Exhibit 1.5
XXXXXXXXX MORTGAGE, INC.
5,500,000 Shares
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
August 7, 2001
August 7, 2001
UBS WARBURG LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
X.X. XXXXXXX & SONS, INC.
U.S. BANCORP XXXXX XXXXXXX INC.
as representatives of the several underwriters,
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxxxxxx Mortgage, Inc., a Maryland corporation (the "Company"), proposes
to issue and sell to the underwriters named in Schedule A annexed hereto (the
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"Underwriters"), for whom UBS Warburg LLC ("UBS Warburg"), Credit Suisse First
Boston Corporation, X.X. Xxxxxxx & Sons, Inc. and U.S. Bancorp Xxxxx Xxxxxxx
Inc. are acting as representatives, an aggregate of 5,500,000 shares (the "Firm
Shares") of common stock, $0.01 par value (the "Common Stock"), of the Company.
In addition, solely for the purpose of covering over-allotments, the Company
proposes to grant to the Underwriters the option to purchase from the Company up
to an additional 825,000 shares of Common Stock (the "Additional Shares"). The
Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the "Shares." The Shares are described in the Prospectus which
is referred to below.
The Company has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the "Securities Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, (File No. 333-61966)
including a prospectus (the "Registration Statement"), with respect to the
Shares, which amends pursuant to Rule 429 of the Securities Act the Company's
earlier registration statement on Form S-3 (File No. 333-16799) (the "Prior
Registration Statement") and which incorporates by reference documents which the
Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "Exchange Act"). The Company has prepared a
prospectus supplement (the "Prospectus Supplement") to the prospectus included
as part of the Registration Statement setting forth the terms of the offering,
sale and plan of distribution of the Shares and additional information
concerning the Company and its business. The Company has furnished to UBS
Warburg, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses, containing the prospectus included as part of the
Registration Statement, as supplemented by a preliminary Prospectus Supplement,
and including the documents incorporated in such prospectus by reference (each,
a "Preliminary Prospectus"), relating to the Shares. Except where the context
otherwise requires, the Registration Statement and the Prior Registration
Statement, as amended when each became effective, including all documents filed
as part thereof or incorporated by reference
therein, and including any information contained in a Prospectus (as defined
below) subsequently filed with the Commission pursuant to Rule 424(b) under the
Securities Act, are herein called the "Registration Statements," and the
prospectus, including all documents incorporated therein by reference, included
in the Registration Statement, as supplemented by the Prospectus Supplement, in
the form filed by the Company with the Commission pursuant to Rule 424(b) under
the Securities Act on or before the second Business Day (as defined below)
following the date of this Underwriting Agreement (the "Agreement") (or on such
other day as the parties may mutually agree), is herein called the "Prospectus."
Any reference herein to the Registration Statements, the Prospectus, any
Preliminary Prospectus or any amendment or supplement thereto shall be deemed to
refer to and include the documents incorporated by reference therein, and any
reference herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statements, the Prospectus or any Preliminary Prospectus
shall be deemed to refer to and include the filing after the execution hereof of
any document with the Commission deemed to be incorporated by reference therein.
For purposes of this Agreement, all references to the Registration Statements,
the Prospectus, any Preliminary Prospectus or to any amendment or supplement
thereto shall be deemed to include any copy filed with the Commission pursuant
to its Electronic Data Gathering Analysis and Retrieval System ("XXXXX"), and
such copy shall be identical in content to any Prospectus or Preliminary
Prospectus delivered to the Underwriters for use in connection with the offering
of the Shares.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
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representations and subject to the terms and conditions herein set forth, the
Company agrees to issue and sell the Firm Shares to the several Underwriters,
and each of the Underwriters, severally and not jointly, agrees to purchase from
the Company the respective number of Firm Shares (subject to such adjustment as
UBS Warburg may determine to avoid fractional shares) set forth opposite the
name of such Underwriter in Schedule A annexed hereto at a purchase price of $
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15.08 per Share. The Company is advised by UBS Warburg that the Underwriters
intend (i) to make a public offering of the Shares as soon as the Underwriters
deem advisable after this Agreement has been executed and delivered and (ii)
initially to offer the Firm Shares upon the terms set forth in the Prospectus.
The Underwriters may from time to time increase or decrease the public offering
price after the initial public offering to such extent as they may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company ratably
in accordance with the number of Firm Shares to be purchased by each of them
(subject to such adjustment as UBS Warburg shall determine to avoid fractional
shares), all or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for
the Firm Shares. This option may be exercised by UBS Warburg on behalf of the
several Underwriters at any time (but not more than once) on or before the
thirtieth day following the date hereof, by written notice to the Company. Such
notice shall set forth the aggregate number of Additional Shares as to which the
option is being exercised and the date and time when the Additional Shares are
to be delivered (such date and time being herein referred to as the "additional
time of purchase"); provided, however, that the additional time of purchase
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shall not be (i) earlier than the time of purchase (as defined below) or (ii)
later than the tenth Business Day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the
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aggregate number of Firm Shares (subject, in each case, to such adjustment as
UBS Warburg may determine to eliminate fractional shares). As used herein
"Business Day" shall mean a day on which the New York Stock Exchange is open for
trading or commercial banks in the City of New York are open for business.
2. Payment and Delivery. Payment of the purchase price for the Firm
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Shares shall be made to the Company by federal funds wire transfer against
delivery of the certificates for the Firm Shares to UBS Warburg through the
facilities of the Depository Trust Company ("DTC") for the respective accounts
of the Underwriters. Such payment and delivery shall be made at 10:00 A.M., New
York City time, on August 13, 2001 (unless another time shall be agreed to by
UBS Warburg and the Company or unless postponed in accordance with the
provisions of Section 8 hereof). The time at which such payment and delivery are
actually made is herein sometimes called the "time of purchase." Certificates
for the Firm
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Shares shall be delivered to UBS Warburg, through the facilities of DTC, in
definitive form in such names and in such denominations as UBS Warburg shall
specify no later than the second Business Day preceding the time of purchase.
For the purpose of expediting the checking of the certificates for the Firm
Shares by UBS Warburg, the Company agrees to make such certificates available to
UBS Warburg for such purpose at least one full Business Day preceding the time
of purchase.
Payment of the purchase price for the Additional Shares shall be made at
the additional time of purchase in the same manner and at the same office as the
payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to UBS Warburg, through the facilities of DTC, in definitive form in
such names and in such denominations as UBS Warburg shall specify no later than
the second Business Day preceding the additional time of purchase. For the
purpose of expediting the checking of the certificates for the Additional Shares
by UBS Warburg, the Company agrees to make such certificates available to UBS
Warburg for such purpose at least one full Business Day preceding the additional
time of purchase.
3. Representations and Warranties of the Company. The Company and, where
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applicable, the Manager (as defined below) represent and warrant to each of the
Underwriters that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act. The Registration Statements have been filed with the Commission
and have been declared effective under the Securities Act. The Company has not
received, and has no notice of, any order of the Commission preventing or
suspending the use of the Registration Statements, or threatening or instituting
proceedings for that purpose. Any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement have been so
described or filed. The Prospectus Supplement has been or will be so prepared
and will be filed pursuant to Rule 424(b) of the Securities Act on or before the
second Business Day following the date of this Agreement or on such other day as
the parties may mutually agree. The Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to the requirements of the
Securities Act. Copies of the Registration Statements, the Preliminary
Prospectus and the Prospectus, any such amendments or supplements and all
documents incorporated by reference therein that were filed with the Commission
on or prior to the date of this Agreement (including one fully executed copy of
each of the Registration Statements and of each amendment thereto for the
Underwriters) have been delivered to the Underwriters and their counsel. Neither
the Company nor the Manager has distributed any offering material in connection
with the offering or sale of the Shares other than the Registration Statement,
the Preliminary Prospectus, the Prospectus or any other materials, if any,
permitted by the Securities Act.
(b) Each part of the Registration Statement, when such part became or
becomes effective or was or is filed with the Commission, and the Prospectus and
any amendment or supplement thereto, on the date of filing thereof with the
Commission and at the time of purchase and, if applicable, at the additional
time of purchase, conformed or will conform in all material respects with the
requirements of the Securities Act. Each part of the Registration Statement,
when such part became or becomes effective or was or is filed with the
Commission, did not or will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and at the
time of purchase and, if applicable, at the additional time of purchase, did not
or will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
foregoing shall not apply to statements in, or omissions from, any such document
in reliance upon, and in conformity with, written information concerning the
Underwriters that was furnished in writing to the Company by UBS Warburg, on
behalf of the several Underwriters, specifically for use in the preparation
thereof.
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(c) The documents incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto, when they
became or become effective under the Securities Act or were or are filed with
the Commission under the Securities Act or the Exchange Act, as the case may be,
conformed or will conform in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable.
(d) The consolidated financial statements of the Company and the
Subsidiaries (as defined below), together with the related schedules and notes
thereto, set forth or included or incorporated by reference in the Registration
Statement and Prospectus fairly present the financial condition of the Company
and the Subsidiaries as of the dates indicated and the results of operations,
changes in financial position, shareholders' equity and cash flows for the
periods therein specified are in conformity with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise stated therein). The selected financial and statistical data included
or incorporated by reference in the Registration Statement and the Prospectus
present fairly the information shown therein and, to the extent based upon or
derived from the financial statements, have been compiled on a basis consistent
with the financial statements presented therein. Any pro forma financial
statements of the Company and the Subsidiaries, and the related notes thereto,
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the basis described
therein, and the assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein. No other financial statements are
required to be set forth or to be incorporated by reference in the Registration
Statement or the Prospectus under the Securities Act.
