Exhibit 1.10
1,000,000 SHARES
COMMON STOCK
($0.01 PAR VALUE)
UNDERWRITING AGREEMENT
December 10, 2002
X.X. XXXXXXX & SONS, INC.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, Xxxxxxxxx Mortgage, Inc., a Maryland corporation (the
"Company"), hereby addresses X.X. Xxxxxxx & Sons, Inc., as the underwriter (the
"Underwriter"), and hereby confirms its agreement with the Underwriter as
follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and sell to the
Underwriter 1,000,000 shares (the "Firm Shares") of its common stock, par value
$0.01 per share (the "Common Stock"). Solely for the purpose of covering
over-allotments in the sale of the Firm Shares, the Company further proposes to
grant to the Underwriter the right to purchase up to an additional 150,000
shares of Common Stock (the "Option Shares"), as provided in Section 3 of this
Underwriting Agreement (this "Agreement"). The Firm Shares and the Option Shares
are herein sometimes referred to as the "Shares" and are more fully described in
the Prospectus (as defined below).
2. PURCHASE, SALE AND DELIVERY OF FIRM SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, at a
purchase price of $18.3825 per share, the Firm Shares and any additional number
of Option Shares which the Underwriter may become obligated to purchase pursuant
to Section 3 hereof.
The closing of the sale and purchase of the Firm Shares shall take place
at Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000 or at such other place
as may be agreed upon between the Underwriter and the Company. Payment of the
purchase price for the Firm Shares sold by the Company to the Underwriter shall
be made by wire transfer of immediately available funds payable to the order of
the Company against delivery of the definitive certificates for the Firm Shares
to the Underwriter by full FAST transfer through the facilities of The
Depository Trust Company ("DTC") for the account of the Underwriter. Such
payment and delivery shall be made at 11:00 a.m., New York City time, on
December 16, 2002, or at such other time and date not later than five full
business days thereafter as the Underwriter and the Company may agree, such time
and date of payment and delivery being herein called the "Closing Date."
Any certificates for the Firm Shares to be so delivered will be made
available to the Underwriter for inspection at its offices located at 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx ("Xxxxxxx' Office"), or such other place as the
Underwriter and the Company may mutually agree upon, at least one full business
day prior to the Closing Date and will be in such names and denominations as the
Underwriter may request at least forty-eight hours prior to the Closing Date.
It is understood that the Underwriter proposes to offer the Firm Shares to
the public upon the terms and conditions set forth in the Registration Statement
(as defined below) and the Prospectus.
3. PURCHASE, SALE AND DELIVERY OF THE OPTION SHARES. The Company hereby
grants an option to the Underwriter to purchase from it up to 150,000 Option
Shares on the same terms and conditions as the Firm Shares; provided, however,
that such option may be exercised only for the purpose of covering any
over-allotments which may be made by the Underwriter in the sale of the Firm
Shares. No Option Shares shall be sold or delivered unless the Firm Shares
previously have been, or simultaneously are, sold and delivered.
The option is exercisable by the Underwriter at any time, and from time to
time, before the expiration of 30 days from the date of the Prospectus (or, if
such 30th day shall be a Saturday, Sunday or holiday, on the next day thereafter
when the New York Stock Exchange (the "NYSE") is open for trading), for the
purchase of all or part of the Option Shares covered thereby, by notice given by
the Underwriter to the Company in the manner provided in Section 11 hereof,
setting forth the number of Option Shares as to which the Underwriter is
exercising the option and the date of delivery of such Option Shares, which date
shall not be more than five business days after the date of such notice unless
otherwise agreed to by the Underwriter and the Company. The Underwriter may
terminate the option at any time, as to any unexercised portion thereof, by
giving written notice to the Company to such effect.
Payment of the purchase price for the Option Shares sold by the Company to
the Underwriter pursuant to the exercise of the option shall be made by wire
transfer of immediately available funds payable to the order of the Company
against delivery of the definitive certificates for such Option Shares to the
Underwriter by full FAST transfer through the facilities of DTC for the account
of the Underwriter. Such payment and delivery shall be made at 11:00 a.m., New
York City time, on the date designated in the notice given by the Underwriter as
provided for above (which may be the same as the Closing Date), unless some
other date and time are agreed upon, which date and time of payment and delivery
are called the "Option Closing Date."
Any certificates for the Option Shares to be so delivered will be made
available to the Underwriter for inspection at Xxxxxxx' Office, or such other
place as the Underwriter and the Company may mutually agree upon, at least one
full business day prior to the Option Closing Date and will be in such names and
denominations as the Underwriter may request at least forty-eight hours prior to
the Option Closing Date. On the Option Closing Date, the Company shall provide
to the Underwriter such representations, warranties, agreements, opinions,
letters, certificates and covenants with respect to the Option Shares as are
required to be delivered on the Closing Date with respect to the Firm Shares.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company and,
where applicable, Xxxxxxxxx Mortgage Advisory Corporation, the Company's
external manager (the "Manager"), represent and warrant to the Underwriter that:
(a) The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "1933 Act"), with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-3 (File No. 333-61966), including a
prospectus, and such amendments to such registration statement as may have been
required to the date of this Agreement, with respect to the Shares, which
incorporates by reference documents which the Company has filed or will file in
accordance with the provisions of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (collectively, the "1934
Act"). The Company has prepared a prospectus supplement (the "Prospectus
Supplement") to the prospectus included as part of such registration statement
setting forth the terms of the offering, sale and plan of distribution of the
Shares and additional information concerning the Company and its business.
Except where the context otherwise requires, such registration statement, as
amended when effective, including all exhibits and all documents filed as part
thereof or incorporated by reference therein, and including any information
contained in the Prospectus subsequently filed with the SEC pursuant to
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Rule 424(b) under the 1933 Act, is herein called the "Registration Statement,"
and the prospectus, including all documents incorporated therein by reference,
included in the Registration Statement, as supplemented by the Prospectus
Supplement, in the form filed by the Company with the SEC pursuant to Rule
424(b) under the 1933 Act, is herein called the "Prospectus." Any reference
herein to the Registration Statement, the Prospectus or any amendment or
supplement thereto shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
"amend," "amendment," "amended," "supplement" or "supplemented" with respect to
the Registration Statement and the Prospectus shall be deemed to refer to and
include any amendment or amendments to the Registration Statement or the
Prospectus, as the case may be, as well as the filing after the execution hereof
of any document with the SEC deemed to be incorporated by reference therein. For
purposes of this Agreement, all references to the Registration Statement, the
Prospectus or to any amendment or supplement thereto shall be deemed to include
any copy filed with the SEC pursuant to its Electronic Data Gathering Analysis
and Retrieval System ("XXXXX"), and such copy shall be identical in content to
any Prospectus delivered to the Underwriter for use in connection with the
offering of the Shares.
(b) The Company meets the requirements for use of Form S-3 under
the 1933 Act. The Registration Statement has been declared effective under the
1933 Act by the SEC. The Company has not received, and has no notice of, any
order of the SEC preventing or suspending the use of the Registration Statement
or threatening or instituting proceedings for that purpose. Any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement have been so described or filed. The Prospectus
Supplement has been or will be so prepared and will be filed pursuant to Rule
424(b) of the 1933 Act on or before the second business day following the date
of this Agreement or on such other day as the Underwriter and the Company may
mutually agree. Copies of the Registration Statement and the Prospectus, any
amendments or supplements thereto and all documents incorporated by reference
therein that were filed with the SEC on or prior to the date of this Agreement
(including one fully executed copy of the Registration Statement and of each
amendment thereto) have been delivered to the Underwriter and its counsel.
Neither the Company nor the Manager has distributed any offering material in
connection with the offering or sale of the Shares other than the Registration
Statement, the Prospectus or any other materials, if any, permitted by the 1933
Act.
(c) Each part of the Registration Statement, when such part became
or becomes effective or was or is filed with the SEC, and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with the SEC and
at the Closing Date and, if applicable, at the Option Closing Date, conformed or
will conform in all material respects with the requirements of the 1933 Act.
Each part of the Registration Statement, when such part became or becomes
effective or was or is filed with the SEC, did not or will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Prospectus and any amendment or supplement thereto, on the date of filing
thereof with the SEC and at the Closing Date and, if applicable, at the Option
Closing Date, did not or will not include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the foregoing shall not apply to statements in, or omissions from,
any such document in reliance upon, and in conformity with, written information
concerning the Underwriter that was furnished in writing to the Company by the
Underwriter, specifically for use in the preparation thereof. Neither the SEC
nor any state or other jurisdiction or other regulatory body has issued, or, to
the knowledge of the Company, is threatening to issue, any stop order under the
1933 Act or other order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the Prospectus or suspending
the qualification or registration of the Shares for offering or sale in any
jurisdiction nor has instituted or, to the knowledge of the Company, threatened
to institute proceedings for any such purpose.
