
regarding the Company or Saxon in connection therewith, except as set
forth in the Final Memorandum. No stop order or other similar order or
decree preventing the use of the Preliminary Memorandum or the Final
Memorandum or any amendment or supplement thereto, or any order
asserting that the transactions contemplated by this Agreement are
subject to the registration requirements of the Securities Act, has
been issued and no proceeding for that purpose has commenced or is
pending or, to its knowledge, is contemplated;
(q) except as permitted by the Securities Act, neither
the Company nor any subsidiary has distributed and, prior to the later
to occur of the Closing Time and completion of the distribution of the
Shares, will not distribute any offering material in connection with
the offering and sale of the Shares other than the Preliminary
Memorandum and the Final Memorandum; except as set forth in the
Registration Rights Agreement, neither the Company nor any subsidiary
has directly, or through any agent or person acting on its behalf, (i)
sold, offered for sale, solicited offers to buy or otherwise negotiated
in respect of, any security (as defined in the Securities Act) which is
or will be integrated with the offering and sale of the Shares in a
manner that would require the
14
registration of the Shares under the Securities Act or (ii) engaged
in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with the offering of the
Shares;
(r) none of the Company or its affiliates or any person
acting on behalf of it or its affiliates has engaged in any directed
selling efforts (as that term is defined in Regulation S) with respect
to the Shares, and the Company and any person acting on its behalf
(other than the Initial Purchaser as to which the Company makes no
representation) have complied with the offering restrictions
requirement of Regulation S;
(s) neither Saxon nor any subsidiary is in breach of, or
in default under (nor has any event occurred which with notice, lapse
of time, or both would constitute a breach of, or default under), its
certificate of incorporation or by-laws or in the performance or
observance of any obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, bank loan or
credit agreement or other agreement or instrument to which Saxon or any
subsidiary is a party or by which it is bound, except for such breaches
or defaults which would not have a material adverse effect on the
operations, business or condition of Saxon, and the execution, delivery
and performance by the Company of this Agreement, the Warrant Agreement
and the Registration Rights Agreement and the issuance and sale of the
Shares and the Warrants and Warrant Shares and consummation of the
transactions contemplated hereby and thereby 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 constitute a
breach of, or default under), (i) any provision of the certificate of
incorporation or by-laws of Saxon or any subsidiary, or (ii) any
provision of any license, indenture, mortgage, deed of trust, bank loan
or credit agreement or other agreement or instrument to which Saxon or
any subsidiary 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, permit or order applicable
to Saxon or any subsidiary, except in the case of this clause (ii) for
such breaches or defaults which have been validly waived or would not
have a material adverse effect on the operations, business or condition
of Saxon;
(t) to the knowledge of the Company, Deloitte & Touche
LLP, whose reports on the financial statements of Saxon are included in
the Final Memorandum, are independent public accountants within the
meaning of Rule 101 of the AICPA's Code of Professional Conduct and its
interpretation and rulings;
(u) each of Saxon and its subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all
necessary filings required under any federal, state or local law,
regulation or rule, and has obtained all necessary authorizations,
consents and approvals from other persons, required in order to conduct
its business, except to the extent that any failure to have any such
licenses, authorizations, consents or approvals, to make any such
filings or to obtain any such authorizations, consents or approvals
would not, alone or in the aggregate, have a material adverse effect on
the operations, business, condition, prospects or property of Saxon;
neither Saxon nor any subsidiary is in violation of, or in default
under, any such license, authorization, consent or approval or any
federal, state, local or foreign law, regulation or rule or any
15
decree, order or judgment applicable to Saxon or any subsidiary the
effect of which could be material and adverse to the operations,
business, condition, prospects or property of Saxon;
(v) the Final Memorandum contains accurate summaries of
all material contracts, agreements, instruments and other documents of
Saxon that would be required to be described in a prospectus included
in a registration statement on Form S-1 under the Securities Act; the
copies of all contracts, agreements, instruments and other documents
(including governmental licenses, authorizations, permits, consents and
approvals and all amendments or waivers relating to any of the
foregoing) that have been previously furnished to the Initial Purchaser
or its counsel are complete and genuine and include all material
collateral and supplemental agreements thereto;
(w) there are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against Saxon or any
subsidiary or any of their properties, at law or in equity, or before
or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency which could result in a
judgment, decree or order having a material adverse effect on the
operations, business, condition, prospects or property of Saxon;
(x) the historical financial statements, including the
notes thereto, included in the Final Memorandum comply as to form with
the requirements applicable to financial statements required to be
included in prospectuses included in registration statements on Form
S-1 under the Securities Act and present fairly the financial position
of Saxon as of the dates indicated and the results of operations and
changes in financial position and cash flow of Saxon for the periods
specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as indicated in the notes
thereto);
(y) subsequent to the date of the Final Memorandum, and
except as may be otherwise stated in the Final Memorandum, there has
not been (i) any material adverse change, financial or otherwise, in
the business, properties, prospects, results of operations or
condition, present or prospective, of Saxon, (ii) any transaction,
other than in the ordinary course of business, which is material to
Saxon, contemplated or entered into by Saxon or any subsidiary, (iii)
any obligation, contingent or otherwise, directly or indirectly
incurred by Saxon or any subsidiary, other than in the ordinary course
of business, which is material to Saxon or (iv) any dividend or
distribution of any kind declared, paid or made by Saxon on any class
of its capital stock;
(z) none of Saxon, any subsidiary, or, to the knowledge
of the Company, any of their directors, officers or controlling persons
has taken, directly or indirectly, any action intended, or which might
reasonably be expected, to cause or result, under the Securities Act,
the Exchange Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares; and
16
(aa) any certificate signed by any officer of Saxon or any
of its subsidiaries delivered to the Initial Purchaser or to counsel
for the Initial Purchaser pursuant to or in connection with this
Agreement shall be deemed a representation and warranty by the Company
to the Initial Purchaser as to the matters covered thereby.
6. CERTAIN COVENANTS OF THE COMPANY: The Company hereby agrees
with the Initial Purchaser:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offer and sale
under the securities or blue sky laws of such states as the Initial
Purchaser may designate and to maintain such qualifications in effect
as long as required by such laws for the distribution of the Shares and
for the Exempt Resales, 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 state or subject itself to taxation
as doing business in any jurisdiction (except service of process with
respect to the offering and sale of the Shares);
(b) to prepare the Final Memorandum in a form approved by
the Initial Purchaser and to furnish promptly (and with respect to the
initial delivery of such Final Memorandum, not later than 10:00 a.m.