(e) The Preliminary Prospectus was, and the Prospectus delivered to
the Underwriters for use in connection with this offering will be identical to
the versions of the Preliminary Prospectus and Prospectus, respectively, created
to be transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T.
(f) The Company has been duly formed and incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction, each of which is listed on Schedule B hereto,
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in which its ownership or lease of property or assets or the conduct of its
business requires such qualification, except where the failure to so qualify
would not have a material adverse effect on the business, assets, properties,
prospects, financial condition or results of operation of the Company and the
Subsidiaries taken as a whole (a "Material Adverse Effect"), and has full
corporate power and authority necessary to own, hold, lease and/or operate its
assets and properties, to conduct the business in which it is engaged and as
described in the Prospectus and to enter into and perform its obligations under
this Agreement and to consummate the transactions contemplated hereby, and the
Company is in compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by such jurisdictions.
Complete and correct copies of the articles of incorporation and of the bylaws
of the Company and all amendments thereto have been delivered to UBS Warburg
and, except as set forth in the exhibits to the Registration Statement, no
changes therein will be made subsequent to the date hereof and prior to the time
of purchase or, if applicable, the additional time of purchase.
(g) The Company has no "subsidiaries" (as such term is defined in Rule
1-02 of Regulation S-X promulgated under the Securities Act) other than
Xxxxxxxxx Mortgage Funding Corporation ("Funding I"), Xxxxxxxxx Mortgage
Acceptance Corporation ("Acceptance I"), Xxxxxxxxx Mortgage Home Loans, Inc.
("TMHL"), Xxxxxxxxx Mortgage Funding Corporation II ("Funding II") and Xxxxxxxxx
Mortgage Acceptance Corporation II ("Acceptance II") (each a "Subsidiary" and,
collectively, the "Subsidiaries"). Each of the Subsidiaries has been duly formed
and incorporated and is validly
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existing as a corporation in good standing under the laws of the State of
Delaware, is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction, each of which is listed on Schedule C hereto,
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in which its ownership or lease of property or assets or the conduct of its
business requires such qualification, except where the failure to so qualify
would not have a Material Adverse Effect, and has full corporate power and
authority necessary to own, hold, lease and/or operate its assets and
properties, to conduct the business in which it is engaged and as described in
the Prospectus and to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby, and each of
the Subsidiaries is in compliance in all material respects with the laws,
orders, rules, regulations and directives issued or administered by such
jurisdictions. Complete and correct copies of the certificates of incorporation
and of the bylaws of the Subsidiaries and all amendments thereto have been
delivered to UBS Warburg and, except as set forth in the exhibits to the
Registration Statement, no changes therein will be made subsequent to the date
hereof and prior to the time of purchase or, if applicable, the additional time
of purchase.
(h) Other than the Subsidiaries, the Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity. All of the outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable, and are wholly owned by the Company, directly
or through TMHL, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or other equity or adverse claims. The Company directly
owns 100% of each of Funding I, Acceptance I and TMHL. Funding II and Acceptance
II are wholly owned by TMHL. No options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(i) Xxxxxxxxx Mortgage Advisory Corporation (the "Manager") has been
duly formed and incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction,
each of which is listed on Schedule D hereto, in which its ownership or lease of
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property or assets or the conduct of its business requires such qualification,
and has full corporate power and authority necessary to own, hold, lease and/or
operate its assets and properties, to conduct the business in which it is
engaged and as described in the Prospectus and to enter into this Agreement, and
the Manager is in compliance in all material respects with the laws, orders,
rules, regulations and directives issued or administered by such jurisdictions.
Complete and correct copies of the certificate of incorporation and of the
bylaws of the Manager and all amendments thereto have been delivered to UBS
Warburg and no changes therein will be made subsequent to the date hereof and
prior to the time of purchase or, if applicable, the additional time of
purchase. The Manager has no "subsidiaries" (as such term is defined in Rule 1-
02 of Regulation S-X promulgated under the Securities Act).
(j) TMA Mortgage Funding Trust I and TMA Mortgage Funding Trust II
(collectively, the "Trusts") have each been duly formed and are validly existing
as business trusts under the Delaware Business Trust Act, in good standing under
the laws of Delaware, with full authority to perform all functions (i) which
business trusts are authorized to perform and (ii) which are described in the
Prospectus. The trustee for each of the Trusts is the Wilmington Trust Company.
(k) Neither the Company or any of the Subsidiaries nor the Manager is
in breach of, or in default under (nor has any event occurred which with notice,
lapse of time or both would result in any breach of, or constitute a default
under), (i) their respective charters or bylaws or (ii) any obligation,
agreement, covenant or condition contained in any contract, license, repurchase
agreement, management agreement, indenture, mortgage, deed of trust, bank loan
or credit agreement, note, lease or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which the Company,
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any of the Subsidiaries or the Manager is a party or by which the Company, the
Subsidiaries, the Manager or any of their respective assets or properties may be
bound or affected. Except as set forth in Schedule E annexed hereto, to the best
knowledge of the Company and the Manager, no other party under any contract or
other agreement to which the Company or any of the Subsidiaries is a party is in
default in any respect thereunder. The execution, delivery and performance of
this Agreement, the issuance and sale of the Shares and the consummation of the
transactions contemplated hereby will not conflict with, or result in any breach
of or constitute a default under (nor constitute any event which with notice,
lapse of time or both would result in any breach of, or constitute a default
under), (i) any provision of the charter or bylaws of the Company, any of the
Subsidiaries or the Manager, (ii) any provision of any contract, license,
repurchase agreement, management agreement, indenture, mortgage, deed of trust,
bank loan or credit agreement, note, lease or other evidence of indebtedness, or
any lease, contract or other agreement or instrument to which the Company, any
of the Subsidiaries or the Manager is a party or by which the Company, any of
the Subsidiaries or the Manager, or any of their respective assets or properties
may be bound or affected, or, with respect to the Manager, which would have a
material adverse effect on the ability of the Manager to perform its obligations
under the Management Agreement (as defined below), or (iii) any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of the Subsidiaries.
(l) As of March 31, 2001, as of the date of this Agreement and as of
the time of purchase, the Company had, has or will have an authorized, issued
and outstanding capitalization as set forth under the headings "Historical," and
"As adjusted for this offering," respectively, in the section of the Prospectus
Supplement entitled "Capitalization." All of the issued and outstanding shares
of capital stock, including the Common Stock of the Company, have been duly and
validly authorized and issued and are fully paid and non-assessable, have been
issued in compliance with all federal and state securities laws and were not
issued in violation of any preemptive right, resale right, right of first
refusal or similar right.
(m) This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except to the extent that (i)
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
equitable principles and (ii) the indemnification and contribution provisions of
Section 9 hereof may be limited by federal or state securities laws and public
policy considerations in respect thereof.
(n) The capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and Prospectus and such description conforms to the
rights set forth in the instruments defining the same. The certificates for the
Shares are in due and proper form and the holders of the Shares will not be
subject to personal liability by reason of being such holders.
(o) The Shares have been duly and validly authorized by the Company
for issuance and sale pursuant to this Agreement and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued and
fully paid and non-assessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim, and will be registered pursuant to Section 12
of the Exchange Act.
(p) No approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transaction contemplated hereby
other than (i) registration of the Shares under the Securities Act, (ii) any
necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by
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the Underwriters, or (iii) such approvals as have been obtained in connection
with the approval of the listing of the Shares on the New York Stock Exchange.
(q) No person, as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the Securities Act (each, a "Person"), has the right,
contractual or otherwise, to cause the Company to issue to it any shares of
capital stock or other securities of the Company upon the issue and sale of the
Shares to the Underwriters hereunder, nor does any Person have preemptive
rights, co-sale rights, rights of first refusal or other rights to purchase or
subscribe for any of the Shares or any securities or obligations convertible
into or exchangeable for, or any contracts or commitments to issue or sell any
of, the Shares or any such options, rights or convertible securities or
obligations, other than those that have been expressly waived prior to the date
hereof.
(r) PricewaterhouseCoopers LLP and McGladrey & Xxxxxx, LLP, whose
reports on the consolidated financial statements of the Company are filed with
the Commission as part of the Registration Statement and Prospectus, are and,
during the periods covered by their reports, were independent public accountants
as required by the Securities Act.
(s) Each of the Company, the Subsidiaries and the Manager has all
necessary licenses, permits, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary permits, authorizations,
consents and approvals from other Persons, in order to conduct its business as
described in the Prospectus. Neither the Company or any of the Subsidiaries nor
the Manager is required by any applicable law to obtain accreditation or
certification from any governmental agency or authority in order to provide the
products and services which it currently provides or which it proposes to
provide as set forth in the Prospectus. Neither the Company or any of the
Subsidiaries nor the Manager is in violation of, or in default under, any such
license, permit, authorization, consent or approval or any federal, state, local
or foreign law, regulation or rule or any decree, order or judgment applicable
to the Company or any of the Subsidiaries or the Manager.
