EXHIBIT 1.1
8,000,000 SHARES
ORIGEN FINANCIAL, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
, 2004
XXXXXX BROTHERS INC.
CREDIT SUISSE FIRST BOSTON LLC
FLAGSTONE SECURITIES, LLC
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Origen Financial, Inc., a Delaware corporation (the "Company"),
proposes to sell an aggregate of 8,000,000 shares (the "Firm Stock") of the
Company's Common Stock, par value $.01 per share (the "Common Stock").
It is understood that, subject to the conditions hereinafter stated,
the Firm Stock will be sold to the several Underwriters named in Schedule 1
hereto in connection with the offering and sale of such Firm Stock. Xxxxxx
Brothers Inc., Credit Suisse First Boston LLC and Flagstone Securities, LLC
shall act as representatives (the "Representatives") of the several
Underwriters.
In addition, the Company proposes to grant to the Underwriters an option to
purchase up to an additional 1,200,000 shares of the Common Stock on the terms
and for the purposes set forth in Section 2 (the "Option Stock"). The Firm Stock
and the Option Stock, if purchased, are hereinafter collectively called the
"Stock." This is to confirm the agreement concerning the purchase of the Stock
from the Company by the Underwriters.
Section 1. Representations, Warranties and Agreements of the
Company.
The Company represents, warrants and agrees that:
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(a) A registration statement on Form S-11 with respect to the Stock has
(i) been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, (ii) been filed
with the Commission under the Securities Act and (iii) become effective
under the Securities Act. Copies of such registration statement and
each of the amendments thereto have been delivered by the Company to
you. As used in this Agreement, "Effective Time" means the date and the
time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations; "Registration
Statement" means such registration statement, as amended at the
Effective Time, including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations and deemed to be a part of the registration
statement as of the Effective Time pursuant to Rule 430A of the Rules
and Regulations; and "Prospectus" means the prospectus in the form
first used to confirm sales of Stock. If the Company has filed an
abbreviated registration statement to register additional shares of
Common Stock pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and Regulations and do
not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in light of the circumstances
under which they were made in the case of the Prospectus) not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries have been duly
incorporated or formed and are validly existing as corporations or
limited liability companies in good standing under the laws of their
respective jurisdictions of incorporation or formation, are duly
qualified to do business and are in good standing as foreign
corporations or limited liability companies in each jurisdiction in
which their respective ownership or lease of
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property or the conduct of their respective businesses requires such
qualification (except such failures to qualify as are not, either
individually or in the aggregate, material to the Company and its
subsidiaries taken as a whole), and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged; and none of the subsidiaries of
the Company (other than Origen Financial L.L.C.) is a "significant
subsidiary," as such term is defined in Rule 405 of the Rules and
Regulations.
(d) The Company has an authorized capitalization as of December 31,
2003 as set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable. All of the Company's
options, warrants and other rights to purchase or exchange any
securities for shares of the Company's capital stock have been duly and
validly authorized and issued, were issued in compliance with federal
and state securities laws, and conform in all material respects to the
description thereof contained in the Prospectus. All of the issued
equity securities of each subsidiary of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable,
and except as set forth in the Prospectus are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(e) The shares of the Stock to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor in accordance with this
Agreement, will be duly and validly issued, fully paid and
non-assessable. The Stock and the Common Stock will conform to the
descriptions thereof contained in the Prospectus. Upon payment for and
delivery of the Stock to be sold by the Company pursuant to this
Agreement, the Underwriters will acquire good and valid title to such
Stock, in each case free and clear of all liens, encumbrances,
equities, preemptive rights, subscription rights, other rights to
purchase, voting or transfer restrictions and other claims.
(f) The Company has the requisite corporate power and authority to
enter into this Agreement and this Agreement has been duly authorized,
executed and delivered by the Company.
(g) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries
is subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of its
subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties
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or assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and applicable
state securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization
or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of
the transactions contemplated hereby and thereby.
(h) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(i) Except as described in the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock options
plans or other employee compensation plans.
