EXHIBIT 1.1
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CMC SECURITIES CORPORATION II
PASS-THROUGH CERTIFICATES
(Issuable in Series)
UNDERWRITING AGREEMENT
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October 25, 1996
PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CMC Securities Corporation II (the "Company"), a Delaware corporation and
wholly-owned subsidiary of Capstead Inc., also a Delaware corporation
("Capstead"), proposes to issue its Pass-Through Certificates of the series
(each, a "Series") and classes designated at the time of sale (the
"Certificates"). Each Series of Certificates shall be issued pursuant to a
pooling agreement (each a "Pooling Agreement"), between the Company and Texas
Commerce Bank National Association, as trustee (the "Trustee").
Underwritten Offerings of Certificates may be made through you or through
an underwriting syndicate managed by you. The Company proposes to sell one or
more Series of Certificates to you and to each of the other several
underwriters, if any, participating in an underwriting syndicate managed by you.
It is understood, however, that the Company may elect to retain, through the
execution of one or more underwriting agreements in addition to this Agreement,
one or more additional underwriters other than you to underwrite, or manage the
underwriting syndicate with respect to, any offering of one or more Series of
its Certificates.
Whenever the Company determines to make such an offering of Certificates
through you, it will enter into an agreement (the "Terms Agreement") providing
for the sale of such Certificates (the "Offered Certificates") to, and the
purchase and offering thereof by, you and such other underwriters, if any,
selected by you as have authorized you to enter into such Terms Agreement on
their behalf (the underwriters designated in any such Terms Agreement being
referred to herein as "Underwriters," which term shall
include you whether acting alone in the sale of any Series of Certificates or as
a member of the underwriting syndicate). The Terms Agreement relating to each
offering of Certificates shall specify the principal amount of Certificates to
be issued and the terms governing the purchase of the Certificates by the
Underwriters, a brief description of the Mortgage Assets (as defined below), the
names of the Underwriters participating in such offering (subject to
substitution as provided in Section 11 hereof) and the principal amount of the
Offered Certificates which each severally agrees to purchase, the names of such
other Underwriters, if any, acting as co-managers with you in connection with
such offering, the price at which the Offered Certificates are to be purchased
by the Underwriters from the Company, the initial public offering price (or the
manner in which such prices shall be determined), the time and place of delivery
of and payment for the Offered Certificates, and such other information as may
be agreed upon. The Terms Agreement, which shall be substantially in the form
of Exhibit A hereto, may take the form of an exchange of any standard form of
written telecommunication between you and the Company. Each offering of
Certificates through you will be governed by this Agreement, as supplemented by
the applicable Terms Agreement, and this Agreement and such Terms Agreement
shall inure to the benefit of and be binding upon each Underwriter participating
in the offering of such Certificates.
At their date of issuance, the Offered Certificates will evidence interests
in Asset Certificates (as defined in the applicable Pooling Agreement) and fixed
and adjustable rate, fully amortizing, conventional first lien residential
mortgage loans (the "Mortgage Loans") (together with the Asset Certificates, the
"Mortgage Assets"). The Certificates are more fully described in the
Registration Statement (as defined below). Capitalized terms used but not
defined herein shall have the meanings given to them in the applicable Pooling
Agreement.
If specified in the applicable Terms Agreement, the Offered Certificates
may have the benefit of an insurance policy (the "Policy") issued by the
certificate insurer named therein (the "Certificate Insurer") pursuant to an
indemnification and insurance policy between the Company and the Certificate
Insurer (the "Insurance Agreement").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-68930), a related
preliminary prospectus and related preliminary prospectus supplements for the
registration of the Certificates under the Securities Act of 1933 (the "1933
Act"),
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which registration statement as most recently amended was declared effective on
December 11, 1995. Such registration statement, as from time to time amended
through the date of the Terms Agreement, including all exhibits thereto and all
documents therein incorporated by reference from time to time pursuant to Item
12 of Form S-3 under the 1933 Act that were filed under the Securities Exchange
Act of 1934 (the "1934 Act"), on or before the effective date of such
registration statement, is hereinafter referred to as the "Registration
Statement." The prospectus in the form in which it appears in the Registration
Statement, including all documents therein incorporated by reference from time
to time pursuant to the 1934 Act, is hereinafter referred to as the "Basic
Prospectus". The Basic Prospectus as supplemented by the prospectus supplement
or supplements relating to a particular Series of Certificates each in the form
first filed after the date of the related Terms Agreement with the Commission
pursuant to Rule 424 under the 1933 Act, including any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act that were
filed under the 1934 Act on or before the date of such prospectus supplement
(such prospectus supplement, including such incorporated documents, in the form
first filed after the date of the related Terms Agreement pursuant to Rule
424(b) being hereinafter termed the "Prospectus Supplement"), is hereinafter
referred to as the "Final Prospectus". Any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration Statement,
the Final Prospectus or the Prospectus Supplement shall be deemed to refer to
and include the filing of any document under the 1934 Act after the effective
date of the Registration Statement or the issue date of the Final Prospectus or
Prospectus Supplement, as the case may be, deemed to be incorporated therein by
reference pursuant to Item 12 of Form S-3 under the 1933 Act.
SECTION 1. Representations and Warranties. The Company and Capstead,
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jointly and severally, represent and warrant to you as of the date hereof, and
to each Underwriter named in a Terms Agreement as of the date thereof (in each
case the "Representation Date"), as follows:
(a) The Registration Statement, at the time it became effective,
complied and, as of the date hereof, does comply, in all material respects
with the requirements of the 1933 Act and the rules and regulations of the
Commission thereunder (the "1933 Act Regulations") and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and the Final Prospectus at the time it is mailed to the
Commission for filing pursuant to
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Rule 424 under the Act and at the Closing Time referred to in Section 2
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from (i) the
Registration Statement or Final Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through you expressly for use in the Registration Statement or
Final Prospectus or (ii) any Current Report (as defined in Section 3(b)
below), or in any amendment thereof or supplement thereto, incorporated by
reference in such Registration Statement or such Final Prospectus (or any
amendment thereof or supplement thereto). There are no material contracts
or documents of the Company which are required to be filed as exhibits to
the Registration Statement by the 1933 Act or the 1933 Act Regulations
which have not been so filed.
(b) The documents incorporated by reference in the Registration
Statement and the applicable Final Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder, and, when read together and with
the other information in the applicable Final Prospectus, at the time the
Registration Statement and any amendments thereof became effective, and at
the time such Final Prospectus is filed with the Commission, did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to any Current Report with
respect to any Section 8 Materials or Collateral Term Sheets.
(c) The accountants who reported on the balance sheet included or
incorporated in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(d) The balance sheet, if any, of the Company included or
incorporated in the Registration Statement presents fairly the financial
position of the Company at the date indicated,
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and has been prepared in conformity with generally accepted accounting
principles.
(e) Since the respective dates as of which information is given in
the Registration Statement or, if later, the applicable Final Prospectus,
except as otherwise stated therein, there has been no material adverse
change in the condition, financial or otherwise, earnings, business
affairs, or business prospects of the Company.
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Registration
Statement, and, at the Closing Time, the Company will be duly qualified as
a foreign corporation to transact business and will be in good standing in
the State of Texas. The Company is not required to qualify to do business
as a foreign corporation under the laws of any other state. The Company has
no subsidiaries.
(g) The authorized, issued and outstanding capital stock of the
Company is as set forth (or incorporated) in the Registration Statement,
and the shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-
assessable, and are owned of record and beneficially by Capstead, free and
clear of any lien, charge, option, warrant, security interest, encumbrance,
voting trust or similar arrangement.
(h) Neither the Company nor Capstead is in violation of its charter
or bylaws. The Company is not in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, pooling and administration agreement, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by
which it or its properties may be bound, which violations or defaults
separately or in the aggregate would have a material adverse effect on the
Company.
(i) The Company owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease, own or license, as the case may be, and
to operate, its properties and to carry on its business as described in the
Registration
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Statement or, if later, the applicable Final Prospectus; and the Company
has conducted and is conducting its business so as to comply in all
material respects with all applicable laws, administrative regulations and
administrative and court decrees.
(j) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending against the
Company or, to the knowledge of the Company, threatened against the Company
(except as set forth in the Registration Statement or, if later, the
applicable Final Prospectus) which could reasonably be expected to result
in any material adverse change in the condition, financial or otherwise,
earnings, business affairs, or business prospects of the Company which
could reasonably be expected to interfere with or materially and adversely
affect the consummation of the transactions contemplated herein.