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(d) The documents incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto, when they
became or become effective under the 1933 Act or were or are filed with the SEC
under the 1933 Act or the 1934 Act, as the case may be, conformed or will
conform in all material respects with the requirements of the 1933 Act and the
1934 Act, as applicable.
(e) The consolidated financial statements of the Company and the
Subsidiaries (as defined below), together with the related schedules and notes
thereto, set forth or included or incorporated by reference in the Registration
Statement and Prospectus are accurate in all material respects and fairly
present the financial condition of the Company and the Subsidiaries as of the
dates indicated and the results of operations, changes in financial position,
shareholders' equity and cash flows for the periods therein specified and are in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein). The
selected financial and statistical data included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the information
shown therein and, to the extent based upon or derived from the financial
statements, have been compiled on a basis consistent with the financial
statements presented therein. Any pro forma financial statements of the Company
and the Subsidiaries, and the related notes thereto, included or incorporated by
reference in the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the SEC's rules
and guidelines with respect to pro forma financial statements and have been
properly compiled on the basis described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein. No other financial statements are required to be set forth or
incorporated by reference in the Registration Statement or the Prospectus under
the 1933 Act that are not so set forth or incorporated by reference therein.
(f) The Prospectus delivered to the Underwriter for use in
connection with this offering will be identical to the version of the Prospectus
created to be transmitted to the SEC for filing via XXXXX, except to the extent
permitted by Regulation S-T.
(g) The Company has been duly formed and incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Maryland, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction, each of which is listed on Schedule A
annexed hereto, in which its ownership or lease of property or assets or the
conduct of its business requires such qualification, except where the failure to
so qualify would not have a material adverse effect on the business, assets,
properties, prospects, financial condition or results of operation of the
Company and the Subsidiaries taken as a whole (a "Material Adverse Effect"), and
has full corporate power and authority necessary to own, hold, lease and/or
operate its assets and properties, to conduct the business in which it is
engaged and as described in the Prospectus and to enter into and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The Company is in compliance in all material respects with the laws,
orders, rules, regulations and directives issued or administered by such
jurisdictions. Complete and correct copies of the charter and the bylaws of the
Company and all amendments thereto have been delivered to the Underwriter and,
except as set forth in the exhibits to the Registration Statement, no changes
therein will be made subsequent to the date hereof and prior to the Closing Date
or, if applicable, the Option Closing Date.
(h) The Company has no "subsidiaries" (as such term is defined in
Rule 1-02 of Regulation S-X promulgated under the 1933 Act) other than Xxxxxxxxx
Mortgage Funding Corporation ("Funding I"), Xxxxxxxxx Mortgage Acceptance
Corporation ("Acceptance I"), Xxxxxxxxx Mortgage Home Loans, Inc. ("TMHL"),
Xxxxxxxxx Mortgage Funding Corporation II ("Funding II") and Xxxxxxxxx Mortgage
Acceptance Corporation II ("Acceptance II") (each a "Subsidiary" and,
collectively, the "Subsidiaries"). Each of the Subsidiaries has been duly formed
and incorporated and is validly
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existing as a corporation in good standing under the laws of the State of
Delaware, is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction, each of which is listed on Schedule B annexed
hereto, in which its ownership or lease of property or assets or the conduct of
its business requires such qualification, except where the failure to so qualify
would not have a Material Adverse Effect, and has full corporate power and
authority necessary to own, hold, lease and/or operate its assets and
properties, and to conduct the business in which it is engaged and as described
in the Prospectus. Each of the Subsidiaries is in compliance in all material
respects with the laws, orders, rules, regulations and directives issued or
administered by such jurisdictions. Complete and correct copies of the
certificates of incorporation and of the bylaws of the Subsidiaries and all
amendments thereto have been delivered to the Underwriter and, except as set
forth in the exhibits to the Registration Statement, no changes therein will be
made subsequent to the date hereof and prior to the Closing Date or, if
applicable, the Option Closing Date.
(i) Other than the Subsidiaries, the Company does not own,
directly or indirectly, any shares of stock or any other equity or long-term
debt securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity. All of the outstanding
shares of capital stock of each of the Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable, and are wholly owned by
the Company, directly or through TMHL, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or other equity or adverse claims.
The Company directly owns 100% of each of Funding I, Acceptance I and TMHL.
Funding II and Acceptance II are wholly owned by TMHL. No options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligation into shares of capital stock or ownership
interests in the Subsidiaries are outstanding.
(j) The Manager has been duly formed and incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction, each of which is listed on Schedule C
annexed hereto, in which its ownership or lease of property or assets or the
conduct of its business requires such qualification, and has full corporate
power and authority necessary to own, hold, lease and/or operate its assets and
properties, to conduct the business in which it is engaged and as described in
the Prospectus and to enter into this Agreement, and the Manager is in
compliance in all material respects with the laws, orders, rules, regulations
and directives issued or administered by such jurisdictions. Complete and
correct copies of the certificate of incorporation and of the bylaws of the
Manager and all amendments thereto have been delivered to the Underwriter and no
changes therein will be made subsequent to the date hereof and prior to the
Closing Date or, if applicable, the Option Closing Date. The Manager has no
"subsidiaries" (as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the 1933 Act).
(k) TMA Mortgage Funding Trust I and TMA Mortgage Funding Trust II
(collectively, the "Trusts") have each been duly formed and are validly existing
as business trusts under the Delaware Business Trust Act, in good standing under
the laws of Delaware, with full authority to perform all functions (i) which
business trusts are authorized to perform and (ii) which are described in the
Prospectus. The trustee for each of the Trusts is the Wilmington Trust Company.
(l) Neither the Company, any of the Subsidiaries, any of the
Trusts nor the Manager is in breach of, or in default under (nor has any event
occurred which with notice, lapse of time or both would result in any breach of,
or constitute a default under), (i) their respective charters, bylaws or
organizational documents, as the case may be, or (ii) any obligation, agreement,
covenant or condition contained in any contract, license, repurchase agreement,
management agreement, indenture, mortgage, deed of trust, bank loan or credit
agreement, note, lease or other evidence of indebtedness, or any lease, contract
or other agreement or instrument to which the Company, any of the Subsidiaries,
any of the
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Trusts or the Manager is a party or by which the Company, the Subsidiaries, the
Trusts, the Manager or any of their respective assets or properties may be bound
or affected. Except as set forth in Schedule D annexed hereto, to the knowledge
of the Company and the Manager, no other party under any contract or other
agreement to which the Company or any of the Subsidiaries is a party is in
default in any respect thereunder. The execution, delivery and performance of
this Agreement, the issuance and sale of the Shares and the consummation of the
transactions contemplated hereby will not conflict with, or result in any breach
of or constitute a default under (or constitute any event which with notice,
lapse of time or both would result in any breach of, or constitute a default
under), (i) any provision of the charter, bylaws or organizational documents, as
the case may be, of the Company, any of the Subsidiaries, any of the Trusts or
the Manager, (ii) any provision of any contract, license, repurchase agreement,
management agreement, indenture, mortgage, deed of trust, bank loan or credit
agreement, note, lease or other evidence of indebtedness, or any lease, contract
or other agreement or instrument to which the Company, any of the Subsidiaries,
any of the Trusts or the Manager is a party or by which the Company, any of the
Subsidiaries, any of the Trusts or the Manager, or any of their respective
assets or properties may be bound or affected, or, with respect to the Manager,
which would have a material adverse effect on the ability of the Manager to
perform its obligations under the Management Agreement, dated July 15, 1999,
between the Company and the Manager, as amended on October 17, 2000 (the
"Management Agreement"), or (iii) any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the Company or
any of the Subsidiaries. Neither the Company, any of the Subsidiaries, any of
the Trusts nor the Manager has, at any time during the past five years, (i) made
any unlawful contributions to any candidate for any political office or failed
fully to disclose any contribution in violation of law or (ii) made any payment
to any state, federal or foreign government official or other person charged
with similar public or quasi-public duty (other than payment required or
permitted by applicable law).
(m) As of September 30, 2002, as of the date of this Agreement and
as of the Closing Date, the Company had, has or will have an authorized, issued
and outstanding capitalization as set forth under the headings "Actual" and "As
Adjusted," respectively, in the section of the Prospectus Supplement entitled
"Capitalization." All of the issued and outstanding shares of capital stock,
including the Shares, have been duly and validly authorized and issued and are
fully paid and non-assessable, have been issued in compliance with all federal
and state securities laws and were not issued in violation of any preemptive
right, resale right, right of first refusal or similar right.
(n) This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
equitable principles.
(o) The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained in the
Registration Statement and Prospectus and such description conforms to the
rights set forth in the instruments defining the same. The certificates for the
Shares are in due and proper form and the holders of the Shares will not be
subject to personal liability by reason of being such holders.