(j) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in
the Prospectus, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus; and, since such date, there has not been any change in
the stockholders' equity or in the long-term debt of the Company or any
of its subsidiaries (except for changes that are not material, either
individually or in the aggregate, under the Credit Agreement between
Bank One, N.A., and Origen Financial L.L.C., dated July 25, 2002, as
amended) or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the management,
condition, financial or otherwise, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole (a "Material Adverse Effect") otherwise than as set
forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) included in the Prospectus present fairly the
financial condition and results of operations of the entities purported
to be shown thereby, at the dates and for the periods indicated
(except, with respect to the unaudited financial statements, for
certain normal recurring adjustments) and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods. The pro forma financial
information included in the Registration Statement and Prospectus has
been prepared in accordance with the applicable requirements of the
Securities Act and the Rules and
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Regulations and includes all adjustments necessary to present fairly
the pro forma financial position of the respective entity or entities
presented therein at the respective dates indicated and the results of
their operations for the respective periods specified.
(l) Xxxxx Xxxxxxxx LLP, who have certified certain financial statements
of the Company, whose report appears in the Prospectus and who have
delivered the initial letter referred to in Section 7(e) hereof, are
independent public accountants as required by the Securities Act and
the Rules and Regulations during the periods covered by the financial
statements on which they reported.
(m) None of the Company or any of its subsidiaries owns any real
property. The Company and each of its subsidiaries has good and
marketable title to all personal property owned by them, free and clear
of all liens, encumbrances and defects except such as are described in
the Prospectus and such as do not materially affect the value of the
property of the Company and its subsidiaries taken as a whole and do
not materially interfere with the use made and proposed to be made of
such property by the Company or any of its subsidiaries; and all real
property and buildings held under lease by the Company or any of its
subsidiaries are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company or any of its subsidiaries.
(n) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(o) Except as described in the Prospectus, the Company and each of its
subsidiaries own or possess adequate rights to use all material
patents, trademarks, service marks, trade names, copyrights,
applications and/or registrations for any of the foregoing, and trade
secrets (collectively, "Intellectual Property Rights") and licenses to
Intellectual Property Rights necessary for the conduct of their
respective businesses. Except as described in the Prospectus, the
conduct of the respective businesses of the Company and each of its
subsidiaries do not and will not infringe on or conflict with, and the
Company and each of its subsidiaries have not received any notice of
any claim of infringement of or conflict with, any Intellectual
Property Rights of others. There are no pending, or, to the knowledge
of the Company, threatened claims against any of the Company or its
subsidiaries alleging that any of the intellectual property rights used
or held for use by the Company or its subsidiaries (collectively, the
"Company Intellectual Property Rights") or the operation of the
business, infringes or conflicts with the rights of others under any
intellectual property rights. No current or former employee or
consultant of the Company or any of its subsidiaries owns any rights in
or to any of the Company Intellectual Property Rights. The Company and
each of its subsidiaries has taken all reasonable security measures to
protect the secrecy, confidentiality and value of all trade secrets
owned by the Company or the respective subsidiary or used or held for
use by the Company or the subsidiary in the respective business.
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(p) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject that, if determined
adversely to the Company or any of its subsidiaries, could have a
Material Adverse Effect, and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(q) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which
have not been described in the Prospectus or filed as exhibits to the
Registration Statement.
(r) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of
its subsidiaries on the other hand, which is required to be described
in the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent, that could be expected to
have a Material Adverse Effect.
(t) Set forth on Schedule 1(t) hereto is a list of each employee
pension or benefit plan with respect to which the Company or any person
considered an affiliate of the Company (within the meaning of Section
407(d)(7) of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA")) is a party in interest or disqualified person.
(u) The Company is an "operating company" as defined in the "plan
assets" regulation (29 C.F.R. Section 2510.3-101) promulgated by the
U.S. Department of Labor under ERISA.
(v) The Company does not provide services to any (i) "employee benefit
plan" (as defined in Section 3(3) of ERISA) that is subject to the
provisions of Title I of ERISA, (ii) plan described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code"),
or (iii) entity whose underlying assets include "plan assets" by reason
of an employee benefit plan's or other plan's investment in such
entity, including entities such as collective investment funds and
insurance company separate accounts whose underlying assets include
assets of such plans.