(k) The execution and delivery of this Agreement, each applicable
Pooling Agreement, Insurance Agreement and each Terms Agreement, the
incurrence of the obligations herein set forth and the consummation of the
transactions contemplated herein and therein have been, duly authorized by
the Company and/or Capstead, as applicable, by all necessary action
(corporate and other); this Agreement has been and each applicable Pooling
Agreement, Insurance Agreement and the Terms Agreement, when executed and
delivered, will have been, duly executed and delivered by the Company,
and/or Capstead, as applicable, and will be enforceable in accordance with
their terms, subject, as to enforceability of remedies, to applicable
bankruptcy, insolvency, reorganization, or other laws affecting creditors'
rights generally, and to general principles of equity and equitable
remedies (regardless of whether the enforceability of such remedies is
considered in a proceeding in equity or at law). Neither the execution and
delivery of this Agreement, the applicable Pooling Agreement, Insurance
Agreement or the Terms Agreement, the incurrence of the obligations herein
or therein set forth, nor the consummation of the transactions contemplated
herein or therein will conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien, mortgage,
pledge, charge, security interest or encumbrance (collectively, "Lien")
upon any property or assets of the Company or Capstead, as applicable,
pursuant to any contract, indenture, pooling and administration agreement,
mortgage, loan agreement, note, lease or other instrument to which the
Company or Capstead, as applicable, is a party or by
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which either of them may be bound, or to which any of the property or
assets of either of them is subject, which separately or in the aggregate
are material, nor will any such action result in any violation of the
provisions of the charter or bylaws of either of the Company or Capstead,
or, to the best of such entity's knowledge, of any law, administrative
regulation or administrative or court decree.
(l) The issuance of the Certificates underwritten by you has been
duly authorized by the Company (or will have been so authorized prior to
each issuance of Certificates underwritten by you) and, when such
Certificates are executed and authenticated and delivered in accordance
with the applicable Pooling Agreement and sold to the Underwriters pursuant
to this Agreement, and any Terms Agreement, such Certificates will be
entitled to the benefits and security provided by the applicable Pooling
Agreement and the Policy and will constitute the legal, valid and binding
non-recourse obligations of the Company enforceable in accordance with
their terms, but otherwise subject, as to enforceability of remedies, to
applicable bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and to general principles of equity and
equitable remedies (regardless of whether the enforceability of such
remedies is considered in a proceeding in equity or at law).
(m) The Certificates of each Series underwritten by you and the
applicable Pooling Agreement will conform in all material respects to the
respective descriptions thereof contained in the applicable Final
Prospectus, except that no representation or warranty is made that the
Certificates conform with any description thereof contained in any Current
Report.
(n) At the Closing Time with respect to a Series of Certificates, the
Company will own (i) the Mortgage Assets listed in Exhibit B to the Pooling
Agreement relating to the applicable Series of Certificates and (ii) the
money or other assets specified or referred to in the conveyance clauses of
such Pooling Agreement as being sold, transferred, assigned and delivered
to the Trustee at Closing Time (the Mortgage Assets and assets referred to
in clauses (i) and (ii) of this subparagraph (n) are referred to
collectively as the "Initial Assets"), free and clear of any lien; the
Company has power and authority (corporate and other) to sell, transfer,
assign and deliver the Initial Assets to the Trustee under the applicable
Pooling Agreement, and will have duly authorized
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such sale, transfer, assignment and delivery to the Trustee by all
necessary corporate action.
(o) As of the Closing Time with respect to a Series of Certificates,
the Company will have sold, transferred, assigned and delivered to the
Trustee under the applicable Pooling Agreement all of its right, title and
interest in and to, among other things, (i) Mortgage Assets with an
aggregate outstanding principal balance as of such Closing Time at least
equal to the aggregate original principal amount of the Certificates of the
applicable Series then being issued and (ii) cash and/or other assets, if
any, in the amount set forth in the applicable Pooling Agreement.
(p) At the Closing Time with respect to a Series of Certificates, all
of the right, title and interest of the Company in each item of Mortgage
Assets listed on Exhibit B to the applicable Pooling Agreement relating to
the applicable Series of Certificates will have been duly and validly sold,
transferred, assigned and delivered to the Trustee, or its nominee, for the
exclusive use and benefit of all of the holders of Certificates of such
Series. Together with such sale, transfer, assignment and delivery of the
Mortgage Assets to the Trustee, the Company will file a UCC-1 financing
statement with respect to the Mortgage Assets in the office of the
Secretary of State of the State of Texas and in such other jurisdictions,
if any, as the Company deems appropriate in order to additionally protect
the interests of the holders of the Certificates of such Series in the
Mortgage Assets. The information set forth with respect to the Mortgage
Assets in Exhibit B to the related Pooling Agreement will as of the Closing
Time of such Series be true and correct in all material respects.
(q) The Company is not, and will not as a result of the offer and
sale of the Certificates as contemplated in this Agreement and any
applicable Terms Agreement become, an "investment company" or under the
"control" of an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act")
which would be required to register under the Investment Company Act.
(r) The representations and warranties made by the Company in the
applicable Pooling Agreement and made in any Officers' Certificate of the
Company delivered pursuant to the
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applicable Pooling Agreement will be true and correct at the time made and
at the Closing Time.
(s) (i) The applicable Pooling Agreement, at the Closing Time of the
related Series, will have been duly authorized, executed and delivered by,
and will constitute the legal, valid and binding agreement of the Company,
subject, as to enforceability of remedies, to applicable bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights
generally, and to general principles of equity and equitable remedies
(regardless of whether the enforceability of such remedies is considered in
a proceeding in equity or at law); (ii) such Pooling Agreement, the
Certificates, the Mortgage Assets evidenced thereby and the related
policies of insurance shall conform in all material respects to the
respective descriptions thereof contained in the applicable Final
Prospectus.
(t) Any certificate signed by an officer of the Company or Capstead
and delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company or Capstead, respectively, to
each Underwriter as to the matters covered thereby.
(u) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the
United States is required for the issue and sale of the Certificates, or
the consummation by the Company of the other transactions contemplated by
this Agreement, each Terms Agreement or the applicable Pooling Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Certificates by the
Underwriters or as have been obtained.
(v) At the Closing Time of a Series, the Offered Certificates of such
Series shall have been rated one of the four highest rating categories by
at least one nationally recognized statistical rating organization or in
such lower rating categories as are acceptable to the Underwriters.
(w) Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of this Agreement, the related Terms
Agreement, the applicable Pooling Agreement and the Certificates have been
paid or will be paid at or prior to the Closing Time.
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(x) When delivered, any Policy will constitute the legal, valid and
binding obligation of the Certificate Insurer, enforceable in accordance
with its terms.
SECTION 2. Sale and Delivery to the Underwriters; Closing. The several
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commitments of the Underwriters to purchase Offered Certificates pursuant to any
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth. The Company agrees to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not jointly,
agrees to purchase from the Company, the respective original principal amounts
of the Offered Certificates set forth in the applicable Terms Agreement opposite
the name of such Underwriter, plus any additional original principal amount of
Offered Certificates which such Underwriter may be obligated to purchase
pursuant to Section 11 hereof.
Delivery of, and payment of the purchase price for, the Offered
Certificates shall be made at the office of Xxxxxxx & Xxxxx L.L.P., 0000
Xxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000, or at such other place as shall be
agreed upon by you and the Company, at 10:00 A.M. on the date set forth in the
applicable Terms Agreement, or such other time as shall be agreed upon by you
and the Company (such time and date being referred to as the "Closing Time").
Payment shall be made in immediately available or next day funds as specified in
the Terms Agreement, payable to or upon the order of the Company, against
delivery to you for the respective accounts of the Underwriters of the Offered
Certificates to be purchased by them. Such Certificates shall be in such
denominations and registered in such names as you may request in writing at
least two business days prior to the Closing Time.
The parties hereto agree that settlement for all securities sold pursuant
to this Agreement shall take place on the terms set forth herein and not as set
forth in Rule 15c6-1(a) of the Exchange Act.
SECTION 3. Covenants of the Company. The Company covenants with you,
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and with each Underwriter participating in the offering of the applicable Series
of Certificates, as follows:
(a) Immediately following the execution of each Terms Agreement, the
Company will prepare a Final Prospectus setting forth the principal amount
of Certificates covered thereby, the names of the Underwriters
participating in the offering and the principal amount of Certificates
which each severally
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has agreed to purchase, the names of any Underwriters acting as co-managers
with you in connection with the offering, the price at which the
Certificates are to be purchased by the Underwriters from the Company, the
initial public offering price of the Certificates (or method of
calculation), the selling concessions and reallowance, if any, and such
other information as you and the Company deem appropriate in connection
with the offering of the Certificates. The Company will promptly transmit
copies of the Final Prospectus to the Commission for filing pursuant to
Rule 424 of the 1933 Act Regulations and will furnish to the Underwriters
named therein as many copies of the Final Prospectus as you shall
reasonably request.