(t) The descriptions in the Registration Statement and the Prospectus
of the legal or governmental proceedings, contracts, leases and other legal
documents therein described present fairly the information required to be shown,
and there are no legal or governmental proceedings, contracts, leases, or other
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement which
are not described or filed as required. All agreements between the Company, any
of the Subsidiaries or the Manager, as the case may be, and third parties
expressly referenced in the Prospectus are legal, valid and binding obligations
of the Company or the Subsidiaries or the Manager enforceable in accordance with
their respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general equitable principles.
(u) There are no actions, suits, claims, investigations, inquiries or
proceedings pending or, to the best of the Company's knowledge, threatened to
which the Company, any of the Subsidiaries or the Manager or any of their
respective officers or directors is a party or of which the properties or other
assets of any such entity is subject at law or in equity, or before or by any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency which could result in a judgment, decree or order.
(v) During the period of at least the last 24 calendar months prior to
the date of this Agreement, the Company has timely filed with the Commission all
documents and other material required to be filed pursuant to Sections 13, 14
and 15(d) under the Exchange Act. During the period of at least the last 36
calendar months preceding the filing of the Registration Statement, the Company
has filed all
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reports required to be filed pursuant to Sections 13, 14 and 15(d) under the
Exchange Act. As of the date of this Agreement, the aggregate market value of
the Company's voting stock held by nonaffiliates of the Company was equal to or
greater than $150 million.
(w) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been (i)
any material adverse change, or any development which, in the Company's or the
Manager's reasonable judgment, is likely to cause a material adverse change, in
the business, properties or assets described or referred to in the Registration
Statement or Prospectus, or the results of operations, condition (financial or
otherwise), net worth, business or operations of the Company and the
Subsidiaries taken as a whole, (ii) any transaction which is material to the
Company and the Subsidiaries, except transactions in the ordinary course of
business, (iii) any obligation, direct or contingent, which is material to the
Company and the Subsidiaries taken as a whole, incurred by the Company or the
Subsidiaries, except obligations incurred in the ordinary course of business,
(iv) any change in the capital stock or outstanding indebtedness of the Company
or the Subsidiaries, or (v) except for regular quarterly dividends on the Common
Stock and the 9.68% Cumulative Convertible Series A Preferred Stock in amounts
per share that are consistent with past practice, any dividend or distribution
of any kind declared, paid or made by the Company on any class of its capital
stock. Neither the Company nor any of the Subsidiaries has any material
contingent obligation which is not disclosed in the Registration Statement or
Prospectus.
(x) There are no Persons with registration or other similar rights to
have any equity or debt securities, including securities which are convertible
into or exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act.
(y) Neither the Company nor any of the Subsidiaries has defaulted on
any installment on indebtedness for borrowed money or on any rental on one or
more long term leases, which defaults would have a Material Adverse Effect on
the financial position of the Company or any of the Subsidiaries. Since it first
became a publicly-registered entity, the Company has not filed a report pursuant
to Section 13(a) or 15(d) of the Exchange Act indicating that it (i) has failed
to pay any dividend or sinking fund installment on preferred stock or (ii) has
defaulted on any installment on indebtedness for borrowed money or on any rental
on one or more long term leases, which defaults would have a Material Adverse
Effect on the financial position of the Company or any of the Subsidiaries.
(z) Each of the Company, the Subsidiaries, the Manager and each of
their respective officers, directors and controlling persons has not, directly
or indirectly, (i) taken any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to facilitate the
sale of the Shares, or (ii) since the filing of the Registration Statement
(except pursuant to the Company's dividend reinvestment and stock purchase plan
(the "DRSPP")) (A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Shares or (B) paid or agreed to pay to any Person
any compensation for soliciting another to purchase any other securities of the
Company.
(aa) The Shares have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance.
(bb) Except as set forth in Schedule F annexed hereto, neither the
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Company nor any of the Subsidiaries or affiliates (including the Manager) (i) is
required to register as a "broker" or "dealer" in accordance with the provisions
of the Exchange Act or (ii) directly or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning
of Article I of the Bylaws of the National Association of Securities Dealers
("NASD")) any member firm of the NASD.
8
(cc) The Company has not relied upon UBS Warburg or legal counsel for
UBS Warburg for any legal, tax or accounting advice in connection with the
offering and sale of the Shares.
(dd) Any certificate signed by any officer of the Company delivered to
UBS Warburg or to counsel for the Underwriters pursuant to or in connection with
this Agreement shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
(ee) As of the date of this Agreement, the investment portfolio (other
than cash and cash equivalents) of the Company consists of adjustable-rate
mortgage securities and adjustable-rate mortgage loans. As of the date of this
Agreement, the derivative financial instruments held by the Company consist
solely of interest rate cap agreements, interest rate options contracts and
interest rate swap agreements. As of the date of this Agreement and except as
otherwise disclosed in the Prospectus, the Company has no plan or intention to
materially alter its stated investment policies and operating policies and
strategies, as such are described in the Company's Quarterly Report on Form 10-
Q/A for the quarter ended March 31, 2001, including making any change to any
stated investment percentages or guidelines or the stated equity-to-assets ratio
currently employed by the Company and the Subsidiaries. The Company and the
Subsidiaries have good and marketable title to all properties and assets owned,
directly or indirectly, by the Company and the Subsidiaries, in each case free
and clear of any security interests, liens, encumbrances, equities, claims and
other defects (except for any security interest, lien, encumbrance or claim that
may otherwise exist under any applicable repurchase agreement), except such as
do not interfere with the use made or proposed to be made of such property or
asset by the Company and the Subsidiaries. The Company and the Subsidiaries do
not own any real property. Any real property and buildings held under lease by
the Company and the Subsidiaries are held under valid, existing and enforceable
leases, with such exceptions as are disclosed in the Prospectus or are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company and the Subsidiaries.
(ff) Each of the Company and the Subsidiaries has filed all federal,
state and foreign income and franchise tax returns required to be filed on or
prior to the date hereof and has paid taxes shown as due thereon (or that are
otherwise due and payable), other than taxes which are being contested in good
faith and for which adequate reserves have been established in accordance with
generally accepted accounting principles. Neither the Company or any of the
Subsidiaries nor the Manager has knowledge, after due inquiry, of any tax
deficiency which has been asserted or threatened against the Company or any of
the Subsidiaries. To the knowledge of the Company, the Subsidiaries and the
Manager, there are no tax returns of the Company or the Subsidiaries that are
currently being audited by federal, state or local taxing authorities or
agencies which would have a Material Adverse Effect.
(gg) The Company and each of the Subsidiaries owns or possesses
adequate license or other rights to use all patents, trademarks, service marks,
trade names, copyrights, software and design licenses, trade secrets,
manufacturing processes, other intangible property rights and know-how
(collectively, "Intangibles") necessary to entitle the Company and the
Subsidiaries to conduct their business as described in the Prospectus, and the
Company and the Subsidiaries have not received notice of infringement of or
conflict with (and the Company and the Subsidiaries know of no such infringement
of or conflict with) asserted rights of others with respect to any Intangibles
which could have a Material Adverse Effect.
(hh) TMHL owns or possesses adequate and validly issued licenses, or is
otherwise authorized by law, to originate loans as a mortgage lender in all
states in which TMHL has originated or is currently originating loans. As of the
date of this Agreement, TMHL is licensed, or is otherwise authorized by law, to
originate loans in each of the jurisdictions set forth on Schedule G annexed
----------
hereto. To the knowledge of the Company, and the Manager, all third-party
service providers used, employed, hired or otherwise
9
contracted to by the Company or any of the Subsidiaries have obtained all
necessary licenses or other relevant authorization to do business in all
jurisdictions in which such third-party service providers do business on behalf
of the Company or the Subsidiaries.
(ii) Each of the Company, the Subsidiaries and the Manager maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(jj) Each of the Company and the Subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the business in which it is engaged.
Neither the Company or any of the Subsidiaries nor the Manager has been refused
any insurance coverage which has been sought and applied for and has no reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
have a Material Adverse Effect.
(kk) Neither the Company or any of the Subsidiaries nor the Manager is
in violation, and has not received notice of any violation with respect to, any
applicable local, state or federal environmental, safety or similar law
applicable to the business of the Company and the Subsidiaries. Each of the
Company, the Subsidiaries and the Manager has received all permits, licenses or
other approvals required of it under applicable federal and state occupational
safety and health and environmental laws and regulations to conduct its
business, and each of the Company, the Subsidiaries and the Manager is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which could not,
singly or in the aggregate, have a Material Adverse Effect.
(ll) Neither the Company nor any of its affiliates has incurred any
liability for any finder's fees or similar payments in connection with the
transactions herein contemplated, except as may otherwise exist with respect to
the Underwriters pursuant to this Agreement.
(mm) There are no existing or threatened labor disputes with the
employees of the Company, any of the Subsidiaries or the Manager which are
likely to have individually or in the aggregate a Material Adverse Effect.
(nn) Neither the Company nor any of the Subsidiaries nor, to the
knowledge of the Company and the Manager, any employee or agent of the Company
or the Subsidiaries, has made any payment of funds of the Company or any of the
Subsidiaries or received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the Prospectus. No
relationship, direct or indirect, exists between or among the Company, any of
the Subsidiaries or the Manager, on the one hand, and the directors, officers
and stockholders of the Company, any of the Subsidiaries or the Manager, on the
other hand, which is required by the Securities Act to be described in the
Registration Statement and the Prospectus that is not so described.