(p) The Shares have been duly and validly authorized by the
Company for issuance and sale pursuant to this Agreement and, when issued and
delivered against payment therefor as provided herein, will be duly and validly
issued and fully paid and non-assessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim, and will be registered pursuant
to Section 12 of the 1934 Act.
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(q) No approval, authorization, consent or order of or filing with
any national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transaction contemplated hereby
other than (i) registration of the Shares under the 1933 Act, (ii) any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriter or (iii) such approvals
as have been obtained in connection with the approval of the listing of the
Shares on the NYSE.
(r) Except for incentive awards to be granted under the Company's
2002 Long-Term Incentive Plan (the "Plan"), no person, as such term is defined
in Rule 1-02 of Regulation S-X promulgated under the 1933 Act (each, a
"Person"), has the right, contractual or otherwise, to cause the Company to
issue to it any shares of capital stock or other securities of the Company upon
the issuance and sale of the Shares to the Underwriter hereunder, nor does any
Person have preemptive rights, co-sale rights, rights of first refusal or other
rights to purchase or subscribe for any of the Shares or any securities or
obligations convertible into or exchangeable for, or any contracts or
commitments to issue or sell any of, the Shares or any options, rights or
convertible securities or obligations, other than those that have been expressly
waived prior to the date hereof.
(s) PricewaterhouseCoopers LLP ("PWC"), whose report on the
consolidated financial statements of the Company is filed with the SEC as part
of the Registration Statement and Prospectus, are and, during the periods
covered by their report, were independent public accountants as required by the
1933 Act. PWC is not in violation of the auditor independence requirements of
the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act").
(t) Each of the Company, the Subsidiaries, the Trusts and the
Manager has all necessary licenses, permits, authorizations, consents and
approvals and has made all necessary filings required under any federal, state,
local or foreign law, regulation or rule, and has obtained all necessary
permits, authorizations, consents and approvals from other Persons, in order to
conduct its business as described in the Prospectus, except where the failure to
obtain such licenses, permits, authorizations, consents and approvals would not
have a Material Adverse Effect. Each of the Company, the Subsidiaries, the
Trusts and the Manager has obtained all accreditation or certification required
by any applicable law from any governmental agency or authority in order to
provide the products and services which it currently provides or which it
proposes to provide as set forth in the Prospectus. Neither the Company, any of
the Subsidiaries, any of the Trusts nor the Manager is in violation of, or in
default under, any such license, permit, authorization, consent or approval or
any federal, state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to the Company, any of the Subsidiaries, any of the
Trusts or the Manager.
(u) The descriptions in the Registration Statement and the
Prospectus of the legal or governmental proceedings, contracts, leases and other
legal documents therein described present fairly the information required to be
shown and there are no legal or governmental proceedings, contracts, leases or
other documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed as required. All agreements between
the Company, any of the Subsidiaries, any of the Trusts or the Manager, as the
case may be, and third parties expressly referenced in the Prospectus are legal,
valid and binding obligations of the Company, the Subsidiaries, the Trusts or
the Manager, as the case may be, enforceable in accordance with their respective
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and by general equitable principles.
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(v) There are no actions, suits, claims, investigations, inquiries
or proceedings pending or, to the Company's knowledge, threatened to which the
Company, any of the Subsidiaries, any of the Trusts or the Manager or any of
their respective officers or directors is a party or of which the properties or
other assets of any such entity is subject at law or in equity, or before or by
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency which could result in a judgment, decree or
order.
(w) During the period of at least the last 24 calendar months
prior to the date of this Agreement, the Company has timely filed with the SEC
all documents and other material required to be filed pursuant to Sections 13,
14 and 15(d) under the 1934 Act. During the period of at least the last 36
calendar months preceding the filing of the Registration Statement, the Company
has filed all reports required to be filed pursuant to Sections 13, 14 and 15(d)
under the 1934 Act. As of the date of this Agreement, the aggregate market value
of the Company's voting stock held by nonaffiliates of the Company was equal to
or greater than $150 million.
(x) Except as disclosed in the Prospectus (excluding any
disclosure contained in any amendment or supplement to, or incorporated by
reference into, the Prospectus after the date of this Agreement), since the date
of the latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change in the condition (financial or otherwise),
business, net worth, properties, assets or results of operations of the Company,
the Subsidiaries and the Trusts, taken as a whole. Subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus and during the time that a prospectus relating to the Shares is
required to be delivered under the 1933 Act, there has not been and will not be
(i) any transaction which is material to the Company, the Subsidiaries and the
Trusts, except transactions in the ordinary course of business, (ii) any
obligation, direct or contingent, which is material to the Company, the
Subsidiaries and the Trusts taken as a whole, incurred by the Company, the
Subsidiaries or the Trusts, except obligations incurred in the ordinary course
of business, (iii) any change in the capital stock or outstanding indebtedness
of the Company or the Subsidiaries, or (iv) except for regular quarterly
dividends on the Common Stock and the 9.68% Cumulative Convertible Series A
Preferred Stock in amounts per share that are consistent with past practice, any
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock. Neither the Company, the Subsidiaries nor the
Trusts has any material contingent obligation which is not disclosed in the
Registration Statement or Prospectus.
(y) There are no Persons with registration or other similar rights
to have any equity or debt securities, including securities which are
convertible into or exchangeable for equity securities, registered pursuant to
the Registration Statement or otherwise registered by the Company under the 1933
Act.
(z) Neither the Company, the Subsidiaries nor the Trusts has
defaulted on any installment on indebtedness for borrowed money or on any rental
on one or more long term leases, which defaults would have a Material Adverse
Effect. Since it first became a publicly-registered entity, the Company has not
filed a report pursuant to Section 13(a) or 15(d) of the 1934 Act indicating
that it (i) has failed to pay any dividend or sinking fund installment on
preferred stock or (ii) has defaulted on any installment on indebtedness for
borrowed money or on any rental on one or more long term leases, which defaults
would have a Material Adverse Effect.
(aa) Each of the Company, the Subsidiaries, the Trusts, the Manager
and each of their respective officers, directors and controlling Persons has
not, directly or indirectly, (i) taken any action designed to cause or to result
in, or that has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of the Common Stock to facilitate
the sale of the
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Shares or (ii) since the filing of the Registration Statement (except pursuant
to the Company's dividend reinvestment and stock purchase plan (the "DRSPP"),
the Company's sales agreements with Cantor Xxxxxxxxxx & Co. and the public
offerings completed in the third quarter and the fourth quarter of 2001 and the
first quarter of 2002) (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, shares of Common Stock or (B) paid or
agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company.
(bb) The Shares have been approved for listing on the NYSE, subject
to official notice of issuance.
(cc) Except as set forth in Schedule E annexed hereto, neither the
Company nor any of the Subsidiaries, the Trusts or its affiliates (including the
Manager) (i) is required to register as a "broker" or "dealer" in accordance
with the provisions of the 1934 Act or (ii) directly or indirectly through one
or more intermediaries, controls or has any other association with (within the
meaning of Article I of the Bylaws of the National Association of Securities
Dealers ("NASD")) any member firm of the NASD.
(dd) The Company has not relied upon the Underwriter or its legal
counsel for any legal, tax or accounting advice in connection with the offering
and sale of the Shares.
(ee) As of the date of this Agreement, the investment portfolio
(other than cash and cash equivalents) of the Company consists of
adjustable-rate mortgage securities and adjustable-rate mortgage loans. As of
the date of this Agreement, the derivative financial instruments held by the
Company consist solely of interest rate cap agreements, interest rate options
contracts, interest rate swap agreements and eurodollar futures contracts. As of
the date of this Agreement and except as otherwise disclosed in the Prospectus,
the Company has no plan or intention to materially alter its stated investment
policies and operating policies and strategies, as such are described in the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
2002, including making any change to any stated investment percentages or
guidelines or the stated equity-to-assets ratio currently employed by the
Company, the Subsidiaries and the Trusts. The Company, the Subsidiaries and the
Trusts have good and marketable title to all properties and assets owned,
directly or indirectly, by the Company, the Subsidiaries and the Trusts, in each
case free and clear of any security interests, liens, encumbrances, equities,
claims and other defects (except for any security interest, lien, encumbrance or
claim that may otherwise exist under any applicable repurchase agreement),
except such as do not interfere with the use made or proposed to be made of such
property or asset by the Company, the Subsidiaries and the Trusts. Except for
"real estate owned" properties owned by the Company as a result of foreclosures
on delinquent loans, the Company, the Subsidiaries and the Trusts do not own any
real property. Any real property and buildings held under lease by the Company,
the Subsidiaries and the Trusts are held under valid, existing and enforceable
leases, with such exceptions as are disclosed in the Prospectus or are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company and the Subsidiaries.