(w) The Company and each of its subsidiaries is in compliance in all
material respects with all presently applicable provisions of ERISA; no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company would
have any liability; the Company and each of its subsidiaries has not
incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Sections 412 or 4971 of the
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Code; and each "pension plan" for which the Company or any of its
subsidiaries would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.
(x) The Company and each of its subsidiaries has filed all federal,
state and local income and franchise tax returns required to be filed
through the date hereof (taking into account permitted extensions) and
has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries which
has had (nor does the Company have any knowledge of any tax deficiency
which, if determined adversely to the Company or any of its
subsidiaries, might have) a Material Adverse Effect.
(y) Since the date as of which information is given in the Preliminary
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, neither the Company nor any of its
subsidiaries has (i) issued or granted any securities, (ii) incurred
any liability or obligation, direct or contingent, other than
liabilities and obligations that were incurred in the ordinary course
of business, (iii) entered into any transaction not in the ordinary
course of business or (iv) declared or paid any dividend on its capital
stock.
(z) The Company (i) makes and keeps accurate books and records and (ii)
maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary
to permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted
only in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(aa) Except as set forth on Schedule 1(aa), neither the Company nor any
of its subsidiaries (i) is in violation of its charter or by-laws or
other formation documents, (ii) is in default in any material respect,
and no event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance
of any term, covenant, condition or other obligation contained in any
material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound
or to which any of its properties or assets is subject, (iii) is in
violation in any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets
may be subject or has failed to obtain or maintain any material
license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or
to the conduct of its business or (iv) violates, in any material
respect, any law, ordinance, governmental rule, regulation or court
decree to which it is subject in the origination, purchase or servicing
of consumer obligations.
(bb) Neither the Company nor any of its subsidiaries, nor, to the
knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting
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on behalf of the Company or any of its subsidiaries, has used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct
or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation
of any provision of the Foreign Corrupt Practices Act of 1977; or made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(cc) Except for such matters as would not, individually or in the
aggregate, either result in a Material Adverse Effect or require
disclosure in the Prospectus, the Company and any of its subsidiaries
(or, to the knowledge of the Company or any of its subsidiaries or any
of their respective predecessors in interest) (i) are conducting and
have conducted their businesses, operations and facilities in
compliance with Environmental Laws (as defined below); (ii) possess,
and are in compliance with, any and all permits, licenses or
registrations required under Environmental Laws ("Environmental
Permits"); (iii) will not require material expenditures to maintain
such compliance with Environmental Laws or their Environmental Permits
or to remediate, clean up, xxxxx or remove any Hazardous Substance (as
defined below); and (iv) are not subject to any pending or, to the best
knowledge of the Company or any of its subsidiaries, threatened claim
or other legal proceeding under any Environmental Laws against the
Company or its subsidiaries, and have not been named as a "potentially
responsible party" under or pursuant to any Environmental Laws. As used
in this paragraph, "Environmental Laws" means any and all applicable
federal, state, local, and foreign laws, ordinances, regulations and
common law, or any administrative or judicial order, consent, decree or
judgment thereof, relating to pollution or the protection of human
health or the environment, including, without limitation, those related
to (A) emissions, discharges, releases or threatened releases of, or
exposure to, Hazardous Substances, (B) the generation, manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Substances, or (C) the investigation,
remediation or cleanup of any Hazardous Substances. As used in this
paragraph, "Hazardous Substances" means pollutants, contaminants or
hazardous, dangerous, toxic, biohazardous or infectious substances,
materials or wastes, or any other chemical substance regulated under
Environmental Laws.
(dd) Neither the Company nor any of its subsidiaries is now, or, after
receipt of payment for the Stock, use of the proceeds of the offering
as described in the Prospectus and consummation of all related
transactions will be an "investment company," or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act"), or an "investment
advisor,' as such term is defined in the Investment Advisors Act of
1940, as amended, or a "broker" within the meaning of Section 3(a)(4)
of the Exchange Act or a "dealer" within the meaning of Section 3(a)(5)
of the Exchange Act or required to be registered pursuant to Section
15(a) of the Exchange Act.
(ee) There are no contracts, agreements or understandings between the
Company any of its subsidiaries and any person (other than the
Underwriters) that would give rise to a
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valid claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with this
offering.
