UNDERWRITER AGREEMENT January 30, 2008
Exhibit 1.0
January
30, 2008
Redwood
Securities Group, Inc.
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Ladies
and Gentlemen:
CS
Financing Corporation, a Delaware corporation (the “Company”), has registered
for public sale a maximum of $100,00,000,000 in of 5 year Notes (the “Notes”)
under a continuous offering under Rule 415 (the “Offering”). The minimum
purchase for the Notes shall be $25,000 except as otherwise indicated in the
Prospectus.
Redwood
Securities Group, Inc. (“Underwriter”) will be a Qualified Independent
Underwriter (“QIU”) as defined in section 2720 of the NASD rules and will
perform the duties of a QUI as required under section 2720(c)(3)(A) of the NASD
rules under the Financial Industry Regulatory Authority (“FINRA”).
In
connection therewith, the Company hereby agrees with the Underwriter, as
follows:
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1.
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Underwriter
may enter into Broker-Dealer Distribution Agreements (“Distribution
Agreement”) in the form approved by Company with other broker-dealers
(each dealer being referred to herein as a “Underwriter Dealer” and said
dealers being collectively referred to herein as the “Underwriter
Dealers”) who will participate in the distribution of the
Notes.
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2.
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Company
may also, separately, enter into Distribution Agreements with broker
dealers, including Company’s affiliated broker –dealer, Capital Solutions
Distributor, LLC (“CSD”).
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3.
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Broker-dealers
(whether Underwriter Dealers or broker-dealers who have signed a
Distribution agreement with Company, are referred to as “Broker-Dealers”)
shall receive selling commissions from the Underwriter or the Company, as
the case may be, in connection with the sale of the
Notes.
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4.
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This
Underwriter Agreement shall relate only to the Notes registered with the
Securities and Exchange Commission (the “SEC”) pursuant to the
Registration Statement, which is a shelf registration under Rule 415 of
the Securities Act of 1933, as amended (“Securities
Act”).
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5.
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In
the event of any change in the purchase price or yield of the Notes being
offered and sold in this Offering, the Company shall notify the
Underwriter in writing, and the Underwriter shall notify the Underwriter
Dealers of such change in the purchase price of the Notes pursuant to the
terms of the Distribution
Agreements.
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6.
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The
Company shall have the right to approve any material modifications or
addendums to the form of the Distribution Agreement used by Underwriter to
contract with an Underwriter
Dealer.
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7.
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Terms
not defined herein shall have the same meaning as in the
Prospectus.
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8.
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Representations
and Warranties of the Company. The Company represents and
warrants to the Underwriter and each Underwriter Dealer with whom the
Underwriter enters into a Distribution Agreement
that:
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8.1.
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A
registration statement covering the Notes has been registered and deemed
effective in accordance with applicable requirements of the Securities Act
of 1933, as amended (the “Securities Act”), and the applicable rules and
regulations (the “Rules and Regulations”) of the SEC promulgated
thereunder. The registration statement and prospectus contained
therein, when declared effective by the SEC, and as may be revised,
amended or modified from time to time thereafter by any amendments (as to
the registration statement) and/or supplements (as to the prospectus), are
respectively hereinafter referred to as the “Registration Statement” and
the “Prospectus.” Copies of the Prospectus (as amended
from time to time) will be delivered to the
Underwriter.
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8.2.
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The
Company has been duly and validly organized and formed as a corporation
under the laws of the State of Delaware, with the power and authority to
conduct its business as described in the
Prospectus.
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8.3.