(ff) Each of the Company, the Subsidiaries and the Trusts has filed
all federal, state and foreign income and franchise tax returns required to be
filed on or prior to the date hereof and has paid taxes shown as due thereon (or
that are otherwise due and payable), other than taxes which are being contested
in good faith and for which adequate reserves have been established in
accordance with generally accepted accounting principles. Neither the Company
nor the Manager has knowledge, after due inquiry, of any tax deficiency which
has been asserted or threatened against the Company, any of the Subsidiaries or
any of the Trusts. To the knowledge of the Company and the Manager, there are no
tax returns of the Company, the Subsidiaries or the Trusts that are currently
being audited by federal, state or local taxing authorities or agencies which
would have a Material Adverse Effect.
9
(gg) The Company and each of the Subsidiaries and the Trusts owns
or possesses adequate license or other rights to use all patents, trademarks,
service marks, trade names, copyrights, software and design licenses, trade
secrets, manufacturing processes, other intellectual property rights and
know-how (collectively, "Intangibles") necessary to entitle the Company, the
Subsidiaries and the Trusts to conduct their business as described in the
Prospectus, and the Company, the Subsidiaries and the Trusts have not received
notice of infringement of or conflict with (and the Company knows of no such
infringement of or conflict with) asserted rights of others with respect to any
Intangibles which could have a Material Adverse Effect.
(hh) TMHL owns or possesses adequate and validly issued licenses,
or is otherwise authorized by law, to originate loans as a mortgage lender in
all states in which TMHL has originated or is currently originating loans. As of
the date of this Agreement, TMHL is licensed, or is otherwise authorized by law,
to originate loans in each of the jurisdictions set forth on Schedule F annexed
hereto. To the knowledge of the Company and the Manager, all third-party service
providers used, employed, hired or otherwise contracted with by the Company or
any of the Subsidiaries have obtained all necessary licenses or other relevant
authorization to do business in all jurisdictions in which such third-party
service providers do business on behalf of the Company or the Subsidiaries.
(ii) Each of the Company, the Subsidiaries, the Trusts and the
Manager maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles as applied in the United States and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(jj) Each of the Company, the Subsidiaries and the Trusts is
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the business in
which it is engaged, including, but not limited to, directors' and officers'
insurance and insurance covering real and personal property owned or leased by
the Company, the Subsidiaries and the Trusts against theft, damage, destruction,
acts of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect. Neither the Company, the Subsidiaries,
the Trusts nor the Manager has been refused any insurance coverage which has
been sought and applied for and has no reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.
(kk) Neither the Company, the Subsidiaries, the Trusts nor the
Manager is in violation, and has not received notice of any violation with
respect to, any applicable local, state or federal environmental, safety or
similar law applicable to the business of the Company, the Subsidiaries and the
Trusts. Each of the Company, the Subsidiaries, the Trusts and the Manager has
received all permits, licenses or other approvals required of it under
applicable federal and state occupational safety and health and environmental
laws and regulations to conduct its business, and each of the Company, the
Subsidiaries, the Trusts and the Manager is in compliance with all terms and
conditions of any such permit, license or approval, except any such violation of
law or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals which could not, singly or in the aggregate, have a
Material Adverse Effect.
10
(ll) Neither the Company, the Subsidiaries, the Trusts nor any of
their affiliates has incurred any liability for any finder's fees or similar
payments in connection with the transactions herein contemplated, except as may
otherwise exist with respect to the Underwriter pursuant to this Agreement.
(mm) There are no existing or, to the knowledge of the Company,
threatened labor disputes with the employees of the Company, the Subsidiaries,
the Trusts or the Manager which are likely to have individually or in the
aggregate a Material Adverse Effect. None of the employees of the Company, the
Subsidiaries or the Trusts is represented by a union and, to the knowledge of
the Company, no union organizing activities are taking place. To the knowledge
of the Company and the Manager, neither the Company, the Subsidiaries, the
Trusts nor the Manager has violated any federal, state or local law relating to
discrimination in hiring, promotion or pay of employees, or any applicable wage
or hour laws, or the rules and regulations thereunder, which might, individually
or in the aggregate, result in a Material Adverse Effect.
(nn) Neither the Company, the Subsidiaries, the Trusts nor, to the
knowledge of the Company and the Manager, any employee or agent of the Company,
the Subsidiaries or the Trusts, has made any payment of funds of the Company,
the Subsidiaries or the Trusts, or received or retained any funds, in violation
of any law, rule or regulation or of a character required to be disclosed in the
Prospectus. No relationship, direct or indirect, exists between or among the
Company, the Subsidiaries, the Trusts or the Manager, on the one hand, and the
directors, officers and stockholders of the Company, the Subsidiaries, the
Trusts or the Manager, on the other hand, which is required by the 1933 Act to
be described in the Registration Statement and the Prospectus that is not so
described.
(oo) The Company, for all taxable years commencing with the taxable
year ended December 31, 1993, and each of the Subsidiaries, since its respective
date of inception, have been, and upon the sale of the Shares will continue to
be, organized and operated in conformity with the requirements for qualification
and taxation of the Company as a "real estate investment trust" ("REIT") under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"). The proposed method of operation of the Company and each of the
Subsidiaries and the Trusts as described in the Prospectus will enable the
Company to continue to meet the requirements for qualification and taxation as a
REIT under the Code, and no actions have been taken (or not taken which are
required to be taken) which would cause such qualification to be lost. The
Company intends to continue to operate in a manner which would permit it to
qualify as a REIT under the Code. The Company has no intention of changing its
operations or engaging in activities which would cause it to fail to qualify, or
make economically undesirable its continued qualification, as a REIT.
(pp) Neither the Company nor any of the Subsidiaries or the Trusts
is and, after giving effect to the offering and sale of the Shares, will be an
"investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(qq) The Manager has full legal right, power and authority to
perform its duties in accordance with and under the Management Agreement and to
consummate the transactions contemplated therein. The Management Agreement has
been duly authorized, executed and delivered by the Manager and constitutes a
valid and binding agreement of the Manager, enforceable in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and by general equitable principles. To the knowledge of the
Company and the Manager, there is no breach of, or default under (nor has any
event occurred which with notice, lapse of time, or both would constitute a
breach of, or default under), the Management Agreement by the Manager.
11
(rr) No relationship, direct or indirect, exists between or among
the Company or any of the Subsidiaries, the Trusts or the Manager, on the one
hand, and the directors, officers, stockholders or trustees of the Company, any
of the Subsidiaries, the Trusts or the Manager, on the other hand, which is
required by the rules of the NASD to be described in the Registration Statement
and the Prospectus which is not so described. Except as otherwise disclosed in
the Prospectus, there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company or any of the Subsidiaries or the
Trusts to or for the benefit of any of the officers or directors of the Company,
any of the Subsidiaries or the Manager or any of the members of the families of
any of them.
(ss) The Company, the Subsidiaries and the Trusts are in compliance
in all material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"). No "reportable
event" (as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company, the Subsidiaries and the Trusts would
have any liability. The Company, the Subsidiaries and the Trusts have not
incurred and do not expect to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Code. Each "pension plan" for which the Company, the
Subsidiaries or the Trusts would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(tt) The Company is in compliance with applicable provisions of the
Xxxxxxxx-Xxxxx Act that are effective and is actively taking steps to ensure
that it will be in compliance with other applicable provisions of the
Xxxxxxxx-Xxxxx Act upon the effectiveness of such provisions.
5. ADDITIONAL COVENANTS. The Company hereby covenants and agrees with
the Underwriter that:
(a) The Company will furnish such information as may be required
and otherwise will cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such jurisdictions (both domestic and
foreign) as the Underwriter may designate and maintain such qualifications in
effect so long as required for the distribution of the Shares; provided,
however, that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
jurisdiction (except service of process with respect to the offering and sale of
the Shares). The Company will promptly advise the Underwriter of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(b) The Company will prepare the Prospectus in a form approved by
the Underwriter and file such Prospectus with the SEC pursuant to Rule 424(b)
under the 1933 Act not later than 10:00 a.m., New York City time, on or before
the second business day following the date of this Agreement or on such other
day as the parties may mutually agree and will furnish promptly (and with
respect to the initial delivery of such Prospectus, not later than 10:00 a.m.,
New York City time, on or before the second business day following the date of
this Agreement or on such other day as the parties may mutually agree) to the
Underwriter copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements
thereto after the effective date of the Registration Statement) in such
quantities and at such locations as the Underwriter may reasonably request for
the purposes contemplated by the 1933 Act, which Prospectus and any amendments
or supplements thereto furnished to the Underwriter will be identical to the
version created to be transmitted to the SEC for filing via XXXXX, except to the
extent permitted by Regulation S-T.