(ff) The statistical and market-related data included in the Prospectus
and the Registration Statement are based on or derived from sources
which the Company believes to be reliable and accurate.
(gg) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Stock), will violate or result in a violation of Section 7 of
the Exchange Act, or any regulation promulgated thereunder, including,
without limitation, Regulations T, U and X of the Board of Governors of
the Federal Reserve System.
(hh) The statements set forth in the Prospectus insofar as they purport
to describe the provisions of the laws and documents referred to
therein, are accurate in all material respects.
(ii) The minute books and records of the Company and its subsidiaries
relating to proceedings of their respective shareholders, boards of
directors, committees of their respective boards of directors, members,
managers and committees of their respective managers made available to
Xxxxxxx Procter LLP, counsel for the Underwriters, are their original
minute books and records or are true, correct and complete copies
thereof, with respect to all proceedings of said shareholders, boards
of directors, members, managers and committees since December 18, 2001
through the date hereof. In the event that definitive minutes have not
been prepared with respect to any proceedings of such shareholders,
boards of directors, members, managers or committees, the Company has
provided Xxxxxxx Procter LLP with originals or true, correct and
complete copies of draft minutes or written agendas relating thereto,
which drafts and agendas, if any, reflect all events that occurred in
connection with such proceedings.
(jj) All instruments, records, agreements and other documents requested
by the Underwriters or their counsel, Xxxxxxx Procter LLP, have been
provided to, or made available for inspection by, the Underwriters or
Xxxxxxx Procter LLP, and such documents are complete and genuine and
include all material collateral and supplemental thereto.
(kk) The Company is not aware of (i) any significant deficiency in the
design or operation of internal controls which could adversely affect
the Company's ability to record, process, summarize and report
financial data or any material weaknesses in internal controls; or (ii)
any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal
controls.
(ll) There have been no significant changes in internal controls or in
other factors that could significantly affect internal controls,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
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(mm) The Company is organized in conformity with the requirements for
qualification as a real estate investment trust ("REIT") under the Code
and its proposed method of operation, as described in the Prospectus,
will enable it to meet the requirements for taxation as a REIT under
the Code, for the Company's taxable years ending December 31, 2004 and
thereafter. Each of the Company's corporate subsidiaries is in
compliance with all requirements applicable to a "qualified REIT
subsidiary" within the meaning of Section 856(i) of the Code and all
applicable regulations under the Code, and the Company is not aware of
any fact that would negatively impact such qualifications.
(nn) All of the information supplied by the Company, whether written or
oral (and whether included in the Prospectus or otherwise), is true and
accurate and complete in all material respects. In addition, except as
would not result in a Material Adverse Effect, the Company has received
written permission from each and every entity or person that has any
right to authorize or grant permission for the use of the information.
(oo) The consummation of the transactions contemplated by the
Prospectus will not result in a conflict of interest by or among the
Company or any of its affiliates which has not been disclosed in the
Prospectus.
(pp) Any certificate signed by an officer of the Company or an officer
or manager of any of its subsidiaries and delivered to the Underwriters
or to Xxxxxxx Procter LLP shall be deemed to be a representation and
warranty by the Company and its subsidiaries to the Underwriters as to
the matters set forth therein and not representations and warranties of
the officers in their individual capacities.
(qq) Except as otherwise disclosed in the Prospectus, 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.
(rr) The Preliminary Prospectus, and the Prospectus as of their
respective dates and the Prospectus as of the First Delivery Date (as
defined below) and the Second Delivery Date (as defined below), if any,
did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except that
this representation and warranty does not apply to statements in or
omissions from the Preliminary Prospectus and Prospectus made in
reliance upon and in conformity with information relating to the
Underwriters furnished to the Company in writing by or on behalf of the
Underwriters expressly for use therein.
(ss) There is and has been no failure on the part of the Company or any
of the Company's directors or officers, in their capacities as such, to
comply with any applicable provision of the Xxxxxxxx-Xxxxx Act of 2002
(the "Xxxxxxxx-Xxxxx Act") and the rules and regulations promulgated in
connection therewith.
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Section 2. Purchase of the Stock by the Underwriters.