(oo) The Company, for all taxable years commencing with the taxable
year ended December 31, 1993, and each of the Subsidiaries, since its respective
date of inception, have been, and
10
upon the sale of Shares will continue to be, organized and operated in
conformity with the requirements for qualification and taxation of the Company
as a "real estate investment trust" (a "REIT") under Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended (the "Code"). The proposed method
of operation of the Company and each of the Subsidiaries as described in the
Prospectus will enable the Company to continue to meet the requirements for
qualification and taxation as a REIT under the Code, and no actions have been
taken (or not taken which are required to be taken) which would cause such
qualification to be lost. The Company intends to continue to operate in a manner
which would permit it to qualify as a REIT under the Code. The Company has no
intention of changing its operations or engaging in activities which would cause
it to fail to qualify, or make economically undesirable its continued
qualification, as a REIT.
(pp) Neither the Company nor any of the Subsidiaries is and, after
giving effect to the offering and sale of the Shares, will not be an "investment
company" or an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(qq) The Manager has full legal right, power and authority to perform
its duties in accordance with and under the Management Agreement, dated July 15,
1999, between the Company and the Manager, as amended on October 17, 2000 (the
"Management Agreement"), and to consummate the transactions contemplated
therein. The Management Agreement has been duly authorized, executed and
delivered by the Manager and constitutes a valid and binding agreement of the
Manager, enforceable in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
equitable principles. To the knowledge of the Company and the Manager, there is
no breach of, or default under (nor has any event occurred with which notice,
lapse of time, or both would constitute a breach of, or default under), the
Management Agreement by the Manager.
(rr) Except as otherwise disclosed in the Prospectus, there are no
material outstanding loans or advances or material guarantees of indebtedness by
the Company or any of the Subsidiaries to or for the benefit of any of the
officers or directors of the Company, any of the Subsidiaries or the Manager or
any of the members of the families of any of them.
4. Certain Covenants of the Company. The Company hereby covenants and
--------------------------------
agrees with each of the Underwriters that:
(a) The Company will furnish such information as may be required and
otherwise will cooperate in qualifying the Shares for offering and sale under
the securities or blue sky laws of such jurisdictions (both domestic and
foreign) as UBS Warburg may designate and maintain such qualifications in effect
so long as required for the distribution of the Shares, provided that the
Company shall not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the Shares). The
Company will promptly advise UBS Warburg of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(b) The Company will prepare the Prospectus in a form approved by the
Underwriters and file such Prospectus with the Commission pursuant to Rule
424(b) under the Securities Act not later than 10:00 A.M. (New York City time),
on or before the second Business Day following the date of this Agreement or on
such other day as the parties may mutually agree and to furnish promptly (and
with respect to the initial delivery of such Prospectus, not later than 10:00
A.M. (New York City time) on or before the second Business Day following the
date of this Agreement or on such other day as the parties
11
may mutually agree) to the Underwriters copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the Registration
Statement) in such quantities and at such locations as the Underwriters may
reasonably request for the purposes contemplated by the Securities Act, which
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the version created to be transmitted to the
Commission for filing via XXXXX, except to the extent permitted by Regulation S-
T.
(c) The Company will advise UBS Warburg immediately, confirming such
advice in writing, of (i) the receipt of any comments from the Commission
relating to the Registration Statements or the Prospectus or, prior to the
termination of the underwriting syndicate contemplated in this Agreement, any
other filing of the Company under the Securities Act or the Exchange Act, (ii)
any request by the Commission for amendments or supplements to the Prospectus
or, prior to the termination of the underwriting syndicate contemplated in this
Agreement, the Registration Statements, or for additional information with
respect thereto, (iii) the issuance by the Commission of any stop order
suspending the effectiveness of any one of the Registration Statements or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, (iv) the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, (v) the initiation, threatening or contemplation of
any proceedings for any of such purposes and, if the Commission or any other
governmental agency or authority should issue any such order, the Company will
make every reasonable effort to obtain the lifting or removal of such order as
soon as possible. The Company will advise UBS Warburg promptly of any proposal
to amend or supplement the Prospectus or, prior to the termination of the
underwriting syndicate contemplated in this Agreement, the Registration
Statements, including by filing any documents that would be incorporated therein
by reference, and to file no such amendment or supplement to which UBS Warburg
shall object in writing.
(d) The Company will advise UBS Warburg promptly and, if requested by
UBS Warburg, will confirm such advice in writing when, prior to the termination
of the underwriting syndicate contemplated in the Agreement, any post-effective
amendment to any one of the Registration Statements becomes effective under the
Securities Act.
(e) The Company will furnish to UBS Warburg and, upon request, to each
of the other Underwriters for a period of five years from the date of this
Agreement (i) copies of any reports or other communications which the Company
shall send to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed with
the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form as may be
designated by the Commission, (iii) if different than the items contained in
clauses (i) and (ii) above, copies of documents or reports filed with any
national securities exchange on which any class of securities of the Company is
listed (other than correspondence or other similar communications), and (iv)
such other information as UBS Warburg may reasonably request regarding the
Company or any of the Subsidiaries, in each case as soon as such communications,
documents or information become available.
(f) The Company will advise the Underwriters promptly of the happening
of any event known to the Company, the Subsidiaries or the Manager within the
time during which a Prospectus relating to the Shares is required to be
delivered under the Securities Act which would require the making of any change
in the Prospectus then being used, or in the information incorporated by
reference therein, so that the Prospectus would not include an untrue statement
of material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with any law. If within the time
during which a Prospectus relating to the Shares is required to be delivered
under the Securities Act any event shall occur or condition shall
12
exist which, in the reasonable opinion of the Company, UBS Warburg or their
respective counsel, would require the making of any change in the Prospectus
then being used, or in the information incorporated by reference therein, so
that the Prospectus would not include an untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or supplement
the Prospectus to comply with any law, the Company will promptly prepare and
furnish to the Underwriters copies of the proposed amendment or supplement
before filing any such amendment or supplement with the Commission and
thereafter promptly furnish, at the Company's own expense, to the Underwriters
and to dealers copies in such quantities and at such locations as UBS Warburg
may from time to time reasonably request of an appropriate amendment to the
Registration Statements or supplement to the Prospectus so that the Prospectus
as so amended or supplemented will not, in the circumstances when it is so
delivered, be misleading or so that the Prospectus will comply with the law.
(g) The Company will make generally available to its stockholders as
soon as practicable, and in the manner contemplated by Rule 158 of the
Securities Act but in any event not later than 15 months after the end of the
Company's current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period beginning after the date upon which the
Prospectus Supplement is filed pursuant to Rule 424(b) under the Securities Act
that shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder.
(h) The Company will furnish to UBS Warburg a signed copy of the
Registration Statements, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents incorporated by
reference therein) and such number of conformed copies of the foregoing (other
than exhibits) as UBS Warburg may reasonably request.
(i) The Company will apply the net proceeds from the sale of the
Shares in the manner set forth under the caption "Use of Proceeds" in the
Prospectus.
(j) The Company will use its best efforts to furnish to UBS Warburg,
not less than two Business Days before a filing with the Commission during the
period referred to in paragraph (f) above, a copy of any document proposed to be
filed pursuant to Section 13, 14 or 15(d) of the Exchange Act and during such
period to file all such documents in a manner and within the time periods
required by the Exchange Act.
(k) The Company will furnish to UBS Warburg, as early as practicable
prior to the time of purchase and the additional time of purchase, as the case
may be, but not later than two Business Days prior thereto, a copy of the latest
available unaudited interim consolidated financial statements of the Company and
the Subsidiaries which have been read by the Company's independent certified
public accountants, as stated in their letter to be furnished pursuant to
Section 6(b) hereof.
(l) Neither the Company or the Subsidiaries nor the Manager will sell,
offer, contract to sell, pledge, grant any option to purchase or otherwise
dispose of, directly or indirectly, any shares of capital stock, or any
securities convertible into, or exercisable, exchangeable or redeemable for
shares of capital stock, except for the registration of the Shares and the sales
to the Underwriters pursuant to this Agreement and except for issuances of
Common Stock upon the exercise of outstanding options, for a period of 90 days
after the date hereof, without the prior written consent of UBS Warburg. The
foregoing sentence shall not apply to (i) the Shares to be sold hereunder, (ii)
any shares of Common Stock issued by the Company upon the exercise of an option
outstanding on the date hereof and referred to in the Prospectus, (iii) shares
of Common Stock issued pursuant to the DRSPP or (iv) the grant of awards
pursuant to the Company's Amended and Restated 1992 Stock Option and Incentive
Plan (the "Plan") or
13
issuances pursuant to the exercise of employee stock options or other awards,
including restricted stock awards approved under an amendment to the Plan on
July 17, 2001.
(m) The Company will use its best efforts to cause each officer and
director of the Company to furnish to UBS Warburg, prior to the time of
purchase, a letter or letters, substantially in the form of Exhibit C hereto,
---------
pursuant to which each such person shall agree not to sell, offer, contract to
sell, pledge, grant any option to purchase or otherwise dispose of, directly or
indirectly, any shares of capital stock, or any securities convertible into, or
exercisable, exchangeable or redeemable for shares of capital stock of the
Company for a period of 90 days after the date hereof, without the prior written
consent of UBS Warburg.
(n) The Company will use its best efforts to cause the Shares to be
listed on the New York Stock Exchange and to maintain such listing and to file
with the New York Stock Exchange all documents and notices required by the New
York Stock Exchange of companies that have securities that are listed on the New
York Stock Exchange.
(o) The Company will engage and maintain, at its expense, a registrar
and transfer agent for the Shares.