(b) The Company will cause any Computational Materials and any
Structural Term Sheets (each as defined in Section 8 below) with respect to
the Certificates that are delivered by you to the Company pursuant to
Section 8 hereof to be filed with the Commission on a Current Report on
Form 8-K (any such Current Report on Form 8-K with respect to any
Computational Materials and any Structural Term Sheets related to the
Certificates is herein referred to as a "Current Report") pursuant to Rule
13a-11 under the 1934 Act not later than 11:00 a.m. Eastern Time on the
Business Day immediately following the Business Day on which all such
Section 8 Materials (as defined below) are delivered to counsel for the
Company by you prior to 3:00 p.m. Dallas, Texas time, and will promptly
advise you when any such Current Report has been filed, provided that in
any event the Company will cause the Section 8 Materials to be so filed not
later than the date on which the related Final Prospectus is required to be
so filed pursuant to Rule 424 under the 1933 Act. The Company will cause
any Collateral Term Sheet (as defined in Section 9 below) with respect to
the Offered Certificates of a Series that is delivered by the Underwriter
to the Company in accordance with the provisions of Section 9 to be filed
with the Commission on a Current Report pursuant to Rule 13a-11 under the
Exchange Act on the business day immediately following the day on which
such Collateral Term Sheet is delivered to counsel for the Company by the
Underwriter prior to 10:30 a.m. The Company shall have no obligation to
file any materials provided by you pursuant to Section 8 ("Section 8
Materials") or any Collateral Term Sheets which, in the reasonable
determination of the Company (a "Non-Filing Determination"), are not
required to be filed pursuant to the Xxxxxx Letter or the PSA Letter (each
as defined in Section 8 below), or which contain erroneous information or
contain any
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untrue statement of a material fact or, when read in conjunction with the
Final Prospectus and Prospectus Supplement, omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading (it being understood, however, that the Company shall have
no obligation to review or pass upon the accuracy or adequacy of, or to
correct, any Section 8 Materials or Collateral Term Sheets provided by you
to the Company); provided that, in the event of a Non-Filing Determination,
the Company shall immediately notify you in writing of the reasons for such
Non-Filing Determination; and, provided, further, that the Company shall
file those Section 8 Materials or Collateral Term Sheets for which you have
specifically confirmed in writing that the items giving rise to the Non-
Filing Determination are complete and correct and that you are advising the
Company to file such Section 8 Materials or Collateral Term Sheets.
(c) The Company will notify you immediately, and in writing confirm
the notice, (i) of the receipt of any comments from the Commission, (ii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Final Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iv) of receipt by the
Company of any notification with respect to the suspension of the
qualification of the Certificates for sale in any jurisdiction or the
initiation or threat of any proceeding for that purpose, and (v) of the
happening of any event which makes untrue any statement of a material fact
made in, or results in the omission of material information from, the
Registration Statement or in any Final Prospectus then required to be
distributed or which requires the making of a change in the Registration
Statement or any such Final Prospectus in order to make any material
statements therein, in the light of the circumstances under which they were
made, not misleading. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(d) The Company will give you notice of its intention to file any
amendment to the Registration Statement or any amendment or supplement to
the Final Prospectus, whether pursuant to the 1934 Act, 1933 Act or
otherwise, and will not file any such amendment or supplement without
furnishing a
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copy thereof to you and counsel for the Underwriters and obtaining your
consent to such filing, which consent shall not be unreasonably withheld.
(e) The Company will deliver to you, as soon as practicable, as many
signed copies of the Registration Statement as originally filed and of each
amendment thereto, with signed consents and exhibits filed therewith
(including exhibits incorporated by reference therein and documents
incorporated by reference in the Final Prospectus), and will also deliver
to you such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto (including consents and
exhibits) as you may reasonably request.
(f) The Company will furnish to each Underwriter, from time to time
during the period when the Final Prospectus is required to be delivered
under the 1933 Act, such number of copies of the Final Prospectus (as
amended or supplemented), other than exhibits to any related Current
Report, as it may reasonably request for the purposes contemplated by the
1933 Act or the 0000 Xxx.
(g) If at any time when a prospectus relating to the Certificates is
required to be delivered under the 1933 Act any event occurs as a result of
which the applicable Final Prospectus as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend such Final Prospectus to comply with the
1933 Act, the Company, subject to subparagraph (d) above, promptly will
prepare and file with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance; provided, however, that the Company will not be required to
file any such amendment or supplement with respect to any Section 8
Materials or Collateral Term Sheets incorporated by reference in the Final
Prospectus other than any amendments or supplements of such Section 8
Materials that are furnished to the Company by the Underwriter pursuant to
Section 8(a) hereof or any amendments or supplements of such Collateral
Term Sheets that are furnished to the Company by you pursuant to Section
9(d) hereof that the Company determines to file in accordance therewith.
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(h) The Company will endeavor, in cooperation with you and counsel
for the Underwriters, to qualify the Offered Certificates for offering and
sale under the applicable securities and Blue Sky laws of such
jurisdictions as you may reasonably designate, and will maintain such
qualification in effect for as long as required for the distribution of
such Offered Certificates, unless the offering and sale of the Offered
Certificates is exempt from such qualification under the Secondary Mortgage
Market Enhancement Act of 1984, and will cooperate with you and counsel for
the Underwriters, to determine the eligibility of the Offered Certificates
for investment by institutional investors in such jurisdictions. The
Company will, at your request or the request of counsel for the
Underwriters, file such statements and reports as may be required by the
laws of each jurisdiction in which the Certificates have been qualified as
above provided. Notwithstanding the foregoing, no such qualification shall
be required in any jurisdiction where, as a result thereof, the Company
would be subject to general service of process, other than by reason of the
offer and sale of the Certificates, qualification as a foreign corporation
or to taxation as a foreign corporation doing business in such
jurisdiction.
(i) The Company will make generally available to its security holders
and will deliver to you as soon as practicable an earnings statement,
conforming to the requirements of Section 11(a) of the 1933 Act, covering a
period of at least twelve months beginning after the effective date of the
Registration Statement. Compliance with Rule 158 under the 1933 Act shall
satisfy the requirements of this paragraph.
(j) So long as any Certificates are outstanding, the Company will
furnish to you as soon as practicable:
(i) copies of the annual reports and other items required to be
delivered to the Trustee or sent to Certificateholders pursuant to the
applicable Pooling Agreement;
(ii) copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange by
the Company; and
(iii) information as to the outstanding principal balances of the
Asset Certificates and mortgage loans evidenced thereby, and, to the
extent that such
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information has been maintained in the ordinary course of business by
the Company, such other information as may reasonably be requested by
you which in your judgment is necessary or appropriate to the
maintenance of a secondary market in the Certificates.
(k) So long as any Certificates of any Series underwritten by you are
outstanding, the Company will furnish to you within five days after they
are available, copies of all reports filed by the Company under the 1934
Act.
(l) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file promptly all documents required
to be filed with the Commission pursuant to Section 13 or 14 of the 1934
Act; provided, however, that, subject to the last sentence of Section 3(b)
hereof, the Company will not be required to file any amendment or
supplement to any Current Report incorporated by reference in the
Prospectus other than any amendments or supplements thereto that are
furnished to the Company by you pursuant to Section 8(a) or Section 9(d)
hereof which the Company determines to file in accordance therewith.
(m) The Company shall prepare and file with the Commission, within
the period provided in the related Final Prospectus, its Current Report on
Form 8-K which shall include such detailed information, schedules and
reports (the "Detailed Description") regarding the Mortgage Assets relating
to the Offered Certificates as the Underwriters may reasonably request;
provided that if a Detailed Description regarding the Mortgage Assets is
included in the Final Prospectus no such information is required to be
filed on a Current Report on Form 8-K unless the actual Mortgage Assets are
different from those described in the Final Prospectus.
(n) During the period, if any, commencing on the date of the
applicable Terms Agreement and expiring on the date specified in such Terms
Agreement (the "Stand-Off Period"), neither the Company nor Capstead nor or
any subsidiary thereof will, without your prior written consent or as may
be otherwise permitted by such Terms Agreement, offer or sell, or enter
into any agreement to sell to the public, any mortgage-related or mortgage-
backed securities issued by any of them which are similar to the
Certificates. The provisions of this subparagraph (n) do not apply to
securities issued or guaranteed by GNMA, FNMA or FHLMC.
- 15 -
SECTION 4. Payment of Expenses. The Company will pay, and Capstead will
-------------------
cause the Company to pay, all expenses incident to the performance of the
Company's obligations under this Agreement and the applicable Terms Agreement
unless otherwise agreed upon by the parties (other than the expenses of Ernst &
Young L.L.P. under Section 8(c) hereof, the Underwriters' due diligence
expenses, the Underwriters' counsel fees and the Underwriters' own expenses,
which will be paid by you), including and without limitation those related to:
(i) the filing of the Registration Statement with respect to the Certificates
and all amendments thereto, (ii) the printing or photocopying and delivery to
the Underwriters, in such quantities as you may reasonably request, of copies of
this Agreement and the Terms Agreement, (iii) the preparation, registration,
issuance and delivery to the Underwriters of the Certificates underwritten
pursuant to this Agreement, (iv) the fees and disbursements of the Company's
counsel and accountants, and of any counsel rendering a closing opinion with
respect to matters of local law, (v) the qualification of the Certificates
underwritten pursuant to this Agreement under securities and Blue Sky laws and
the determination of the eligibility of the Certificates for investment in
accordance with the provisions of Section 3(h), including filing fees in
connection therewith, (vi) the printing and delivery to the Underwriters, in
such quantities as you may reasonably request, of copies of the Registration
Statement with respect to the Certificates underwritten pursuant to this
Agreement and all amendments thereto, of any preliminary prospectus and
preliminary prospectus supplement and of the Final Prospectus and all amendments
and supplements thereto and all documents incorporated therein (other than
exhibits to any Current Report), and of any Blue Sky Survey and Legal Investment
Survey, (vii) the printing or photocopying and delivery to the Underwriters, in
such quantities as you may reasonably request, of copies of the applicable
Pooling Agreement, (viii) the fees charged by investment rating agencies
requested by the Company to rate the Certificates underwritten pursuant to this
Agreement, (ix) the fees and expenses, if any, incurred in connection with the
listing of the Certificates underwritten pursuant to this Agreement on any
national securities exchange; and (x) the fees and expenses of the Trustee and
its counsel.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the Underwriters to purchase the Offered Certificates pursuant to any Terms
Agreement are subject to the accuracy in all material respects of the
representations and warranties of the Company and Capstead herein contained, to
the performance by the Company and
- 16 -
Capstead of their obligations hereunder, and to the following further
conditions:
(a) At the applicable Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, (ii) the rating assigned as of the date of the applicable Terms
Agreement by any nationally recognized securities rating agency to the
Offered Certificates to be underwritten at such time pursuant to this
Agreement shall not have been lowered since that date and (iii) there shall
not have come to your attention any fact that would cause you to believe
that the Final Prospectus at the time it was required to be delivered to a
purchaser of the Offered Certificates to be underwritten at such time
pursuant to this Agreement contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at such time,
not misleading.