12
(c) The Company will advise the Underwriter immediately,
confirming such advice in writing, of (i) the receipt of any comments from the
SEC relating to the Registration Statement or the Prospectus or, prior to the
termination of the offering contemplated in this Agreement, any other filing of
the Company under the 1933 Act or the 1934 Act, (ii) any request by the SEC for
amendments or supplements to the Prospectus or, prior to the termination of the
offering contemplated in this Agreement, the Registration Statement or for
additional information with respect thereto, (iii) the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of the Prospectus, (iv) the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction or (v) the initiation, threatening or contemplation of any
proceedings for any of such purposes and, if the SEC or any other governmental
agency or authority should issue any such order, the Company will make every
reasonable effort to obtain the lifting or removal of such order as soon as
possible. The Company will promptly provide the Underwriter with copies of all
correspondence to and from, and all documents issued to and by, the SEC in
connection with the registration of the Shares under the 1933 Act or, prior to
the termination of the offering contemplated in this Agreement, relating to any
documents incorporated by reference into the Registration Statement or the
Prospectus. The Company will advise the Underwriter promptly of any proposal to
amend or supplement the Prospectus or, prior to the termination of the offering
contemplated in this Agreement, the Registration Statement, including by filing
any documents that would be incorporated therein by reference, will afford the
Underwriter a reasonable opportunity to comment on any such proposed amendment
or supplement and will not file any such amendment or supplement to which the
Underwriter shall object in writing.
(d) The Company will use its best efforts to advise the
Underwriter promptly and, if requested by the Underwriter, will confirm such
advice in writing when, prior to the termination of the offering contemplated in
the Agreement, any post-effective amendment to the Registration Statement
becomes effective under the 1933 Act.
(e) The Company will furnish to the Underwriter for a period of
five years from the date of this Agreement (i) copies of any reports or other
communications which the Company shall send to its stockholders or shall from
time to time publish or publicly disseminate, (ii) copies of all annual,
quarterly and current reports filed with the SEC on Forms 10-K, 10-Q and 8-K or
such other similar form as may be designated by the SEC, (iii) if different than
the items contained in clauses (i) and (ii) above, copies of documents or
reports filed with any national securities exchange on which any class of
securities of the Company is listed (other than correspondence or other similar
communications) and (iv) such other information as the Underwriter may
reasonably request regarding the Company, the Subsidiaries or the Trusts, in
each case as soon as such communications, documents or information become
available.
(f) The Company will advise the Underwriter promptly of the
happening of any event known to the Company or the Manager within the time
during which a Prospectus relating to the Shares is required to be delivered
under the 1933 Act which would require the making of any change in the
Prospectus then being used, or in the information incorporated by reference
therein, so that the Prospectus would not include an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with any law. If within the time
during which a Prospectus relating to the Shares is required to be delivered
under the 1933 Act any event shall occur or condition shall exist which, in the
reasonable opinion of the Company, the Underwriter or their respective counsel,
would require the making of any change in the Prospectus then being used, or in
the information incorporated by reference therein, so that the Prospectus would
not include an untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or
if it is necessary at any time to amend or
13
supplement the Prospectus to comply with any law, the Company will promptly
prepare and furnish to the Underwriter copies of the proposed amendment or
supplement before filing any such amendment or supplement with the SEC and
thereafter promptly furnish, at the Company's own expense, to the Underwriter
and to dealers copies in such quantities and at such locations as the
Underwriter may from time to time reasonably request of an appropriate amendment
to the Registration Statement or supplement to the Prospectus so that the
Prospectus as so amended or supplemented will not, in the circumstances when it
is so delivered, be misleading or so that the Prospectus will comply with the
law.
(g) The Company will make generally available to its stockholders
as soon as practicable, and in the manner contemplated by Rule 158 of the 1933
Act but in any event not later than 15 months after the end of the Company's
current fiscal quarter, an earnings statement (which need not be audited)
covering a 12-month period beginning after the date upon which the Prospectus
Supplement is filed pursuant to Rule 424(b) under the 1933 Act that shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder.
(h) The Company will furnish to the Underwriter a signed copy of
the Registration Statement, as initially filed with the SEC, and of all
amendments thereto (including all exhibits thereto and documents incorporated by
reference therein) and such number of conformed copies of the foregoing (other
than exhibits) as the Underwriter may reasonably request.
(i) The Company will apply the net proceeds from the sale of the
Shares in the manner set forth under the caption "Use of Proceeds" in the
Prospectus.
(j) The Company will use its best efforts to furnish to the
Underwriter, not less than two business days before a filing with the SEC during
the period referred to in paragraph (f) above, a copy of any document proposed
to be filed pursuant to Section 13, 14 or 15(d) of the 1934 Act and during such
period to file all such documents in a manner and within the time periods
required by the 1934 Act.
(k) The Company will furnish to the Underwriter, as early as
practicable prior to the Closing Date and the Option Closing Date, as the case
may be, but not later than two business days prior thereto, a copy of the latest
available unaudited interim consolidated financial statements of the Company,
the Subsidiaries and the Trusts which have been read by the Company's
independent certified public accountants, as stated in their letter to be
furnished pursuant to Section 6(f) hereof.
(l) The Company, the Subsidiaries and the Trusts will maintain and
keep accurate books and records reflecting their assets and maintain internal
accounting controls which provide reasonable assurance that (i) transactions are
executed in accordance with management's authorization, (ii) transactions are
recorded as necessary to permit the preparation of the Company's consolidated
financial statements and to maintain accountability for the assets of the
Company, the Subsidiaries and the Trusts, (iii) access to the assets of the
Company, the Subsidiaries and the Trusts is permitted only in accordance with
management's authorization and (iv) the recorded accounts of the assets of the
Company, the Subsidiaries and the Trusts are compared with existing assets at
reasonable intervals.
(m) Neither the Company, the Subsidiaries, the Trusts nor the
Manager will sell, offer, contract to sell, pledge, grant any option to purchase
or otherwise dispose of, directly or indirectly, or file with the SEC a
registration statement, or amend any effective registration statement under the
1933 Act relating to, any shares of capital stock, or any securities convertible
into, or exercisable, exchangeable or redeemable for shares of capital stock, or
publicly disclose the intention to make any such offer, sale, contract to sell,
pledge, disposition, filing or amendment, for a period of 90 days after the date
hereof, without the prior written consent of the Underwriter, which consent will
not be unreasonably withheld. The foregoing sentence shall not apply to (i) the
Shares to be sold hereunder, (ii) shares of
14
Common Stock issued pursuant to the DRSPP, (iii) the grant of awards pursuant to
the Plan, (iv) the filing of any amendment to the Registration Statement and/or
any new registration statement on Form S-3 by the Company for the purpose of
registering shares of Common Stock in contemplation of any "at the market"
offering of such shares pursuant to Rule 415(a)(4) promulgated under the 1933
Act (a "Rule 415(a)(4) Offering") or any off-market offering following the
expiration of a period of 30 days after the date hereof; provided, however, that
any such filing shall be in compliance with the conditions set forth in this
Section 5 or (v) the issuance and sale of shares of Common Stock by the Company
in any Rule 415(a)(4) Offering or any off-market offering that is in compliance
with all applicable securities laws and the rules and regulations of the NYSE
following the expiration of a period of 30 days after the date hereof.
(n) The Company will use its best efforts to cause each officer
and director of the Company to furnish to the Underwriter, prior to the Closing
Date, a letter or letters, substantially in the form of Exhibit A attached
hereto, pursuant to which each such person shall agree not to sell, offer,
contract to sell, pledge, grant any option to purchase or otherwise dispose of,
directly or indirectly, any shares of capital stock, or any securities
convertible into, or exercisable, exchangeable or redeemable for shares of
capital stock of the Company for a period of 45 days after the date hereof,
without the prior written consent of the Underwriter. The foregoing sentence
shall not apply to any shares of Common Stock sold by any such officer or
director to the Company, at the current market value, as reported on the NYSE,
at the time of any such sale, pursuant to a stock repurchase plan instituted by
the Company and approved by the Company's Board of Directors, which is in
compliance with all applicable securities laws and the rules and regulations of
the NYSE.
(o) The Company will use its best efforts to cause the Shares to
be listed on the NYSE and to maintain such listing and to file with the NYSE all
documents and notices required by the NYSE of companies that have securities
that are listed on the NYSE.
(p) The Company will engage and maintain, at its expense, a
registrar and transfer agent for the Shares.
(q) Prior to termination of the offering contemplated by this
Agreement, neither the Company, the Subsidiaries, the Trusts nor the Manager
will (i) take, directly or indirectly, any action designed to stabilize or
manipulate the price of any security of the Company, or which may cause or
result in, or which might in the future reasonably be expected to cause or
result in, the stabilization or manipulation of the price of any security of the
Company, to facilitate the sale or resale of any of the Shares, (ii) sell, bid
for, purchase or pay any Person (other than as contemplated by the provisions
hereof) any compensation for soliciting purchases of the Shares, or (iii) pay or
agree to pay to any Person any compensation for soliciting any order to purchase
any other securities of the Company.