(p) The Company will pay all expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the Underwriters,
except as set forth under Section 5 hereof or (iii) or (iv) below) in connection
with (i) the preparation and filing of the Registration Statements, each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii) the
issuance, sale and delivery of the Shares by the Company, (iii) the word
processing and/or printing of this Agreement, any Agreement among the
Underwriters, any dealer agreements, any Statements of Information, the Custody
Agreement and the Powers of Attorney, as applicable, and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state laws and the determination of their
eligibility for investment under state law as aforesaid (including the legal
fees and filing fees and other disbursements of counsel to the Underwriters) and
the printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) any listing of the
Shares on the New York Stock Exchange and any registration thereof under the
Exchange Act, (vi) the filing, if any, for review of the public offering of the
Shares by the NASD, and (vii) the performance of the Company's other obligations
hereunder.
(q) Prior to termination of the underwriting syndicate contemplated by
this Agreement, neither the Company or the Subsidiaries nor the Manager will (i)
take, directly or indirectly, any action designed to stabilize or manipulate the
price of any security of the Company, or which may cause or result in, or which
might in the future reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company, to
facilitate the sale or resale of any of the Shares, (ii) sell, bid for, purchase
or pay any Person (other than as contemplated by the provisions hereof) any
compensation for soliciting purchases of the Shares, or (iii) pay or agree to
pay to any Person any compensation for soliciting any order to purchase any
other securities of the Company.
(r) The Company will comply with all requirements imposed upon it by
the Securities Act and the Exchange Act as from time to time in force, so far as
necessary to permit the continuance of sales of, or dealings in, the Shares as
contemplated by the provisions hereof and the Prospectus.
(s) The Company will not invest in futures contracts, options on
futures contracts or options on commodities unless the Company is exempt from
the registration requirements of the Commodity
14
Exchange Act, as amended, or otherwise complies with the Commodity Exchange Act,
as amended. In addition, the Company will not engage in any activities which
might be subject to the Commodity Exchange Act, as amended, unless such
activities are exempt from that Act or otherwise comply with that Act or with an
applicable no-action letter to the Company from the Commodities Futures Trading
Commission.
(t) The Company will comply with all of the provisions of any
undertakings in the Registration Statements.
(u) The Company and the Subsidiaries have been organized and operated
in conformity with the requirements for qualification and taxation of the
Company as a REIT under the Code, and the Company's proposed methods of
operation will enable the Company to continue to meet the requirements for
qualification and taxation as a REIT under the Code for subsequent taxable
years.
(v) The Company will not be or become, at any time prior to the
expiration of three years after the date of the Agreement, an "investment
company," as such term is defined in the Investment Company Act.
(w) The Company has retained PricewaterhouseCoopers LLP as its
qualified accountants and qualified tax experts (i) to test procedures and
conduct annual compliance reviews designed to determine compliance with the REIT
provisions of the Code and the Company's exempt status under the Investment
Company Act and (ii) to otherwise assist the Company in monitoring appropriate
accounting systems and procedures designed to determine compliance with the REIT
provisions of the Code and the Company's exempt status under the Investment
Company Act.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
---------------------------------------
delivered for any reason other than the termination of this Agreement pursuant
to the default by one or more of the Underwriters in its or their respective
obligations hereunder, the Company shall, in addition to paying the amounts
described in Section 4(p) hereof, reimburse the Underwriters for all of their
out-of-pocket expenses, including the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of
---------------------------------------
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Manager on the date hereof and
at the time of purchase (and the several obligations of the Underwriters at the
additional time of purchase are subject to the accuracy of the representations
and warranties on the part of the Company and the Manager on the date hereof, at
the time of purchase (unless previously waived) and at the additional time of
purchase, as the case may be), the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) The Company shall furnish to UBS Warburg at the time of purchase
and at the additional time of purchase, as the case may be, an opinion of
Xxxxxxx, Xxxxx & Xxxx LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of purchase,
as the case may be, with reproduced copies for each of the other Underwriters
and in form satisfactory to Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, counsel for the
Underwriters, substantially in the form of Exhibit A attached hereto.
---------
(b) UBS Warburg shall have received from PricewaterhouseCoopers LLP
and McGladrey & Xxxxxx, LLP, letters dated, respectively, the date of this
Agreement and the time of purchase and the additional time of purchase, as the
case may be, and addressed to the Underwriters (with reproduced copies for each
of the Underwriters) in the forms heretofore approved by UBS Warburg relating to
the financial statements, including any pro forma financial statements of the
Company and the Subsidiaries
15
and such other matters customarily covered by comfort letters issued in
connection with a registered public offering.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (i) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless UBS
Warburg deems such explanation unnecessary, and (ii) such changes, decreases or
increases do not, in the sole judgment of UBS Warburg, make it impractical or
inadvisable to proceed with the purchase and delivery of the Shares as
contemplated by the Registration Statements and the Prospectus.
(c) UBS Warburg shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion of
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, counsel for the Underwriters, dated the time
of purchase or the additional time of purchase, as the case may be,
substantially in the form of Exhibit B hereto.
---------
(d) No amendment or supplement to the Registration Statements or
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed to which the Underwriters object in writing.
(e) Prior to the time of purchase or the additional time of purchase,
as the case may be, (i) no stop order with respect to the effectiveness of any
one of the Registration Statements shall have been issued under the Securities
Act or proceedings initiated under Section 8(d) or 8(e) of the Securities Act;
(ii) the Registration Statements and all amendments thereto, or modifications
thereof, if any, shall not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and (iii) the Prospectus and all
amendments or supplements thereto, or modifications thereof, if any, shall not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they are made, not misleading.
(f) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the time of purchase or the additional time
of purchase, as the case may be, shall have been made within the applicable time
period prescribed for such filing by Rule 424.
(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statements and Prospectus), in the business, condition, net worth
or prospects of the Company or the Subsidiaries shall occur or become known and
(ii) no transaction which is material and unfavorable to the Company or the
Subsidiaries or the Manager shall have been entered into by the Company or any
of the Subsidiaries.
(h) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to UBS Warburg a certificate of two of its
executive officers (one of which shall be Xxxxxxx Xxxxxxxxx) to the effect that
the representations and warranties of the Company and the Manager as set forth
in this Agreement are true and correct as of each such date, that the Company
shall perform such of its obligations under this Agreement as are to be
performed at or before the time of purchase and at or before the additional time
of purchase, as the case may be, and that the conditions set forth in paragraphs
(e) and (g) of this Section 6 have been met.
(i) The Company shall have furnished to UBS Warburg such other
documents and certificates as to the accuracy and completeness of any statement
in the Registration Statements and the
16
Prospectus as of the time of purchase and the additional time of purchase, as
the case may be, as UBS Warburg may reasonably request.
(j) The Shares shall have been approved for listing on the New York
Stock Exchange, subject only to notice of issuance at or prior to the time of
purchase or the additional time of purchase, as the case may be.
(k) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(l) UBS Warburg shall have received lock-up agreements from the
Company and its officers and directors and the Manager, in the form of Exhibit C
---------
attached hereto, and such letter agreements shall be in full force and effect.
(m) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall not
have occurred any downgrading, nor shall any notice or announcement have been
given or made of (i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company by any "nationally recognized
statistical rating organization," as that term is defined in Rule 436(g)(2)
under the Securities Act.
7. Termination. The obligations of the several Underwriters hereunder
-----------
shall be subject to termination in the absolute discretion of UBS Warburg at any
time prior to the time of purchase or, if applicable, the additional time of
purchase, (i) if any of the conditions specified in Section 6 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, (ii) if
any material adverse and unfavorable change occurs (financial or otherwise), or
any development involving a material adverse and unfavorable change occurs
(financial or otherwise) (in each case, other than as disclosed in, or
incorporated by reference into, the Registration Statements and Prospectus), in
the operations, business, net worth, condition or prospects of the Company or
the Subsidiaries, or a material change in management of the Company or the
Subsidiaries or the Manager occurs, whether or not arising in the ordinary
course of business, which would, in UBS Warburg's sole judgment, make it
impracticable to market the Shares, (iii) if the United States shall have
declared war in accordance with its constitutional processes or there has
occurred an outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic, political or other
conditions the effect of which on the financial markets of the United States is
such as to make it, in the sole judgment of UBS Warburg, impracticable to market
the Shares or enforce contracts for the sale of the Shares, (iv) if trading in
any securities of the Company has been suspended by the Commission or by the New
York Stock Exchange, or if trading generally on the New York Stock Exchange has
been suspended (including an automatic halt in trading pursuant to market-
decline triggers other than those in which solely program trading is temporarily
halted), or limitations on or minimum prices for trading (other than limitations
on hours or numbers of days of trading) shall have been fixed, or maximum ranges
for prices for securities have been required, by such exchange or the NASD or
Nasdaq or by order of the Commission or any other governmental authority, (v) if
a banking moratorium shall have been declared by New York or United States
authorities, (vi) if there shall have occurred any downgrading, or any notice or
announcement shall have been given or made of (a) any intended or potential
downgrading or (b) any review or possible change that does not indicate an
improvement, in the rating accorded any securities of or guaranteed by the
Company or any of the Subsidiaries by any "nationally recognized statistical
rating organization," as that term is defined in Rule 436(g)(2) under the
Securities Act, (vii) if any federal or state statute, regulation, rule or order
of any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated which, in the reasonable opinion of UBS
Warburg, materially adversely affects or will materially adversely affect the
business or operations of the Company or any of the Subsidiaries, or (viii) if
any
17
action has been taken by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which, in the reasonable opinion of
UBS Warburg, has a material adverse effect on the securities markets in the
United States.