On the basis of the representations and warranties contained in, and
subject to the terms and conditions of, this Agreement, the Company agrees to
sell 8,000,000 shares of the Firm Stock to the several Underwriters and each of
the Underwriters, severally and not jointly, agrees to purchase the number of
shares of the Firm Stock set forth opposite that Underwriter's name in Schedule
1 hereto. Each Underwriter shall be obligated to purchase from the Company that
number of shares of the Firm Stock which represents the same proportion of the
number of shares of the Firm Stock to be sold by the Company as the number of
shares of the Firm Stock set forth opposite the name of such Underwriter in
Schedule 1 represents of the total number of shares of the Firm Stock to be
purchased by all of the Underwriters pursuant to this Agreement. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,200,000 shares of Option Stock. Such option is granted for
the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set forth opposite the name of such Underwriters
in Schedule 1 hereto. The respective purchase obligations of each Underwriter
with respect to the Option Stock shall be adjusted by the Representatives so
that no Underwriter shall be obligated to purchase Option Stock other than in
100 share amounts.
The price of both the Firm Stock and any Option Stock shall be
$________ per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), except upon payment for
all the Stock to be purchased on such Delivery Date as provided herein.
Section 3. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
Section 4. Delivery of and Payment for the Stock.
Delivery of and payment for the Firm Stock shall be made at the offices
of Xxxxxxx Procter LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00
A.M., New York City time, on the fourth full business day following the date of
this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Stock to the Representatives for the account of each Underwriter against
payment of the purchase price by wire transfer in immediately available funds to
the Company or upon the order of the Company. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Company shall make the
certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
11
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter against payment of the purchase price by
wire transfer in immediately available funds to the Company or upon the order of
the Company. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Option Stock shall be registered
in such names and in such denominations as the Representatives shall request in
the aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
Section 5. Further Agreements of the Company. The Company
agrees:
(a) To prepare the Prospectus in a form approved by the Representatives
(which approval shall not be unreasonably withheld or delayed) and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than Commission's close of business on the second business
day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus except as
permitted herein; to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus,
of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its
withdrawal;
12
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter against payment of the purchase price by
wire transfer in immediately available funds to the Company or upon the order of
the Company. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Option Stock shall be registered
in such names and in such denominations as the Representatives shall request in
the aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
Section 5. Further Agreements of the Company. The Company
agrees:
(a) To prepare the Prospectus in a form approved by the Representatives
(which approval shall not be unreasonably withheld or delayed) and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than Commission's close of business on the second business
day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus except as
permitted herein; to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus,
of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its
withdrawal;
13
(b) To furnish promptly to the Representatives and to counsel for the
Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case excluding
exhibits) and (ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus; and, if the delivery of a
prospectus is required at any time after the Effective Time in
connection with the offering or sale of the Stock or any other
securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary to amend or supplement the
Prospectus in order to comply with the Securities Act, to notify the
Representatives and, upon its request, to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request
of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing (which consent shall not be unreasonably withheld or delayed);
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to furnish
to the Representatives copies of all materials furnished by the Company
to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed pursuant
to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder;
14
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may reasonably request and to comply with such laws
so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction or
subject itself to taxation in any such jurisdiction where it is not
then so subject;
(i) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than the Stock
and shares issued pursuant to employee benefit plans, qualified stock
option plans or other employee compensation plans existing on the date
hereof or pursuant to currently outstanding options, warrants or
rights), or sell or grant options, rights or warrants with respect to
any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the grant of options pursuant
to option plans existing on the date hereof), or (2) enter into any
swap or other derivatives transaction that transfers to another, in
whole or in part, any of the economic benefits or risks of ownership of
such shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or
other securities, in cash or otherwise, in each case without the prior
written consent of Xxxxxx Brothers Inc. on behalf of the Underwriters;
and to cause each shareholder, officer and director of the Company who
is not party to either an existing lock-up agreement with Xxxxxx
Brothers Inc. or the Registration Rights Agreement by and among the
Company, Xxxxxx Brothers Inc. and the other parties thereto, dated as
of October 8, 2003, to furnish to the Representatives, prior to the
First Delivery Date, a letter or letters, substantially in the form of
Exhibit A hereto, pursuant to which each such person shall agree not
to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (2)
enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case
for a period of 180 days from the date of the Prospectus, without the
prior written consent of Xxxxxx Brothers Inc. on behalf of the
Underwriters;
(j) To apply for the listing of the Stock on the Nasdaq National
Market, and to use commercially reasonable best efforts to complete
that listing, subject only to official notice of issuance, prior to the
First Delivery Date;
(k) To apply the net proceeds from sale of Stock as set forth in the
Prospectus;
15
(l) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" as
defined in the Investment Company Act;
(m) To meet the requirements to qualify, effective for the fiscal year
ending December 31, 2004, as a REIT under the Code, and to continue to
have each of its corporate subsidiaries comply with all applicable laws
and regulations necessary to maintain a status as a "qualified REIT
subsidiary" under the Code; and
(n) To comply with all applicable securities and other applicable laws,
rules and regulations, including, without limitation, the
Xxxxxxxx-Xxxxx Act, and to use its best efforts to cause the Company's
directors and officers, in their capacities as such, to comply with
such laws, rules and regulations, including, without limitation, the
provisions of the Xxxxxxxx-Xxxxx Act.