(New York City time) on the second day following the execution and
delivery of this Agreement) to the Initial Purchaser as many copies of
the Final Memorandum (and any amendments or supplements thereto) as the
Initial Purchaser may reasonably request for the purposes contemplated
by this Agreement;
(c) to advise the Initial Purchaser promptly, confirming
such advice in writing, of (i) the happening of any event known to the
Company within the time during which the Final Memorandum shall (in the
view of the Initial Purchaser) be required to be distributed by the
Initial Purchaser in connection with an Exempt Resale (and the Initial
Purchaser hereby agrees to notify the Company in writing when the
foregoing time period has ended) which, in the judgment of the Company,
would require the making of any change in the Final Memorandum then
being used so that the Final Memorandum would not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading
and (ii) the receipt of any notification with respect to the
modification, rescission, withdrawal or suspension of the qualification
of the Shares, or of any exemption from such qualification or from
registration of the Shares, for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceedings for any of such
purposes and, if any government agency or authority should issue any
such order, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; to prepare and furnish, at
the Company's expense, to the Initial Purchaser (and to any persons
designated by the Initial Purchaser) promptly any proposed amendments
or supplements to the Final Memorandum as may be necessary;
(d) to furnish to the Initial Purchaser for a period of
five years from the Closing Time (i) copies of all annual, quarterly
and current reports supplied to holders of
17
the Shares, (ii) copies of all reports filed by the Company with the
Commission and (iii) such other information as the Initial Purchaser
may reasonably request regarding the Company or its subsidiaries;
(e) not to amend or supplement the Preliminary Memorandum
or the Final Memorandum prior to the Closing Time unless the Initial
Purchaser shall previously have been advised thereof and shall have
consented thereto or not have reasonably objected thereto (for legal
reasons) in writing within a reasonable time after being furnished a
copy thereof;
(f) during any period in the two years (or such shorter
period as may then be applicable under the Securities Act regarding the
holding period for securities under Rule 144(k) under the Securities
Act or any successor rule) after the Closing Time in which the Company
is not subject to Section 13 or 15(d) of the Exchange Act to furnish,
upon request, to any holder of such Shares the information ("Rule 144A
Information") specified in Rule l44A(d)(4) under the Securities Act and
any additional information required by The Portal Market ("Portal
Information"), and any such Rule l44A Information and Portal
Information will not, at the date thereof, contain any untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they are made, not misleading;
(g) to apply the net proceeds from the sale of the Shares
in the manner set forth under the caption "Use of Proceeds" in the
Final Memorandum;
(h) that neither the Company nor any affiliate (as
defined in Rule 501(b) of Regulation D) of the Company will solicit any
offer to buy or offer or sell the Shares by means of any form of
general solicitation or general advertising (within the meaning of
Regulation D) or engage in any directed selling efforts (as defined in
Rule 902 of Regulation S);
(i) that neither the Company nor any affiliate (as
defined in Rule 501(b) of Regulation D) of the Company will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in the Securities Act) the offering of which
security will be integrated with the sale of the Shares in a manner
which would require the registration under the Securities Act of the
sale to the Initial Purchaser or the Eligible Purchasers of the Shares;
(j) that the Company will not take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Shares;
(k) that, except as permitted by the Securities Act, the
Company will not distribute any offering materials in connection with
Exempt Resales;
(l) to pay all expenses, fees and taxes in connection
with (i) the preparation of the Preliminary Memorandum and the Final
Memorandum, and any amendments or supplements thereto, and the printing
and furnishing of copies of each thereof to the
18
Initial Purchaser (including costs of mailing and shipment), (ii)
the preparation, issuance and delivery of the Shares and the
Warrants and Warrant Shares, including any stock or other transfer
taxes or duties payable upon the sale of the Shares and the Warrants
to the Initial Purchaser or the issuance of the Warrant Shares to
the Initial Purchaser, (iii) the printing of this Agreement and any
dealer agreements, and the reproduction and/or printing and furnishing
of copies of each thereof to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares for offering and
sale under state laws and the determination of their eligibility for
investment under state law as aforesaid (including the reasonable
legal fees and filing fees and other reasonable disbursements of
counsel for the Initial Purchaser) and the printing and furnishing
of copies of any blue sky surveys or legal investment surveys to the
Initial Purchaser and to dealers, (v) the designation of the Shares
and the Warrant Shares as PORTAL eligible securities by the National
Association of Securities Dealers, Inc. PORTAL Market, (vi) the fees
and expenses of any transfer agent or registrar for the shares of
Common Stock, (vii) the out-of-pocket expenses of the Initial
Purchaser incurred in connection with its services under this
Agreement, including the reasonable fees and disbursements of its
legal counsel (other than those expenses of the Initial Purchaser
previously reimbursed pursuant to the engagement letter between DCI
and the Initial Purchaser dated April 23, 2001), (viii) the costs
and expenses of the Initial Purchaser and the Company incurred in
connection with the marketing of the Shares, including "road show"
costs and expenses, and (ix) the performance of the Company's other
obligations hereunder;
(m) to use reasonable efforts in cooperation with the
Initial Purchaser to obtain permission for the Shares sold to QIBs, as
such term is defined in Rule 144A under the Securities Act, to be
eligible for clearance and settlement through the Depository Trust
Company;
(n) in connection with Shares offered and sold in an
offshore transaction (as defined in Regulation S), not to register any
transfer of such Shares not made in accordance with the provisions of
Regulation S and not, except in accordance with the provisions of
Regulation S, if applicable, to issue any such Shares in the form of
definitive securities;
(o) to furnish to the Initial Purchaser, during the
period referred to in clause (i) of paragraph 6(c) above, not less than
two business days before filing with the Commission, a copy of the most
current draft at such time of any document proposed to be filed with
the Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act;
(p) to refrain during a period of 180 days from the date
of the Final Memorandum, without the prior written consent of the
Initial Purchaser, from (i) offering, pledging, selling, contracting to
sell, selling any option or contract to purchase, purchasing any option
or contract to sell, granting any option for the sale of, or otherwise
disposing of or transferring, directly or indirectly, any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or filing any registration statement
under the Securities Act with respect to any of the foregoing, or (ii)
entering into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the
19
Common Stock, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Shares to be sold hereunder, the
Warrants and the Warrant Shares to be issued upon exercise of the
Warrants, (B) the registration and sale of the Shares and the
Warrant Shares in accordance with the terms of the Registration
Rights Agreement, (C) any shares of Common Stock issued by the
Company upon the exercise of an option outstanding on the date
hereof and referred to in the Final Memorandum or (D) such issuances
of options or grants of restricted stock under the Company's 2001
Stock Incentive Plan as are described in the Final Memorandum; and
(q) that the Initial Purchaser and its direct or indirect
transferees of the Shares are authorized to rely on the representations
and warranties of the Company contained in the purchase and sale
agreement relating to the Saxon Acquisition (the "Saxon Agreement") as
if such representations and warranties were made directly to the
Initial Purchaser and its transferees.