(b) At the applicable Closing Time you shall have received:
(1) The opinion, addressed to the Underwriters and dated the
Closing Time, of Xxxxxxx & Xxxxx L.L.P., counsel to the Company, in
form and substance reasonably satisfactory to you and counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and conduct its business as
described in the applicable Final Prospectus; and the Company is
qualified as a foreign corporation to transact business in the
State of Texas and each other jurisdiction where the nature of
its assets requires such qualification.
(iii) All the authorized, issued and outstanding capital
stock of the Company has been duly authorized and validly issued
and is fully paid and non-assessable, and is owned of record by
- 17 -
Capstead, to the knowledge of such counsel, free and clear of any
lien, security interest, encumbrance, option, warrant, voting
trust or similar arrangement.
(iv) The Company is not in violation of its charter or
bylaws. To the best of such counsel's knowledge, the Company is
not in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
material contract, indenture, pooling and administration
agreement, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its
properties may be bound.
(v) To the best of such counsel's knowledge, the Company
owns or possesses or has obtained all material governmental
licenses, permits, consents, orders, approvals and other
authorizations necessary to lease or own, as the case may be, and
to operate, its properties and to carry on its businesses as
presently conducted; and, to the best of such counsel's
knowledge, the Company has conducted and is conducting its
businesses so as to comply in all material respects with all
applicable laws.
(vi) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending, or, to the best of such counsel's knowledge, threatened
against the Company which could reasonably be expected to
interfere with or adversely affect the consummation of the
transactions contemplated herein.
(vii) The execution and delivery of this Agreement, the
applicable Terms Agreement and the applicable Pooling Agreement,
the incurrence of the obligations herein and therein set forth
and the consummation of the transactions contemplated herein and
therein have been duly authorized by the Company, by all
necessary action; this Agreement, the Insurance Agreement and the
applicable Terms Agreement have been duly authorized, executed
and delivered by the Company; and the applicable
- 18 -
Pooling Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and
binding agreement of the Company, enforceable in accordance with
its terms, subject, as to enforceability of remedies, to
applicable bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally and to general principles
of equity and equitable remedies (regardless of whether the
enforceability of such remedies is considered in a proceeding at
law or in equity).
(viii) Neither the execution and delivery of this Agreement,
the applicable Terms Agreement, the Insurance Agreement or the
applicable Pooling Agreement, the incurrence of the obligations
herein or therein set forth, nor the consummation of the
transactions contemplated herein or therein, to the best of such
counsel's knowledge, will conflict with or constitute a breach
of, or default under, or result in the creation or imposition of
any Lien upon any property or assets of the Company pursuant to,
any material contract, indenture, pooling and administration
agreement, mortgage, loan agreement, note, lease or other
instrument to which the Company is a party or by which it may be
bound, or to which any of its assets is subject which separately
or in the aggregate are material, nor will any such action result
in any violation of the provisions of the charter or bylaws of
the Company or, to the best of such counsel's knowledge, of any
law, administrative regulation or administrative or court decree.
(ix) No filing or, registration with, notice to or consent,
approval, authorization or order or other action of, any court or
governmental authority or agency, is required for the
consummation by the Company of the transactions contemplated by
this Agreement or the applicable Terms Agreement, except such as
have been obtained and except such as may be required under state
securities or Blue Sky laws in connection with the distribution
of the Certificates referred to in such Terms Agreement by the
Underwriters.
- 19 -
(x) The issuance of the Offered Certificates to be
underwritten at such time pursuant to this Agreement has been
duly authorized by the Company and such Offered Certificates have
been duly executed and delivered by the Company and, assuming (A)
due authorization, execution and delivery of the applicable
Pooling Agreement by the Trustee, when authenticated by the
Trustee in accordance with the terms of the applicable Pooling
Agreement and delivered to and paid for by the Underwriters
pursuant to the applicable Terms Agreement, and (B) due
authorization, execution and delivery of the Pooling and the
Insurance Agreement by the Certificate Insurer will be entitled
to the benefits provided by the applicable Pooling Agreement and
the Policy. The Offered Certificates are in all material respects
in the form contemplated by the applicable Pooling Agreement.
(xi) The Offered Certificates to be underwritten at such
time pursuant to this Agreement and the applicable Pooling
Agreement conform in all material respects to the respective
descriptions thereof contained in the applicable Final Prospectus
(excluding any descriptions thereof in any Current Report, as to
which no opinion need be rendered).
(xii) At the Closing Time, the Company had corporate power
and authority to sell, transfer, assign and deliver the Initial
Assets to the Trustee under the applicable Pooling Agreement, and
had duly authorized such sale, transfer, assignment and delivery
to the Trustee by all necessary corporate action.
(xiii) The Registration Statement is effective under the
1933 Act, and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or threatened by the Commission.
(xiv) The Registration Statement and the applicable Final
Prospectus, and each amendment or supplement thereto (other than
the financial
- 20 -
statements, schedules, notes thereto, and the financial and
statistical data included therein and any documents incorporated
by reference in the Registration Statement and the applicable
Final Prospectus, including without limitation any Current
Report, in each case as to which no opinion need be rendered), as
of their respective effective or issue dates, complied as to form
in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations.
(xv) The statements in the applicable Final Prospectus under
the captions "Certain Federal Income Tax Consequences" and "ERISA
Considerations", to the extent they constitute matters of law or
legal conclusions, have been prepared or reviewed by such counsel
and correctly represent the opinion of such counsel; the
descriptions in such Final Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown.
(xvi) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened which are
required to be disclosed therein, nor any contracts or documents
of a character required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed as exhibits
thereto (other than financial statements, schedules, and notes
thereto and the financial and statistical data included therein
and the other documents, if any, incorporated by reference
therein, as to which no opinion need be rendered).
(xvii) For each Series for which an election is made to
treat the Trust Fund or portion thereof (each, a "REMIC Pool") as
a "real estate mortgage investment conduit" (REMIC) for Federal
income tax purposes, assuming (1) the making of an appropriate
election, (2) compliance with all provisions of the applicable
Pooling Agreement, and (3) continuing compliance with the
applicable provisions of the Internal Revenue Code of 1986 as
- 21 -
it may be amended from time to time (the "Code") and any
applicable Treasury regulations adopted thereunder, each REMIC
Pool will qualify as a REMIC for Federal income tax purposes,
each of the Certificates, other than the Residual Certificates,
issued pursuant to the applicable Pooling Agreement will be
treated as a "regular interest" in a REMIC within the meaning of
Section 860G(a)(1) of the Code and the Residual Certificates of
each REMIC Pool will be treated as a "residual interest" in a
REMIC within the meaning of Section 860G(a)(2) of the Code.
(xviii) The Company is not, and will not as a result of the
offer and sale of the Offered Certificates as contemplated in
this Agreement and any applicable Terms Agreement, become an
"investment company" or under the "control" of an "investment
company" as such terms are defined in the Investment Company Act
which would be required to register under the Investment Company
Act.
(xix) Nothing has come to the attention of such counsel that
would lead them to believe that the Registration Statement or any
amendment thereto (other than the financial statements,
schedules, notes thereto and the financial and statistical data
included therein and any documents incorporated by reference
therein, including without limitation any Current Report related
thereto, in each case as to which no opinion need be rendered),
at their respective effective dates, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Final Prospectus or any
amendment or supplement thereto (other than any Current Report
related thereto, in each case as to which no opinion need be
rendered), at their respective issue dates or, as amended or
supplemented (except as aforesaid), at Closing Time, contained an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
- 22 -
(xx) The Offered Certificates to be underwritten at such
time pursuant to this Agreement will be "mortgage related
securities," as defined in Section 3(a)(41) of the 1934 Act, so
long as such Offered Certificates are rated in one of the two
highest rating categories by at least one nationally recognized
statistical rating organization.
(xxi) The execution and delivery of Amendment No. 2 and
Amendment No. 3, the incurrence of the obligations therein set
forth and the consummation of the transactions contemplated
therein have been duly authorized by the Company and by Capstead
Mortgage Corporation, as Administrator ("Capstead Mortgage"), by
all necessary action; and each of Amendment No. 2 and Amendment
No. 3 has been duly authorized, executed and delivered by the
Company and Capstead Mortgage, constitutes a legal, valid and
binding agreement of the Company and Capstead Mortgage,
enforceable in accordance with its terms, subject, as to
enforceability of remedies, to applicable bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights
generally and to general principles of equity and equitable
remedies (regardless of whether the enforceability of such
remedies is considered in a proceeding at law or in equity.)