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As
of the signing, and during the Term, of this Underwriting Agreement, the
Registration Statement and Prospectus comply with the Securities Act and
the Rules and Regulations, and the Prospectus and any and all authorized
sales materials prepared or approved by the Company for use with potential
investors in connection with the Offering (“Authorized Sales Materials”),
when used in conjunction with the Prospectus, do not contain any untrue
statements of material facts or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein
not misleading; provided, however, that the foregoing provisions of this
Section 8.3 will not extend to such statements contained in or
omitted from the Registration Statement or Prospectus or Authorized Sales
Materials as are primarily within the knowledge of the Underwriter or any
of the Dealers and are based upon information either (a) furnished by a
Dealer in writing to the Underwriter or the Company, or (b) furnished
by the Underwriter in writing to the Company specifically for inclusion
therein.
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8.4.
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The
Company intends to use the funds received from the sale of the Notes as
set forth in the Prospectus.
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8.5.
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No
consent, approval, authorization or other order of any governmental
authority is required in connection with the execution or delivery by the
Company of this Underwriter Agreement (except as provided in section 27 of
this Underwriting Agreement) or the issuance and sale by the Company of
the Notes, except such as may be required under the Securities Act or
applicable state securities laws.
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8.6.
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There
are no actions, suits or proceedings pending or to the knowledge of the
Company, threatened against the Company at law or in equity or before or
by any federal or state commission, regulatory body or administrative
agency or other governmental body, domestic or foreign, which will have a
material adverse effect on the business or property of the
Company.
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8.7.
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The
execution and delivery of this Underwriter Agreement, the consummation of
the transactions herein contemplated and compliance with the terms of this
Underwriter Agreement by the Company will not conflict with or constitute
a default under any charter, by-law, indenture, mortgage, deed of trust,
lease, rule, regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company, except to the extent that the
enforceability of the indemnity and/or contribution provisions contained
in Section 15 (Indemnification) of this Underwriter Agreement may be
limited under applicable securities
laws.
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8.8.
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The
Company has full legal right, power and authority to enter into this
Underwriter Agreement and to perform the transactions contemplated hereby,
except to the extent that the enforceability of the indemnity and/or
contribution provisions contained in Section 15 of this Underwriter
Agreement may be limited under applicable securities
laws.
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8.9.
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The
Notes, when subscribed for, paid for and issued, will be duly and validly
issued, fully paid and non-assessable and will conform to the description
thereof contained in the Prospectus; no holder thereof will be subject to
personal liability for the obligations of the Company solely by reason of
being such a holder; and all corporate action required to be taken for the
authorization, issuance and sale of such Notes shall have been validly and
sufficiently taken.
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8.10.
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The
financial statements of the Company filed as part of the Registration
Statement and those included in the Prospectus present fairly in all
material respects the financial position of the Company as of the date
indicated and the results of its operations for the periods indicated;
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent
basis.
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8.11.
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The
Company does not intend to conduct its business so as to be an “investment
company” as that term is defined in the Investment Company Act of 1940, as
amended, and the rules and regulation thereunder, and it will exercise
reasonable diligence to ensure that it does not become an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.
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8.12.
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Company
will be duly qualified to do business as a foreign corporation in each
jurisdiction in which it will own or lease property of a nature, or
transact business of a type, which will make such qualification
necessary.
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9.
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Representations
and Warranties of Underwriter. The Underwriter represents and
warrants to the Company that:
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9.1.
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As
of the signing, and during the Term, of this Underwriting Agreement,
Underwriter meets all of the requirements of a Qualified Independent
Underwriter as specified in Section 2720(b)(15) of the NASD rules or as
required under any applicable federal or state securities laws, all as
amended from time to time.
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9.2.
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Underwriter
has been duly and validly organized and formed as a corporation under the
laws of the State of California and has the full legal right, power and
authority to enter into this Underwriter Agreement and to perform the
transactions contemplated hereby, except to the extent the enforceability
of the indemnity and/or contribution provisions contained in Section 15
(Indemnification) of the Underwriter Agreement may be limited under
applicable securities laws.
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9.3.
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No
consent, approval, authorization or other order of any governmental
authority is required in connection with the execution or delivery by
Underwriter of this Underwriter Agreement (except as provided in section
27 of this Underwriting Agreement).