7. CONDITIONS OF THE INITIAL PURCHASER'S OBLIGATIONS: The
obligations of the Initial Purchaser hereunder are subject to the accuracy of
the representations and warranties on the part of the Company on the date hereof
and at the Closing Time, the performance by the Company of its obligations
hereunder and to the following conditions:
(a) The Company shall furnish to the Initial Purchaser at
the Closing Time an opinion of XxXxx Xxxxxx LLP, counsel for the
Company, addressed to the Initial Purchaser and dated the Closing Time
and in form reasonably satisfactory to the Initial Purchaser, stating
that:
(i) the Company has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of its state of incorporation with full corporate
power and authority to own its properties and to conduct its
business (including the business of Saxon upon consummation of
the Saxon Acquisition) and to execute and deliver this
Agreement, the Warrant Agreement, the Warrants and the
Registration Rights Agreement and to issue the Shares and the
Warrant Shares;
(ii) the Company is duly qualified or licensed by
and is in good standing in each jurisdiction in which the
character or location of its assets or properties or the
nature of its business makes such qualification 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 operations, business or condition of the Company;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) each of the Warrant Agreement, the Warrants
and the Registration Rights Agreement has been duly
authorized, executed and delivered by the
20
Company, and, assuming due authorization, execution and
delivery by the Initial Purchaser, is a legal, valid and
binding agreement of the Company enforceable against the
Company in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and by
general principles of equity, and except to the extent that
the indemnification provisions therein may be limited by
federal or state securities laws and public policy
considerations in respect thereof;
(v) the Shares and the Warrant Shares have been
duly authorized by the Company and, upon payment therefor and
delivery in accordance with this Agreement or the Warrant
Agreement, will be validly issued, fully paid and
non-assessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim, and the
issuance and sale of the Shares and the Warrant Shares by the
Company is not subject to preemptive or other similar rights
arising by operation of law, under the certificate of
incorporation or by-laws of the Company, or under any
agreement known to us to which the Company or any of
subsidiary is a party or otherwise;
(vi) the Company has an authorized capitalization
as set forth in the Final Memorandum; the outstanding shares
of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable
and free of pre-emptive rights; the Company has reserved and
kept available for issuance upon exercise of the Warrants,
such number of authorized but unissued shares of Common Stock
as are sufficient to permit the exercise in full of the
Warrants; all of the issued and outstanding shares of capital
stock of Saxon are, upon consummation of the Saxon
Acquisition, owned by the Company, free and clear of any
adverse claims, and, to the best of such counsel's knowledge,
the Company has no subsidiaries other than Saxon and Saxon's
subsidiaries;
(vii) the Shares, the Warrants and Warrant Shares,
the Warrant Agreement and the Registration Rights Agreement
conform in all material respects to the descriptions thereof
contained in the Final Memorandum;
(viii) the statements under the captions
"Management - Executive Compensation" (only with respect to
the employment agreements described therein), "Management -
Stock Plan", "Management - Indemnification and Limitation on
Liability; Insurance", "U.S. Federal Tax Considerations for
Non-U.S. Holders" and "Description of Capital Stock" in the
Final Memorandum, insofar as such statements constitute a
summary of the legal matters or documents referred to therein,
constitute accurate summaries thereof in all material respects
and accurately present the information called for with respect
to such matters or documents;
(ix) assuming (i) the accuracy of the
representations and warranties of the Company and the Initial
Purchaser set forth in this Agreement and (ii) that the
purchasers who buy the Shares in Exempt Resales are either
QIBs (or persons who the Initial Purchaser reasonably believes
are QIBs), Regulation S Purchasers
21
or Accredited Investors, the sale of the Shares to the
Initial Purchaser as contemplated hereby and the Exempt
Resales are exempt from the registration requirements of
the Securities Act;
(x) to such counsel's knowledge, the Company and
its affiliates and any person acting on behalf of the Company
or its affiliates (other than the Initial Purchaser as to
which such counsel need express no opinion) have complied with
the offering restrictions requirement of Regulation S;
(xi) the Shares satisfy the requirements set
forth in Rule 144A(d)(3) under the Securities Act;
(xii) as of the date of the Final Memorandum, the
Final Memorandum (except as to the financial statements and
other financial and statistical data contained therein, as to
which such counsel need express no opinion) complied as to
form in all material respects with the requirements of the
Securities Act Regulations for prospectuses included in
registration statements on Form S-1;
(xiii) assuming (i) the accuracy of the
representations and warranties of the Company and the Initial
Purchaser set forth in this Agreement and (ii) that the
purchasers who buy the Shares in Exempt Resales are either
QIBs (or persons who the Initial Purchaser reasonably believes
are QIBs), Regulation S Purchasers or Accredited Investors, no
approval, authorization, consent or order of or filing with
any federal, or to such counsel's knowledge, state or local
governmental or regulatory commission, board, body, authority
or agency is required in connection with the transactions
contemplated by this Agreement, the Warrant Agreement, the
Warrants and the Registration Rights Agreement and the
issuance of the Shares and the Warrant Shares as contemplated
hereby or thereby other than such as have been obtained or
made and other than the filing of a Form D with the Commission
and except that such counsel need express no opinion as to (i)
any necessary qualification under the state securities or blue
sky laws of the various jurisdictions in which the Shares are
being offered by the Initial Purchaser or (ii) any approval,
authorization, consent or order necessary by any federal or
state securities regulatory authorities in connection with or
pursuant to the Registration Rights Agreement, including
without limitation the filing of the registration statement(s)
required thereby with the Commission;
(xiv) the execution, delivery and performance of
this Agreement, the Warrant Agreement, the Warrants and the
Registration Rights Agreement and the issuance of the Shares
and the Warrant Shares by the Company and the consummation by
the Company of the transactions contemplated hereby and
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
constitute a breach of or default under), (i) any provisions
of the certificate of incorporation or by-laws of the Company,
(ii) any provision of any material license, indenture,
mortgage, deed of trust, bank loan, credit agreement or other
agreement or instrument known to such counsel to which the
Company, Saxon or
22
any subsidiary is a party or by which it or its properties
may be bound or affected, or (iii) the Securities Act or the
rules and regulations of the Commission or any other federal
law or any decree, judgment, permit or order applicable to the
Company, Saxon or any subsidiary, except in the case of clause
(ii) for such conflicts, breaches or defaults which have been
waived or which individually or in the aggregate would not
have a material adverse effect on the operations, business or
condition of the Company;
(xv) to such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a
character which are required to be summarized or described in
the Final Memorandum which have not been so summarized or
described;
(xvi) to such counsel's knowledge, there are no
actions, suits or proceedings pending or threatened against
the Company, Saxon or any subsidiary or any of their
properties, at law or in equity or before or by any
commission, board, body, authority or agency which are
required to be described in the Final Memorandum but are not
so described;
(xvii) the form of certificate used to evidence the
Shares complies in all material respects with all applicable
statutory requirements and with any applicable requirements of
the certificate of incorporation and by-laws of the Company;
(xviii) to the best of such counsel's knowledge,
there are no persons with registration or other similar rights
to have any securities registered by the Company under the
Securities Act, other than pursuant to the Registration Rights
Agreement; and
(xix) the Company is not, and will not become upon
and as a result of the sale of the Shares and the Warrant
Shares and the application of the net proceeds therefrom as
described in the Final Memorandum under the caption "Use of
Proceeds", an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the
1940 Act.
Such opinion shall address matters under the laws of the
Commonwealth of Virginia and, to the extent relevant, the State of
Delaware and under the laws of the United States. Counsel shall be
entitled to rely on the opinion of Saxon's General Counsel on all
matters governed by the laws of the Commonwealth of Virginia. In
addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company and
Saxon, representatives of the independent public accountants of the
Company and Saxon and representatives of the Initial Purchaser at which
the contents of the Preliminary Memorandum and the Final Memorandum
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 Preliminary Memorandum or the Final
Memorandum (except as and to the extent stated in subparagraphs (vii)
and (viii) above), on the basis of the foregoing nothing has
23
come to the attention of such counsel that causes them to believe
that either the Preliminary Memorandum or the Final Memorandum, in
each case as amended or supplemented as of its date and as of the
Closing Time, 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 in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading (it being understood that, in each case, such
counsel need express no view with respect to the financial
statements and other financial and statistical data included in the
Preliminary Memorandum or the Final Memorandum).
(b) Saxon shall furnish to the Initial Purchaser at the
Closing Time an opinion of its General Counsel, addressed to the
Initial Purchaser and dated the Closing Time and in form reasonably
satisfactory to the Initial Purchaser, stating that:
(i) all of the issued and outstanding shares of
capital stock of Saxon and its subsidiaries have been duly and
validly authorized and issued and are fully paid and
non-assessable and free of pre-emptive rights;
(ii) Saxon and each of its subsidiaries has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of
incorporation with full corporate power and authority to own
its properties and to conduct its business; Saxon and each of
its subsidiaries is duly qualified or licensed by and is in
good standing in each jurisdiction in which the character or
location of its assets or properties or the nature of its
business makes such qualification 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
operations, business or condition of Saxon;
(iii) the execution, delivery and performance of
this Agreement, the Warrant Agreement, the Warrants and the
Registration Rights Agreement and the issuance of the Shares
and the Warrant Shares by the Company and the consummation by
the Company of the transactions contemplated hereby and
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
constitute a breach of or default under), (i) any provisions
of the certificate of incorporation or by-laws of Saxon or any
subsidiary or (ii) any federal law or any decree, judgment,
permit or order applicable to Saxon or any subsidiary
pertaining to consumer lending;
(iv) Saxon and each subsidiary own or possess
such licenses or other rights to use all material Intangibles
as are necessary to entitle Saxon and the subsidiaries to
conduct its business as currently conducted as described in
the Final Memorandum, and to such counsel's knowledge, none of
Saxon or any subsidiary has received written notice of
infringement of or conflict with asserted rights of others
with respect to any material Intangibles which could have a
material adverse effect on the business, operations, property
or condition of the Company, Saxon and each subsidiary; and
24
(v) the statements under the caption "Business -
Regulation" in the Final Memorandum, insofar as such
statements constitute a summary of the legal matters referred
to therein, constitute accurate summaries thereof in all
material respects.