(xxii) The issuance of the Asset Certificates has been duly
authorized by the Company and the Asset Certificates have been
duly executed and delivered by the Company and, assuming due
authorization, execution and delivery of the applicable Asset
Issuance Agreement by the Trustee and Capstead Mortgage, when
authenticated by the Trustee in accordance with the terms of the
applicable Asset Issuance Agreement, will be entitled to the
benefits provided by such Asset Issuance Agreement.
(2) The opinion, addressed to the Underwriters and dated the
Closing Time, of counsel to Capstead, in form and substance reasonably
satisfactory to you and counsel for the Underwriters, to the effect
that:
- 23 -
(i) Capstead has been duly organized and is validly existing
as a corporation, in good standing under the laws of the
jurisdiction of its organization with corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the applicable Final Prospectus.
(ii) Capstead is not, nor will it be, as a result of its
entering into this Agreement and consummating the transactions
contemplated hereby, in violation of its charter or bylaws, and
to the best of such counsel's knowledge, is not in default in the
performance or observance of any obligation, agreement, covenant
or condition contained in any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it or its properties may be
bound.
(iii) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign,
now pending, or, to the best of such counsel's knowledge,
threatened against Capstead which could reasonably be expected to
interfere with or adversely affect the consummation of the
transactions contemplated herein.
(iv) The execution and delivery of this Agreement and the
applicable Terms Agreement, the incurrence of the obligations
herein and therein set forth and the consummation of the
transactions contemplated herein and therein have been duly
authorized by Capstead by all necessary corporate action; and
this Agreement and the applicable Terms Agreement have been duly
authorized, executed and delivered by Capstead.
(v) No filing or registration with, notice to or consent,
approval, authorization or order or other action of, any court or
governmental authority or agency, is required for the
consummation by Capstead of the transactions contemplated by this
Agreement or the applicable Terms Agreement, except such as have
been obtained and except such as may be required under state
- 24 -
securities or Blue Sky laws in connection with the distribution
of the Certificates to be underwritten at such time pursuant to
this Agreement by the Underwriters.
(vi) Any applicable servicing agreement executed by Capstead
in respect of the mortgage loans evidenced by the Asset
Certificates has been duly authorized, executed and delivered by,
and constitutes the legal, valid and binding agreement of
Capstead, subject, as to enforceability of remedies, to
applicable bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally, and to general principles
of equity and equitable remedies (regardless of whether the
enforceability of such remedies is considered in a proceeding in
equity or at law).
(c) At the Closing Time you shall have received the opinion of
Xxxxxxx & Xxxxx L.L.P., addressed to the Underwriters and dated the Closing
Time, with respect to certain tax matters, in substantially the same form
as their opinion filed as Exhibit 8.1 of the Registration Statement.
(d) At the Closing Time you shall have received the favorable
opinion, dated the Closing Time, of Xxxxx & Wood LLP, counsel for the
Underwriters, with respect to the issuance and sale of the Offered
Certificates, the Registration Statement, the Final Prospectus and such
other related matters as the Underwriter may reasonably require.
(e) At the Closing Time there shall not have been, since the date of
the applicable Terms Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse
change in the condition, financial or otherwise, earnings, business
affairs, regulatory situation or business prospects of the Company or
Capstead, whether or not arising in the ordinary course of business, and
you shall have received, at the Closing Time, a certificate of the Chairman
of the Board, the President, any Senior Executive Vice President, Executive
Vice President, Senior Vice President, Vice President or Authorized Officer
of the Company and of Capstead to the effect that there has been no such
material adverse change and to the effect that the other representations
and warranties of the Company and Capstead contained in Section 1 are true
and correct with the
- 25 -
same force and effect as though made at and as of the Closing Time.
(f) The Policy relating to the Offered Certificates of the related
Series, if any, shall have been duly executed and issued prior to the
Closing Time, in form and substance that is customary and reasonably
satisfactory to you, and shall conform in all respects to the description
thereof in the Final Prospectus.
(g) If applicable, the Offered Certificates shall have the benefit of
the proceeds and any insurance policies covering the Mortgage Assets.
(h) If applicable, counsel for the Certificate Insurer shall have
furnished to you an opinion, dated as of the Closing Time, in form and
substance that is customary and reasonably acceptable to you regarding to
certain matters relating to the Certificate Insurer.
In rendering his opinion such counsel may rely as to matters of fact,
to the extent deemed proper and as stated therein, on certificates of
responsible officers of the Certificate Insurer or public officials.
(i) The Company and you shall have received from Ernst & Young L.L.P.
two letters, one dated as of the date of the applicable Terms Agreement,
and delivered simultaneously with the printing of the Final Prospectus, and
the other dated as of Closing Time and delivered at such time, in form and
substance satisfactory to you, and in the case of clause (v) below, the
Company and you, to the effect that:
(i) they are independent accountants with respect to the Company
within the meaning of the 1933 Act and the 1933 Act Regulations;
(ii) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial and other information appearing in the applicable Final
Prospectus (other than any Current Report) and, with respect to their
letter dated as of Closing Time, the Detailed Description, which
either relate to the Mortgage Assets (including, without limitation,
such data with respect to the Mortgage Assets as is required to be set
forth on the Schedule of Mortgage Assets to be included in the
- 26 -
applicable Pooling Agreement) or are derived from the general
accounting records of the Company which appear, or are incorporated,
in the Final Prospectus and the Detailed Description and which are
specified by you, and have compared such amounts, percentages and
financial and other information with such sources as are specified by
them and have found them to be in agreement;
(iii) they have carried out certain other specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial and other information appearing in any
Current Report (other than any Current Report filed with respect to
Section 8 Materials), which procedures and information have been
specified by any Company, and have compared such amounts, percentages
and financial and other information with such sources as are agreed to
by the Company and have found them to be in agreement;
(iv) if a DEC Table (as defined below) is included in the Final
Prospectus, they have compared the data used in the calculations
described in (v) and (vii) below with the appropriate sources
described in (ii) above in the manner and to the extent specified in
such letter and acceptable to you;
(v) if a DEC Table is included in the Final Prospectus, using the
assumptions and methodology requested by you and as are consistent
with the applicable Pooling Agreement, all of which shall be described
in such letter, they have recalculated the percentages and weighted
average lives set forth in the Final Prospectus in the table (the "DEC
Table") entitled "Percent of Original Class Certificate Principal
Balance Outstanding," compared the results of their recalculations to
the corresponding items in such table, and found each such percentage
and weighted average life to be in agreement with the results of such
recalculation;
(vi) if any Certificates are targeted amortization class or
planned amortization class certificates, based upon the assumptions
and methodology set forth in the Final Prospectus, all of which shall
be described by reference in such letter, they have verified the
mathematical accuracy of any Scheduled Balance Table set
- 27 -
forth in the Final Prospectus for each indicated Distribution Date;
(vii) if a DEC Table is included in the Final Prospectus, using
the assumptions and methodology requested by you and as are consistent
with the applicable Pooling Agreement, all of which shall be described
in such letter, they have calculated, with respect to each
Distribution Date, the amount of principal and interest payable on the
Certificates then to be underwritten pursuant to this Agreement and
the corresponding amount of funds scheduled to be available for
application to the payments on such Certificates on such Distribution
Date, and found that such recalculations show that the amount of funds
scheduled to be so available on each Distribution Date exceeds the
distribution amount on the Certificates on such Distribution Date; and
(viii) if a DEC Table is included in the Final Prospectus, using
the assumptions and methodology requested by you and as are consistent
with the applicable Pooling Agreement, all of which shall be described
in such letter, they have recalculated the Scheduled Final
Distribution Dates of the Offered Certificates, and found that such
recalculated Scheduled Final Distribution Dates were no later than
those shown on the cover page of the Final Prospectus.
(j) At the Closing Time, you and the Company shall have received the
favorable opinion of counsel for the Trustee, addressed to the Underwriters
and the Company and dated the Closing Time, in form and substance
satisfactory to you and counsel for the Underwriters and the Company, to
the effect that:
(i) The Trustee is duly incorporated, validly existing and in
good standing as a national banking association under the laws of the
United States of America, with full corporate and trust power and
authority to conduct its business and affairs as a trustee;
(ii) The Trustee has full power and authority to execute and
deliver the applicable Pooling Agreement and to perform its
obligations thereunder;
- 28 -
(iii) The Trustee has duly accepted the office of Trustee under
the applicable Pooling Agreement; and
(iv) The Trustee has duly authorized, executed and delivered the
applicable Pooling Agreement.
(k) At the Closing Time, you shall have received the opinion of
counsel for Capstead Mortgage, to the effect that the execution and
delivery of the applicable Asset Issuance Agreement, the incurrence of the
obligations therein set forth and the consummation of the transactions
contemplated therein have been duly authorized by Capstead Mortgage, by all
necessary action; and the applicable Asset Issuance Agreement has been duly
authorized, executed and delivered by Capstead Mortgage and constitutes a
legal, valid and binding agreement of Capstead Mortgage, enforceable in
accordance with its terms, subject, as to enforceability of remedies, to
applicable bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally and to general principles of equity and
equitable remedies (regardless of whether the enforceability of such
remedies is considered in a proceeding at law or in equity).