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9.4.
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There
are no actions, suits or proceedings pending or to the knowledge of
Underwriter, threatened against Underwriter at law or in equity or before
or by any federal or state commission, regulatory body or administrative
agency or other governmental body, domestic or foreign, which will have a
material adverse effect on the business or property of Underwriter, except
for the current suspension by FINRA of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ for 45 days from
January 28,2008 through March 12, 2008 under Docket#
E0120500701/200600401/06-4308/-46541.
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9.5.
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The
execution and delivery of this Underwriter Agreement, the consummation of
the transactions herein contemplated and compliance with the terms of this
Underwriter Agreement by Underwriter will not conflict with or constitute
a default under any charter, by-law, indenture, mortgage, deed of trust,
lease, rule, regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over Underwriter, except to the extent that the
enforceability of the indemnity and/or contribution provisions contained
in Section 15 (Indemnification) of this Underwriter Agreement may be
limited under applicable securities
laws.
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9.6.
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As
of the signing, and during the Term, of this Underwriting Agreement,
Underwriter is registered as a broker –dealer under section 15(d) of the
Securities and Exchange Act of 1934 (“Exchange Act”) and is a member, in
good standing, of FINRA and that its employees and representatives have
all the required licenses and registrations to act as contemplated under
this Underwriting Agreement..
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9.7.
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As
of the signing, and during the Term, of this Underwriting Agreement,
Underwriter agrees that it will use only those Underwriter Dealers who
shall be, at the time they sign a Distribution Agreement with Underwriter
and throughout the time such a person is an Underwriter Dealer, members in
good standing of FINRA.
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9.8.
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As
of the signing, and during the Term, of this Underwriting Agreement, the
Underwriter represents and warrants to the Company that it will, not use
any sales literature not authorized and approved by the Company, or use
any “broker-dealer use only” materials with members of the public in
connection with the offer or sale of
Notes.
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9.9.
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As
of the signing, and during the Term, of this Underwriting Agreement, the
Underwriter further represents and warrants to the Company that it shall
promptly (a) notify the Underwriter Dealers of any supplement or
amendment to the Prospectus, and (b) supply the Underwriter Dealers
with reasonable quantities of the Prospectus and any supplements or
amendments thereto, to the extent provided to the Underwriter by the
Company. In addition, the Underwriter represents and warrants to the
Company that, in connection with the sale of Notes to customers of the
Underwriter in transactions pursuant to which the Underwriter rather than
an Underwriter Dealer is acting as the broker-dealer of record, it will
deliver or make available a copy of the Prospectus as provided to the
Underwriter by the Company from time to
time.
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9.10.
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As
of the signing, and during the Term, of this Underwriting Agreement, the
Underwriter will offer the Notes, and in its agreements with Underwriter
Dealers will require that the Underwriter Dealers offer the Notes, only to
persons who meet the suitability standards set forth in the Prospectus or
in any suitability letter or memorandum sent to it by the Company and will
only make offers to persons in the states in which it is advised in
writing that the Notes are qualified for sale or that such qualification
is not required. In offering the Notes, the Underwriter will, and in its
agreements with Underwriter Dealers, the Underwriter will, require that
the Underwriter Dealers comply with the provisions of all applicable rules
and regulations relating to suitability of investors, and shall
specifically require that the Underwriter Dealers comply with the FINRA
rules contained in Rules 2730, 2740, 2740 and 2420 of
NASD.
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10.
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Company
will furnish the Underwriter, at no expense to the Underwriter, with such
number of printed copies of the Prospectus as the Underwriter may
reasonably request.
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11.
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If
at any time the SEC or any state securities commission shall issue any
stop order suspending the effectiveness of the Registration Statement, and
to the extent the Company determines that such action is in the best
interest of its shareholders, it will use its best efforts to obtain the
lifting of such order at the earliest possible
time.
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12.