(c) The Initial Purchaser shall have received from
Deloitte & Touche LLP, letters dated, respectively, as of the date of
the Preliminary Memorandum, this Agreement and the Closing Time and
addressed to the Initial Purchaser in the forms heretofore approved by
the Initial Purchaser.
(d) The Initial Purchaser shall have received at the
Closing Time the favorable opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP,
counsel for the Initial Purchaser, dated the Closing Time, in form and
substance satisfactory to the Initial Purchaser.
(e) Prior to the Closing Time, (i) no suspension of the
qualification of the Shares for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceedings for any of such
purposes, shall have occurred and (ii) the Final Memorandum and all
amendments or supplements thereto, or modifications thereof, if any,
shall not contain 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
are made, not misleading.
(f) Between the time of execution of this Agreement and
the Closing Time, (i) no material adverse change, financial or
otherwise (other than as disclosed in the Final Memorandum), in the
operations, business, condition, prospects or property of the Company,
Saxon or any subsidiary shall occur or become known, (ii) no
transaction which is material and unfavorable to the Company or Saxon
shall have been entered into by the Company, Saxon or any subsidiary
and (iii) no order, decree or stop order preventing the use of the
Final Memorandum, or any amendment or supplement thereto or any order
asserting that any of the transactions contemplated by this Agreement
are subject to the registration requirements of the Securities Act
shall have been issued.
(g) The representations and warranties of the Company set
forth in this Agreement and the conditions set forth in paragraph (e)
and paragraph (f) have been met and are true and correct as of the
Closing Time, and the Company will, at the Closing Time, deliver to the
Initial Purchaser a certificate of two of its executive officers to
that effect.
(h) On or before the Closing Time, the Initial Purchaser
shall have received the Registration Rights Agreement and the Warrant
Agreement and the Warrants executed by the Company and such agreements
shall be in full force and effect.
(i) The Company shall have furnished to the Initial
Purchaser such other documents and certificates as to the accuracy and
completeness of any statement in the Final Memorandum or any amendment
or supplement thereto as of the Closing Time as the Initial Purchaser
may reasonably request.
25
(j) The Company shall have performed such of its
obligations under this Agreement as are to be performed by the terms
hereof at or before the Closing Time.
(k) The Shares shall have been approved for trading on
PORTAL.
(l) The consummation of the Saxon Acquisition shall have
occurred.
8. TERMINATION: The obligations of the Initial Purchaser
hereunder shall be subject to termination in the absolute discretion of the
Initial Purchaser, at any time prior to the Closing Time, (i) if any of the
conditions specified in Section 7 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, (ii) if trading in any securities of
the Company has been suspended by the Commission or by Nasdaq or if trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange shall have been suspended or minimum prices shall have been established
on the New York Stock Exchange or the American Stock Exchange, (iii) if a
banking moratorium shall have been declared either by the United States or New
York State authorities or (iv) if the United States shall have declared war in
accordance with its constitutional processes or there shall have occurred any
material outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic, political or other
conditions of such magnitude in its effect on the financial markets of the
United States as, in the judgment of the Initial Purchaser, to make it
impracticable to market the Shares.
If the Initial Purchaser elects to terminate this Agreement as provided
in this Section 8, the Company shall be notified promptly by letter, fax or
telegram.
If the sale to the Initial Purchaser of the Shares, as contemplated by
this Agreement, is not carried out by the Initial Purchaser for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 6(l) and 9 hereof) and the Initial
Purchaser shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof).
9. INDEMNITY BY THE COMPANY AND THE INITIAL PURCHASER:
(a) The Company agrees to indemnify, defend and hold
harmless the Initial Purchaser, and any person who controls the Initial
Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any loss, expense,
liability or claim (including the reasonable cost of investigation)
which, jointly or severally, the Initial Purchaser or any such
controlling person may incur under the Securities Act, the Exchange Act
or otherwise, insofar as such loss, expense, liability or claim arises
out of or is based upon (i) any untrue statement or alleged untrue
statement made by the Company in Section 4 or 5 hereof, (ii) any breach
by the Company of any covenant set forth in Section 6 hereof, or (iii)
any untrue statement or alleged untrue statement of a material fact
contained in the Final Memorandum (the term Final Memorandum for the
purpose of this Section 9 being deemed to include any Preliminary
Memorandum, the Final Memorandum and the Final Memorandum as amended or
supplemented by the Company), or arises out of or is based upon any
omission or alleged
26
omission to state a material fact required to be stated in the Final
Memorandum or necessary to make the statements made therein, in
light of the circumstances under which they were made not misleading,
except insofar as any such loss, expense, liability or claim arises
out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information furnished in writing by the Initial Purchaser to the
Company expressly for use in such Final Memorandum or arises out of
or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be
stated in such Final Memorandum or necessary to make such
information not misleading.
If any action is brought against the Initial Purchaser or any
controlling person in respect of which indemnity may be sought against
the Company pursuant to the preceding paragraph, the Initial Purchaser
shall promptly notify the Company in writing of the institution of such
action and the Company shall assume the defense of such action,
including the employment of counsel and payment of expenses. The
Initial Purchaser or controlling person shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Initial Purchaser or such
controlling person unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the
defense of such action or the Company shall not have employed counsel
to have charge of the defense of such action within a reasonable time
or such indemnified party or parties shall have reasonably concluded
(based on the advice of counsel) that there may be defenses available
to it or them which are different from or additional to those available
to the Company (in which case the Company shall not have the right to
direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne
by the Company and paid as incurred (it being understood, however, that
the Company shall not be liable for the fees and expenses of more than
one separate counsel for the Initial Purchaser or controlling persons
in any one action or series of related actions in the same jurisdiction
representing the indemnified parties who are parties to such action).
Anything in this paragraph to the contrary notwithstanding, the Company
shall not be liable for any settlement of any such claim or action
effected without its written consent.
(b) The Initial Purchaser agrees to indemnify, defend and
hold harmless the Company and its directors and officers and any person
who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any
loss, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such
person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of
a material fact contained in and in conformity with information
furnished in writing by the Initial Purchaser to the Company expressly
for use in the Final Memorandum (or in any amendment or supplement
thereof by the Company), or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such
information required to be stated in such Final Memorandum or necessary
to make such information not misleading.
27
If any action is brought against the Company or any such
person in respect of which indemnity may be sought against the Initial
Purchaser pursuant to the foregoing paragraph, the Company or such
person shall promptly notify the Initial Purchaser in writing of the
institution of such action and the Initial Purchaser shall assume the
defense of such action, including the employment of counsel and payment
of expenses. The Company or such person shall have the right to employ
its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company or such person unless
the employment of such counsel shall have been authorized in writing by
the Initial Purchaser in connection with the defense of such action or
the Initial Purchaser shall not have employed counsel to have charge of
the defense of such action within a reasonable tune or such indemnified
party or parties shall have reasonably concluded (based on the advice
of counsel) that there may be defenses available to it or them which
are different from or additional to those available to the Initial
Purchaser (in which case the Initial Purchaser shall not have the right
to direct the defense of such action on behalf of the indemnified party
or parties), in any of which events such fees and expenses shall be
borne by the Initial Purchaser and paid as incurred (it being
understood, however, that the Initial Purchaser shall not be liable for
the expenses of more than one separate counsel in any one action or
series of related actions in the same jurisdiction representing the
indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Initial Purchaser shall
not be liable for any settlement of any such claim or action effected
without its written consent.