(l) At the Closing Time, the Offered Certificates then to be
underwritten pursuant to this Agreement shall be rated in the highest
rating category by the rating agencies requested to rate such Offered
Certificates or such other rating category as the related Terms Agreement
shall state.
(m) At the Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions (including copies of insurance
policies described in the applicable Final Prospectus and opinions of
counsel with respect to such policies) as they may reasonably require for
the purpose of enabling them to pass upon the Registration Statement, the
applicable Final Prospectus, the issuance and sale of the Certificates then
to be underwritten pursuant to this Agreement as contemplated in the
applicable Terms Agreement and related proceedings, or in order to evidence
the accuracy of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and Capstead in connection with the issuance and sale
of the Certificates then to be underwritten pursuant to this Agreement as
contemplated in the applicable Terms Agreement and in the applicable
Pooling Agreement shall be reasonably satisfactory in form and substance to
you and counsel for the Underwriters.
- 29 -
(n) At the Closing Time, you shall have received letters,
certificates and opinions from counsel for each of PMI Mortgage Insurance
Company, Aetna Casualty and Surety Company and/or Capital Reinsurance
Company in form and substance satisfactory to you.
(o) At the Closing Time, you shall have received a reliance letter
related to each opinion of counsel for the Company that is delivered to the
rating agencies requested to rate the Certificates then to be underwritten
pursuant to this Agreement.
If any condition in this Section shall not have been fulfilled when and as
required to be fulfilled, this Agreement and the applicable Terms Agreement may
be terminated by you by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4.
SECTION 6. Indemnification. (a) The Company and Capstead, jointly and
---------------
severally, agree to indemnify and hold harmless each Underwriter and/or each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, preliminary
prospectus supplement or the Final Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein in the
light of the circumstances under which they were made not mis leading;
provided, however, that (A) the Company shall not be liable in any
such case if such untrue statement or omission or such alleged untrue
statement or omission was made (1) in reliance upon and in conformity
with written information furnished to the Company by any Underwriter
through you expressly for use in the Registration Statement (or any
amendment thereto) or in
- 30 -
any preliminary prospectus, preliminary prospectus supplement or each
Final Prospectus (or any amendment or supplement thereto) or (2) in
any Section 8 Materials or Collateral Term Sheets included in any
Current Report or any amendment or supplement thereof, except to the
extent that any untrue statement or alleged untrue statement therein
results (or is alleged to have resulted) directly from an error (a
"Mortgage Collateral Error") in the information concerning the
characteristics of the Mortgage Loans furnished by the Company to you
in writing or by electronic transmission that was used in the
preparation of either (x) any Section 8 Materials or Collateral Term
Sheets (or amendments or supplements thereof) included in such Current
Report (or amendment or supplement thereof) or (y) any written or
electronic materials furnished to prospective investors on which any
Section 8 Materials or Collateral Term Sheets (or amendments or
supplements thereof) were based; (B) such indemnity with respect to
any Corrected Statement (as defined below) in such Final Prospectus
(or supplement thereto) shall not inure to the benefit of any
Underwriter (or any person controlling any Underwriter) from whom the
person asserting any loss, claim, damage or liability purchased the
Certificates that are the subject thereof if such person did not
receive a copy of a supplement to such Final Prospectus at or prior to
the confirmation of the sale of such Certificates and the untrue
statement or admission of a material fact contained in such Final
Prospectus (or supplement thereto) was corrected (a "Corrected
Statement") in such other supplement and such supplement was furnished
by the Company to you prior to the delivery of such confirmation; and
(C) such indemnity with respect to any Mortgage Collateral Error shall
not inure to the benefit of any Underwriter (or any person controlling
the Underwriter) from whom the person asserting any loss, claim,
damage or liability received any Section 8 Materials (or any written
or electronic materials on which any Section 8 Materials or Collateral
Term Sheets are based) that were prepared on the basis of such
Mortgage Collateral Error, if, prior to the time of confirmation of
the sale of the applicable Certificates to such person, the Company
notified you in writing of the Mortgage Collateral Error or provided
in written or electronic form information superseding or correcting
such Mortgage Collateral Error (in any such case a "Corrected Mortgage
Collateral Error"), and such
- 31 -
Underwriter failed to notify such person thereof or to deliver to such
person corrected Section 8 Materials (or underlying written or
electronic materials relating thereto);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based, in each case, upon any such untrue statement
or omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; or
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
you) reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the
Registration Statement, Capstead and each person, if any, who controls the
Company or Capstead within the meaning of Section 15 of the 1933 Act and
the officers and directors of any such person against any and all loss,
liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendment thereto) or any preliminary
prospectus, preliminary prospectus supplement or the Final Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity
with (i) written information furnished to the Company by such Underwriter
expressly for use in the Registration Statement (or any amendment thereto)
or in any preliminary prospectus, preliminary prospectus supplement or each
Final Prospectus (or any amendment or supplement thereto) or (ii) any
Section 8 Materials or Collateral Term Sheets (or amendments or supplements
thereof) furnished to the Company by such
- 32 -
Underwriter and incorporated by reference in such Registration Statement or
the related Final Prospectus or any amendment or supplement thereto (except
that no such indemnity shall be available for any losses, claims, damages
or liabilities, or actions in respect thereof, resulting from any Mortgage
Collateral Error, other than a Corrected Mortgage Collateral Error).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder; provided, however, that the failure to
-------- -------
notify an indemnifying party shall not relieve it from any liability which
it may have under this Section 6 except to the extent it has been
materially prejudiced by such failure. An indemnifying party may
participate at its own expense in the defense of such action. In no event
shall the indemnifying parties be liable for the fees and expenses of more
than one counsel in connection with any one action or separate but similar
and related actions in the same jurisdiction arising out of the same
general allegations or similar circumstances; provided, however, that if
-------- -------
the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assert such legal defenses and
to otherwise participate in the defense of such action on behalf of such
indemnified party or parties.
(d) The indemnity agreement provided by this Section 6 shall be in
addition to any liability the Company and the Underwriters shall otherwise
have.
SECTION 7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unavailable to or insufficient to hold
harmless the indemnified parties although applicable in accordance with its
terms, the Company and Capstead, on the one hand, and the Underwriters on the
other, shall:
(a) in the case of any losses, claims, damages and liabilities (or
actions in respect thereof) relating to a class or classes of any Series of
Certificates (a "Class" or
- 33 -
"Classes,"as the case may be) which do not arise out of or are not based
upon any untrue statement or omission of a material fact in any Section 8
Materials or Collateral Term Sheets (or any amendments or supplements
thereof), contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by Section 6 hereof incurred in
respect of any Class or Classes underwritten pursuant to this Agreement by
the Company or Capstead and the Underwriter of such Class or Classes, as
incurred, in such proportions that the Underwriter of such Class or Classes
is responsible for that portion represented by the percentage that the
difference between the proceeds to the Company appearing on the cover page
of the applicable Final Prospectus and the total of all proceeds received
by such Underwriter from the sale of all Offered Certificates underwritten
by it (the "Underwriting Discount") bears to the total proceeds received by
such Underwriter from such Offered Certificates, and the Company and
Capstead are responsible for the balance; and
(b) in the case of any losses, claims, damages and liabilities (or
actions in respect thereof) which arise out of or are based upon any untrue
statement or omission of a material fact in any Section 8 Materials or
Collateral Term Sheets (or any amendments or supplements thereof),
contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred in
respect of any Class or Classes underwritten pursuant to this Agreement by
the Company or Capstead, and the Underwriter of such Class or Classes, as
incurred, in such proportion as is appropriate to reflect the relative
fault of the Company and Capstead on the one hand and such Underwriter on
the other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages and expenses (or
actions in respect thereof) as well as any other relevant equitable
considerations; provided that in no event shall such Underwriter be
responsible for an amount greater than the net profit received by such
Underwriter in the sale of all Offered Certificates of such Series
underwritten by it;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Underwriter and each director of the
- 34 -
Company, each officer of the Company and Capstead who signed the Registration
Statement, and each person, if any, who controls the Company or Capstead within
the meaning of Section 15 of the 1933 Act and the officers and directors of any
such person shall have the same rights to contribution as the Company or
Capstead.
SECTION 8. Computational Materials and Structural Term Sheets. (a) As
--------------------------------------------------
soon as practicable and in no event later than 3:00 p.m. Dallas, Texas time two
Business Days before the date on which the Final Prospectus relating to the
Offered Certificates of a Series is required to be filed by the Company with the
Commission pursuant to Rule 424 under the 1933 Act, you shall deliver to the
Company five complete copies of all materials provided by you to prospective
investors regarding the Class or Classes being underwritten by you which
constitute (i) "Computational Materials" within the meaning of the no-action
letter dated May 20, 1994 issued by the Division of Corporation Finance of the
Commission to Xxxxxx, Xxxxxxx Acceptance Corporation I, Xxxxxx, Peabody & Co.