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If
at any time when a Prospectus is required to be delivered under the
Securities Act any event occurs as a result of which, in the opinion of
either the Company or the Underwriter, the Prospectus or any other
prospectus then in effect would include an untrue statement of a material
fact or, in view of the circumstances under which they were made, omit to
state any material fact necessary to make the statements therein not
misleading, the Company will promptly notify the Underwriter thereof
(unless the information shall have been received from the Underwriter) and
will effect the preparation of an amended or supplemental prospectus which
will correct such statement or omission. The Company will then promptly
prepare such amended or supplemental prospectus or prospectuses as may be
necessary to comply with the requirements of Section 10 of the
Securities Act.
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13.
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The
Underwriter and the Underwriter Dealers will suspend or terminate offering
of the Notes upon request of the Company at any time and will resume
offering the Notes upon subsequent request of the
Company.
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14.
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Compensation. As
compensation for the services performed by Underwriter under this
Underwriting Agreement, the Company agrees that it will pay to Underwriter
a selling commission in the amount of 0.375% of the face value of the
Notes sold to the public (that is, multiplying the factor of 0.00375 by
the amount of the face value of the Note) during the Term of this
Underwriting; provided that such selling commission shall only
be paid with respect to the Notes sold after the effective date of this
Underwriting Agreement (under section 27), and for not more that $90
million of face value of the Notes.
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14.1.
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No
selling commissions or underwriter fee shall be paid with respect to Notes
sold: (a) pursuant to any exchange or dividend reinvestment plan, or
(b) in connection with, the merger or consolidation of the Company
with any other entity; or the acquisition by the Company of all or
substantially all of the assets or of the outstanding securities of any
other entity; or (c) otherwise in accordance with any then-current
Offering documents of the Company.
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15. Indemnifications.
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15.1.
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Company
Indemnification. The Company will indemnify and hold harmless
the Underwriter, its officers and directors and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), from and against any losses, claims,
damages or liabilities, joint or several, to which the Underwriter, its
officers, directors, or any such controlling person may become subject,
under the Securities Act or the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (a) any untrue statement or alleged
untrue statement of a material fact contained in (i) the Registration
Statement (including the Prospectus as a part thereof),
(ii) Authorized Sales Materials (when read in conjunction with the
Prospectus) or (iii) any blue sky application or other document
executed by the Company or on its behalf specifically for the purpose of
qualifying any or all of the Notes for sale under the securities laws of
any jurisdiction or based upon written information furnished by the
Company under the securities laws thereof (any such application, document
or information being hereinafter called a “Blue Sky Application”), or
(b) the omission or alleged omission to state in the Registration
Statement (including the Prospectus as a part thereof), Authorized Sales
Materials (when read in conjunction with the Prospectus), or in any Blue
Sky Application a material fact required to be stated therein or necessary
to make the statements therein not misleading. The Company will reimburse
the Underwriter, and its officers and directors and controlling persons,
for any reasonable legal or other expenses reasonably incurred by the
Underwriter, and its officers and directors and controlling persons, in
connection with investigating or defending such loss, claim, damage,
liability or action; provided that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of, or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the
Underwriter for use in the Registration Statement, the Prospectus, such
Authorized Sales Materials or any such Blue Sky Application; and further
provided that the Company will not be liable in any such case if it is
determined that the Underwriter had knowledge of the untrue statement or
alleged untrue statement or omission or alleged omission giving rise to or
resulting in such loss, claim, damage, liability or
action.