(c) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under subsections (a) and (b) of
this Section 9 in respect of any losses, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the Initial Purchaser on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one
hand and of the Initial Purchaser on the other in connection with the
statements or omissions which resulted in such losses, expenses,
liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Initial Purchaser on the other shall be deemed to be
in the same proportion as the total proceeds from the offering (net of
initial purchaser discounts and commissions but before deducting
expenses) received by the Company bear to the initial purchaser
discounts and commissions received by the Initial Purchaser. The
relative fault of the Company on the one hand and of the Initial
Purchaser on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information
supplied by the Company or by the Initial Purchaser and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or
other
28
fees or expenses reasonably incurred by such party in connection
with investigating or defending any claim or action.
(d) The Company and the Initial Purchaser agree that it
would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable
considerations referred to in subsection (c) above. Notwithstanding the
provisions of this Section 9, the Initial Purchaser shall not be
required to contribute any amount in excess of the amount by which the
total price at which the Shares purchased by it and distributed in
Exempt Resales were initially offered exceeds the amount of any damages
which the Initial Purchaser 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 Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained
in this Section 9 and the covenants, warranties and representations of
the Company contained in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Initial Purchaser, or any person who controls the Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, or by or on behalf of the Company, its directors and
officers or any person who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and
shall survive any termination of this Agreement or the sale and
delivery of the Shares. The Company and the Initial Purchaser agree
promptly to notify the others of the commencement of any litigation or
proceeding against it and, in the case of the Company, against any of
the Company's officers and directors, in connection with the sale and
delivery of the Shares, or in connection with the Final Memorandum.
10. NOTICES: Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing delivered by facsimile
(with receipt confirmed), overnight courier or registered or certified mail,
return receipt requested, or by telegram and, if to the Initial Purchaser, shall
be sufficient in all respects if delivered or sent to Friedman, Billings, Xxxxxx
& Co., Inc., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention:
Compliance Department; (facsimile: 703-312-9698); and if to the Company, shall
be sufficient in all respects if delivered to the Company at the offices of the
Company at 0000 Xxx Xxxx, Xxxx Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X.
Xxxxxx; (facsimile: 804-967-5826); with a copy to Xxxxxxx X. Xxxxxxxx at the
same address; (facsimile: 804-217-7679).
11. GOVERNING LAW; HEADINGS: THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE THE
APPLICATION OF THE LAW OF ANY OTHER STATE. The section headings in this
Agreement have been inserted as a matter of convenience of reference and are not
a part of this Agreement.
29
12. PARTIES AT INTEREST: The Agreement herein set forth has been
and is made solely for the benefit of the Initial Purchaser and the Company and
the controlling persons, directors and officers referred to in Section 9 hereof,
and their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from the Initial Purchaser) shall acquire or have any right under or
by virtue of this Agreement.
13. COUNTERPARTS: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
[Remainder of page intentionally left blank.]
30
If the foregoing correctly sets forth the understanding among the
Company and the Initial Purchaser, please so indicate in the space provided
below for the purpose, whereupon this letter shall constitute a binding
agreement between the Company and the Initial Purchaser.
Very truly yours,
SAXON CAPITAL ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Title: President
Accepted and agreed to as
of the date first above
written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Title: Managing Director
31
EXHIBIT A
CERTIFICATE OF RULE 144A
QUALIFIED INSTITUTIONAL BUYER
Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
1. We certify, to enable you to make offers and sales of shares
(the "Shares") of Common Stock, par value $0.01 per share (the "Common Stock"),
of Saxon Capital Acquisition Corp., a Delaware corporation (the "Company"),
pursuant to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), that we are a "qualified institutional buyer" (as defined in
section (a) of Rule 144A) in that we satisfy the requirements of one or more of
paragraphs (i) through (vi) hereof (check applicable box(es)):
| | (i) We are an entity referred to in subparagraphs (A)
through (G) hereof, acting for our own account or the
accounts of other qualified institutional buyers,
that in the aggregate owned and invested on a
discretionary basis at least the amount of securities
specified below (not less than $100 million),
calculated as provided in Rule 144A, as of the date
specified below.
o (A) CORPORATION, ETC. A corporation
(other than a bank, savings and loan or
similar institution referred to in (ii)
below), partnership, Massachusetts or
similar business trust, organization
described in Section 501(c)(3) of the
Internal Revenue Code, small business
investment company licensed by the U.S.
Small Business Administration under Section
301(c) or (d) of the Small Business
Investment Act of 1958 or business
development company as defined in Section
202(a)(22) of the Investment Advisers Act of
1940; or
o (B) INSURANCE COMPANY. An insurance
company as defined in Section 2(13) of the
Securities Act; or
o (C) ERISA PLAN. An employee benefit
plan within the meaning of Title I of the
Employee Retirement Income Security Act of
1974; or
o (D) STATE OR LOCAL PLAN. A plan
established and maintained by a state, its
political subdivisions, or any agency or
instrumentality of a state or its political
subdivisions, for the benefit of its
employees; or
A-1
o (E) TRUST FUND. Any trust fund whose
trustee is a bank or trust company and
whose participants are exclusively plans of
the types identified in subparagraphs (C) or
(D) above, except trust funds that include
as participants individual retirement
accounts or HR. 10 plans; or
o (F) INVESTMENT COMPANY. An investment
company registered under the Investment
Company Act of 1940 or any business
development company as defined in Section
2(a)(48) of that Act; or
o (G) INVESTMENT ADVISER. An investment
adviser registered under the Investment
Advisers Act of 1940.
| | (ii) Bank or Savings and Loan. We are a bank as defined in
Section 3(a)(2) of the Securities Act, a savings and
loan association or other institution referenced in
Section 3(a)(5)(A) of the Securities Act, or a
foreign bank or savings and loan association or
equivalent institution, acting for our own account or
the accounts of other qualified institutional buyers,
that in the aggregate owned and invested on a
discretionary basis at least the amount of securities
specified below (not less than $100 million),
calculated as provided in Rule 144A, as of the date
specified below and had an audited net worth of at
least $25 million as of the end of our most recent
fiscal year. (This paragraph does not include bank
commingled funds.)
| | (iii) One of a Family of Investment Companies. We are an
investment company registered under the Investment
Company Act of 1940, acting for our own account or
the accounts of other qualified institutional buyers,
that is a part of a "family of investment companies"
as defined in Rule 144A, that owned in the aggregate
at least the amount of securities specified below
(not less than $100 million), calculated as provided
in Rule 144A, as of the date specified below.
| | (iv) Dealer. We are a dealer registered under Section 15
of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), acting for our own account or
the accounts of other qualified institutional buyers,
that in the aggregate owned and invested on a
discretionary basis at least the amount of securities
specified below (not less than $10 million),
calculated as provided in Rule 144A, as of the date
specified below.
| | (v) Dealer (Riskless Principal Transaction). We are a
dealer registered under Section 15 of the Exchange
Act acting in a riskless principal transaction on
behalf of a qualified institutional buyer (satisfying
one or more of (i) through (iv) above, including, as
applicable, the $100 million test).
A-2
| | (vi) Entity Owned by Qualified Buyers. We are an entity,
all of the equity owners of which are qualified
institutional buyers (each satisfying one or more of
(i) through (v) above, including, as applicable, the
$100 million test), acting for our own account or the
accounts of other qualified institutional buyers.
In calculating the aggregate amount of securities owned and invested by
an entity as provided in Rule 144A: (a) repurchase agreements, securities owned
but subject to repurchase agreements, swaps, bank deposit instruments, loan
participation, securities of affiliates and dealers' unsold allotments are
excluded; and (b) securities are valued at cost, except that securities that are
reported in financial statements may be valued at market if no current cost
information has been published.
Each entity, including a parent or subsidiary, must separately meet the
requirements to be a qualified institutional buyer under Rule 144A. Securities
owned by any subsidiary are included as owned or invested by its parent entity
for purposes of Rule 144A only if (1) the subsidiary is consolidated in the
parent entity's financial statements and (2) the subsidiary's investments are
managed under the parent entity's discretion (except that a subsidiary's
securities are not included if the parent entity is itself a majority-owned
consolidated subsidiary of another enterprise and is not a reporting company
under the Exchange Act).