(r) The Company will comply with all requirements imposed upon it
by the 1933 Act and the 1934 Act as from time to time in force, so far as
necessary to permit the continuance of sales of, or dealings in, the Shares as
contemplated by the provisions hereof and the Prospectus.
(s) The Company will not invest in futures contracts, options on
futures contracts or options on commodities unless the Company is exempt from
the registration requirements of the Commodity Exchange Act, as amended, or
otherwise complies with the Commodity Exchange Act, as amended, or with an
applicable no-action letter to or on behalf of the Company from the Commodity
Futures Trading Commission. In addition, the Company will not engage in any
activities which might be subject to the Commodity Exchange Act, as amended,
unless such activities are exempt from that Act or otherwise comply with that
Act or with an applicable no-action letter to or on behalf of the Company from
the Commodity Futures Trading Commission.
15
(t) The Company will comply with all of the provisions of any
undertakings in the Registration Statement.
(u) The Company and the Subsidiaries have been organized and
operated in conformity with the requirements for qualification and taxation of
the Company as a REIT under the Code, and the Company's proposed methods of
operation will enable the Company to continue to meet the requirements for
qualification and taxation as a REIT under the Code for subsequent taxable
years.
(v) The Company will not be or become, at any time prior to the
expiration of three years after the date of this Agreement, an "investment
company," as such term is defined in the Investment Company Act.
(w) The Company has retained PWC (for all periods after January 1,
1999) as its qualified accountants and qualified tax experts (i) to test
procedures and conduct annual compliance reviews designed to determine
compliance with the REIT provisions of the Code and the Company's exempt status
under the Investment Company Act and (ii) to otherwise assist the Company in
monitoring appropriate accounting systems and procedures designed to determine
compliance with the REIT provisions of the Code and the Company's exempt status
under the Investment Company Act.
(x) Prior to the Closing Date (and, if applicable, the Option
Closing Date), neither the Company, the Subsidiaries, the Trusts nor the Manager
will issue any press releases or other communications directly or indirectly and
will hold no press conferences with respect to the Company, the Subsidiaries or
the Trusts, the financial condition, results of operations, business,
properties, assets or liabilities of the Company, the Subsidiaries or the
Trusts, or the offering of the Shares, without the Underwriter's prior written
consent, which shall not be unreasonably withheld.
(y) The Company, the Subsidiaries and the Trusts will maintain
such controls and other procedures, including, without limitation, those
required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act, and the applicable
regulations thereunder that are designed to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the
1934 Act is recorded, processed, summarized and reported, within the time
periods specified in the SEC's rules and forms, including, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the 1934
Act is accumulated and communicated to the Company's management, including its
Chief Executive Officer and Principal Financial Officer, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure and to ensure that material information relating to the Company, the
Subsidiaries and the Trusts is made known to them by others within those
entities, particularly during the period in which such periodic reports are
being prepared.
(z) The Company, the Subsidiaries and the Trusts will comply with
all effective applicable provisions of the Xxxxxxxx-Xxxxx Act.
6. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter to purchase and pay for the Shares, as provided herein, shall be
subject to the accuracy, as of the date hereof and as of the Closing Date (and,
if applicable, the Option Closing Date), of the representations and warranties
of the Company and the Manager contained herein, to the performance by the
Company of its covenants and obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective not later than 1:00 p.m., New York City
time, on the date hereof, or, with the consent of the Underwriter, at a later
date and time, not later than 5:00 p.m., New York City time, on the first
16
business day following the date hereof, or at such later date and time as may be
approved by the Underwriter. All filings required by Rule 424 and Rule 430A of
the 1933 Act shall have been made. No stop order suspending the effectiveness of
the Registration Statement, as amended from time to time, shall have been issued
and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Company or the Underwriter, threatened or contemplated by the
SEC, and any request of the SEC for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Underwriter.
(b) The Underwriter shall not have advised the Company on or prior
to the Closing Date (and, if applicable, the Option Closing Date) that the
Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of counsel to the
Underwriter, is material, or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing
Date), the Underwriter shall have received the opinion of Dechert, counsel for
the Company, addressed to the Underwriter and dated the Closing Date (and, if
applicable, the Option Closing Date), 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
Maryland, with the corporate power and corporate authority to own, lease
and operate its assets and properties and conduct its business as
described in the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as herein contemplated.
(ii) The Subsidiaries and the Manager have been duly
incorporated and are validly existing as corporations in good standing
under the laws of the State of Delaware, with the corporate power and
corporate authority to own, lease and operate their assets and properties
and conduct their business as described in the Prospectus.
(iii) The Trusts have each been duly formed and are validly
existing as business trusts under the Delaware Business Trust Act in good
standing under the laws of Delaware, with the authority to perform all
functions (i) which business trusts are authorized to perform and (ii)
which are described in the Prospectus.
(iv) The Company, the Subsidiaries, the Trusts and the
Manager are duly licensed or qualified by each jurisdiction listed on
Schedule A to such opinion.
(v) The execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company and the
Manager. This Agreement has been duly authorized, executed and delivered
by the Company and the Manager.
(vi) The Shares have been duly authorized by the Company and,
when issued and delivered to and paid for by the Underwriter, will be duly
and validly issued and will be fully paid and non-assessable. The Shares
when issued and outstanding will conform in all material respects with the
description thereof contained in the Prospectus. The certificates for the
Shares are in due and proper form and comply with all applicable
requirements of the General Corporation Law of the State of Maryland (the
"MGCL"), with any applicable requirements of the Company's charter and
by-laws and with the requirements of the NYSE. No holder of the Shares is
or will be subject to personal liability, under the MGCL or the Company's
charter or by-laws, by reason of being a holder.
17
(vii) The Company has an authorized capitalization as set
forth in the Prospectus. All of the issued and outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and conform, in all material
respects, to the description thereof contained in the Prospectus.
(viii) The issuance of the Shares is not subject to preemptive
or other similar rights of any stockholder of the Company arising by
operation of the MGCL or under the Company's charter or by-laws or, to the
knowledge of such counsel, any contractual preemptive rights, resale
rights, rights of first refusal or similar rights. Except as disclosed in
the Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and, to the
best of such counsel's knowledge, no commitment, plan or arrangement to
issue, any shares of capital stock of the Company or any security
convertible into, exercisable, exchangeable or redeemable for shares of
capital stock of the Company. No holder of any security of the Company has
the right to require any security owned by such holder to be included for
registration in the Registration Statement.
(ix) The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
Subsidiaries listed on Schedule A to such opinion.
(x) Each part of the Registration Statement, when such part
became effective, and the Prospectus and any amendment or supplement
thereto (except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference
therein, as to which such counsel need not express an opinion) on the date
of filing with the SEC and at the Closing Date (and, if applicable, the
Option Closing Date) complied as to form in all material respects with the
requirements of the 1933 Act and the 1934 Act, including, without
limitation, Item 503 of Regulation S-K.
(xi) The Registration Statement has been declared effective
under the 1933 Act, the Prospectus has been filed as required by this
Agreement and, to the best of such counsel's knowledge, no stop order has
been issued or proceedings with respect thereto pending, contemplated or
threatened under the 1933 Act and any required filings of the Prospectus
and any supplement thereto pursuant to Rule 424 under the 1933 Act have
been made in the manner and within the time period required by such Rule
424.
(xii) No approval, authorization, consent or order of or
filing with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required in connection
with the authorization, issuance, transfer, sale and delivery of the
Shares and the consummation by the Company of the transaction as
contemplated by this Agreement or with the taking by the Company of any
action contemplated thereby other than registration of the Shares under
the 1933 Act and except as may be required under state securities laws or
by the bylaws and rules of the NASD in connection with the purchase and
distribution by the Underwriter of the Shares.
(xiii) The execution, delivery and performance of this
Agreement by the Company and the Manager and the consummation by the
Company of the transactions contemplated hereby do not and will not
conflict with, or result in any breach of, or constitute a default under
(nor constitute any event which with notice, lapse of time, or both, would
result in any breach of or constitute a default under, nor cause the time
for performance of any obligation to be accelerated under, or result in
the creation or imposition of any lien, charge or encumbrance upon any of
the assets of the Company pursuant to the terms of) (i) any provisions of
the charter,
18
bylaws or other organizational documents, as the case may be, of the
Company, the Subsidiaries, the Trusts or the Manager, (ii) any provision
of any contract, document or other agreement or instrument listed on
Schedule B to such opinion, (iii) the MGCL or the Delaware General
Corporation Law (the "DGCL") or any federal law, regulation or rule or any
decree, judgment or order applicable to the Company, the Subsidiaries or
the Trusts, or (iv) any existing obligation of the Company under any court
or administrative order, judgment or decree of which such counsel has
knowledge, or violate applicable provisions of the MGCL, the DGCL or any
statute or regulation of the United States.