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15.2
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Underwriter
Indemnification. The Underwriter will indemnify and hold
harmless the Company its officers and directors (including any persons
named in any of the Registration Statements with his consent, as about to
become a director), each person who has signed any of the Registration
Statements and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any losses, claims, damages or liabilities
to which any of the aforesaid parties may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (a) any untrue statement of a material fact
contained in the Registration Statement (including the Prospectus as a
part thereof), Authorized Sales Materials (when read in conjunction with
the Prospectus), or any Blue Sky Application, or (b) the omission to
state in the Registration Statement (including the Prospectus as a part
thereof), Authorized Sales Materials (when read in conjunction with the
Prospectus) or in any Blue Sky Application a material fact required to be
stated therein or necessary to make the statements therein not misleading,
in each case described in clauses (a) and (b) to the extent, but
only to the extent, that such untrue statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Underwriter specifically for use with
reference to the Underwriter in the preparation of the Registration
Statement, the Prospectus, such Authorized Sales Materials or any such
Blue Sky Application, or (c) any failure by the Underwriter to comply
with its obligations contained in this Underwriting Agreement, or
(d) any untrue statement made by the Underwriter or its
representatives or agents or omission to state a fact necessary in order
to make the statements made, in light of the circumstances under which
they were made, not misleading in connection with the offer and sale of
the Notes, or (e) any material violation of this Agreement by the
Underwriter, or (f) any failure by the Underwriter to comply with
applicable laws governing money laundry abatement and anti-terrorist
financing efforts, including applicable rules of FINRA, including the NASD
Conduct rules, SEC Rules and the USA PATRIOT Act of 2001, or (g) any
other failure by the Underwriter to comply with applicable rules of FINRA,
including the NASD Conduct rules or SEC Rules. Underwriter will reimburse
the aforesaid parties, in connection with investigation or defending such
loss, claim, damage, liability or action. This indemnity agreement will be
in addition to any liability which the Underwriter may otherwise
have.
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15.3
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Joint
Company and Underwriter Indemnification. The Company and the
Underwriter will jointly and severally indemnify and hold harmless each
Broker- Dealer, its officers and directors and each person, if any, who
controls such Dealer within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any
losses, claims, damages or liabilities, joint or several, to which such
Broker-Dealer, its officers and directors, or any such controlling person
may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (a) any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (including the Prospectus as a part
thereof), Authorized Sales Materials (when read in conjunction with the
Prospectus) or any Blue Sky Application, or (b) the omission or
alleged omission to state in the Registration Statement (including the
Prospectus as a part thereof), Authorized Sales Materials (when read in
conjunction with the Prospectus) or in any Blue Sky Application a material
fact required to be stated therein or necessary to make the statements
therein not misleading. The Company and the Underwriter will reimburse
Broker-Dealers and their officers and directors and controlling persons,
for any reasonable legal or other expenses reasonably incurred by such
Broker-Dealers and their officers and directors and controlling persons,
in connection with investigating or defending such loss, claim, damage,
liability or action; provided that the Company and the Underwriter will
not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of, or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company
or the Underwriter by or on behalf of the Broker-Dealers specifically for
use in the preparation of the Registration Statement, the Prospectus, such
Authorized Sales Materials or any such Blue Sky Application; and further
provided that neither the Company nor the Underwriter will be liable in
any such case if it is determined in a legal proceeding that the
Broker-Dealers had knowledge of the matter or event giving rise to or
resulting in such loss, claim, damage, liability or
action.
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15.4.
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Notwithstanding
the foregoing, the indemnifications and agreements to hold harmless are
further limited to the extent that no such indemnification by the Company
of the Underwriter, or its officers, directors or control persons,
pursuant to Section 15.1 above or by the Company or the Underwriter
or a Broker-Dealer, or its officers, directors or control persons,
pursuant to this Section 15 of this Underwriting Agreement shall be
permitted under this Underwriting Agreement for, or arising out of, an
alleged violation of federal or state securities laws, unless one or more
of the following conditions are met: (i) there has been a successful
adjudication on the merits of each count involving alleged securities law
violations as to the particular indemnitee; (ii) such claims have
been dismissed with prejudice on the merits by a court of competent
jurisdiction as to the particular indemnitee; or (iii) a court of
competent jurisdiction approves a settlement of the claims against the
indemnitee and finds that indemnification of the settlement and the
related costs should be made, and the court considering the request for
indemnification has been advised of the position of the SEC and of the
published position of any state securities regulatory authority in which
the securities were offered or sold as to indemnification for violations
of securities laws.