2. We further certify that we will purchase securities under Rule
144A from or through you only for our account or for the account of another
entity which is a qualified institutional buyer. We will not purchase securities
for another entity under Rule 144A unless it satisfies one or more paragraphs
(i) through (vi) above, including, as applicable, the $100 million test.
3. We agree to notify you of any change in the certifications
herein, and each purchase by us of securities under Rule 144A from or through
you will constitute a reaffirmation of the certifications herein (as modified by
any such notice) as of the time of such purchase.
4. We understand that the Shares are being offered in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Shares have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree, on our own behalf and on behalf
of each account for which we acquire any Shares, that, if in the future we
decide to offer, resell, pledge or otherwise transfer such Shares, prior to the
date which is two years after the later of the date of original issue and the
last date on which the Company or any affiliate of the Company (or any
predecessor thereto) was the owner of such Shares (the "Resale Restriction
Termination Date"), such Shares may be offered, resold, pledged or otherwise
transferred only (a) to the Company, (b) pursuant to a registration statement
that has been declared effective under the Securities Act, (c) for so long as
the Shares are eligible for resale pursuant to Rule 144A under the Securities
Act, in a transaction complying with the requirements of Rule 144A to a person
who we reasonably believe is a qualified institutional buyer under Rule 144A (a
"QIB") that purchases for its own account or for the account of a QIB and to
whom notice is given that the offer, resale, pledge or transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and
A-3
sales to non-U.S. persons that occur outside the United States within the
meaning of Regulation S under the Securities Act, (e) to an institutional
"accredited investor" (within the meaning of Rule 501(a)(1), (2), (3), (7) or
(8) under the Securities Act) (an "Institutional Accredited Investor") or an
individual "accredited investor" (within the meaning of Rule 501(a)(4), (5) or
(6) under the Securities Act) (an "Individual Accredited Investor") that is
acquiring the Shares for his, her or its own account or for the account of such
an Institutional Accredited Investor or Individual Accredited Investor for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution thereof, or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all
times within our or their control and subject to compliance with any applicable
state securities laws. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. If any resale or other
transfer of the Shares is proposed to be made pursuant to clause (d) above
prior to the end of the one-year restricted period within the meaning of
Regulation S under the Securities Act or pursuant to clause (e) above prior to
the Resale Restriction Termination Date, the transferor shall deliver to the
Company and to the transfer agent of the Shares, a letter from the transferee a
substantially in the form of Appendix A to the Offering Memorandum (as defined
herein), which shall provide, as applicable, among other things, that the
transferee is (x) an institution that, at the time the buy order was
originated, was outside the United States and was not a U.S. person within the
meaning of Regulation S under the Securities Act or (y) an Institutional
Accredited Investor or an Individual Accredited Investor, and that he, she or
it is acquiring such Shares for investment purposes and not for distribution in
violation of the Securities Act. We understand that the registrar and transfer
agent for the Shares will not be required to accept for registration of
transfer any Shares acquired by us, except upon presentation of evidence
satisfactory to the Company and the transfer agent that the foregoing
restrictions on transfer have been complied with. We further understand that
any certificates representing Shares acquired by us will bear a legend
reflecting the substance of this paragraph. Each purchaser acknowledges, on
his, her or its own behalf and on behalf of any investor account for which he,
she or it is purchasing the Shares, that the Company and you reserve the right
prior to any offer, sale or other transfer of the Shares (i) pursuant to clause
(d) above prior to the Resale Restriction Termination Date, (ii) prior to the
end of the one-year restricted period within the meaning of Regulation S under
the Securities Act or (iii) pursuant to clauses (e) or (f) above prior to the
Resale Restriction Termination Date to require the delivery of an opinion of
counsel, certifications and/or other information satisfactory to the Company
and you.
5. We agree to make the representations and warranties deemed
made by us under the section of the Offering Memorandum relating to the Shares
entitled "Transfer Restrictions" and agree to be bound by the restrictions set
forth in such section.
6. We have received a copy of the preliminary Offering
Memorandum, dated June 8, 2001, and will receive a copy of the final Offering
Memorandum relating to the offering of the Shares (collectively, the "Offering
Memorandum") and understand that we and our professional advisor(s), if any,
have the right to ask questions of and receive answers from the Company and its
officers and directors, and to obtain such information concerning the terms and
conditions of the offering of the Shares to the extent that the Company
possesses the same or can acquire it without unreasonable effort or expense, as
we and our advisor(s), if any, deem necessary to
A-4
verify the accuracy of the information referred to in the Offering Memorandum
pursuant to which the Company is offering the Shares to certain qualified
offerees. We represent and agree that prior to our agreement to purchase Shares
we and our professional advisor(s), if any, will have asked such questions,
received such answers and obtained such information as we deem necessary to
verify the accuracy (i) of the information referred to in the Offering
Memorandum and (ii) of any other information that we deem relevant to making an
investment decision with respect to the Shares.
7. We acknowledge that you, the Company and others will rely upon
our confirmation, acknowledgments and agreements set forth herein and we agree
to notify you promptly if any of our representations or warranties herein ceases
to be accurate and complete.
8. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAWS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE.
A-5
Amount of Securities: $________________________
(State specific amount owned/invested - may be approximate,
but no range or minimum)
Most Recent Fiscal Year End: __________________
Date Owned/invested: ___________________________
(Complete only if this date is after most recent fiscal year end)
Date: _________________________
By: _________________________
Name: _________________________
Title: _________________________
* Certificate must be signed by the Institution's chief financial officer
or another executive officer, except that if the Institution is a member of a
"family of investment companies", the certificate must be signed by an executive
officer of such Institution's Investment Adviser.
X-0
XXXXXXX X-0
CERTIFICATE OF ACCREDITED
INSTITUTIONAL INVESTOR
Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
In connection with our proposed purchase of an aggregate of _______
shares (the "Shares") of the Common Stock, par value $0.01 per share, (the
"Common Stock") of Saxon Capital Acquisition Corp., a Delaware corporation (the
"Company"), we confirm that:
1. we are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3), (7) or (8) under the Securities Act of 1933, as
amended (the "Securities Act")) (an "Institutional Accredited Investor");
2. any purchase of the Shares by us will be for our own account
or for the account of one or more other Institutional Accredited Investors;
3. we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Shares and invest in or purchase securities similar to the
Shares in the normal course of our business;
4. we and any accounts for which we are acting are each able to
bear the economic risk of our or its investment and can afford the complete loss
of such investment;
5. we or any accounts for which we are acting are acquiring the
Shares for investment purposes and not with a view to distribution thereof or
with any present intention of offering or selling any of the Shares in violation
of the Securities Act;
6. we acknowledge that we have received a copy of the preliminary
Offering Memorandum, dated June 8, 2001, and will receive a copy of the final
Offering Memorandum relating to the offering of the Shares (collectively, the
"Offering Memorandum") and that we and our professional adviser(s), if any, have
the right to ask questions of and receive answers from the Company and its
officers and directors, and to obtain such information concerning the terms and
conditions of the offering of the Shares to the extent that the Company
possesses the same or can acquire it without unreasonable effort or expense, as
we and our advisor(s), if any, deem necessary to verify the accuracy of the
information referred to in the Offering Memorandum; we represent and agree that
prior to our agreement to purchase Shares we and our professional adviser(s), if
any, will have asked such questions, received such answers and obtained such
information as we deem necessary to verify the accuracy (i) of the information
referred to in the Offering Memorandum and (ii) of any other information that we
deem relevant to making an investment decision with respect to the Shares; and
B-1-1
7. we are not an "affiliate" (as defined in Rule 144 under the
Securities Act) of the Company or acting on behalf of an affiliate of the
Company.