(xiv) All descriptions in the Registration Statement and
Prospectus (i) under the captions "Prospectus Supplement Summary," "Price
Range of Common Stock and Dividends," "Capitalization," "Compliance with
REIT Requirements and Investment Company Act of 1940," "Manager," "About
This Prospectus," "Risk Factors," "Description of Stock," "Federal Income
Tax Considerations," and "Plan of Distribution" of statutes, regulations,
legal and governmental proceedings or other legal matters, or (ii) of
contracts, instruments, leases, licenses and other agreements
(collectively, the "Documents"), are accurate and fairly present the
information required to be shown and such counsel does not know of any
statutes or legal or governmental proceedings required to be described in
the Registration Statement or the Prospectus that are not described as
required, or of any Documents of a character required to be described in
the Registration Statement or Prospectus that are not described as
required, and any Document required to be filed as an exhibit to the
Registration Statement has been filed as an exhibit thereto or has been
incorporated as an exhibit by reference into the Registration Statement.
(xv) To the best of such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending, threatened
or contemplated to which the Company, the Subsidiaries, the Trusts or the
Manager are subject or of which any of their assets or properties are
subject at law or in equity or before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority or
agency which are required to be described in the Prospectus but are not so
described or which (i) seek to challenge the legality or enforceability of
this Agreement, (ii) seek to challenge the legality or enforceability of
any of the Documents filed, or required to be filed, or incorporated by
reference as exhibits to the Registration Statement, (iii) seek damages or
other remedies with respect to any of the Documents filed, or required to
be filed, as exhibits to the Registration Statement, (iv) except as set
forth in or contemplated by the Registration Statement and the Prospectus,
seek money damages or seek to impose criminal penalties upon the Company,
the Subsidiaries, the Trusts or the Manager, or any of their respective
officers or directors in their capacities as such or (v) seek to enjoin
any of the business activities of the Company, the Subsidiaries, the
Trusts or the Manager or the transactions described in the Prospectus.
(xvi) The statements made in the Prospectus under the
"Description of Stock," "Plan of Distribution" and "Risk Factors" and in
the Registration Statement in Item 15 of Part II, to the extent that they
constitute summaries of provisions of the Company's charter and bylaws or
matters of law or legal conclusions, have been reviewed by such counsel
and are accurate summaries, in all material respects.
(xvii) The documents incorporated by reference into the
Registration Statement and Prospectus, when they became effective or were
filed (or, if an amendment with respect to any such document was filed
when such amendment was filed) with the SEC, complied as to form in all
material respects with the 1934 Act (except as to the financial statements
and
19
schedules and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need not
express an opinion).
(xviii) Each of the Company, the Subsidiaries and the Trusts
is not and will not, upon consummation of the transactions contemplated by
this Agreement, be an "investment company," or a "promoter" or "principal
underwriter" for, a "registered investment company," as such terms are
defined in the Investment Company Act, or a "broker" within the meaning of
Section 3(a)(4) of the 1934 Act or a "dealer" within the meaning of
Section 3(a)(5) of the 1934 Act or required to be registered pursuant to
Section 15(a) of the 1934 Act.
(xix) The Company, for all taxable years commencing with the
taxable year ended December 31, 1993, and each of the Subsidiaries, since
its respective date of inception, have been, and upon the sale of Shares
will continue to be, organized and operated in conformity with the
requirements for qualification and taxation of the Company as a REIT under
Sections 856 through 860 of the Code. To the extent that the foregoing
opinion refers to any period prior to the taxable year beginning January
1, 2002, such opinion is solely based on the opinion of Xxxx, Xxxxx &
Xxxxxxx LLP (which Xxxx, Xxxxx & Xxxxxxx LLP has permitted such counsel to
rely upon and such reliance is expressly permitted by the Underwriter).
The proposed method of operation of the Company and each of the
Subsidiaries and the Trusts as described in the Prospectus will enable the
Company to continue to meet the requirements for qualification and
taxation as a REIT under the Code, and, to the best knowledge of such
counsel, no actions have been taken (or not taken which are required to be
taken) which would cause such qualification to be lost. The disclosure
contained in the Prospectus under the caption "Federal Income Tax
Considerations," to the extent such information constitutes matters of
law, summaries of legal matters or legal conclusions, has been reviewed by
such counsel and is accurate in all material respects.
(xx) The Shares have been duly authorized for listing by
the NYSE, subject to official notice of issuance.
Such counsel shall confirm that during the preparation of the Registration
Statement and Prospectus, such counsel participated in conferences with the
Underwriter and its counsel and with officers and representatives of the Company
and its independent accountants, at which conferences the contents of the
Registration Statement and the Prospectus (including all documents filed under
the 1934 Act and deemed incorporated by reference therein) were discussed,
reviewed and revised. On the basis of the information which was developed in the
course thereof, considered in light of such counsel's understanding of
applicable law and the experience gained by such counsel through their practice
thereunder, without such counsel assuming responsibility for, or independently
verifying, the accuracy and completeness of such statements, except to the
extent expressly provided above in the applicable opinion paragraph preceding
this paragraph, such counsel shall confirm that nothing came to their attention
that would lead them to believe that either the Registration Statement
(including any document filed under the 1934 Act and deemed incorporated by
reference therein), as of its effective date, 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, in the light of the circumstances
under which they were made, not misleading, or the Prospectus or any amendment
or supplement thereto (including any document filed under the 1934 Act and
deemed incorporated by reference therein) as of its respective issue date and as
of the Closing Date, or, if applicable, the Option Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (except for in each of the above cases the financial statements and
schedules and other financial or statistical data as to which such counsel need
express no opinion).
20
In rendering the foregoing opinion, such counsel may rely as to matters of
fact, upon certificates and written statements of the executive officers of, and
accountants for, the Company. In rendering the foregoing opinions, all
statements and opinions given "to the knowledge of such counsel" (or similar
phrases) shall refer to the actual present knowledge of the attorneys of such
firm who have devoted substantive attention to the offering and related matters
(and who shall be named in such opinion), and not to the knowledge of the firm
or its partners or employees generally, and all such statements and opinions
given to the knowledge of such counsel shall be supported, as to matters of
fact, by officer's certificates obtained from the Company, the Subsidiaries or
the Trusts, as appropriate, executed copies of which shall be delivered to the
Underwriter on the Closing Date.
(d) The Underwriter shall have received on the Closing Date (and,
if applicable, the Option Closing Date), from Xxxxxxxx Chance US LLP, counsel to
the Underwriter, such opinion or opinions, dated the Closing Date (and, if
applicable, the Option Closing Date) with respect to such matters as the
Underwriter may reasonably require and the Company shall have furnished to such
counsel such documents as it reasonably requests for the purposes of enabling it
to review or pass on the matters referred to in this Section 6 and in order to
evidence the accuracy, completeness and satisfaction of the representations,
warranties and conditions herein contained. In rendering the foregoing opinion
or opinions, such counsel may rely, as to matters involving the laws of the
State of Maryland, upon the opinion or opinions addressed to the Underwriter of
Dechert, counsel for the Company.
(e) The Underwriter shall have received at or prior to the Closing
Date from Xxxxxxxx Chance US LLP a memorandum or memoranda (a "Blue Sky
Memorandum"), in form and substance satisfactory to the Underwriter, with
respect to the qualification for offering and sale by the Underwriter of the
Shares under state securities or blue sky laws of such jurisdictions as the
Underwriter may have designated to the Company.
(f) On the business day immediately preceding the date of this
Agreement and on the Closing Date (and, if applicable, the Option Closing Date),
the Underwriter shall have received from PWC a letter, dated the date of this
Agreement and the Closing Date (and, if applicable, the Option Closing Date), in
the form and substance satisfactory to the Underwriter, confirming that they are
independent public accountants with respect to the Company within the meaning of
the 1933 Act and stating to the effect set forth in Schedule G hereto.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriter that (i) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Underwriter deems such explanation unnecessary, and (ii) such changes, decreases
or increases do not, in the sole judgment of the Underwriter, make it
impractical or inadvisable to proceed with the purchase and delivery of the
Shares as contemplated by the Registration Statement and the Prospectus.