Section 6. Expenses. The Company agrees to pay (a) the costs
incident to the authorization, issuance, sale and delivery of the Stock
and any taxes payable in that connection; (b) the costs incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the
costs of distributing the Registration Statement as originally filed
and each amendment thereto and any post-effective amendments thereof
(including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as
provided in this Agreement; (d) the costs of producing and distributing
this Agreement, any supplemental agreement among Underwriters and any
other related documents in connection with the offering, purchase, sale
and delivery of the stock; (e) the filing fees incident to securing the
review by the National Association of Securities Dealers, Inc. of the
terms of sale of the Stock; (f) any applicable listing or other fees;
(g) the fees and expenses of qualifying the Stock under the securities
laws of the several jurisdictions as provided in Section 6(h) and of
preparing, printing and distributing a Blue Sky Memorandum (including
related reasonable fees and expenses of counsel to the Underwriters);
(h) all costs and expenses of the Underwriters; (i) the costs and
expenses of the Company relating to investor presentations on any "Road
Show" undertaken in connection with the marketing of the offering of
the Stock, including, without limitation, reasonable expenses
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in
connection with the road show and (j) all other costs and expenses
incident to the performance of the obligations of the Company under
this Agreement; provided that, except as provided in this Section 6 and
in Section 11 the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes
on the Stock which they may sell and the expenses of advertising any
offering of the Stock made by the Underwriters.
Section 7. Conditions of Underwriters' Obligations
16
The respective obligations of the Underwriters hereunder are subject to
the accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company contained herein, to the performance by the Company of
its obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement, the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable
them to pass upon such matters.
(c) Jaffe, Raitt, Heuer & Xxxxx, P.C. shall have furnished to the
Representatives their written opinion (based on the assumptions and
subject to the exclusions contained therein), as counsel to the
Company, addressed to the Underwriters and dated such Delivery Date,
substantially as to the matters set forth in Exhibit B hereto. In
rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the State of Michigan and the General Corporation
Law of the State of Delaware. Such opinion shall also be to the effect
that (x) such counsel has acted as counsel to the Company in connection
with the preparation of the Registration Statement and (y) based on the
foregoing, no facts have come to the attention of such counsel which
lead them to believe that the Registration Statement (except for the
financial statements and financial schedules and other financial and
statistical data included therein, as to which such counsel need
express no belief) as of the Effective Date, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus (except as
stated above) contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Such
17
opinion and statement may be qualified by a statement to the effect
that such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as set forth in
clause (x) of Exhibit B hereto).
(d) The Representatives shall have received from Xxxxxxx Procter LLP,
counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(e) At the time of execution of this Agreement, the Representatives
shall have received from Xxxxx Xxxxxxxx LLP a letter or letters, in
form and substance reasonably satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "Comfort Letters" to underwriters in connection
with registered public offerings.
(f) With respect to the letter or letters of Xxxxx Xxxxxxxx LLP
referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement (the
"Initial Letters"), the Company shall have furnished to the
Representatives a letter (the "Bring-Down Letter") of such accountants,
addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the Bring-Down Letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the Bring-Down Letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the Initial Letters and (iii)
confirming in all material respects the conclusions and findings set
forth in the Initial Letters.