We understand that the Shares are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Shares have not been registered under the Securities
Act and, unless so registered, may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of each account
for which we acquire any Shares, that, if in the future we decide to offer,
resell, pledge or otherwise transfer such Shares, prior to the date which is two
years after the later of the date of original issue and the last date on which
the Company or any affiliate of the Company (or any predecessor thereto) was the
owner of such Shares (the "Resale Restriction Termination Date"), such Shares
may be offered, resold, pledged or otherwise transferred only (a) to the
Company, (b) pursuant to a registration statement that has been declared
effective under the Securities Act, (c) for so long as the Shares are eligible
for resale pursuant to Rule 144A under the Securities Act, in a transaction
complying with the requirements of Rule 144A to a person who we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the offer, resale, pledge or transfer is being made in reliance on
Rule 144A, (d) pursuant to offers and sales to non-U.S. persons that occur
outside the United States within the meaning of Regulation S under the
Securities Act, (e) to an Institutional Accredited Investor or an individual
"accredited investor" (within the meaning of Rule 501(a)(4), (5) or (6) under
the Securities Act) (an "Individual Accredited Investor") that is acquiring the
Shares for his, her or its own account or for the account of such an
Institutional Accredited Investor or Individual Accredited Investor for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution thereof, or (f) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and subject to compliance with any applicable state securities
laws. The foregoing restrictions on resale will not apply subsequent to the
Resale Restriction Termination Date. If any resale or other transfer of the
Shares is proposed to be made pursuant to clause (d) above prior to the end of
the one-year restricted period within the meaning of Regulation S under the
Securities Act or pursuant to clause (e) above prior to the Resale Restriction
Termination Date, the transferor shall deliver to the Company and the transfer
agent of the Shares, a letter from the transferee substantially in the form of
Appendix A to the Offering Memorandum, which shall provide, as applicable, among
other things, that the transferee is (x) an institution that, at the time the
buy order was originated, was outside the United States and was not a U.S.
person within the meaning of Regulation S under the Securities Act or (y) an
Institutional Accredited Investor or an Individual Accredited Investor, and that
he, she or it is acquiring such Shares for investment purposes and not for
distribution in violation of the Securities Act. We understand that the
registrar and transfer agent for the Shares will not be required to accept for
registration of transfer any Shares acquired by us, except upon presentation of
evidence satisfactory to the Company and the transfer agent that the foregoing
restrictions on transfer have been complied with. We further understand that any
Shares acquired by us will bear a legend reflecting the substance of this
paragraph. Each purchaser acknowledges, on his, her or its own behalf and on
behalf of any investor account for which he, she or it is purchasing the Shares,
that the Company and you reserve the right prior to any offer, sale or other
transfer of
B-1-2
the Shares (i) pursuant to clause (d) above prior to the Resale Restriction
Date, (ii) prior to the end of the one-year restricted period within the
meaning of Regulation S under the Securities Act or (iii) pursuant to clauses
(e) or (f) above prior to the Resale Restriction Termination Date to require
the delivery of an opinion of counsel, certifications and/or other
information satisfactory to the Company and you.
We agree to make the representations and warranties deemed made by us
under the section of the Offering Memorandum relating to the Shares entitled
"Transfer Restrictions" and agree to be bound by the restrictions set forth in
such section.
We acknowledge that you, the Company and others will rely upon our
confirmation, acknowledgments and agreements set forth herein and we agree to
notify you promptly if any of our representations or warranties herein ceases to
be accurate and complete.
You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAWS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE.
Date:
-------------------------
(Name of Purchaser)
B-1-3
EXHIBIT B-2
CERTIFICATE OF INDIVIDUAL
ACCREDITED INVESTOR
Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
In connection with my proposed purchase of an aggregate of _______
shares (the "Shares") of Common Stock, par value $0.01 per share (the "Common
Stock") of Saxon Capital Acquisition Corp., a Delaware corporation (the
"Company"), I confirm that:
1. I am an individual "accredited investor" (as defined in Rule 501(a)
(4), (5) or (6) under the Securities Act of 1933, as amended (the "Securities
Act")) (an "Individual Accredited Investor") in that I satisfy the requirements
of one or more of paragraphs (a) through (c) hereof (check applicable box(es)):
| | (a) I am a director, executive officer or general partner
of the issuer of the securities being offered or
sold, or a director, executive officer or general
partner of a general partner of that issuer;
| | (b) I am a natural person whose individual net worth or
joint net worth with my spouse, at the time of
purchase exceeds $1,000,000; or
| | (c) I am a natural person who had an individual income in
excess of $200,000 in each of the two most recent
years or joint income with my spouse in excess of
$300,000 in each of those years and have a reasonable
expectation of reaching that same income level in the
current year.
2. any purchase of the Shares by me will be for my own account or
for the account of one or more other Individual Accredited Investors or
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3),
(7) or (8) under the Securities Act (an "Institutional Accredited Investor" and
each of an Individual Accredited Investor and an Institutional Accredited
Investor, an "Accredited Investor"));
3. I have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of my investment in
the Shares and invest in or purchase securities similar to the Shares in the
normal course of my business;
4. I and any accounts for which I am acting are each able to bear
the economic risk of my or its investment and can afford the complete loss of
such investment;
B-2-1
5. I or any accounts for which I am acting am acquiring the
Shares for investment purposes and not with a view to distribution thereof or
with any present intention of offering or selling any of the Shares in violation
of the Securities Act; and
6. I acknowledge that I have received a copy of the preliminary
Offering Memorandum, dated June 8, 2001, and will receive a copy of the final
Offering Memorandum relating to the offering of the Shares (collectively, the
"Offering Memorandum") and that I and my professional adviser(s), if any, have
the right to ask questions of and receive answers from the Company and its
officers and directors, and to obtain suck information concerning the terms and
conditions of the offering of the Shares to the extent that the Company
possesses the same or can acquire it without unreasonable effort or expense, as
I and my adviser(s), if any, deem necessary to verify the accuracy of the
information referred to in the Offering Memorandum; I represent and agree that
prior to my agreement to purchase Shares I and my professional advisor(s), if
any, will have asked such questions, received such answers and obtained such
information as we deem necessary to verify the accuracy (i) of the information
referred to in the Offering Memorandum and (ii) of any other information that we
deem relevant to making an investment decision with respect to the Shares.
I understand that the Shares are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Shares have not been registered under the Securities
Act, and, unless so registered, may not be sold except as permitted in the
following sentence. I agree, on my own behalf and on behalf of each account for
which I acquire any Shares, that, if in the future I decide to offer, resell,
pledge or otherwise transfer such Shares prior to the date which is two years
after the later of the date of original issue and the last date on which the
Company or any affiliate of the Company (or any predecessor thereto) was the
owner of such Shares (the "Resale Restriction Termination Date"), such Shares
may be offered, resold, pledged or otherwise transferred only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) for so long as the Shares are eligible
for resale pursuant to Rule 144A under the Securities Act, in a transaction
complying with the requirements of Rule 144A to a person who I reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the offer, resale, pledge or transfer is being made in reliance on
Rule 144A, (d) pursuant to offers and sales to non-U.S. persons that occur
outside the United States within the meaning Regulation S under the Securities
Act, (e) to an Accredited Investor that is purchasing for his, her or its own
account or for the account of such an Accredited Investor for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution thereof, or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of my property or
the property of such investor account or accounts be at all times within my or
their control and subject to compliance with any applicable state securities
laws. The foregoing restrictions on resale will not apply subsequent to the
Resale Restriction Termination Date. If any resale or other transfer of the
Shares is proposed to be made pursuant to clause (d) above prior to the end of
the one-year restricted period within the meaning of Regulation S under the
Securities Act or pursuant to clause (e) above prior to the Resale Restriction
Termination Date, the transferor shall deliver to the Company and the transfer
agent, a letter from the transferee substantially in the form of Appendix A to
the Offering Memorandumwhich shall provide, as applicable, among other
B-2-2
things, that the transferee is (x) an institution that, at the time the buy
order was originated, was outside the United States and was not a U.S. person
within the meaning of Regulation S under the Securities Act or (y) an
Accredited Investor and that he, she or it is acquiring such Shares for
investment purposes and not for distribution in violation of the Securities
Act. I understand that the registrar and transfer agent for the Shares will
not be required to accept for registration of transfer any Shares acquired by
me, except upon presentation of evidence satisfactory to the Company and the
transfer agent that the foregoing restrictions on transfer have been complied
with. I further understand that any Shares acquired by me will bear a legend
reflecting the substance of this paragraph. Each purchaser acknowledges, on
its or his own behalf and on behalf of any investor account for which he, she
or it is purchasing the Shares, that Company and you reserve the right prior
to any offer, sale or other transfer (i) pursuant to clause (d) above prior
to the Resale Restriction Date, (ii) prior to the end of the one-year
restricted period within the meaning of Regulation S under the Securities Act
or (iii) pursuant to clauses (e) or (f) above prior to the Resale Restriction
Termination Date to require the delivery of an opinion of counsel,
certification and/or other information satisfactory to the Company and you.