If UBS Warburg elects to terminate this Agreement as provided in this
Section 7, the Company and each other Underwriter shall be notified promptly by
telephone, which shall be promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(p), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. If any Underwriter shall
-------------------------------------
default in its obligation under this Agreement to take up and pay for the Shares
to be purchased by it under this Agreement (otherwise than for reasons
sufficient to justify the termination of this Agreement under the provisions of
Section 7 hereof), UBS Warburg shall have the right, within 36 hours after such
default, 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 Shares which such Underwriter shall have agreed but failed to take up and
pay for (the "Defaulted Shares"). Absent the completion of such arrangements
within such 36 hour period, (i) if the total number of Defaulted Shares does not
exceed 10% of the total number of Shares to be purchased at the time of purchase
or the additional time of purchase, as the case may be, each non-defaulting
Underwriter shall take up and pay for (in addition to the number of Shares which
it is otherwise obligated to purchase on such date pursuant to this Agreement)
the number of Shares agreed to be purchased by all such defaulting Underwriters
in such amount or amounts as UBS Warburg may designate with the consent of each
Underwriter so designated or, in the event no such designation is made, such
Shares shall be taken up and paid for by all non-defaulting Underwriters pro
rata in proportion to the aggregate number of Firm Shares set opposite the names
of such non-defaulting Underwriters in Schedule A; and (ii) if the total number
of Defaulted Shares exceeds 10% of such total number of Shares to be purchased
at the time of purchase or the additional time of purchase, as the case may be,
and if neither the non-defaulting Underwriters nor the Company shall make
arrangements within the five Business Day period from the date of default for
the purchase of such Defaulted Shares, UBS Warburg may terminate this Agreement
by notice to the Company, without liability of any party to any other party
except that the provisions of Sections 4(p), 5 and 9 shall at all times be
effective and shall survive such termination. Nothing in this paragraph, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that they
will not sell any Shares hereunder unless all of the Shares are purchased by the
Underwriters (or by substituted Underwriters selected by UBS Warburg with the
approval of the Company or selected by the Company with UBS Warburg's approval).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter or Underwriters in accordance with the foregoing provisions, the
Company or UBS Warburg shall have the right to postpone the time of purchase or
the additional time of purchase, as the case may be, for a period not exceeding
five Business Days from the date of substitution in order that any necessary
changes in the Registration Statements and Prospectus and other documents may be
effected.
18
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with like effect as if such
substituted Underwriter had originally been named in Schedule A.
----------
9. Indemnity and Contribution.
--------------------------
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any Person who controls
any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing Persons from and against any loss, damage, expense, liability or claim
(including, but not limited to, the reasonable cost of investigation) which,
jointly or severally, any such Underwriter or any such Person may incur under
the Securities Act, the Exchange Act, federal or state statutory law or
regulation, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statements (or in the Registration Statements as amended by any post-effective
amendment thereof by the Company) or in a Prospectus (the term Prospectus for
the purpose of this Section 9 being deemed to include any Preliminary
Prospectus, the Prospectus and the Prospectus as amended or supplemented by the
Company), or in any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus, or in any application or other
document executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities or blue sky laws thereof or filed with
the Commission, (ii) upon any omission or alleged omission to state in any such
document a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading or (iii) any act or failure to act or any alleged act or
failure to act by the Underwriters in connection with, or relating in any manner
to, the Shares or the offering contemplated hereby, and which is included as
part of or referred to in any loss, damage, expense, liability, claim or action
arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company shall not be liable under this clause (iii) to the
extent it is finally judicially determined by a court of competent jurisdiction
that such loss, damage, expense, liability, claim or action resulted directly
from any such acts or failures to act undertaken or omitted to be taken by the
Underwriters through their gross negligence or willful misconduct), except
insofar as any such loss, damage, expense, liability or claim arises out of or
is based upon any untrue statement or alleged untrue statement of a material
fact contained in and in conformity with information furnished in writing by or
on behalf of any Underwriter through UBS Warburg to the Company expressly for
use with reference to such Underwriter in the Prospectus or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in the Prospectus or
necessary to make such information not misleading.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such Person in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such Underwriter
or such Person shall promptly notify the Company in writing of the institution
of such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the omission
-------- -------
to so notify the Company shall not relieve the Company from any liability which
the Company may have to any Underwriter or any such Person or otherwise. Such
Underwriter or such controlling Person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such Person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such Proceeding or the Company shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such indemnified
party or parties shall have reasonably concluded
19
that there may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Company (in which case
the Company shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Company and paid as incurred (it being
understood, however, that the Company shall not be liable for the expenses of
more than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). The
Company shall not be liable for any settlement of any such Proceeding effected
without its written consent (which shall not be unreasonably withheld) but if
settled with the written consent of the Company, the Company agrees to indemnify
and hold harmless any Underwriter and any such Person from and against any loss
or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 Business Days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, any Person who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and each
director of the Company and each officer of the Company who signed the
Registration Statements from and against any loss, damage, expense, liability or
claim (including, but not limited to, the reasonable cost of investigation)
which, jointly or severally, the Company or any such Person may incur under the
Securities Act, the Exchange Act, federal or state statutory law or regulation,
the common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any (i) untrue statement or alleged untrue
statement of a material fact contained in, and in conformity with information
furnished in writing by or on behalf of such Underwriter through UBS Warburg to
the Company expressly for use with reference to such Underwriter in, the
Registration Statements (or in the Registration Statements as amended by or on
behalf of any post-effective amendment thereof by the Company) or in a
Prospectus, or in any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus, or in any application or other
document executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities or blue sky laws thereof or filed with
the Commission or (ii) omission or alleged omission to state in any such
document a material fact in connection with such information required to be
stated therein or necessary to make the statement therein, in the light of the
circumstances under which they were made, not misleading.
If any Proceeding is brought against the Company or any such Person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such Person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
-------- -------
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such Person or otherwise.
The
20
Company or such Person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such Person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the defense of such
Proceeding or such Underwriter shall not have employed counsel to have charge of
the defense of such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties,
but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company and any such
Person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 Business Days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under subsections (a) and (b) of this Section 9 in
respect of any losses, damages, expenses, liabilities or claims referred to
therein, then in order to provide just and equitable contribution in such
circumstance, each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other hand
from the offering of the Shares or (ii) if, but only if, the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, damages, expenses, liabilities or claims, as well as
any other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be deemed to
be in the same respective proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, bear to the aggregate public offering price of the
shares. The relative fault of the Company on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
damages,
21
expenses, liabilities and claims referred to in this subsection shall be deemed
to include any legal or other fees or expenses reasonably incurred by such party
in connection with investigating, preparing to defend or defending any claim or
Proceeding.
(d) The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, no Underwriter shall be liable or responsible
for, or be required to contribute, any amount pursuant to this Section 9 in
excess of the amount of the underwriting discounts and commissions applicable to
the Shares purchased by such Underwriter. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section 9
and the covenants, warranties and representations of the Company contained in
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, its directors and
officers or any Person (including each partner, officer or director of such
Person) who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, its directors or officers or any Person who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and shall survive any termination of this Agreement or the issuance and
delivery of the Shares. The Company and each Underwriter agree promptly to
notify each other upon the commencement of any Proceeding against it and, in the
case of the Company, against any of the Company's officers or directors in
connection with the issuance and sale of the Shares, or in connection with the
Registration Statements or Prospectus.
10. Notices. Except as otherwise herein provided, all statements,
-------
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department, and if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 000 Xxxx
Xxxxx Xxxxxx, Xxxxx Xx, Xxx Xxxxxx 00000, Attention: President (with a copy to
Xxxxxxx, Xxxxx & Xxxx, LLP, Attention: Xxxxxxx Xxxxxxx).
11. Governing Law; Construction. This Agreement and any claim,
---------------------------
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement (a "Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim may
--------------------------
be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against UBS Warburg or any indemnified
party. Each of UBS Warburg and the Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and affiliates)
waives all right to trial by jury in any action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) in any way arising out of or
relating to this
22
Agreement. The Company agrees that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and may be enforced in any other courts in the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
13. Parties at Interest. The Agreement herein set forth has been and is
-------------------
made solely for the benefit of the Underwriters, the Company and to the extent
provided in Section 9 hereof the controlling Persons, directors and officers
referred to in such Section, and their respective successors, assigns, heirs,
pursuant representatives and executors and administrators. No other Person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the parties in one or
------------
more counterparts which together shall constitute one and the same agreement
among the parties.
15. Successors and Assigns. This Agreement shall be binding upon the
----------------------
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
16. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned subsidiary
-------------
of UBS AG, is not a bank and is separate from any affiliated bank, including any
U.S. branch or agency of UBS AG. Because UBS Warburg LLC is a separately
incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended by UBS Warburg
LLC are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending relationships with
issuers of securities underwritten or privately placed by UBS Warburg LLC. To
the extent required under the securities laws, prospectuses and other disclosure
documents for securities underwritten or privately placed by UBS Warburg LLC
will disclose the existence of any such lending relationships and whether the
proceeds of the issue will be used to repay debts owed to affiliates of UBS
Warburg LLC.
23
If the foregoing correctly sets forth the understanding among the Company,
the Manager and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company, the Manager and the Underwriters,
severally.