18
(g) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its Chief Financial Officer
stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in Section 8
have been fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus did
not include any untrue statement of a material fact and did
not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus.
(h) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus (A) any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (B) since such date there shall not
have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a
19
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (A) or (B), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(i) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes
of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange,
the Nasdaq National Market or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or the settlement of
such trading generally shall have been disrupted or minimum prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the
public offering or delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(k) The Nasdaq National Market shall have approved the Stock for
listing, subject only to official notice of issuance.
(l) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that the Registration Statement or
the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact which, in the reasonable opinion of Xxxxxxx
Procter LLP, counsel to the Underwriters, is material or omits to state
a fact which, in the reasonable opinion of such counsel, is material
and is required to be stated therein or is necessary to make the
statements therein not misleading.
(m) XxXxxxxxxx Xxxxxxxx PLLC shall have furnished to the
Representatives their written opinion (based on the assumptions and
subject to the exclusions contained
20
therein), as counsel to the Company, addressed to the Underwriters and
dated such Delivery Date, substantially as to the matters set forth in
Exhibit B hereto.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
Section 8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
directors, officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, director, officer, employee or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (B) in any materials or information
provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Stock ("Marketing
Materials"), including any roadshow or investor presentations made to
investors by the Company (whether in person or electronically), (ii)
the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Marketing Materials, any
material fact required to be stated therein or necessary to make the
statements therein not misleading or (iii) any act or failure to act or
any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based
upon matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable under this clause (iii) to the extent that
it is determined in a final
21
judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or willful misconduct), and shall
reimburse each Underwriter and each such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any such amendment or
supplement thereto, in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company
through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of
the information specified in Section 8(e); and provided, further, that
the Company shall not be liable to any Underwriter under the indemnity
agreement in this Section 8(a) to the extent, but only to the extent,
that (w) such loss, claim, damage, or liability of such Underwriter
results from an untrue statement of a material fact or an omission of a
material fact contained in the Preliminary Prospectus, which untrue
statement or omission was completely corrected in the Prospectus dated
the Effective Date (the "Final Prospectus") and (x) such Underwriter
sold shares of Stock to the person alleging such loss, claim,
liability, expense or damage without sending or giving, at or prior to
written confirmation of such sale, a copy of the Final Prospectus and
(y) the Company had previously furnished sufficient quantities of the
Final Prospectus to the Underwriters within a reasonable amount of time
prior to such sale or such confirmation, and (z) such Underwriter
failed to deliver the Final Prospectus, if required by law to have so
delivered it, and such delivery would have been a complete defense
against the person asserting such loss, claim, liability, expense or
damage. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to
any director, officer, employee or controlling person of that
Underwriter.
(b) Each Underwriter shall, severally and not jointly, indemnify and
hold harmless the Company and its officers and employees, each of its
directors, and each person, if any, who controls the Company within the
meaning of the Securities Act, from and against any loss, claim, damage
or liability, joint or several, or any action in respect thereof, to
which the Company or any such director, officer or controlling person
may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto,
or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the
22
Registration Statement or the Prospectus or in any amendment or
supplement thereto, any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf of
that Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition
to any liability which any Underwriter may otherwise have to the
Company or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 8, except to the extent it has been materially prejudiced
by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 8. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Representatives shall have
the right to employ counsel to represent jointly the Representatives
and those other Underwriters and their respective directors, officers,
employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by
the Underwriters against the Company under this Section 8 if, in the
reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, directors, officers, employees
and controlling persons to be jointly represented by separate counsel
due to the availability of one or more legal defenses available to them
which are different from or additional to those available to the
indemnifying party, and in that event the reasonable fees and expenses
of such separate counsel shall be paid by the Company. No indemnifying
party shall (i) without the prior written consent of the indemnified
parties (which consent shall not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or
23
contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of
such claim, action, suit or proceeding and does not include any
findings of fact or admissions of fault or culpability as to the
indemnified party or (ii) be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the
indemnifying party or if there be a final judgment of the plaintiff in
any such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a), 8(b) or 8(c) in respect of any
loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Underwriters on the
other, from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Underwriters on the other, with
respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by
the Company, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of
the Stock purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the Stock
under this Agreement, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters, the
intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were
to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section 8(d)
shall be deemed to include, for purposes of this Section 8(d), any
legal or other expenses reasonably
24
incurred by such indemnified party in connection with investigating or
defending or preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Stock underwritten by it and
distributed to the public was offered to the public exceeds the amount
of any damages which such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11 of the Securities
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 8(d) are several
in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by
the Underwriters set forth on the cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in the
Prospectus are correct and constitute the only information concerning
such Underwriters furnished in writing to the Company by or on behalf
of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
Section 9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 2. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Company to sell, the Option Stock) shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company, except that the Company will continue to be liable for
25
the payment of expenses to the extent set forth in Sections 6 and 11. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Stock which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default,
including liability for expenses referred to in Section 11 hereof. If other
underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
Section 10. Termination.
The obligations of the Underwriters hereunder may be terminated by the
Representatives by notice given to and received by the Company prior to delivery
of and payment for the Firm Stock if, prior to that time, any of the events
described in Sections 8(h), 8(i) or 8(j), shall have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement.
Section 11. Reimbursement of Underwriters' Expense.
If the Company shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on their part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Company is not fulfilled, the Company will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company
shall pay the full amount thereof to the Representatives. If this Agreement is
terminated pursuant to Section 9 by reason of the default of one or more
Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
Section 12. Notices, Etc.
All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission to
Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Syndicate Registration
Group (Fax: 000-000-0000), with a copy, in the case
of any notice pursuant to Section 10(c), to the
Director of Litigation, Office of the General
Counsel, Xxxxxx Brothers Inc., 000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000 (Fax: 000-000-0000) and a
copy to Xxxxxxx Procter LLP,
00
Xxxxxxxx Xxxxx, Xxxxxx, XX 00000, Attention, Xxxxxxx
X. Xxxxx, P.C. (Fax: 000-000-0000); and
(b) if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to the address
of the Company set forth in the Registration
Statement, Attention: Xxxxxx X. Xxxxx (Fax:
248-746-7091), with a copy to Xxxxx Xxxxx Heuer &
Xxxxx, P.C., Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx Xxxxx;
provided, however, that any notice to an Underwriter pursuant to Section 8(b)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by the Representatives.
Section 13. Persons Entitled to Benefit of Agreement.
This Agreement shall inure to the benefit of and be binding upon the
Underwriters, the Company and their respective successors. This Agreement and
the terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control any Underwriter within the
meaning of Section 15 of the Securities Act and (B) the indemnity agreement of
the Underwriters contained in Section 8(b) of this Agreement shall be deemed to
be for the benefit of directors of the Company, officers of the Company who have
signed the Registration Statement and any person controlling the Company within
the meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
Section 14. Survival.
The respective indemnities, representations, warranties and agreements
of the Company and the Underwriters contained in this Agreement or made by or on
behalf on them, respectively, pursuant to this Agreement, shall survive the
delivery of and
27
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
Section 15. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of New York.
Section 16. Definition of the Terms "business day" and
"subsidiary".
For purposes of this Agreement, (a) "business day" means each Monday,
Tuesday, Wednesday, Thursday or Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close and (b) "subsidiary" has the meaning set forth in Rule
405 of the Rules and Regulations.
Section 17. Counterparts.
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original but all such counterparts shall together constitute one
and the same instrument.
Section 18. Headings.
The headings herein are inserted for convenience of reference only and
are not intended to be part of, or to affect the meaning or interpretation of,
this Agreement.
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
28
Very truly yours,
ORIGEN FINANCIAL, INC.,
By:
------------------------------
Name:
Title:
Accepted:
XXXXXX BROTHERS INC.
CREDIT SUISSE FIRST BOSTON LLC
FLAGSTONE SECURITIES, LLC
For themselves and as the Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By:
------------------------------
Authorized Representatives
By CREDIT SUISSE FIRST BOSTON LLC
By:
------------------------------
Authorized Representatives
By FLAGSTONE SECURITIES, LLC
By:
------------------------------
Authorized Representatives