Incorporated, and Xxxxxx Structured Asset Corporation and the no-action letter
dated May 27, 1994 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (together, the "Xxxxxx
Letters"), the filing of which material is a condition of the relief granted in
such letter (such materials being the "Computational Materials"), and (ii)
"Structural Term Sheets" within the meaning of the no-action letter dated
February 17, 1995 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (the "PSA Letter"), the filing
of which material is a condition of the relief granted in such letter (such
materials being the "Structural Term Sheets"). Each delivery of Computational
Materials or Structural Term Sheets to the Company pursuant to this paragraph
(a) shall be effected by delivering four copies of such materials to counsel for
the Company at Xxxxxxx & Xxxxx L.L.P., 0000 Xxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxx
00000, or such other address specified by such counsel to you in writing, and
one copy of such materials to the Company.
(b) You represent and warrant to and agree with the Company, as of
the date of the related Terms Agreement and as of the Closing Date, that:
(i) the Section 8 Materials furnished to the Company constitute
(either in original, aggregated or consolidated form) all of the
materials furnished to prospective investors by the Underwriters prior
to the time of delivery thereof to the Company that are required to be
filed with the Commission with respect to the
- 35 -
related Offered Certificates in accordance with the Xxxxxx Letter
and the PSA Letter, and such Section 8 Materials comply with the
requirements of the Xxxxxx Letter and the PSA Letter;
(ii) on the date any such Section 8 Materials with respect to
such Offered Certificates (or any written or electronic materials
furnished to prospective investors on which the Computational
Materials are based) were last furnished to each prospective investor
and on the date of delivery thereof to the Company pursuant to Section
8(a) and on the related Closing Date, such Section 8 Materials (or
such other materials) did not and will not include any untrue
statement of a material fact or, when read in conjunction with the
Final Prospectus and Prospectus Supplement, omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that you make no
representation or warranty as to such Final Prospectus and Prospectus
Supplement (other than such portion thereof described in Section 6 (a)
(i) (A)); and
(iii) all Section 8 Materials (or underlying materials
distributed to prospective investors on which the Computational
Materials were based) furnished to prospective investors contained and
will contain a legend, prominently displayed on the first page thereof
to the effect that the Section 8 Materials are being provided
exclusively by the Underwriter and that the content and accuracy of
such materials have not been reviewed by the Company, and otherwise in
form and substance satisfactory to the Company.
Notwithstanding the foregoing, you make no representation or warranty as to
whether any Section 8 Materials (or any written or electronic materials on
which the Computational Materials are based) included or will include any
untrue statement resulting directly from any Mortgage Collateral Error
(except any Corrected Mortgage Collateral Error, with respect to materials
prepared after the receipt by you from the Company of notice of such
Corrected Mortgage Collateral Error or materials superseding or correcting
such Corrected Mortgage Collateral Error).
(c) You shall cause Ernst & Young L.L.P. to furnish to the Company a
letter, dated as of the date on which you deliver any Computational
Materials to the Company pursuant to
- 36 -
Section 8 (a), in form and substance satisfactory to the Company, stating
in effect that they have verified the mathematical accuracy of any
calculations performed by you and set forth in such Computational
Materials.
(d) You acknowledge and agree that any Section 8 Materials with
respect to any Series of Certificates furnished to prospective investors
from and after the date hereof have been prepared and disseminated by you
and not by or on behalf of the Company, and that such Section 8 Materials
shall include a disclaimer in the form set forth in paragraph (b) (iii)
above. This disclaimer shall not alter the rights or obligations of the
parties hereto pursuant to Sections 6 and 7 hereof.
(e) If, at any time when a prospectus relating to the Certificates of
a Series is required to be delivered under the 1933 Act, it shall be
necessary to amend or supplement the related Final Prospectus as a result
of an untrue statement of a material fact contained in any Section 8
Materials provided by you or the omission to state therein a material fact
required, when considered in conjunction with the Final Prospectus and
Prospectus Supplement, to be stated therein or necessary to make the
statements therein, when read in conjunction with the Final Prospectus and
Prospectus Supplement, not misleading, or if it shall be necessary to amend
or supplement any Current Report to comply with the 1933 Act or the rules
thereunder, you promptly will prepare and furnish to the Company for filing
with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance.
You represent and warrant to the Company, as of the date of delivery of
such amendment or supplement to the Company, that such amendment or
supplement will not include any untrue statement of a material fact or,
when read in conjunction with the Final Prospectus and Prospectus
Supplement, omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that you make no representation or warranty (i) as to such Final Prospectus
and Prospectus Supplement (other than such portion thereof described in
Section 6 (a) (i) (A)) and (ii) as to whether any such amendment or
supplement will include any untrue statement resulting directly from any
Mortgage Pool Error (except any Corrected Mortgage Pool Error, with respect
to any such amendment or supplement prepared after the receipt by you from
the Company of notice of such Corrected Mortgage Pool Error or materials
superseding or correcting such
- 37 -
Corrected Mortgage Pool Error). The Company shall have no obligation to
file such amendment or supplement if the Company determines that (i) such
amendment or supplement contains any untrue statement of a material fact
or, when read in conjunction with the Final Prospectus and Prospectus
Supplement, omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (it being
understood, however, that the Company shall have no obligation to review or
pass upon the accuracy or adequacy of, or to correct, any such amendment or
supplement provided by the Underwriter to the Company pursuant to this
paragraph (e)) or (ii) such filing is not required under the Act; provided
that, in the event the Company makes such a determination, it shall
immediately notify you in writing of the reasons for such determination;
and, provided, further, that it shall file such amendment or supplement if
you specifically confirm in writing to the Company that (A) such amendment
or supplement does not contain any untrue statement of a material fact or,
when read in conjunction with the Final Prospectus and Prospectus
Supplement, omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (B) you are
advising the Company to file such amendment or supplement.
SECTION 9. Collateral Term Sheets. (a) Prior to the delivery of any
----------------------
"Collateral Term Sheet" within the meaning of the PSA Letter, the filing of
which material is a condition of the relief granted in such letter (such
material being the "Collateral Term Sheets"), to a prospective investor in any
Offered Certificates, you shall, in order to facilitate the timely filing of
such material with the Commission, notify the Company and its counsel by
telephone of its intention to deliver such materials and the approximate date on
which the first such delivery of such materials is expected to occur. Not later
than 10:30 a.m., New York time, on the business day immediately following the
date on which any Collateral Term Sheet was first delivered to a prospective
investor in such Offered Certificates, you shall deliver to the Company five
complete copies of all materials provided by you to prospective investors in
such Offered Certificates which constitute "Collateral Term Sheets." Each
delivery of a Collateral Term Sheet to the Company pursuant to this paragraph
(a) shall be effected by delivering four copies of such materials to counsel for
the Company on behalf of the Company at the address specified in Section 13
hereof and one copy of such materials to the Company. At the time of each such
delivery, you shall indicate in writing that the materials being delivered
constitute Collateral Term Sheets, and, if there has been any prior
- 38 -
such delivery with respect to the related Series, shall indicate whether such
materials differ in any material respect from any Collateral Term Sheets
previously delivered to the Company with respect to such Series pursuant to this
Section 9(a) as a result of the occurrence of a material change in the
characteristics of the related Mortgage Loans.
(b) You represent and warrant to and agree with the Company as of the
date of the related Terms Agreement and as of the Closing Time, that:
(i) The Collateral Term Sheets furnished to the Company pursuant
to Section 9(a) constitute all of the materials furnished to prospective
investors by the Underwriter prior to time of delivery thereof to the
Company that are required to be filed with the Commission as "Collateral
Term Sheets" with respect to the related Offered Certificates in accordance
with the PSA Letter, and such Collateral Term Sheets comply with the
requirements of the PSA Letter;
(ii) On the date any such Collateral Term Sheets with respect to
such Offered Certificates were last furnished to each prospective investor
and on the date of delivery thereof to the Company pursuant to Section 9(a)
and on the related Closing Time, such Collateral Term Sheets did not and
will not include any untrue statement of a material fact or, when read in
conjunction with the Prospectus and Prospectus Supplement, omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and
(iii) you have not represented to any prospective investor that
any Collateral Term Sheets with respect to any Series were prepared or
disseminated on behalf of the Company, and, except as otherwise disclosed
by you to the Company in writing prior to the date hereof, all Collateral
Term Sheets previously furnished to prospective investors included a
disclaimer to the effect set forth in Section 8(b)(iii).
Notwithstanding the foregoing, you make no representation or warranty as to
whether any Collateral Term Sheet included or will include any untrue statement
or material omission resulting directly from any Mortgage Pool Error (except any
Corrected Mortgage Pool Error, with respect to materials prepared after the
receipt by you from the Company of notice of such Corrected
- 39 -
Mortgage Pool Error or materials superseding or correcting such Corrected
Mortgage Pool Error).
(c) You acknowledge and agree that any Collateral Term Sheets with
respect to any Series of Certificates furnished to prospective investors from
and after the date hereof shall include a disclaimer in form satisfactory to the
Company to the effect set forth in Section 8(b) (iii) hereof, and to the effect
that the information contained in such materials supersedes the information
contained in any prior Collateral Term Sheet with respect to such Series of
Offered Certificates and will be superseded by the description of the related
Mortgage Loans in the related Prospectus Supplement and in the Detailed
Description relating to such Prospectus Supplement to be filed under cover of
Form 8-K. You agree that you will not represent to prosective investors that any
Collateral Term Sheets were prepared or disseminated on behalf of the Company.