Very truly yours,
XXXXXXXXX MORTGAGE, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chief Executive Officer
Accepted and agreed to as of the date first
above written, on behalf of itself and the
other several Underwriters named in Schedule A
----------
UBS WARBURG LLC
By: UBS WARBURG LLC
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Director
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Director
Accepted and agreed to as of the date first
above written, only as to the representations
and warranties of the Manager as set forth in
Section 3 hereof.
XXXXXXXXX MORTGAGE ADVISORY CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS Warburg LLC 1,795,500
Credit Suisse First Boston Corporation 1,795,500
X.X. Xxxxxxx & Sons, Inc. 769,500
U.S. Bancorp Xxxxx Xxxxxxx Inc. 769,500
Xxxxx, Xxxxxxxx & Xxxxx, Inc. 75,000
Xxxxxx Xxxxxx & Company, Inc. 75,000
Xxxxxxx Xxxxx & Associates, Inc. 75,000
Xxxxxx Xxxxxxx Sutro Capital Markets 75,000
Flagstone Securities, LLC 35,000
Xxxxxxxxx Securities Corporation 35,000
---------
Total: 5,500,000
=========
SCHEDULE B
List of jurisdictions in which Xxxxxxxxx Mortgage, Inc.
--------------------------------------------------------
is qualified as a foreign corporation
-------------------------------------
New Mexico
3
SCHEDULE C
List of jurisdictions in which each subsidiary is qualified
-----------------------------------------------------------
as a foreign corporation
------------------------
Subsidiaries of Xxxxxxxxx Mortgage, Inc.:
-----------------------------------------
Xxxxxxxxx Mortgage Acceptance Corporation - None
Xxxxxxxxx Mortgage Funding Corporation - None
Xxxxxxxxx Mortgage Home Loans, Inc. - California
Connecticut
Florida
Georgia
Idaho
Illinois
Kentucky
Louisiana
Maine*
Massachusetts
Michigan
Minnesota
Montana
New Mexico
New York
North Dakota
Oregon
Rhode Island
South Carolina
Vermont
Virginia
West Virginia
Wisconsin
*Franchise tax payment and renewal
request submitted on August 10, 2001.
(See Schedule G for jurisdictions in which Xxxxxxxxx Mortgage Home Loans,
Inc. is authorized or licensed to originate loans)
4
Subsidiaries of Xxxxxxxxx Mortgage Home Loans, Inc.:
---------------------------------------------------
Xxxxxxxxx Mortgage Acceptance Corporation II - None
Xxxxxxxxx Mortgage Funding Corporation II - None
5
SCHEDULE D
List of jurisdictions in which Xxxxxxxxx Mortgage Advisory Corporation
----------------------------------------------------------------------
(the Manager) is qualified as a foreign corporation
---------------------------------------------------
New Mexico
6
SCHEDULE E
Defaults of any party to any agreement to which
-----------------------------------------------
Xxxxxxxxx Mortgage, Inc. or any subsidiary is a party
-----------------------------------------------------
None
7
SCHEDULE F
Requirements to register as broker/dealer
-----------------------------------------
Relationships with member firms of NASD
---------------------------------------
Xxxxxxxxx Securities Corporation, an affiliate of Xxxxxxxxx Mortgage, Inc.,
is registered as a broker/dealer and is a member of the NASD.
8
SCHEDULE G
Jurisdictions in which Xxxxxxxxx Mortgage Home Loans, Inc. ("TMHL")
-------------------------------------------------------------------
is authorized or licensed to originate loans
--------------------------------------------
States where TMHL has obtained licenses to lend:
-----------------------------------------------
Alaska Minnesota
Connecticut Nebraska
Delaware North Carolina
Florida North Dakota
Georgia Oregon
Idaho South Dakota
Illinois Wisconsin
Iowa West Virginia
Kansas Vermont
Louisiana
Maine
Maryland
Massachusetts
States where licensing is not required:
--------------------------------------
Indiana Montana
Colorado South Carolina
Kentucky Wyoming
States with a license exemption:
-------------------------------
Arkansas Oklahoma
Mississippi Texas
Missouri New Mexico
States in which applications are pending:
----------------------------------------
California
Michigan
New York
Utah*
Virginia
* Effective July 1, 2001, Utah requires lenders to obtain a license. TMHL has
been informed by the State of Utah that it may continue to lend in the state
until its application is processed.
9
EXHIBIT A
FORM OF
OPINION OF XXXXXXX, XXXXX & XXXX LLP
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland, with full
corporate power and authority to own, lease and operate its assets and
properties and conduct its business as described in the Prospectus, to execute
and deliver the Underwriting Agreement and to issue, sell and deliver the Shares
as herein contemplated.
2. The Subsidiaries and the Manager have been duly incorporated and are
validly existing as corporations in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate
their assets and properties and conduct their business as described in the
Prospectus.
3. The Trusts have each been duly formed and are validly existing as
business trusts under the Delaware Business Trust Act in good standing under the
laws of Delaware, with full authority to perform all functions (i) which
business trusts are authorized to perform and (ii) which are described in the
Prospectus.
4. The Company, the Subsidiaries and the Manager are duly licensed or
qualified by each jurisdiction in which they conduct their business, or own or
lease real property or maintain an office, in which the nature and conduct of
the Company's, the Subsidiaries' or the Manager's business makes such
qualification and licensing necessary and in which the failure, individually or
in the aggregate, to be so licensed or qualified could have a Material Adverse
Effect and the Company.
5. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company, is a valid and binding agreement of the Company and,
except for the indemnification and contribution provisions thereof, as to which
we express no opinion, is enforceable against the Company in accordance with the
terms thereof.
6. The Shares have been duly authorized and, when issued and delivered to
and paid for by the Underwriters, will be duly and validly and issued and will
be fully paid and non-assessable.
7. The Company has an authorized capitalization as set forth in the
Prospectus. All of the outstanding shares of capital stock of the Company and
the shares to be paid for by the Underwriters in accordance with the terms of
the Underwriting Agreement have been and will be duly and validly authorized and
issued, and are and will be fully paid, non-assessable and free of statutory and
contractual preemptive rights under (i) the statutes, judicial and
administrative decisions and the rules and regulations of the governmental
agencies of the State of Maryland (ii) the Company's certificate of
incorporation or bylaws or (iii) any instrument, document, contract or other
agreement. The Shares, when issued, will be free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and similar rights.
Except as disclosed in the Registration Statement and the Prospectus, there is
no outstanding option, warrant or other right calling for the issuance of, and,
to the knowledge of such counsel, no commitment, plan or arrangement to issue,
any shares of capital stock of the Company or any security convertible into,
exercisable for, or exchangeable for shares of capital stock of the Company. No
holder of any security of the Company has the right to require any security
owned by such holder to be included for registration in the Registration
Statement. The certificates for the Shares (i) are in due and proper form, and
(ii) comply with all applicable statutory requirements, with any applicable
requirements of the Company's
organizational documents and with the requirements of the NYSE. The holders of
the Shares will not be subject to personal liability by reason of being such
holders.
8. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the Subsidiaries and the
Trusts.
9. The capital stock of the Company, including the Shares, conforms to the
description thereof contained in the Registration Statement and Prospectus and
such description conforms to the rights set forth in the instruments defining
the same. The form of certificate used to evidence the Common Stock is in due
and proper form and complies with all applicable statutory requirements.
10. Each part of the Registration Statement, when such part became
effective, and the Prospectus and any amendment or supplement thereto (except as
to the financial statements and schedules and other financial and statistical
data contained or incorporated by reference therein, as to which we express no
opinion) on the date of filing with the Commission and at the time of purchase
or the additional time of purchase, as the case may be, complied as to form in
all material respects with the requirements of the Securities Act, the Exchange
Act, including, without limitation, Item 503 of Regulation S-K.
11. The Registration Statements have been declared effective under the
Securities Act, the Prospectus Supplement has been filed as required by the
Underwriting Agreement and, to the best of our knowledge, after due inquiry, no
stop order has been issued or proceedings with respect thereto pending,
contemplated or threatened under the Securities Act and any required filings of
the Prospectus and any supplement thereto pursuant to Rule 424 under the
Securities Act has been made in the manner and within the time period required
by such Rule 424.
12. No approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the authorization, issuance,
transfer, sale and delivery of the Shares and the consummation by the Company of
the transaction as contemplated by the Underwriting Agreement or with the taking
by the Company of any action contemplated thereby other than registration of the
Shares under the Securities Act and except as may be required under state
securities laws or by the bylaws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares.
13. The execution, delivery and performance of the Underwriting Agreement
by the Company and the Manager and the consummation by the Company of the
transactions contemplated thereby do not and will not conflict with, or result
in any breach of, or constitute a default under (nor constitute any event which
with notice, lapse of time, or both, would result in any breach of or constitute
a default under, nor cause the time for performance of any obligation to be
accelerated under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the assets of the Company pursuant to the terms of)
(i) any provisions of the charter or bylaws of the Company or the subsidiaries
or the Manager, (ii) any provision of any license, indenture, mortgage, deed of
trust, bank loan, loan agreement, bond, debenture, note agreement, capital
lease, repurchase agreement, credit agreement or other evidence of indebtedness,
(iii) any lease, contract or other agreement or instrument to which the Company
or the Subsidiaries or the Manager is a party or by which they or their assets
or properties may be bound or affected, (iv) any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or any of the Subsidiaries, (v) any voting trust arrangement or any
contract or other agreement to which the Company or any of the Subsidiaries is a
party that restricts the ability of the Company to issue securities and of which
we have knowledge, (vi) any document filed as an exhibit to, or incorporated as
an exhibit by reference in, the Registration Statement, or (vii) any existing
obligation of the Company under any court or administrative order, judgment or
decree of which the Company, the Subsidiaries or the Manager has knowledge, or
violate applicable provisions of any statute or regulation in the State of
Maryland, State of New Mexico or of the United States.