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15.5
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Indemnification
Notification and Procedure. Promptly after receipt by an
indemnified party under this Section 15 of notice of the commencement
of any action (but in no event in excess of 30 days after receipt of
actual notice), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 15,
notify in writing the indemnifying party of the commencement thereof and
the omission so to notify the indemnifying party will relieve it from any
liability under this Section 15 as to the particular item for which
indemnification is then being sought, but not from any other liability
which it may have to any indemnified party. In case any such action is
brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be
entitled, to the extent it may wish, jointly with any other indemnifying
party similarly notified, to participate in the defense thereof, with
separate counsel. Such participation shall not relieve such indemnifying
party of the obligation to reimburse the indemnified party for reasonable
legal and other expenses (subject to Section 15.7) incurred by such
indemnified party in defending itself, except for such expenses incurred
after the indemnifying party has deposited funds sufficient to effect the
settlement, with prejudice, of the claim in respect of which indemnity is
sought. Any such indemnifying party shall not be liable to any such
indemnified party on account of any settlement of any claim or action
effected without the consent of such indemnifying
party.
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15.7
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The
indemnifying party shall pay all reasonable legal fees and expenses of the
indemnified party in the defense of such claims or actions; provided,
however, that the indemnifying party shall not be obliged to pay legal
expenses and fees to more than one law firm in connection with the defense
of similar claims arising out of the same alleged acts or omissions giving
rise to such claims notwithstanding that such actions or claims are
alleged or brought by one or more parties against more than one
indemnified party. If such claims or actions are alleged or brought
against more than one indemnified party, then the indemnifying party shall
only be obliged to reimburse the expenses and fees of the one law firm
that has been selected by a majority of the indemnified parties against
which such action is finally brought; and in the event a majority of such
indemnified parties is unable to agree on which law firm for which
expenses or fees will be reimbursable by the indemnifying party, then
payment shall be made to the first law firm of record representing an
indemnified party against the action or claim. Such law firm shall be paid
only to the extent of services performed by such law firm and no
reimbursement shall be payable to such law firm on account of legal
services performed by another law
firm.
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15.8
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The
indemnity agreements contained in this Section 15 shall remain
operative and in full force and effect regardless of (a) any
investigation made by or on behalf of any Broker-Dealer, or any person
controlling any Broker-Dealer or by or on behalf of the Company, the
Underwriter or any officer or director thereof, or by or on behalf of the
Company or the Underwriter, (b) delivery of any Notes and payment
therefor, and (c) any termination of this Underwriter Agreement or
any Distribution Agreement. A successor of any Broker-Dealer or of any of
the parties to this Distribution Agreement, as the case may be, shall be
entitled to the benefits of the indemnity agreements contained in this
Section 15. THE PARTIES HERETO INTEND THAT THE INDEMNITIES SET FORTH
IN SECTION 15 BE CONSTRUED AND APPLIED AS WRITTEN ABOVE NOTWITHSTANDING
ANY RULE OF CONSTRUCTION TO THE CONTRARY. WITHOUT LIMITING THE FOREGOING,
THE INDEMNITIES SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, APPLY
NOTWITHSTANDING ANY STATE’S “EXPRESS NEGLIGENCE RULE” OR SIMILAR RULE THAT
WOULD DENY COVERAGE BASED ON AN INDEMNIFIED PERSON’S SOLE, CONCURRENT OR
CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR STRICT LIABILITY. IT IS THE
INTENT OF THE PARTIES THAT, TO THE EXTENT PROVIDED IN SECTION 15, THE
INDEMNITIES SET FORTH HEREIN SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW,
APPLY TO AN INDEMNIFIED PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE
OR PASSIVE NEGLIGENCE OR STRICT LIABILITY. THE PARTIES AGREE THAT THIS
PROVISION IS “CONSPICUOUS” FOR PURPOSES OF ALL STATE
LAWS.
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16.
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Underwriter
shall provide, if requested by Company, clearing and back-office
activities (“Clearing Services”) for CSD’s sale of the
Notes.
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16.1.
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Underwriter
may provide, through sub-contracts with the persons who provide similar
services to Underwriter, the Clearing Services, provided Underwriter
advises Company of the names of the
sub-contractor.
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16.2.
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The
Clearing Services shall include all those services and functions normally
performed for the back office operations of a broker dealer with retail
customer accounts, and which Clearing Services shall include but not be
limited to:
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16.2.1.
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Receiving
and depositing all moneys received in connection with the sale of the
Notes
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16.2.2.
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Setting
up accounts, under CSD’s name, for each CSD customer (“CSD Customer
Accounts”) who purchases a Note, and accounting for transactions for such
CSD Customer Accounts.
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16.2.3.
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Preparing
monthly statements for each CSD Customer Account, under CSD’s name, and
mailing such statements to the CSD
customers
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16.2.4.
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Maintaining
customer account information, to include but not be limited to, names of
customers, addresses, contact
information.
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17.
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Survival
of Provisions. The following provisions of this Underwriter
Agreement shall survive the termination of this Underwriter
Agreement:
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17.1.
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The
respective agreements, representations and warranties of the Company and
the Underwriter set forth in this Underwriter Agreement shall remain
operative and in full force and effect regardless of (a) any
termination of this Underwriter Agreement, (b) any investigation made
by or on behalf of the Underwriter or any Broker-Dealer or any person
controlling the Underwriter or any Broker-Dealer or by or on behalf of the
Company or any person controlling the Company, and (c) the acceptance
of any payment for the Notes; and
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17.2. Section
15 Indemnification; and
17.3. Section
14 Compensation; and
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17.4.
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Sections
17 (Survival); 18 (Applicable Law and Venue); section 20 (Successors and
Amendment); Section 23 (Privacy and Customer Information); section 24
(Notices); section 25 (Entire Agreement); and section 26
(Waivers).
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18.
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Applicable
Law and Venue. This Underwriter Agreement was executed and
delivered in, and its validity, interpretation and construction shall be
governed by, the laws of the State of California; provided however, that
causes of action for violations of federal or state securities laws shall
not be governed by this Section. The Company, the Underwriter and each
Broker- Dealer hereby acknowledge and agree that venue for any action
brought hereunder or in connection herewith shall lie exclusively in San
Francisco, California.
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19.
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Counterparts. This
Underwriter Agreement may be executed in any number of counterparts. Each
counterpart, when executed and delivered, shall be an original contract,
but all counterparts, when taken together, shall constitute one and the
same agreement.
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20.
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Successors
and Amendment
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|
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20.1
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This
Underwriter Agreement shall inure to the benefit of and be binding upon
the Underwriter and the Company and their respective successors. Nothing
in this Underwriter Agreement is intended or shall be construed to give to
any other person any right, remedy or claim, except as otherwise
specifically provided herein.
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20.2
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This
Underwriter Agreement may be amended by the written agreement of the
Underwriter and the Company.
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21.
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Term.
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21.1.
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This
Underwriter Agreement may be terminated by the Underwriter or the Company
(a) immediately upon notice to the other party in the event that the
other party shall have materially failed to comply with any of the
material provisions of this Underwriter Agreement on its part to be
performed during the term of this Agreement or if any of the
representations, warranties, covenants or agreements of such party
contained herein shall not have been materially complied with or satisfied
within the times specified or (b) upon 60 days’ written
notice.
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21.2.
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Unless
terminated earlier, this Underwriting Agreement shall expire at the close
of business on the effective date that the Offering is terminated or
expires under Rule 415 of the Securities Act or other applicable
provisions of the Securities Act and its
regulations.