(d) If, at any time when a prospectus relating to the Offered
Certificates of a Series is required to be delivered under the Act, it shall be
necessary to amend or supplement the related Prospectus as a result of an untrue
statement of a material fact contained in any Collateral Term Sheets provided by
you pursuant to this Section 9 or the omission to state therein a material fact
required, when considered in conjunction with the related Prospectus and
Prospectus Supplement, to be stated therein or necessary to make the statements
therein, when read in conjunction with the related Prospectus and Prospectus
Supplement, not misleading, or if it shall be necessary to amend or supplement
any Current Report relating to any Collateral Term Sheets to comply with the Act
or the rules thereunder, you promptly will prepare and furnish to the Company
for filing with the Commission an amendment or supplement which will correct
such statement or omission or an amendment which will effect such compliance.
You represent and warrant to the Company, as of the date of delivery of such
amendment or supplement to the Company, that such amendment or supplement will
not include any untrue statement of a material fact or, when read in conjunction
with the related Prospectus and Prospectus Supplement, omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Company shall have no obligation to file such amendment or
supplement if the Company determines that (i) such amendment or supplement
contains any untrue statement of a material fact or, when read in conjunction
with the related Prospectus and Prospectus Supplement, omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; it being understood, however, that the Company shall
- 40 -
have no obligation to review or pass upon the accuracy or adequacy of, or to
correct, any such amendment or supplement provided by the Underwriter to the
Company pursuant to this paragraph (d) or (ii) such filing is not required under
the Act.
SECTION 10. Representations, Warranties, and Agreements to Survive
------------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement, or contained in certificates of officers of the Company or Capstead
submitted pursuant hereto or as contemplated hereby, shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of the Company or Capstead or a controlling person thereof, and shall survive
delivery of any Certificates to the Underwriters.
SECTION 11. Termination of Agreement. (a) This Agreement may be
------------------------
terminated for any reason at any time by either the Company or you upon the
giving of thirty days' written notice of such termination to the other party
hereto; provided, however, that if a Terms Agreement has been entered into but
the applicable Closing Time has not occurred, this Agreement shall not be
terminated pursuant to this Section 11(a) prior to such Closing Time.
(b) You may terminate this Agreement or such Terms Agreement, by
notice to the Company, at any time at or prior to the Closing Time, (i) if
there has been, since the respective dates as of which information is given
in the Registration Statement or the applicable Final Prospectus, any
material adverse change in the condition, financial or otherwise, earnings,
business affairs, regulatory situation or business prospects of the
Company, Capstead or the Certificate Insurer, whether or not arising in the
ordinary course of business, (ii) if there shall have occurred any material
adverse change in the financial markets of the United States or any
outbreak or escalation of hostilities or other national or international
calamity or crisis the effect of which is such as to make it, in your
judgment, impracticable to market the Certificates or enforce contracts for
the sale of the Certificates, or (iii) if trading in any securities of the
Company has been suspended by the Commission or a national securities
exchange, or if trading generally on either the American Stock Exchange or
the New York Stock Exchange shall have been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices
for securities have been required, by either of said exchanges or by order
of the Commission or any other governmental authority, or if a banking
moratorium shall have been declared by either Federal or New York
authorities, or (iv) if the rating assigned by any
- 41 -
nationally recognized securities rating agency requested to rate any
specific debt securities of the Company as of the date of any applicable
Terms Agreement shall have been lowered since that date or if any such
rating agency shall have publicly announced that it has under surveillance
or review, with possible negative implications, its requested rating of
such debt securities of the Company, or (v) if there shall have come to
your attention any facts that would cause you to believe that the
applicable Final Prospectus, at the time it was required to be delivered to
a purchaser of the Certificates offered thereby, contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in light of the circumstances
existing at the time of such delivery, not misleading.
(c) In the event of any such termination, (i) the covenants set forth
in Section 3 with respect to any offering of Certificates shall remain in
effect so long as any Underwriter owns any such Certificates purchased from
the Company pursuant to the applicable Terms Agreement and (ii) the
covenant set forth in Section 3 (i), the provisions of Section 4, the
indemnity agreement set forth in Section 6, the contribution provisions set
forth in Section 7, and the provisions of Sections 8, 10 and 15 shall
remain in effect.
SECTION 12. Default by One or More of the Underwriters. If one or more of
-------------------------------------------
the Underwriters shall fail at the Closing Time to purchase the Certificates
which it or they are obligated to purchase hereunder and under the applicable
Terms Agreement (the "Defaulted Certificates"), you shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Certificates in such amounts as may be agreed upon and upon the
terms herein set forth and under the applicable Terms Agreement. If, however,
you have not completed such arrangements within such 24-hour period, then:
(a) if the aggregate original principal amount of Defaulted
Certificates does not exceed 10% of the aggregate original principal amount
of the Certificates to be purchased pursuant to such Terms Agreement, the
non-defaulting Underwriters named in such Terms Agreement shall be
obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations thereunder bear to the underwriting
obligations of all non-defaulting Underwriters; and
- 42 -
(b) if the aggregate original principal amount of Defaulted
Certificates exceeds 10% of the aggregate original principal amount of the
Certificates to be purchased pursuant to such Terms Agreement, the
applicable Terms Agreement shall terminate without any liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section 12 and nothing in this Agreement
shall relieve any defaulting Underwriter from liability in respect of its
default.
In the event of any such default which does not result in a termination of
this Agreement or such applicable Terms Agreement, either you or the Company
shall have the right to postpone the Closing Time for a period of time not
exceeding seven days in order to effect any required changes in the Registration
Statement or in any other documents or arrangements.
SECTION 13. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of written telecommunication. Notices to the
Company shall be directed to its agent for service set forth on the cover page
of the Registration Statement, notices to the Company shall be directed to it at
City Place Center East, 0000 X. Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
Attention: Xxxx X. Xxxxx and notices to you shall be directed to you c/o
PaineWebber Incorporated, 1285 Avenue of the Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx Xxxxxx or in respect of any Terms Agreement, to such other
person and place agreed upon by those of you who are parties to such Terms
Agreements.
SECTION 14. Parties. This Agreement shall inure to the benefit of and
-------
be binding upon you, the Company and Capstead, and any Terms Agreement shall
inure to the benefit of and be binding upon the Company and Capstead and any
Underwriter who becomes a party to such Terms Agreement, and their respective
successors. Nothing expressed or mentioned in this Agreement or any Terms
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and officers and directors referred to in Sections 6 and
7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any Terms Agreement or
any provision herein or therein contained. This Agreement and any Terms
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties
- 43 -
hereto and thereto and their respective successors, and said controlling persons
and officers and directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No purchaser of
Certificates from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
Section 15. Counterparts. This Agreement and each Terms Agreement may
------------
be executed by one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
SECTION 16. GOVERNING LAW AND TIME. THIS AGREEMENT AND EACH
----------------------
TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. UNLESS OTHERWISE SPECIFIED, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
- 44 -
If the foregoing is in accordance with your understanding hereof, the form
of acceptance set forth below should be signed by you, whereupon this instrument
along with all counterparts will become a binding agreement among the Company,
Capstead, and us in accordance with its terms.
Very truly yours,
CMC SECURITIES CORPORATION II
By:
-----------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President -
Asset and Liability Management
CAPSTEAD INC.
By:
-----------------------------------------
Name: Xxxx Xxxxxx
Title: Authorized Officer
ACCEPTED at New York, New York as
of the date first above written.
XXXXX XXXXXX INCORPORATED
By:
-------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
EXHIBIT A
CMC SECURITIES CORPORATION II
(a Delaware corporation)
Pass-Through Certificates, Series ____-____
Terms Agreement
---------------
Dated: _________________ __, ____
CMC Securities Corporation II
CityPlace Center East
0000 X. Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Re: Underwriting Agreement dated October 25, 1996
Title of Certificates:
Section 1. The Offered Certificates: The Series ____-__ Certificates (the
---------------------------
"Offered Certificates") shall be as follows:
(a) Principal amount to be issued: $_____________
-----------------------------
(b) Public offering price:
---------------------
(c) Purchase price:
--------------
[plus accrued interest from _______________.]
(d) Payment Dates:
-------------
(e) Accrual Periods:
---------------
(f) Certificate Rating: It is a condition to the issuance of the Offered
-------------------
Certificates that they be rated "___" by __________________________.
Section 2. Closing; Stand-Off Period:
--------------------------
A - 1
(a) Closing date and location:
-------------------------
(b) Type of funds to be delivered by the Underwriters at the Closing:
----------------------------------------------------------------
(c) Expiration date of Stand-Off Period:
-----------------------------------
(d) Securities excluded from Stand-Off Period restrictions:
------------------------------------------------------
Section 3. Co-managers:
-----------
Section 4. Purchase by the Underwriter(s):
------------------------------
The Underwriter agrees, subject to the terms and provisions herein and of
the above-referenced Underwriting Agreement (as modified and amended by the
terms hereof), which is incorporated herein in its entirety and made a part
hereof, to purchase [the entire aggregate principal amount of the Offered
Certificates in the Classes set forth in Section 1 hereof].
Section 5. Certificate Insurer:
-------------------
PAINEWEBBER INCORPORATED
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
A - 2
Accepted:
CMC SECURITIES CORPORATION II
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
CAPSTEAD INC.
By:
--------------------------------
Name:
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Title:
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A - 3