14. Neither the Company nor any of the Subsidiaries nor the Manager is in
violation of its charter or bylaws or in breach of, or in default under (nor has
any event occurred which with notice, lapse of time, or both would result in any
breach of, or constitute a default under), any obligation, agreement, covenant
or condition contained in any contract, license, indenture, mortgage, deed of
trust, bank loan or credit agreement, note, lease or any other agreement or
instrument to which the Company, the Subsidiaries, or the Manager is a party or
by which it or its properties may be bound or affected or under any federal,
state, local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of the Subsidiaries.
15. All descriptions in the Registration Statement and Prospectus of
statutes, regulations, legal and governmental proceedings, contracts,
instruments, leases, licenses and other agreements (collectively, the
"Documents") are accurate and fairly present the information required to be
shown and we do not know of any statutes or legal or governmental proceedings
required to be described in the Prospectus or the Registration Statement that
are not described as required, or of any Documents of a character required to be
described in the Registration Statement or Prospectus that are not described as
required and any Document required to be filed as an exhibit to the Registration
Statement has been filed as an exhibit thereto or has been incorporated as an
exhibit by reference in the Registration Statement; and no default exists in the
due performance or observance of any material obligation, agreement, covenant or
condition contained in any Document filed or required to be filed as an exhibit
to the Registration Statement.
16. To the best of our knowledge, there are no actions, suits, claims,
investigations or proceedings pending, threatened or contemplated to which the
Company or any of the Subsidiaries or the Manager are subject or of which any of
their assets or properties are subject at law or in equity or before or by any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency which are required to be described in the Prospectus
but are not so described or which (i) seek to challenge the legality or
enforceability of the Underwriting Agreement, (ii) seek to challenge the
legality or enforceability of any of the Documents filed, or required to be
filed, or incorporated by reference as exhibits to the Registration Statement,
(iii) seek damages or other remedies with respect to any of the Documents filed,
or required to be filed, as exhibits to the Registration Statement, (iv) except
as set forth in or contemplated by the Registration Statement and the
Prospectus, seek money damages or seek to impose criminal penalties upon the
Company, the Subsidiaries or the Manager, or any of their respective officers or
directors in their capacities as such and of which we have knowledge or (v) seek
to enjoin any of the business activities of the Company, the Subsidiaries or the
Manager, or the transactions described in the Prospectus and of which we have
knowledge.
17. The documents incorporated by reference in the Registration Statements
and Prospectus, when they became effective were filed (or, if an amendment with
respect to any such document was filed when such amendment was filed) with the
Commission, complied as to form in all material respects with the Exchange Act
(except as to the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein as to which we
express no opinion).
18. Each of the Company and the Subsidiaries is not and will not, upon
consummation of the transactions contemplated by the Underwriting Agreement, be
an "investment company," or a "promoter" or "principal underwriter" for, a
"registered investment company," as such terms are defined in the Investment
Company Act, or a "broker" within the meaning of Section 3(a)(4) of the Exchange
Act or a
"dealer" within the meaning of Section 3(a)(5) of the Exchange Act or required
to be registered pursuant to Section 15(a) of the Exchange Act.
19. For all taxable years commencing with the taxable year ended December 31,
1993, the Company and each of the Subsidiaries have been, and upon the sale of
Shares will continue to be, organized and operated in conformity with the
requirements for qualification and taxation of the Company as a "real estate
investment trust" (a "REIT") under Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the "Code"). The proposed method of operation
of the Company and each of the Subsidiaries as described in the Prospectus will
enable the Company to continue to meet the requirements for qualification and
taxation as a REIT under the Code, and no actions have been taken (or not taken
which are required to be taken) which would cause such qualification to be lost.
The Company intends to continue to operate in a manner which would permit it to
qualify as a REIT under the Code. The Company has no intention of changing its
operations or engaging in activities which would cause it to fail to qualify, or
make economically undesirable its continued qualification, as a REIT. The
disclosure contained in the Prospectus under the caption "Federal Income Tax
Considerations," to the extent such information constitutes matters of law,
summaries of legal matters or legal conclusions, has been reviewed by such
counsel and are accurate in all material respects.
20. The Shares have been duly authorized for listing by the New York Stock
Exchange upon official notice of issuance.
21. To the best of our knowledge, neither the Company or the Subsidiaries nor
the Manager is in violation of, or in default with respect to, any law, rule,
regulation, order, judgment or decree, except as may be described in the
Prospectus or such as in the aggregate do not now have and will not in the
future have a material adverse effect upon the operations, business or assets of
the Company, the Subsidiaries or the Manager.
22. Delivery of certificates for the Shares and/or transfer of the Shares
through the "FAST" system of the Depository Trust Company for the accounts of
the Underwriters will transfer valid and marketable title thereto to each
Underwriter that has purchased such Shares in good faith and without any notice
of any adverse claim with respect thereto.
We have participated in conferences with officers and other representatives of
the Company and the Subsidiaries, representatives of the independent public
accountants of the Company and the Subsidiaries and representatives of the
Underwriters at which the contents of the Registration Statements and Prospectus
and related matters were discussed and, although we are not passing upon and do
not assume responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statements or Prospectus (except as and
to the extent stated in opinions number nine and eleven above), on the basis of
the foregoing nothing has come to our attention that causes us to believe that
the Registration Statements or any amendment thereto at the time such
Registration Statements or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus or Prospectus Supplement at the date of such Prospectus or
Prospectus Supplement, and at all times up to and including the time of purchase
or additional time of purchase, as the case may be, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood that we express no opinion with respect to the financial statements
and schedules and other financial and statistical data included in the
Registration Statements or Prospectus).
EXHIBIT B
FORM OF
OPINION OF XXXXXXXX CHANCE XXXXXX & XXXXX LLP
1. The Underwriting Agreement has been duly authorized, executed and
delivered by the Underwriters.
2. The Shares have been duly authorized and, when issued and delivered to
and paid for by the Underwriters, will be duly and validly and issued and will
be fully paid and non-assessable.
3. The Shares conform to the description thereof contained in the
Registration Statements and Prospectus.
4. The Registration Statements and the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which we express no
opinion) comply as to form in all material respects with the requirements of the
Securities Act.
5. The Registration Statements have become effective under the Securities
Act and, to the best of our knowledge, no stop order proceedings with respect
thereto are pending or threatened under the Securities Act and any required
filings of the Prospectus and any supplement thereto pursuant to Rule 424 under
the Securities Act has been made in the manner and within the time period
required by such Rule 424.
In addition, we have reviewed the Registration Statement and the Prospectus and
participated in the preparation of the Prospectus Supplement and in conferences
with officers and other representatives of and counsel to the Company,
representatives of the independent public accountants for the Company and
representatives of the Underwriters at which the contents of the Registration
Statements and Prospectus and related matters were discussed and, we have
reviewed certain corporate records, documents and proceedings, and on the basis
of the foregoing, nothing has come to our attention that leads us to believe
that the Registration Statement, at the time such Registration Statement became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus, as of the date of the
Underwriting Agreement or the date hereof, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that we express
no belief with respect to the financial statements, financial schedules and
other financial data included or incorporated by reference in the Registration
Statements or the Prospectus).
The limitations inherent in the independent verification of factual matters and
the character of determinations involved in the preparation of a disclosure
document are such, however, that we do not assume any responsibility for the
accuracy, completeness, or fairness of the statements contained in the
Registration Statement or Prospectus or any amendments or supplements thereto
(including any of the documents incorporated by reference therein).
EXHIBIT C
FORM OF
LOCK-UP LETTER
August 7, 2001
UBS Warburg LLC
Credit Suisse First Boston Corporation
X.X. Xxxxxxx & Sons, Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
as representatives of the several underwriters,
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
In consideration of the agreement of UBS Warburg LLC ("UBS Warburg"),
Credit Suisse First Boston Corporation, X.X. Xxxxxxx & Sons, Inc. and U.S.
Bancorp Xxxxx Xxxxxxx Inc. and certain other underwriters to underwrite a
proposed public offering (the "Offering") of a maximum of 6,325,000 shares (the
"Shares") of common stock, par value $0.01 per share (the "Common Stock"), of
Xxxxxxxxx Mortgage, Inc., a Maryland corporation (the "Company"), as
contemplated by a registration statement on Form S-3 (File No. 333-61966),
including a prospectus (the "Registration Statement"), with respect to the
Shares, the undersigned hereby agrees that the undersigned will not, for a
period of 90 days after the commencement of the public offering of such Shares,
without the prior written consent of UBS Warburg, offer, sell, contract to sell,
pledge, grant any option to purchase or otherwise dispose of, directly or
indirectly, any shares of capital stock, or any securities convertible into, or
exercisable, exchangeable or redeemable for, shares of capital stock, except for
issuances of Common Stock upon the exercise of outstanding options and for
purchases of Common Stock through the Company's dividend reinvestment and stock
purchase plan.
Very truly yours,
By_________________________________________
Name:
Title:
