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EXHIBIT 1.1
EXECUTION
CAPSTEAD SECURITIES CORPORATION IV
COLLATERALIZED MORTGAGE OBLIGATIONS
(Issuable in Series)
UNDERWRITING AGREEMENT
September 28, 1998
Greenwich Capital Markets, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
Capstead Securities Corporation IV (the "Company"), a Delaware
corporation and wholly-owned subsidiary of Capstead Mortgage Corporation, a
Maryland corporation ("Capstead"), proposes to issue its Collateralized Mortgage
Obligations of the series (each, a "Series") and classes designated at the time
of sale (the "Bonds"). The Bonds shall be issued under an indenture, dated as of
September 1, 1998 (the "Original Indenture"), between the Company and Chase Bank
of Texas, National Association, as trustee (the "Indenture Trustee"), as
supplemented from time to time by one or more supplemental indentures, each
providing for the issuance of a Series of Bonds (the "Series Supplements")
between the Company and the Indenture Trustee. Such Original Indenture, as
supplemented from time to time hereafter, and as supplemented by the Series
Supplements, with any changes therein made with your consent, and, with your
consent any other indenture is herein referred to as the "Indenture." Capstead
joins this agreement for the purposes set forth herein.
Underwritten Offerings of Bonds may be made through you or through an
underwriting syndicate managed by you. The Company proposes to sell one or more
Series of the Bonds or certain Classes of Bonds of one or more Series to you and
to each of the other several underwriters, if any, participating in an
underwriting syndicate managed by you. It is understood, however, that the
Company may elect to retain, through the execution of one or more underwriting
agreements in addition to this Agreement, one or more additional underwriters
other than you to underwrite, or manage the underwriting syndicate with respect
to, any offering of one or more Series of its Bonds.
Whenever the Company determines to make such an offering of Bonds
through you, it will enter into an agreement (the "Terms Agreement") providing
for the sale of such Bonds to, and the purchase and offering thereof by, you and
such other underwriters, if any, selected by you as have authorized you to enter
into such Terms Agreement on their behalf (the underwriters designated in any
such Terms Agreement being referred to herein as "Underwriters," which term
shall include you whether acting alone in the sale of any Series of Bonds or as
a member of the underwriting syndicate). The Terms Agreement relating to each
offering of Bonds shall specify the principal amount of Bonds to be issued and
their terms not otherwise specified in the Indenture, a brief description of the
Conventional Certificates (as defined below) to be pledged as security therefor,
the names of the Underwriters participating in such offering (subject to
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substitution as provided in Section 11 hereof) and the principal amount of the
Bonds which each severally agrees to purchase, the names of such other
Underwriters, if any, acting as co-managers with you in connection with such
offering, the price at which the Bonds are to be purchased by the Underwriters
from the Company, the initial public offering price (or the manner in which such
prices shall be determined), the time and place of delivery of and payment for
the Bonds, and such other information as may be agreed upon. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, may
take the form of an exchange of any standard form of written telecommunication
between you and the Company. Each offering of Bonds through you will be governed
by this Agreement, as supplemented by the applicable Terms Agreement, and this
Agreement and such Terms Agreement shall inure to the benefit of and be binding
upon each Underwriter participating in the offering of such Bonds.
At their date of issuance, the Bonds of each Series underwritten by you
will be secured by a pledge to the Indenture Trustee of, among other things,
Conventional Certificates (as defined in the Indenture) (collectively, the
"Conventional Certificates"). The Bonds are more fully described in the
Registration Statement (as defined below). Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-42337), a related
preliminary prospectus and related preliminary prospectus supplements for the
registration of the Bonds under the Securities Act of 1933 (the "1933 Act"),
which registration statement, as most recently amended, was declared effective
on October 1, 1991. Such registration statement, as from time to time amended
through the date of the Terms Agreement, including all exhibits thereto and all
documents therein incorporated by reference from time to time pursuant to Item
12 of Form S-3 under the 1933 Act that were filed under the Securities Exchange
Act of 1934 (the "1934 Act"), on or before the effective date of such
registration statement, but excluding the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of 1939 (the "1939 Act"),
is hereinafter referred to as the "Registration Statement." The prospectus in
the form in which it appears in the Registration Statement, including all
documents therein incorporated by reference from time to time pursuant to the
1934 Act, is hereinafter referred to as the "Basic Prospectus". The Basic
Prospectus, as amended to the date hereof and as supplemented by the prospectus
supplement or supplements relating to a particular Series of the Bonds, each in
the form first filed after the date of the related Terms Agreement with the
Commission pursuant to Rule 424 under the 1933 Act, including any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act that were filed under the 1934 Act on or before the date of such prospectus
supplement (such prospectus supplement, including such incorporated documents,
in the form first filed after the date of the related Terms Agreement pursuant
to Rule 424(b) being hereinafter termed the "Prospectus Supplement"), is
hereinafter referred to as the "Final Prospectus". Any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the Registration
Statement, the Final Prospectus or the Prospectus Supplement shall be deemed to
refer to and include the filing of any document under the 1934 Act after the
effective date of the Registration Statement or the issue date of the Final
Prospectus or Prospectus Supplement, as the case may be, deemed to be
incorporated therein by reference pursuant to Item 12 of Form S-3 under the 1933
Act.
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SECTION 1. Representations and Warranties. The Company and Capstead,
jointly and severally, represent and warrant to you as of the date hereof, and
to each Underwriter named in a Terms Agreement as of the date thereof (in each
case the "Representation Date"), as follows:
(a) The Registration Statement, at the time it became effective,
complied and, as of the date hereof, does comply, in all material respects
with the requirements of the 1933 Act and the rules and regulations of the
Commission thereunder (the "1933 Act Regulations") and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and the Final Prospectus at the time it is mailed to the
Commission for filing pursuant to Rule 424 under the Act and at the Closing
Time referred to in Section 2 will not contain an 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
were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from (i) the Registration Statement or Final Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing
by any Underwriter through you expressly for use in the Registration
Statement or Final Prospectus or (ii) the Current Report (as defined in
Section 3(b) below), or in any amendment thereof or supplement thereto,
incorporated by reference in such Registration Statement or such Final
Prospectus (or any amendment thereof or supplement thereto). There are no
material contracts or documents of the Company which are required to be
filed as exhibits to the Registration Statement by the 1933 Act or the 1933
Act Regulations which have not been so filed.
(b) At the time the Registration Statement became effective the
Indenture Trustee was duly qualified under the requirements of the 1939 Act
and the rules and regulations of the Commission thereunder (the "1939 Act
Regulations"), and at the Closing Time the Indenture will be so qualified
and will conform in all material respects with the requirements of the 1939
Act and the 1939 Act Regulations.
(c) The documents incorporated by reference in the Registration
Statement and the applicable Final Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder, and, when read together and with
the other information in the applicable Final Prospectus, at the time the
Registration Statement and any amendments thereof became effective, and at
the time such Final Prospectus is filed with the Commission, did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to the Current Report.
(d) The accountants who reported on the balance sheet included or
incorporated by reference in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
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(e) The balance sheet of the Company included or incorporated by
reference in the Registration Statement presents fairly the financial
position of the Company at the date indicated, and has been prepared in
conformity with generally accepted accounting principles.
(f) Since the respective dates as of which information is given in the
Registration Statement or, if later, the applicable Final Prospectus,
except as otherwise stated therein, there has been no material adverse
change in the condition, financial or otherwise, earnings, business
affairs, or business prospects of the Company.
(g) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Registration
Statement, and, at the Closing Time, the Company will be duly qualified as
a foreign corporation to transact business and will be in good standing in
the State of Texas. The Company is not required to qualify to do business
as a foreign corporation under the laws of any other state. The Company has
no subsidiaries.
(h) The authorized, issued and outstanding capital stock of the
Company is as set forth (or incorporated) in the Registration Statement,
and the shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable, and are owned of record and beneficially by Capstead, free
and clear of any lien, charge, option, warrant, security interest,
encumbrance, voting trust or similar arrangement.
(i) Neither the Company nor Capstead is in violation of its charter or
bylaws. The Company is not in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it or its properties may be bound, which
violations or defaults separately or in the aggregate would have a material
adverse effect on the Company.
(j) The Company owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease, own or license, as the case may be, and
to operate, its properties and to carry on its business as described in the
Registration Statement or, if later, the applicable Final Prospectus; and
the Company has conducted and is conducting its business so as to comply in
all material respects with all applicable laws, administrative regulations
and administrative and court decrees.
(k) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending against the
Company or, to the knowledge of the Company and Capstead, threatened
against the Company (except as set forth in the Registration Statement or,
if later, the applicable Final Prospectus) which could reasonably be
expected to result in any material adverse change in the condition,
financial or otherwise, earnings, business affairs, or business prospects
of the
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Company which could reasonably be expected to interfere with or materially
and adversely affect the consummation of the transactions contemplated
herein.
(l) The execution and delivery of this Agreement, the Original
Indenture, the related Series Supplement, the pass-through certificate
purchase agreement between the Company and Capstead (the "Pass-Through
Certificate Purchase Agreement"), the incurrence of the obligations herein
set forth and the consummation of the transactions contemplated herein and
therein have been, and the execution and delivery of each Terms Agreement
and the consummation of the transactions contemplated therein will have
been (before the issuance of the related Bonds), duly authorized by the
Company and/or Capstead, as applicable, by all necessary action (corporate
and other); this Agreement, the Original Indenture, the related Series
Supplement, the Pass-Through Certificate Purchase Agreement and the Terms
Agreement, when executed and delivered, will have been, duly executed and
delivered by the Company and/or Capstead, as applicable, enforceable in
accordance with their terms, subject, as to enforceability of remedies, to
applicable bankruptcy, insolvency, reorganization, or other laws affecting
creditors' rights generally, and to general principles of equity and
equitable remedies (regardless of whether the enforceability of such
remedies is considered in a proceeding in equity or at law). Neither the
execution and delivery of this Agreement, the Original Indenture, the
related Series Supplement, the Pass-Through Certificate Purchase Agreement
or the Terms Agreement, the incurrence of the obligations herein or therein
set forth, nor the consummation of the transactions contemplated herein or
therein will conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, mortgage, pledge, charge,
security interest or encumbrance (collectively, "Lien") upon any property
or assets of the Company or Capstead, as applicable, pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or Capstead, as applicable, is a party or
by which any of them may be bound, or to which any of the property or
assets of any of them is subject (other than the Lien created pursuant to
the Indenture), which separately or in the aggregate are material, nor will
any such action result in any violation of the provisions of the charter or
bylaws of either of the Company or Capstead, or, to the best of such
entity's knowledge, of any law, administrative regulation or administrative
or court decree.
(m) The issuance of the Bonds underwritten by you has been duly
authorized by the Company (or will have been so authorized prior to each
issuance of Bonds underwritten by you) and, when such Bonds are executed
and authenticated and delivered in accordance with the Indenture and sold
to the Underwriters pursuant to this Agreement and any Terms Agreement,
such Bonds will be entitled to the benefits and security provided by the
Indenture and will constitute the legal, valid and binding non-recourse
obligations of the Company enforceable in accordance with their terms, but
otherwise subject, as to enforceability of remedies, to applicable
bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally, and to general principles of equity and equitable
remedies (regardless of whether the enforceability of such remedies is
considered in a proceeding in equity or at law).
(n) The Bonds of each Series underwritten by you and the Indenture
will conform in all material respects to the respective descriptions
thereof contained in the applicable Final Prospectus, except that no
representation or warranty is made that the Bonds conform with any
description thereof contained in the Current Report.
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(o) At the Closing Time with respect to a Series of Bonds, the Company
will own (i) the Conventional Certificates listed in Schedule A to the
Series Supplement relating to the applicable Series of Bonds and (ii) the
money or other assets specified or referred to in the granting clauses of
such Series Supplement as being pledged to the Indenture Trustee at Closing
Time (together, the "Initial Collateral"), free and clear of any Lien,
except the Lien of the Indenture; the Company has power and authority
(corporate and other) to assign, pledge and deliver the Initial Collateral
to the Indenture Trustee under the Indenture, and will have duly authorized
such assignment, pledge and delivery to the Indenture Trustee by all
necessary corporate action.
(p) As of the Closing Time with respect to a Series of Bonds, the
Company will have assigned, pledged and delivered to the Indenture Trustee
under the Indenture all of its right, title and interest in and to, among
other things, (i) Conventional Certificates with an aggregate outstanding
principal balance as of such Closing Time at least equal to the aggregate
original principal amount of the Bonds of the applicable Series then being
issued and (ii) cash and/or other assets, if any, in the amount set forth
in the related Series Supplement.
(q) At the Closing Time with respect to a Series of Bonds, each
Conventional Certificate listed on Schedule A to the Series Supplement
relating to the applicable Series of Bonds will have been duly and validly
assigned, pledged and delivered to the Indenture Trustee, or its nominee,
and together with such assignment, pledge and delivery of each Conventional
Certificate, the filing of a UCC-1 financing statement with respect to the
Conventional Certificates in the office of the Secretary of State of the
State of Texas and in such other jurisdictions, if any, as the Company
deems appropriate and the possession by the Indenture Trustee, or its
nominee, of the Conventional Certificates and of the monies and/or other
assets, if any, specified in the related Series Supplement, will create as
security for repayment of the Bonds a valid, perfected first security
interest. The information set forth with respect to the Conventional
Certificates in Schedule A to the related Series Supplement will as of the
Closing Time of such Series be true and correct in all material respects.
(r) The Company is not, and will not as a result of the offer and sale
of the Bonds as contemplated in this Agreement and any applicable Terms
Agreement become, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act")
which would be required to register under the Investment Company Act.
(s) The representations and warranties made by the Company in the
Indenture and the Pass-Through Certificate Purchase Agreement and made in
any Officers' Certificate of the Company delivered pursuant to the Original
Indenture or the Pass-Through Certificate Purchase Agreement will be true
and correct at the time made and at the Closing Time.
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(t) The Pass-Through Certificate Purchase Agreement, the Conventional
Certificates and the mortgage loans evidenced thereby shall conform in all
material respects to the respective descriptions thereof contained in the
applicable Final Prospectus, except that no representation is made that the
Conventional Certificates conform with the descriptions thereof (if any)
contained in the Current Report.
(u) Any certificate signed by an officer of the Company or Capstead
and delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company or Capstead, respectively, to
each Underwriter as to the matters covered thereby.
(v) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the
United States is required for the issue and sale of the Bonds, or the
consummation by the Company of the other transactions contemplated by this
Agreement, each Terms Agreement or the Indenture, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Bonds by the Underwriters or as have been
obtained.
(w) At the Closing Time of a Series, the Bonds of such Series shall
have been rated in the highest rating category by at least two nationally
recognized statistical rating organizations or in such lower rating
categories as are acceptable to the Underwriters.
(x) Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of this Agreement, the related Terms
Agreement, the Indenture and the Bonds have been paid or will be paid at or
prior to the Closing Time.
(y) All of the information regarding the characteristics of the
Mortgage Loans contained in the Registration Statement or furnished to you
by the Company in writing or by electronic transmission is true and
correct.
SECTION 2. Sale and Delivery to the Underwriters; Closing. The several
commitments of the Underwriters to purchase Bonds pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, the respective original principal amounts of the Bonds set
forth in the applicable Terms Agreement opposite the name of such Underwriter,
plus any additional original principal amount of Bonds which such Underwriter
may be obligated to purchase pursuant to Section 11 hereof.
Delivery of, and payment of the purchase price for, the Bonds shall be
made at the office of Xxxxxxx & Xxxxx L.L.P., 0000 Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000, or at such other place as shall be agreed upon by you and
the Company, at 10:00 A.M. (Dallas time) on the date set forth in the applicable
Terms Agreement, or such other time as shall be agreed upon by you and the
Company (such time and date being referred to as the "Closing Time"). Payment
shall be made in immediately available or next day funds as specified in the
Terms Agreement,
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payable to or upon the order of the Company, against delivery to you for the
respective accounts of the Underwriters of the Bonds to be purchased by them.
Such Bonds shall be in such denominations and registered in such names as you
may request in writing at least two business days prior to the Closing Time. The
Bonds will be made available for your examination in Dallas, Texas not later
than 10:00 A.M. on the Business Day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with you, and
with each Underwriter participating in the offering of the applicable Series of
Bonds, as follows:
(a) Immediately following the execution of each Terms Agreement, the
Company will prepare a Final Prospectus setting forth the principal amount
of Bonds covered thereby and their terms not otherwise specified in the
Indenture, the names of the Underwriters participating in the offering and
the principal amount of Bonds which each severally has agreed to purchase,
the names of any Underwriters acting as co-managers with you in connection
with the offering, the price at which the Bonds are to be purchased by the
Underwriters from the Company, and such other information as you and the
Company deem appropriate in connection with the offering of the Bonds. The
Company will promptly transmit copies of the Final Prospectus to the
Commission for filing pursuant to Rule 424 of the 1933 Act Regulations and
will furnish to the Underwriters named therein as many copies of the Final
Prospectus as you shall reasonably request.
(b) The Company will cause any materials provided by you pursuant to
Section 8 below ("Section 8 Materials") with respect to the Bonds that are
delivered by you to the Company pursuant to Section 8 hereof to be filed
with the Commission on a Current Report on Form 8-K (the "Current Report")
pursuant to Rule 13a-11 under the 1934 Act not later than the Business Day
immediately following the Business Day on which all such Section 8
Materials are delivered to counsel for the Company by you prior to 3:00
p.m. Dallas, Texas time, and will promptly advise you when such Current
Report has been filed, provided that in any event the Company will cause
the Section 8 Materials to be so filed not later than the date on which the
related Final Prospectus is required to be so filed pursuant to Rule 424
under the 1933 Act. Such Current Report shall be incorporated by reference
in such Final Prospectus and the related Registration Statement.
Notwithstanding the two preceding sentences, the Company shall have no
obligation to file any Section 8 Materials which, in the reasonable
determination of the Company (a "Non-Filing Determination"), are not
required to be filed pursuant to the Xxxxxx Letter or the PSA Letter (as
defined in Section 8 below), or which contain erroneous information or
contain any untrue statement of a material fact or, when read in
conjunction with the Final Prospectus and Prospectus Supplement, omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading (it being understood, however, that
the Company shall have no obligation to review or pass upon the accuracy or
adequacy of, or to correct, any Section 8 Materials); provided that, in the
event of a Non-Filing Determination, the Company shall immediately notify
you in writing of the reasons for such Non-Filing Determination; and,
provided, further, that the Company shall file those Section 8 Materials
for which you have specifically confirmed in writing that the items giving
rise to the Non-Filing
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Determination are complete and correct and that you are advising the
Company to file such Section 8 Materials.
(c) The Company will notify you immediately, and in writing confirm
the notice, (i) of the receipt of any comments from the Commission, (ii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Final Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iv) of receipt by the
Company of any notification with respect to the suspension of the
qualification of the Bonds for sale in any jurisdiction or the initiation
or threat of any proceeding for that purpose, and (v) of the happening of
any event which makes untrue any statement of a material fact made in, or
results in the omission of material information from, the Registration
Statement or in any Final Prospectus then required to be distributed or
which requires the making of a change in the Registration Statement or any
such Final Prospectus in order to make any material statements therein, in
the light of the circumstances under which they were made, not misleading.
The Company will make every reasonable effort to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(d) The Company will give you notice of its intention to file any
amendment to the Registration Statement or any amendment or supplement to
the Final Prospectus, whether pursuant to the 1934 Act, 1933 Act or
otherwise, and will not file any such amendment or supplement without
furnishing a copy thereof to you and counsel for the Underwriters and
obtaining your consent to such filing, which consent shall not be
unreasonably withheld or delayed.
(e) The Company will deliver to you, as soon as practicable, as many
signed copies of the Registration Statement as originally filed and of each
amendment thereto, with signed consents and exhibits filed therewith
(including exhibits incorporated by reference therein and documents
incorporated by reference in the Final Prospectus), and will also deliver
to you such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto (including consents and
exhibits) as you may reasonably request.
(f) The Company will furnish to each Underwriter, from time to time
during the period when the Final Prospectus is required to be delivered
under the 1933 Act, such number of copies of the Final Prospectus (as
amended or supplemented), other than exhibits to the related Current
Report, as it may reasonably request for the purposes contemplated by the
1933 Act or the 0000 Xxx.
(g) If at any time when a prospectus relating to the Bonds is required
to be delivered under the 1933 Act any event occurs as a result of which
the applicable Final Prospectus as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend such Final Prospectus to comply with the
1933 Act, the
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Company, subject to subparagraph (d) above, promptly will prepare and file
with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance;
provided, however, that the Company will not be required to file any such
amendment or supplement with respect to any Section 8 Materials
incorporated by reference in the Final Prospectus other than any amendments
or supplements of such Section 8 Materials that the Company determines to
file in accordance therewith.
(h) The Company will endeavor, in cooperation with you and counsel for
the Underwriters, to qualify the Bonds for offering and sale under the
applicable securities and Blue Sky laws of such jurisdictions as you may
reasonably designate, and will maintain such qualification in effect for a
period of not less than one year after the date hereof, unless the offering
and sale of the Bonds is exempt from such qualification under the Secondary
Mortgage Market Enhancement Act of 1984, and will cooperate with you and
counsel for the Underwriters, to determine the eligibility of the Bonds for
investment by institutional investors in such jurisdictions. The Company
will, at your request or the request of counsel for the Underwriters, file
such statements and reports as may be required by the laws of each
jurisdiction in which the Bonds have been qualified as above provided.
Notwithstanding the foregoing, no such qualification shall be required in
any jurisdiction where, as a result thereof, the Company would be subject
to general service of process, other than by reason of the offer and sale
of the Bonds, qualification as a foreign corporation or to taxation as a
foreign corporation doing business in such jurisdiction.
(i) The Company will make generally available to its security holders
and will deliver to you as soon as practicable an earnings statement,
conforming to the requirements of Section 11(a) of the 1933 Act, covering a
period of at least twelve months beginning after the effective date of the
Registration Statement. Compliance with Rule 158 under the 1933 Act shall
satisfy the requirements of this paragraph.
(j) So long as any Bonds are outstanding, the Company will furnish to
you (or cause to be furnished to you) as soon as practicable upon your
written request:
(i) copies of the annual reports and other items required to be
delivered to the Bondholders pursuant to the Indenture;
(ii) copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange by
the Company; and
(iii) information as to the outstanding principal balances of the
mortgage loans underlying the Conventional Certificates, and, to the
extent that such information has been maintained in the ordinary
course of business by the Company, such other information as may
reasonably be requested by you which in your judgment is necessary or
appropriate to the maintenance of a secondary market in the Bonds.
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(k) So long as any Bonds of any Series underwritten by you are
outstanding, Capstead will furnish to you within five days after they are
available, upon your written request, copies of all reports filed by
Capstead under the 1934 Act.
(l) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file promptly all documents required
to be filed with the Commission pursuant to Section 13 or 14 of the 1934
Act; provided, however, that the Company will not be required to file any
amendment or supplement to the Current Report incorporated by reference in
the Prospectus other than any amendments or supplements thereto that are
furnished to the Company by you pursuant to Section 8 hereof which the
Company determines to file in accordance therewith.
(m) The Company shall prepare and file with the Commission, within the
period provided in the related Final Prospectus, its Current Report on Form
8-K which shall include such detailed information, schedules and reports
(the "Detailed Description") regarding the Conventional Certificates and
the mortgage loans underlying such Conventional Certificates relating to
the Series of Bonds offered by such Final Prospectus (the "Mortgage Loans")
as you may reasonably request
(n) During the period, if any, commencing on the date of the
applicable Terms Agreement and expiring on the date specified in such Terms
Agreement (the "Stand-Off Period"), neither the Company nor Capstead or any
subsidiary thereof will, without your prior written consent or as may be
otherwise permitted by such Terms Agreement, offer or sell, or enter into
any agreement to sell to the public, any mortgage-related or
mortgage-backed securities issued by any of them which are similar to the
Bonds. The provisions of this subparagraph (n) do not apply to securities
issued or guaranteed by GNMA, FNMA or FHLMC.
SECTION 4. Payment of Expenses. Unless otherwise specified in the
applicable Terms Agreement, the Company will pay, and Capstead will cause the
Company to pay, the following expenses incident to the performance of the
Company's obligations under this Agreement and the applicable Terms Agreement:
(i) the filing of the Registration Statement with respect to the Bonds and all
amendments thereto, (ii) the printing or photocopying and delivery to the
Underwriters, in such quantities as you may reasonably request, of copies of
this Agreement and the Terms Agreement, (iii) the preparation, registration,
issuance and delivery to the Underwriters of the Bonds underwritten pursuant to
this Agreement, (iv) the fees and disbursements of the Company's counsel, (v)
the printing and delivery to the Underwriters, in such quantities as you may
reasonably request, of copies of the Registration Statement with respect to the
Bonds underwritten pursuant to this Agreement and all amendments thereto, of any
preliminary prospectus and preliminary prospectus supplement and of the Final
Prospectus and all amendments and supplements thereto and all documents
incorporated therein (other than exhibits to the Current Report), of any private
placement memoranda with respect to Bonds that are to be privately placed, and
of any Blue Sky and Legal Investment Surveys, (vi) the printing or photocopying
and delivery to the Underwriters, in such quantities as you may reasonably
request, of copies of the Indenture, (vii) the fees and expenses of the
Independent Accountants under Section 5(f) hereof, (viii) the fees charged by
investment rating agencies for rating the Bonds underwritten pursuant to this
Agreement, (ix) the fees and expenses, if any, incurred in
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connection with the listing of the Bonds underwritten pursuant to this Agreement
on any national securities exchange, and (x) the fees and expenses of the
Indenture Trustee and its counsel. In addition, you will pay (or cause to be
paid) the remaining expenses incident to the transactions contemplated by this
Agreement and the applicable Terms Agreement, including and without limitation
those related to: (A) the qualification of the Bonds underwritten pursuant to
this Agreement under securities and Blue Sky laws and the determination of the
eligibility of the Bonds for investment in accordance with the provisions of
Section 3(h), including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of any Blue Sky Survey and Legal Investment Survey and (B) the fees
and expenses of your counsel.
If this Agreement is terminated by you in accordance with the provisions of
Section 5 or 10(b)(i), the Company shall, and Capstead will cause the Company
to, reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase the Bonds pursuant to any Terms Agreement are subject
to the accuracy in all material respects of the representations and warranties
of the Company and Capstead herein contained, to the performance by the Company
and Capstead of their obligations hereunder, and to the following further
conditions:
(a) At the applicable Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, (ii) the rating assigned as of the date of the applicable Terms
Agreement by any nationally recognized securities rating agency to the
Bonds to be underwritten at such time pursuant to this Agreement shall not
have been lowered since that date and (iii) there shall not have come to
your attention any fact that would cause you to believe that the Final
Prospectus at the time it was required to be delivered to a purchaser of
the Bonds to be underwritten at such time pursuant to this Agreement
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light
of the circumstances existing at such time, not misleading.
(b) At the applicable Closing Time you shall have received:
(1) An opinion, addressed to the Underwriters and dated the Closing Time,
of Xxxxxxx & Xxxxx L.L.P., counsel to the Company, in form and substance
reasonably satisfactory to you and counsel for the Underwriters, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and conduct its business as described in
the applicable Final Prospectus; and the Company is qualified as a
foreign corporation to transact
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business in the State of Texas and each other jurisdiction where the
nature of its assets requires such qualification.
(iii) All the authorized, issued and outstanding capital stock of
the Company has been duly authorized and validly issued and is fully
paid and non-assessable, and is owned of record by Capstead, to the
knowledge of such counsel, free and clear of any lien, security
interest, encumbrance, option, warrant, voting trust or similar
arrangement.
(iv) The Company is not in violation of its charter or bylaws. To
the best of such counsel's knowledge, the Company is not in default in
the performance or observance of any obligation, agreement, covenant
or condition contained in any material contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it or its properties may be bound.
(v) To the best of such counsel's knowledge, the Company owns or
possesses or has obtained all material governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to
lease or own, as the case may be, and to operate, its properties and
to carry on its businesses as presently conducted; and, to the best of
such counsel's knowledge, the Company has conducted and is conducting
its businesses so as to comply in all material respects with all
applicable laws.
(vi) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending, or, to the best of such counsel's knowledge, threatened
against the Company which could reasonably be expected to interfere
with or adversely affect the consummation of the transactions
contemplated herein.
(vii) The execution and delivery of this Agreement, the
applicable Terms Agreement and the Indenture (including the applicable
Series Supplement), the incurrence of the obligations herein and
therein set forth and the consummation of the transactions
contemplated herein and therein have been duly authorized by the
Company, by all necessary action; this Agreement and the applicable
Terms Agreement have been duly authorized, executed and delivered by
the Company; and the Indenture (including the applicable Series
Supplement) has been duly authorized, executed and delivered by the
Company and constitutes a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms, subject, as to
enforceability of remedies, to applicable bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally and
to general principles of equity and equitable remedies (regardless of
whether the enforceability of such remedies is considered in a
proceeding at law or in equity).
(viii) Neither the execution and delivery of this Agreement, the
applicable Terms Agreement or the Indenture, the incurrence of the
obligations
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herein or therein set forth, nor the consummation of the transactions
contemplated herein or therein, to the best of such counsel's
knowledge, will conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any Lien upon any
property or assets of the Company pursuant to, any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company is a party or by which it may be bound, or to
which any of its assets is subject (other than the Lien created by the
Indenture) which separately or in the aggregate are material, nor will
any such action result in any violation of the provisions of the
charter or bylaws of the Company or, to the best of such counsel's
knowledge, of any law, administrative regulation or administrative or
court decree.
(ix) No filing or, registration with, notice to or consent,
approval, authorization or order or other action of, any court or
governmental authority or agency, is required for the consummation by
the Company of the transactions contemplated by this Agreement or the
applicable Terms Agreement, except such as have been obtained and
except such as may be required under state securities or Blue Sky laws
in connection with the distribution of the Bonds referred to in such
Terms Agreement by the Underwriters.
(x) The issuance of the Bonds to be underwritten at such time
pursuant to this Agreement has been duly authorized by the Company and
such Bonds have been duly executed and delivered by the Company and,
assuming due authorization, execution and delivery of the Indenture by
the Indenture Trustee, when authenticated by the Indenture Trustee in
accordance with the terms of the Indenture and delivered to and paid
for by the Underwriters pursuant to the applicable Terms Agreement,
will constitute legal, valid and binding non-recourse obligations of
the Company, enforceable in accordance with their terms, subject, as
to enforceability of remedies, to applicable bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally and
to general principles of equity and equitable remedies (regardless of
whether the enforceability of such remedies is considered in a
proceeding at law or in equity), and the Bonds are entitled to the
benefits and security provided by the Indenture.
(xi) The Bonds to be underwritten at such time pursuant to this
Agreement and the Indenture conform in all material respects to the
respective descriptions thereof contained in the applicable Final
Prospectus (excluding any descriptions thereof in the Current Report,
as to which no opinion need be rendered).
(xii) At the Closing Time, the Company had corporate power and
authority to assign, pledge and deliver the Initial Collateral to the
Indenture Trustee under the Indenture, and had duly authorized such
assignment, pledge and delivery to the Indenture Trustee by all
necessary corporate action.
(xiii) Immediately prior to the grant to the Indenture Trustee of
the Conventional Certificates securing the Bonds to be underwritten at
such time
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pursuant to this Agreement, the Company owned such Conventional
Certificates, free and clear of any Lien, except the lien of the
Indenture; each such Conventional Certificate has been duly and
validly assigned, pledged and delivered by the Company to the
Indenture Trustee or its nominee under the Indenture; the Indenture,
together with such assignment, pledge and delivery of each such
Conventional Certificate, the filing of a UCC-1 financing statement
with respect to the Conventional Certificates with the office of the
Secretary of State of the State of Texas and in such other
jurisdictions, if any, as such counsel deems appropriate, and the
possession by the Indenture Trustee, or its nominee, of the
Conventional Certificates not represented by book-entry accounts and
of the other assets comprising the Initial Collateral, create as
security for such Bonds a valid and perfected security interest in the
Trust Estate as security for the repayment of such Bonds free and
clear of any prior Lien; a UCC-1 financing statement with respect to
the security interest created by the Indenture has been filed in the
office of the Secretary of State of the State of Texas and in such
other offices, if any, as such counsel deems appropriate; no other
recordings or filings in any jurisdiction are necessary to perfect the
security interest of the Indenture Trustee in the Initial Collateral
as against any third party, and no further action is required to
create, attach or perfect such security interest except that:
(A) appropriate continuation statements with respect to the UCC-1
financing statements referred to above must be filed within six
months prior to the expiration of each consecutive five-year
period commencing upon the date of initial filing, and
(B) with respect to items of Initial Collateral and the distributions
thereof, a perfected security interest in which is perfected by
delivery of possession, possession of such items must be
maintained by the Indenture Trustee or its bailee (other than an
affiliate of the Company).
(xiv) The Registration Statement is effective under the 1933 Act,
and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under
the 1933 Act and no proceedings for that purpose have been instituted
or threatened by the Commission. The Indenture has been duly qualified
under the 1939 Act.
(xv) The Registration Statement and the applicable Final
Prospectus, and each amendment or supplement thereto (other than the
financial statements, schedules, notes thereto, and the financial and
statistical data included therein and any documents incorporated by
reference in the Registration Statement and the applicable Final
Prospectus, including without limitation the Current Report, in each
case as to which no opinion need be rendered), as of their respective
effective or issue dates, complied as to form in all material respects
with the requirements of the 1933 Act, the 1933 Act Regulations, the
1939 Act and the 1939 Act Regulations; and each document, if any,
filed pursuant to the 1934 Act (other than the financial statements,
schedules, notes thereto, and the financial and statistical data
included therein and any documents incorporated by reference in
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the Registration Statement and the applicable Final Prospectus,
including without limitation the Current Report, in each case as to
which no opinion need be rendered) and incorporated by reference in
the applicable Final Prospectus, complied when so filed as to form in
all material respects with the 1934 Act and the rules and regulations
thereunder.
(xvi) The statements in the applicable Final Prospectus under the
caption "Certain Federal Income Tax Consequences", to the extent they
constitute matters of law or legal conclusions, have been prepared or
reviewed by such counsel and correctly represent the opinion of such
counsel; the descriptions in such Final Prospectus of statutes, legal
and governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown.
(xvii) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened which are
required to be disclosed therein, nor any contracts or documents of a
character required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits thereto (other
than financial statements, schedules, and notes thereto and the
financial and statistical data included therein and the other
documents, if any, incorporated by reference therein, as to which no
opinion need be rendered).
(xviii) The Company is not, and will not as a result of the offer
and sale of the Bonds as contemplated in this Agreement and any
applicable Terms Agreement, become an "investment company" as such
term is defined in the Investment Company Act which would be required
to register under the Investment Company Act.
(xix) Nothing has come to the attention of such counsel that
would lead them to believe that the Registration Statement or any
amendment thereto (other than the financial statements, schedules,
notes thereto and the financial and statistical data included therein
and any documents incorporated by reference therein including without
limitation the Current Report related thereto, in each case as to
which no opinion need be rendered), at their respective effective
dates, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Final
Prospectus or any amendment or supplement thereto (other than the
Current Report related thereto, in each case as to which no opinion
need be rendered), at their respective issue dates or, as amended or
supplemented (except as aforesaid), at Closing Time, contained an
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(xx) The Bonds to be underwritten at such time pursuant to this
Agreement, or the Classes thereof as are identified in such opinion
for these
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purposes, will be "mortgage related securities", as defined in Section
3(a)(41) of the 1934 Act, so long as such Bonds or the identified
Classes are rated in one of the two highest rating categories by at
least one nationally recognized statistical rating organization.
(2) The opinion, addressed to the Underwriters and dated the Closing Time,
of counsel to Capstead in form and substance reasonably satisfactory to you and
counsel for the Underwriters, to the effect that:
(i) Capstead has been duly organized and is validly existing as a
corporation, in good standing under the laws of the jurisdiction of
its organization with corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
applicable Final Prospectus.
(ii) Capstead is not, nor will it be, as a result of its entering
into this Agreement and consummating the transactions contemplated
hereby, in violation of its charter or bylaws, and to the best of such
counsel's knowledge, is not in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or
by which it or its properties may be bound.
(iii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending, or, to the best of such counsel's knowledge, against Capstead
which could reasonably be expected to interfere with or adversely
affect the consummation of the transactions contemplated herein.
(iv) The execution and delivery of this Agreement and the
applicable Terms Agreement, the incurrence of the obligations herein
and therein set forth and the consummation of the transactions
contemplated herein and therein have been duly authorized by Capstead
by all necessary corporate action; and this Agreement and the
applicable Terms Agreement have been duly authorized, executed and
delivered by Capstead.
(v) No filing or registration with, notice to or consent,
approval, authorization or order or other action of, any court or
governmental authority or agency, is required for the consummation by
Capstead of the transactions contemplated by this Agreement or the
applicable Terms Agreement, except such as have been obtained and
except such as may be required under state securities or Blue Sky laws
in connection with the distribution of the Bonds to be underwritten at
such time pursuant to this Agreement by the Underwriters.
(c) At the Closing Time you shall have received the opinion of Xxxxxxx
& Xxxxx L.L.P., addressed to the Underwriters and dated the Closing Time,
with respect to certain tax matters, in substantially the same form as
their opinion filed as Exhibit 8.1 of the Registration Statement.
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(d) At the Closing Time you shall have received the favorable
opinion, dated the Closing Time, of Xxxxx & Xxxx LLP, counsel for the
Underwriters, with respect to the matters set forth in clauses (i),
(vii), (x), (xi), (xiv), (xv), (xix) and (xx) of paragraph (b)(1) of
this Section 5 and in clause (iv) of paragraph (b)(2) of this Section
5.
(e) At the Closing Time there shall not have been, since the date
of the applicable Terms Agreement or since the respective dates as of
which information is given in the Registration Statement, any material
adverse change in the condition, financial or otherwise, earnings,
business affairs, regulatory situation or business prospects of the
Company or Capstead, whether or not arising in the ordinary course of
business, and you shall have received, at the Closing Time, a
certificate of the Chairman of the Board, the President, any Senior
Executive Vice President, Executive Vice President, Senior Vice
President, Vice President or Authorized Officer of the Company and of
Capstead to the effect that there has been no such material adverse
change and to the effect that the other representations and warranties
of the Company and Capstead contained in Section 1 are true and
correct with the same force and effect as though made at and as of the
Closing Time.
(f) The Company and you shall have received from Deloitte &
Touche (the "Independent Accountants") an agreed upon procedures
letter, dated as of the date of the applicable Terms Agreement and
delivered simultaneously with the printing of the Final Prospectus, in
form and substance satisfactory to you. In addition, the Company and
you shall have received from the Independent Accountants an agreed
upon procedures letter, in form and substance satisfactory to you,
with respect to the Section 8 Materials.
(g) At the Closing Time, you and the Company shall have received
the favorable opinion of counsel for the Indenture Trustee, addressed
to the Underwriters and the Company and dated the Closing Time, in
form and substance satisfactory to you and counsel for the
Underwriters and the Company, to the effect that:
(i) The Indenture Trustee is duly incorporated, validly
existing and in good standing as a national banking association
under the laws of the United States of America, with full
corporate and trust power and authority to conduct its business
and affairs as a Indenture Trustee;
(ii) The Indenture Trustee has full power and authority to
execute and deliver the Indenture and to perform its obligations
thereunder;
(iii) The Indenture Trustee has duly accepted the office of
Indenture Trustee under the Indenture; and
(iv) The Indenture Trustee has duly authorized, executed and
delivered the Indenture.
(h) At the Closing Time, the Bonds then to be underwritten
pursuant to this Agreement shall be rated in the highest rating
category by the rating agencies requested to rate such Bonds or such
other rating category as the related Terms Agreement shall state.
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(i) At the Closing Time, counsel for the Underwriters shall have
been furnished with such documents and opinions (including copies of
insurance policies described in the applicable Final Prospectus and
opinions of counsel with respect to such policies) as they may
reasonably require for the purpose of enabling them to pass upon the
Registration Statement, the applicable Final Prospectus, the issuance
and sale of the Bonds then to be underwritten pursuant to this
Agreement as contemplated in the applicable Terms Agreement and
related proceedings, or in order to evidence the accuracy of any of
the representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
and Capstead in connection with the issuance and sale of the Bonds
then to be underwritten pursuant to this Agreement as contemplated in
the applicable Terms Agreement and in the Indenture shall be
reasonably satisfactory in form and substance to you and counsel for
the Underwriters.
If any condition in this Section shall not have been fulfilled when
and as required to be fulfilled, this Agreement and the applicable Terms
Agreement may be terminated by you by notice to the Company at any time at
or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4.
SECTION 6. Indemnification. (a) The Company and Capstead, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, preliminary prospectus
supplement or the Final Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements
therein in the light of the circumstances under which they were
made not misleading; provided, however, that (A) the Company
shall not be liable in any such case if such untrue statement or
omission or such alleged untrue statement or omission was made
(1) in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through you expressly
for use in the Registration Statement (or any amendment thereto)
or in any preliminary prospectus, preliminary prospectus
supplement or each Final Prospectus (or any amendment or
supplement thereto) or (2) in any Current Report or any amendment
or supplement thereof, except to the extent that any untrue
statement or alleged untrue statement therein results (or is
alleged to have resulted) directly from an error (a "Mortgage
Collateral Error") in the information concerning the
characteristics of the Mortgage Loans furnished by the Company to
you in writing or by electronic transmission that was used in the
preparation of either (x) any Section 8 Materials (or amendments
or supplements thereof) included in such Current Report (or
amendment or supplement thereof) or (y) any
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written or electronic materials furnished to prospective
investors on which the Section 8 Materials (or amendments or
supplements thereof) were based; (B) such indemnity with respect
to any Corrected Statement (as defined below) in such Final
Prospectus (or supplement thereto) shall not inure to the benefit
of any Underwriter (or any person controlling any Underwriter)
from whom the person asserting any loss, claim, damage or
liability purchased the Bonds that are the subject thereof if
such person did not receive a copy of a supplement to such Final
Prospectus at or prior to the confirmation of the sale of such
Bonds and the untrue statement or omission of a material fact
contained in such Final Prospectus (or supplement thereto) was
corrected (a "Corrected Statement") in such other supplement and
such supplement was furnished by the Company to you prior to the
delivery of such confirmation; and (C) such indemnity with
respect to any Mortgage Collateral Error shall not inure to the
benefit of any Underwriter (or any person controlling the
Underwriter) from whom the person asserting any loss, claim,
damage or liability received any Section 8 Materials (or any
written or electronic materials on which the Section 8 Materials
are based) that were prepared on the basis of such Mortgage
Collateral Error, if, prior to the time of confirmation of the
sale of the applicable Bonds to such person, the Company notified
you in writing of the Mortgage Collateral Error or provided in
written or electronic form information superseding or correcting
such Mortgage Collateral Error (in any such case a "Corrected
Mortgage Collateral Error"), and such Underwriter failed to
notify such person thereof or to deliver to such person corrected
Section 8 Materials (or underlying written or electronic
materials relating thereto);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based, in each case, upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected with the
written consent of the Company;
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel
chosen by you) reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding
by any governmental agency or body, commenced or threatened or
any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under paragraphs (i)
or (ii) above;
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed
the Registration Statement, Capstead and each person, if any, who
controls the Company or Capstead within the meaning of Section 15 of
the 1933 Act and the officers and directors of any such person against
any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, but only
with respect to untrue statements or
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omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any preliminary
prospectus, preliminary prospectus supplement or the Final Prospectus
(or any amendment or supplement thereto) in reliance upon and in
conformity with (i) written information furnished to the Company by
such Underwriter expressly for use in the Registration Statement (or
any amendment thereto) or in any preliminary prospectus, preliminary
prospectus supplement or each Final Prospectus (or any amendment or
supplement thereto) or (ii) any Section 8 Materials (or amendments or
supplements thereof) furnished to the Company by such Underwriter
pursuant to Section 8 hereof and incorporated by reference in such
Registration Statement or the related Final Prospectus or any
amendment or supplement thereto (except that no such indemnity shall
be available for any losses, claims, damages or liabilities, or
actions in respect thereof, resulting from any Mortgage Collateral
Error, other than a Corrected Mortgage Collateral Error).
(c) Promptly after receipt by an indemnified party under Section
6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 6, notify such indemnifying
party in writing of the commencement thereof; but the omission so to
notify such indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under this
Section 6. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party or parties of the
commencement thereof, the indemnifying party or parties will be
entitled to participate therein, and to the extent that they may elect
by written notice delivered to an indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume
the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action
include both an indemnified party and an indemnifying party and such
indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which
are different from or addition to those available to any indemnifying
party, such indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from an
indemnifying party or parties to such indemnified party of their
election so to assume the defense of such action and approval by such
indemnified party or counsel, such indemnifying party or parties will
not be liable to such indemnified party under this Section 6 for any
legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof unless (i) such
indemnified party shall have employed separate counsel in connection
with the assertion of legal defenses in accordance with the proviso to
the next preceding sentence (it being understood, however, that the
indemnifying party or parties shall not be liable for the expenses of
more than one separate counsel approved by the indemnified party or
parties in the case of subparagraph (a) or (b) above, representing the
indemnified parties under subparagraph (a) or (b) above, who are
parties to such action), (ii) the indemnifying party or parties shall
not have employed counsel satisfactory to the indemnified party or
parties to represent such indemnified party or parties within a
reasonable time after notice of commencement of the action or (iii)
the indemnifying party or parties have authorized the employment of
counsel for an indemnified party at
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the expense of the indemnifying parties; and except that, if clause
(i) or (iii) is applicable, such liability shall be only in respect of
the counsel referred to in such clause (i) or (iii).
(d) The indemnity agreement provided by this Section 6 shall be
in addition to any liability the Company and the Underwriters shall
otherwise have.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for
in Section 6 is for any reason held to be unavailable to or insufficient to
hold harmless the indemnified parties although applicable in accordance
with its terms, the Company and Capstead, on the one hand, and the
Underwriters on the other, shall:
(a) in the case of any losses, claims, damages and liabilities
(or actions in respect thereof) relating to a class or classes of any
Series of Bonds (a "Class" or "Classes," as the case may be) which do
not arise out of or are not based upon any untrue statement or
omission of a material fact in any Section 8 Materials (or any
amendments or supplements thereof), contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred in respect of any
Class or Classes underwritten pursuant to this Agreement by the
Company or Capstead and the Underwriter of such Class or Classes, as
incurred, in such proportions that the Underwriter of such Class or
Classes is responsible for that portion represented by the percentage
that the difference between the proceeds to the Company appearing on
the cover page of the applicable Final Prospectus and the total of all
proceeds received by such Underwriter from the sale of all Bonds
underwritten by it (the "Underwriting Discount") bears to the total
proceeds received by such Underwriter from such Bonds, and the Company
and Capstead are responsible for the balance;
(b) in the case of any losses, claims, damages and liabilities
(or actions in respect thereof) which arise out of or are based upon
any untrue statement or omission of a material fact in any Section 8
Materials (or any amendments or supplements thereof), contribute to
the aggregate losses, liabilities, claims, damages and expenses of the
nature contemplated by said indemnity agreement incurred in respect of
any Class or Classes underwritten pursuant to this Agreement by the
Company or Capstead, and the Underwriter of such Class or Classes, as
incurred, in such proportion as is appropriate to reflect the relative
fault of the Company and Capstead on the one hand and such Underwriter
on the other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages and expenses (or
actions in respect thereof) as well as any other relevant equitable
considerations; provided that in no event shall such Underwriter be
responsible for an amount greater than the excess, if any, of (i) the
total proceeds received by such Underwriter in the sale of all Bonds
underwritten by it (taking into account any gains or losses realized
by such Underwriter in any hedging transactions directly related to
the Bonds) over (ii) the proceeds received by the Company in respect
of the Bonds purchased by such Underwriter.
provided, however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any,
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who controls an Underwriter within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as such Underwriter and each
director of the Company, each officer of the Company and Capstead who
signed the Registration Statement, and each person, if any, who controls
the Company or Capstead within the meaning of Section 15 of the 1933 Act
and the officers and directors of any such person shall have the same
rights to contribution as the Company or Capstead.
SECTION 8. Computational Materials and Structural Term Sheets. (a) As
soon as practicable and in no event later than 3:00 p.m. Dallas, Texas time
one Business Day before the date on which the Final Prospectus relating to
the Bonds of a Series is required to be filed by the Company with the
Commission pursuant to Rule 424 under the 1933 Act, you shall deliver to
the Company five complete copies of all materials provided by you to
prospective investors regarding the Class or Classes being underwritten by
you which constitute (i) "Computational Materials" within the meaning of
the no-action letter dated May 20, 1994 issued by the Division of
Corporation Finance of the Commission to Xxxxxx, Xxxxxxx Acceptance
Corporation I, Xxxxxx, Peabody & Co. Incorporated, and Xxxxxx Structured
Asset Corporation and the no-action letter dated May 27, 1994 issued by the
Division of Corporation Finance of the Commission to the Public Securities
Association (together, the "Xxxxxx Letters") and the filing of such
material is a condition of the relief granted in such letter (such
materials being the "Computational Materials"), and (ii) "Structural Term
Sheets" within the meaning of the no-action letter dated February 17, 1995
issued by the Division of Corporation Finance of the Commission to the
Public Securities Association (the "PSA Letter") and the filing of such
material is a condition of the relief granted in such letter (such
materials being the "Structural Term Sheets"). Each delivery of
Computational Materials or Structural Terms Sheets to the Company pursuant
to this paragraph (a) shall be effected by delivering four copies of such
materials to counsel for the Company at Xxxxxxx & Xxxxx L.L.P., 0000 Xxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, or such other address specified by
such counsel to you in writing, and one copy of such materials to the
Company.
(b) You represent and warrant to and agree with the Company, as of the
date of the related Terms Agreement and as of the Closing Date, that:
(i) the Computational Materials furnished to the Company
pursuant to Section 8(a) constitute (either in original,
aggregated or consolidated form) all of the materials furnished
to prospective investors by the Underwriters prior to the time of
delivery thereof to the Company that are required to be filed
with the Commission with respect to the related Bonds in
accordance with the Xxxxxx Letters, and such Computational
Materials comply with the requirements of the Xxxxxx Letters;
(ii) the Structural Term Sheets furnished to the Company by
such Underwriter pursuant to Section 8(a) constitute all of the
materials furnished to prospective investors by such Underwriter
prior to the time of delivery thereof to the Company that are
required to be filed with the Commission as "Structural Term
Sheets" with respect to the related Offered Securities in
accordance with the PSA Letter, and such Structural Term Sheets
comply with the requirements of the PSA Letter; and
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(iii) on the date any such Computational Materials or
Structural Term Sheets with respect to such Bonds (or any written
or electronic materials furnished to prospective investors on
which the Computational Materials or Structural Term Sheets are
based) were last furnished to each prospective investor and on
the date of delivery thereof to the Company pursuant to Section
8(a) and on the related Closing Date, such Computational
Materials or Structural Term Sheets (or any such written or
electronic materials furnished to prospective investors on which
the Computational Materials or Structural Term Sheets are based)
did not and will not include any untrue statement of a material
fact or, when read in conjunction with the Final Prospectus and
Prospectus Supplement, omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
Notwithstanding the foregoing, you make no representation or warranty as to
whether any Computational Materials or Structural Term Sheets (or any written or
electronic materials on which the Computational Materials or Structural Term
Sheets are based) included or will include any untrue statement resulting
directly from any Mortgage Collateral Error (except any Corrected Mortgage
Collateral Error, with respect to materials prepared after the receipt by you
from the Company of notice of such Corrected Mortgage Collateral Error or
materials superseding or correcting such Corrected Mortgage Collateral Error).
(c) You acknowledge and agree that the Company has not authorized and will
not authorize the distribution of any Computational Materials or Structural Term
Sheets to any prospective investor, and agree that any Computational Materials
or Structural Term Sheets with respect to any Series of Bonds furnished to
prospective investors from and after the date hereof shall include a disclaimer
in form reasonably satisfactory to the Company. You agree that you will not
represent to investors that any Computational Materials or Structural Term
Sheets were prepared or disseminated on behalf of the Company. This disclaimer
shall not alter the rights or obligations of the parties hereto pursuant to
Sections 6 and 7 hereof.
(d) If, at any time when a prospectus relating to the Bonds of a Series is
required to be delivered under the 1933 Act, it shall be necessary to amend or
supplement the related Final Prospectus as a result of an untrue statement of a
material fact contained in any Computational Materials or Structural Term Sheets
provided by you pursuant to this Section 8 or the omission to state therein a
material fact required, when considered in conjunction with the Final Prospectus
and Prospectus Supplement, to be stated therein or necessary to make the
statements therein, when read in conjunction with the Final Prospectus and
Prospectus Supplement, not misleading, or if it shall be necessary to amend or
supplement any Current Report relating to any Computational Materials or
Structural Term Sheets to comply with the 1933 Act or the rules thereunder, you
promptly will prepare and furnish to the Company for filing with the Commission
an amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance. You represent and warrant to the
Company, as of the date of delivery of such amendment or supplement to the
Company, that such amendment or supplement will not include any untrue statement
of a material fact or, when read in conjunction with the Final Prospectus and
Prospectus Supplement, omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The Company
shall have no obligation to file such amendment or supplement if the Company
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determines that (i) such amendment or supplement contains any untrue statement
of a material fact or, when read in conjunction with the Final Prospectus and
Prospectus Supplement, omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (it being
understood, however, that the Company shall have no obligation to review or pass
upon the accuracy or adequacy of, or to correct, any such amendment or
supplement provided by the Underwriter to the Company pursuant to this paragraph
(d)) or (ii) such filing is not required under the Act; provided that, in the
event the Company makes such a determination, it shall immediately notify you in
writing of the reasons for such determination; and, provided, further, that it
shall file such amendment or supplement if you specifically confirm in writing
to the Company that (A) such amendment or supplement does not contain any untrue
statement of a material fact or, when read in conjunction with the Final
Prospectus and Prospectus Supplement, omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading and
(B) you are advising the Company to file such amendment or supplement.
(e) You will cooperate with, and provide any information necessary to the
Independent Accountants so that they may complete and deliver their agreed-upon
procedures letter described in Section 5(f) hereof in a timely manner so that
such letter may be delivered to the Company by not later than 5:00 p.m. New York
time, on the Business Day before the date on which the Current Report described
in Section 3(b) is required to be filed with the Commission.
SECTION 9. Representations, Warranties, and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company or Capstead submitted
pursuant hereto or as contemplated hereby, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of the
Company or Capstead or a controlling person thereof, and shall survive delivery
of any Bonds to the Underwriters.
SECTION 10. Termination of Agreement. (a) This Agreement may be terminated
for any reason at any time by either the Company or you upon the giving of
thirty days' written notice of such termination to the other party hereto;
provided, however, that if a Terms Agreement has been entered into but the
applicable Closing Time has not occurred, this Agreement shall not be terminated
pursuant to this Section 10(a) prior to such Closing Time.
(b) You may terminate this Agreement or such Terms Agreement, by notice to
the Company, at any time at or prior to the Closing Time, (i) if there has been,
since the respective dates as of which information is given in the Registration
Statement or the applicable Final Prospectus, any material adverse change in the
condition, financial or otherwise, earnings, business affairs, regulatory
situation or business prospects of the Company or Capstead, whether or not
arising in the ordinary course of business, (ii) if there shall have occurred
any material adverse change in the financial markets of the United States or any
outbreak or escalation of hostilities or other national or international
calamity or crisis the effect of which is such as to make it, in your judgment,
impracticable to market the Bonds or enforce contracts for the sale of the
Bonds, or (iii) if trading in any securities of the Company has been suspended
by the Commission or a national securities exchange, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange shall have
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have
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been required, by either of said exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium shall have been
declared by either Federal or New York authorities, or (iv) if the rating
assigned by any nationally recognized securities rating agency requested to rate
any specific debt securities of the Company as of the date of any applicable
Terms Agreement shall have been lowered since that date or if any such rating
agency shall have publicly announced that it has under surveillance or review,
with possible negative implications, its requested rating of such debt
securities of the Company, or (v) if there shall have come to your attention any
facts that would cause you to believe that the applicable Final Prospectus, at
the time it was required to be delivered to a purchaser of the Bonds offered
thereby, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances existing at the time of such delivery, not misleading.
(c) In the event of any such termination, (i) the covenants set forth in
Section 3 with respect to any offering of Bonds shall remain in effect so long
as any Underwriter owns any such Bonds purchased from the Company pursuant to
the applicable Terms Agreement and (ii) the provisions of Section 4, the
indemnity agreement set forth in Section 6, the contribution provisions set
forth in Section 7, and the provisions of Sections 8, 9 and 14 shall remain in
effect.
SECTION 11. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time to purchase the Bonds which it
or they are obligated to purchase hereunder and under the applicable Terms
Agreement (the "Defaulted Bonds"), you shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Bonds in such amounts as may be agreed upon and upon the terms
herein set forth and under the applicable Terms Agreement. If, however, you have
not completed such arrangements within such 24-hour period, then:
(a) if the aggregate original principal amount of Defaulted Bonds does
not exceed 10% of the aggregate original principal amount of the Bonds to
be purchased pursuant to such Terms Agreement, the non-defaulting
Underwriters named in such Terms Agreement shall be obligated to purchase
the full amount thereof in the proportions that their respective
underwriting obligations thereunder bear to the underwriting obligations of
all non-defaulting Underwriters; and
(b) if the aggregate original principal amount of Defaulted Bonds
exceeds 10% of the aggregate original principal amount of the Bonds to be
purchased pursuant to such Terms Agreement, the applicable Terms Agreement
shall terminate without any liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 11 and nothing in this Agreement
shall relieve any defaulting Underwriter from liability in respect of its
default.
In the event of any such default which does not result in a termination of
this Agreement or such applicable Terms Agreement, either you or the Company
shall have the right to postpone the Closing Time for a period of time not
exceeding seven days in order to effect any required changes in the Registration
Statement or in any other documents or arrangements.
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SECTION 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of written telecommunication. Notices to the
Company shall be directed to its agent for service set forth on the cover page
of the Registration Statement, notices to the Company shall be directed to it at
CityPlace Center East, 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
Attention: Xxxx X. Xxxxx and notices to you shall be directed to you c/o
Greenwich Capital Markets, Inc., 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx
00000, or in respect of any Terms Agreement, to such other person and place
agreed upon by those of you who are parties to such Terms Agreements.
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
binding upon you, the Company and Capstead, and any Terms Agreement shall inure
to the benefit of and be binding upon the Company and Capstead and any
Underwriter who becomes a party to such Terms Agreement, and their respective
successors. Nothing expressed or mentioned in this Agreement or any Terms
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and officers and directors referred to in Sections 6 and
7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any Terms Agreement or
any provision herein or therein contained. This Agreement and any Terms
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto and thereto and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Bonds from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT AND EACH TERMS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
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If the foregoing is in accordance with your understanding hereof, the
form of acceptance set forth below should be signed by you, whereupon this
instrument along with all counterparts will become a binding agreement among the
Company, Capstead, and us in accordance with its terms.
Very truly yours,
CAPSTEAD SECURITIES CORPORATION IV
By: /s/ XXXX XXXXXX
--------------------------------------
Xxxx Xxxxxx
Vice President - Asset and Liability
Management
CAPSTEAD MORTGAGE CORPORATION
By: /s/ XXXX XXXXXX
--------------------------------------
Xxxx Xxxxxx
Vice President - Asset and Liability
Management
ACCEPTED at Greenwich, Connecticut as
of the date first above written.
GREENWICH CAPITAL MARKETS, INC.
By: /s/ XXXX XXXX XXXXXX
--------------------------------
Name: Xxxx Xxxx Xxxxxx
--------------------------
Position: Vice President
----------------------
29
EXHIBIT A
CAPSTEAD SECURITIES CORPORATION IV
(a Delaware corporation)
Collateralized Mortgage Obligations, Series 199_-__
Terms Agreement
Dated:
-------------------
Capstead Securities Corporation IV
CityPlace Center East
0000 X. Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Re: Underwriting Agreement dated ________ __, 199_
Title of Bonds:
The Bonds: The Series 199_-__ Bonds (the "Series 199_-__ Bonds") shall be as
follows:
(a) Principal amount to be issued: $
-------------
(b) Public offering price:
(c) Purchase price:
[plus accrued interest from .]
---------------
(d) Payment Dates:
(e) Accrual Periods:
(f) Bond Rating: It is a condition to the issuance of the Series 199_-__
Bonds that they be rated "___" by
---------------.
Section 2. Closing; Stand-Off Period:
(a) Closing date and location:
(b) Type of funds to be delivered by the Underwriters at the Closing:
(c) Expiration date of Stand-Off Period:
(d) Securities excluded from Stand-Off Period restrictions:
Section 3. Co-managers:
30
Section 4. Purchase by the Underwriter(s):
The Underwriter(s) agrees, subject to the terms and provisions herein and
of the above-referenced Underwriting Agreement (as modified and amended by the
terms hereof), which is incorporated herein in its entirety and made a part
hereof, to purchase [the entire aggregate principal amount of the Series 199_-__
Bonds in the Classes set forth in Section 1 hereof].
[Name of Underwriter]
By:
--------------------------------------
Name:
---------------------------------
Position:
----------------------------
[Name of Underwriter]
By:
--------------------------------------
Name:
---------------------------------
Position:
----------------------------
31
Accepted:
CAPSTEAD SECURITIES CORPORATION IV
By:
--------------------------------------
Name:
---------------------------------
Position:
----------------------------
CAPSTEAD MORTGAGE CORPORATION
By:
--------------------------------------
Name:
---------------------------------
Position:
----------------------------