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21.3.
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The
Underwriter, upon the expiration or termination of this Underwriter
Agreement, shall promptly deliver to the Company all records and documents
in its possession which relate to the Offering which are not designated as
dealer copies. The Underwriter, at its sole expense, may make and retain
copies of all such records and documents, but shall keep all such
information confidential. The Underwriter shall use its best efforts to
cooperate with the Company to accomplish any orderly transfer of
management of the Offering to a party designated by the
Company.
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22.
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Qualification
of Investors. Upon request of Company, Underwriter or
Underwriter Dealers shall provide sufficient documentation to Company that
the purchaser of a Note is qualified under applicable federal and/state
laws and regulations (including Blue Sky suitability standards applicable
to the sale of the Notes) to make the purchase of the Note. Company agrees
that it shall not use customer information, solicit or offer to sell
anything to, any customer (which customer information was provided by
Underwriter or Underwriter Dealer) whose identity Company has obtained
only through the information given to Company under this section 22 of the
Underwriter Agreement
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23. Privacy
and Customer Information.
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23.1.
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Nonpublic
personal financial information relating consumers or customers of the
Company provided by, or at the direction of the Company to the Underwriter
(or any of its sub-contractors), or collected or retained by Underwriter
(or any of its sub-contractors) to perform its duties as Underwriter
(under this Underwriter Agreement) shall be considered confidential
information. The Underwriter shall not disclose or otherwise use nonpublic
personal financial information relating to present or former holders of
Notes other than for the purposes for which that information was disclosed
to Underwriter, including use under an exception in rule 14 and 15 of
Securities and Exchange Commission Regulation S-P in the ordinary course
of business to carry out those purposes. The Underwriter (and all of its
sub contractors) shall have in place and maintain physical, electronic and
procedural safeguards reasonably designed to protect the security,
confidentiality and integrity of, and to prevent unauthorized access to or
use of records and information relating to consumers or customers of the
Company.
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23.2.
|
Underwriter
shall not use customer information, solicit or offer to sell anything to,
any customer (which customer information was provided by Company) whose
identity Underwriter has obtained only through the information given to
Underwriter under this Underwriter
Agreement.
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24.
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Notices. Any
notice, consent or other communication made or given in connection with
this Agreement shall be in writing and shall be deemed to have been duly
given when delivered by hand, courier service or facsimile or five days
after being mailed by certified mail, return receipt requested, as
follows:
|
To
Underwriter: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
President
Redwood Securities Group,
Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ (fax)▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
To
Company: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Chief Executive Officer
CS Financing Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ (fax)
▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
|
25.
|
Entire
Agreement. This Agreement contains all of the terms agreed upon
or made by the parties relating to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or
written, respecting such subject
matter.
|
|
26.
|
Waivers. The
failure of a party to insist upon strict adherence to any term of this
Underwriting Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Underwriting
Agreement.
|
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27.
|
Conditional
Agreement. This Underwriting Agreement shall not become
operative nor effective unless and until the Financial Industry Regulatory
Authority (“FINRA”) has reviewed and approved the Offering with the
participation of Underwriter as a
QIU.
|
If the
foregoing correctly sets forth our understanding, please indicate your
acceptance
|
|
thereof
in the space provided below for that purpose, whereupon this letter and
your acceptance
|
|
|
shall
constitute a binding agreement between us as provided
herein.
|
|
|
Very
Truly Yours
|
|
|
CS
Financing Corporation
|
|
By:
|
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
|
|
Chief
Executive Officer
|
|
|
Accepted
and agreed to:
|
|
|
Redwood
Securities Group, Inc.
|
|
By:
|
/s/ ▇▇▇▇▇
▇▇▇
|
|
|
▇▇▇▇▇
▇▇▇
|
Senior
Vice president
By: /s/ ▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Operations Manager