I agree to make the representations and warranties deemed made by me
under the section of the Offering Memorandum relating to the Shares entitled
"Transfer Restrictions" and agree to be bound by the restrictions set forth in
such section.
I acknowledge that you, the Company and others will rely upon my
confirmation, acknowledgments and agreements set forth herein and I agree to
notify you promptly if any of my representations or warranties herein ceases to
be accurate and complete.
You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAWS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE.
Date:
-------------------------
(Name of Purchaser)
B-2-3
EXHIBIT C
CERTIFICATE OF NON U.S. PURCHASER
Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
In connection with our proposed purchase of an aggregate of ______
shares (the "Shares") of Common Stock, par value $0.01 per share (the "Common
Stock"), of Saxon Capital Acquisition Corp., a Delaware corporation (the
"Company"), we confirm that:
1. (a) our principal address is outside the United States, (b) we
were located outside the United States at the time any offer to buy the Shares
was made to us and at the time that the buy order was originated by us, and (c)
we are not a "U.S. person" (as defined in Rule 902(o) under the Securities Act
of 1933, as amended (the "Securities Act")) (a "Non-U.S. Person");
2. any purchase of the Shares by us will be for our own account
or for the account of one or more other Non-U.S. Persons located outside the
United States at the time any offer to buy the Shares was made and at the time
the buy order was originated by us;
3. we have such knowledge and experience in financial and
business xxxxxx as to be capable of evaluating the merits and risks of our
investment in the Shares and invest in or purchase securities similar to the
Shares in the normal course of our business;
4. we and any accounts for which we are acting are each able to
bear the economic risk of its investment and can afford the complete loss of
such investment;
5. we and any accounts for which we are acting are acquiring the
Shares for investment purposes and not with a view to distribution thereof or
with any present intention of offering or selling any of the Shares in violation
of the Securities Act;
6. we acknowledge that we have received a copy of the preliminary
Offering Memorandum, dated June 8, 2001, and will receive a copy of the final
Offering Memorandum relating to the offering of the Shares (collectively, the
"Offering Memorandum") and that we have the right to ask questions of and
receive answers from the Company and its officers and directors, and to obtain
such information concerning the terms and conditions of the offering of the
Shares to the extent that the Company possesses the same or can acquire it
without unreasonable effort or expense, as we deem necessary to verify the
accuracy of the information referred to in the Offering Memorandum; we represent
and agree that prior to our agreement to purchase Shares we will have asked such
questions, received such answers and obtained such information as we deem
necessary to verify the accuracy (i) of the information referred to in the
Offering Memorandum and (ii) of any other information that we deem relevant to
making an investment decision with respect to the Shares; and
C-1
7. we are not an "affiliate" (as defined in Rule 144 under the
Securities Act) of the Company or acting on behalf of an affiliate of the
Company.
We understand that the Shares are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Shares have not been registered under the Securities
Act, and, unless so registered, may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of each account
for which we acquire any Shares, that, if in the future we decide to offer,
resell, pledge or otherwise transfer such Shares prior to the date which is two
years after the later of the date of original issue and the last date on which
the Company or any affiliate of the Company (or any predecessor thereto) was the
owner of such Shares (the "Resale Restriction Termination Date"), such Shares
may be offered, resold, pledged or otherwise transferred only (a) to the
Company, (b) pursuant to a registration statement that has been declared
effective under the Securities Act, (c) for so long as the Shares are eligible
for resale pursuant to Rule 144A under the Securities Act, in a transaction
complying with the requirements of Rule 144A to a person who we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the offer, resale, pledge or transfer is being made in reliance on
Rule 144A, (d) pursuant to offers and sales to Non-U.S. Persons that occur
outside the United States within the meaning of Regulation S under the
Securities Act, (e) to an institutional "accredited investor" (within the
meaning of Rule 501(a)(1), (2), (3), (7) or (8) under the Securities Act) (an
"Institutional Accredited Investor") or an individual "accredited investor"
(within the meaning of Rule 501(a)(4), (5) or (6) under the Securities Act) (an
"Individual Accredited Investor") that is acquiring the Shares for his, her or
its own account or for the account of such an Institutional Accredited Investor
or Individual Accredited Investor for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution thereof, or (f)
pursuant to any other available exemption from the registration requirements of
the Securities Act, subject in each of the foregoing cases to any requirement of
law that the disposition of our property or the property of such investor
account or accounts be at all times within our or their control and subject to
compliance with any applicable state securities laws. The foregoing restrictions
on resale will not apply subsequent to the Resale Restriction Termination Date.
If any resale or other transfer of the Shares is proposed to be made pursuant to
clause (d) above prior to the end of the one-year restricted period within the
meaning of Regulation S under the Securities Act or pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver
to the Company and the transfer agent, a letter from the transferee
substantially in the form of Appendix A to the Offering Memorandum which shall
provide, as applicable, among other things, that the transferee is (x) an
institution that, at the time the buy order was originated, was outside the
United States and was not a U.S. person within the meaning of Regulation S under
the Securities Act or (y) an Institutional Accredited Investor or an Individual
Accredited Investor and that he, she or it is acquiring such Shares for
investment purposes and not for distribution in violation of the Securities Act.
We understand that the registrar and transfer agent for the Shares will not be
required to accept for registration of transfer any Shares acquired by us,
except upon presentation of evidence satisfactory to the Company and the
transfer agent that the foregoing restrictions on transfer have been complied
with. We further understand that any Shares acquired by us will bear a legend
reflecting the substance of this paragraph. Each purchaser acknowledges, on its
or his own behalf and on behalf of any investor account for which he, she or it
is purchasing the Shares that the Company and you reserve the right prior to
C-2
any offer, sale or other transfer prior to the Resale Restriction Termination
Date of the Shares (i) pursuant to clause (d) above prior to the Resale
Restriction Termination Date, (ii) prior to the end of the one-year
restricted period within the meaning of Regulation S under the Securities Act
or (iii) pursuant to clauses (e) or (f) above prior to the Resale Restriction
Termination Date, to require the delivery of an opinion of counsel,
certification and/or other information satisfactory to the Company and you.
We agree to make the representations and warranties deemed made by us
under the section of the Offering Memorandum relating to the Shares entitled
"Transfer Restrictions" and agree to be bound by the restrictions set forth in
such section.
We acknowledge that you, the Company and others will rely upon our
confirmation, acknowledgments and agreements set forth herein and we agree to
notify you promptly if any of our representations or warranties herein ceases to
be accurate and complete.
You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAWS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE.
Date:
-------------------------
(Name of Purchaser)
C-3