(g) Except as contemplated in the Prospectus, (i) neither the
Company, the Subsidiaries nor the Trusts shall have sustained since the date of
the latest audited financial statements included or incorporated by reference in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree and (ii) subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company, the Subsidiaries nor the
Trusts shall have incurred any liability or obligation, direct or contingent, or
entered into any transactions, and there shall not have been any change in the
capital stock or short-term or long-term debt of the Company, the Subsidiaries
and the Trusts or any change, or any development involving or which might
reasonably be expected to involve a prospective change in the condition
(financial or other), net worth, business, affairs, management, prospects,
results of operations or cash flow of the
21
Company, the Subsidiaries and the Trusts, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Underwriter so
material or adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares being delivered on such
Closing Date (and, if applicable, the Option Closing Date) on the terms and in
the manner contemplated in the Prospectus.
(h) Between the time of execution of this Agreement and the
Closing Date or the Option Closing Date, as the case may be, there shall not
have occurred any downgrading, nor shall any notice or announcement have been
given or made of (i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company by any "nationally recognized
statistical rating organization," as that term is defined in Rule 436(g)(2)
under the 1933 Act.
(i) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
NYSE, the American Stock Exchange or The Nasdaq National Market or the
establishing on such exchanges or market by the SEC or by such exchanges or
markets of minimum or maximum prices which are not in force and effect on the
date hereof; (ii) a suspension or material limitation in trading in the
Company's securities on the NYSE or the establishing on such exchange by the SEC
or by such exchange of minimum or maximum prices which are not in force and
effect on the date hereof; (iii) a general moratorium on commercial banking
activities declared by either federal or any state authorities; (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, which in the
judgment of the Underwriter makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares in the manner
contemplated in the Prospectus; or (v) any calamity or crisis, change in
national, international or world affairs, act of God, change in the
international or domestic markets, or change in the existing financial,
political or economic conditions in the United States or elsewhere, which in the
judgment of the Underwriter makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares in the manner
contemplated in the Prospectus.
(j) The Underwriter shall have received certificates, dated the
Closing Date (and, if applicable, the Option Closing Date) and signed by the
President and the Chief Financial Officer of the Company, in their capacities as
such, stating that:
(i) the condition set forth in Section 6(a) has been fully
satisfied;
(ii) they have carefully examined the Registration Statement
and the Prospectus as amended or supplemented and all documents
incorporated by reference therein and nothing has come to their attention
that would lead them to believe that either the Registration Statement or
the Prospectus, or any amendment or supplement thereto or any documents
incorporated by reference therein as of their respective effective, issue
or filing dates, contained, and the Prospectus as amended or supplemented
and all documents incorporated by reference therein and when read together
with the documents incorporated by reference therein, at such Closing
Date, contains any untrue statement of a material fact, or omits to state
a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(iii) since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amendment or
supplement to the Registration Statement or the Prospectus which has not
been so set forth and there has been no document required to be filed
under the 1934 Act that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not been so filed;
22
(iv) all representations and warranties made herein by the
Company and the Manager are true and correct at such Closing Date, with
the same effect as if made on and as of such Closing Date, and all
agreements herein to be performed or complied with by the Company on or
prior to such Closing Date have been duly performed and complied with by
the Company;
(v) neither the Company, the Subsidiaries nor the Trusts
has sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree;
(vi) except as disclosed in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company, the Subsidiaries nor
the Trusts has incurred any liabilities or obligations, direct or
contingent, other than in the ordinary course of business, or entered into
any transactions not in the ordinary course of business, which in either
case are material to the Company, the Subsidiaries or the Trusts; and
there has not been any change in the capital stock or material increase in
the short-term debt or long-term debt of the Company, the Subsidiaries or
the Trusts or any material adverse change or any development involving or
which may reasonably be expected to involve a prospective material adverse
change, in the condition (financial or other), net worth, business,
affairs, management, prospects, results of operations or cash flow of the
Company, the Subsidiaries or the Trusts taken as a whole; and there has
been no dividend or distribution of any kind, paid or made by the Company
on any class of its capital stock;
(vii) there has not been any change or decrease specified in
paragraph 6 of the letter or letters delivered to the Underwriter referred
to in Section 6(f) above, except those changes and decreases that are
disclosed therein; and
(viii) covering such other matters as the Underwriter may
reasonably request.
(k) The Company shall not have failed, refused, or been unable, at
or prior to the Closing Date (and, if applicable, the Option Closing Date) to
have performed any agreement on its part to be performed or any of the
conditions herein contained and required to be performed or satisfied by it at
or prior to such Closing Date.
(l) The Company shall have furnished to the Underwriter at the
Closing Date (and, if applicable, the Option Closing Date) such further
information, opinions, certificates, letters and documents as the Underwriter
may have reasonably requested.
(m) The Shares shall have been approved for trading upon official
notice of issuance on the NYSE.
(n) The Underwriter shall have received duly and validly executed
letter agreements referred to in Section 5(n) hereof.
(o) The NASD shall not have raised any objection with respect to
the fairness and reasonableness of the underwriting terms and arrangements.
(p) All filings with the SEC required by Rule 424 under the 1933
Act to have been filed by the Closing Date or the Option Closing Date, as the
case may be, shall have been made within the applicable time period prescribed
for such filing by Rule 424.
23
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Underwriter and to Xxxxxxxx Chance US LLP, counsel to the
Underwriter. The Company will furnish the Underwriter with such signed and
conformed copies of such opinions, certificates, letters and documents as the
Underwriter may request.
If any of the conditions specified above in this Section 6 shall not have
been satisfied at or prior to the Closing Date (and, if applicable, the Option
Closing Date) or waived by the Underwriter in writing, this Agreement may be
terminated by the Underwriter on notice to the Company.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless the Underwriter
for and against any losses, damages or liabilities to which the Underwriter may
become subject, under the 1933 Act or otherwise, insofar as such losses, damages
or liabilities (or actions or claims in respect thereof) arise out of or are
based upon (i) an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus or any other
prospectus relating to the Shares, or any amendment or supplement thereto, or in
any blue sky application or other document executed by the Company or based on
any information furnished in writing by the Company, filed in any state or other
jurisdiction in order to qualify any or all of the Shares under the securities
laws thereof (the "Blue Sky Application"), or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Underwriter for any legal or other expenses incurred by such Underwriter in
connection with investigating, preparing, pursuing or defending against or
appearing as a third party witness in connection with any such loss, damage,
liability or action or claim, including, without limitation, any investigation
or proceeding by any governmental agency or body, commenced or threatened,
including the reasonable fees and expenses of counsel to the indemnified party,
as such expenses are incurred (including such losses, damages, liabilities or
expenses to the extent of the aggregate amount paid in settlement of any such
action or claim, provided that (subject to Section 7(c) hereof) any such
settlement is effected with the written consent of the Company); provided,
however, that the Company shall not be liable in any such case to the extent,
but only to the extent, that any such loss, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Prospectus or any other
prospectus relating to the Shares, or any such amendment or supplement, in
reliance upon and in conformity with written information relating to the
Underwriter furnished to the Company by the Underwriter expressly for use in the
preparation thereof (as provided in Section 12 hereof).
(b) The Underwriter will indemnify and hold harmless the Company
for and against any losses, damages or liabilities to which the Company may
become subject, under the 1933 Act or otherwise, insofar as such losses, damages
or liabilities (or actions or claims in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus or any other prospectus
relating to the Shares, or any amendment or supplement thereto, or any Blue Sky
Application, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, the
Prospectus or any other prospectus relating to the Shares, or any such amendment
or supplement, or any Blue Sky Application, in reliance upon and in conformity
with written information relating to the Underwriter furnished to the Company by
the Underwriter, expressly for use in the preparation thereof (as provided in
Section 12 hereof), and will reimburse the Company for any legal or other
expenses incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred (including such losses,
damages, liabilities or expenses to the extent
24
of the aggregate amount paid in settlement of any such action or claim, provided
that (subject to Section 7(c) hereof) any such settlement is effected with the
written consent of the Underwriter).
(c) Promptly after receipt by an indemnified party under Section
7(a) or 7(b) hereof of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under Section 7(a) or 7(b) hereof, notify the indemnifying
party in writing of the commencement thereof, but the failure to so notify such
indemnifying party shall not relieve such indemnifying party from any liability
except to the extent that it has been prejudiced in any material respect by such
failure or from any liability that it may have to any such indemnified party
otherwise than under Section 7(a) or 7(b) hereof. In case any such action shall
be brought against any such indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of such indemnified party, be counsel to such
indemnifying party), and, after notice from such indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under Section
7(a) or 7(b) hereof for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. The indemnified party shall have the right to employ its own
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the employment of counsel by
such indemnified party at the expense of the indemnifying party has been
authorized by the indemnifying party, (ii) the indemnified party shall have been
advised by such counsel that there may be a conflict of interest between the
indemnifying party and the indemnified party in the conduct of the defense, or
certain aspects of the defense, of such action (in which case the indemnifying
party shall not have the right to direct the defense of such action with respect
to those matters or aspects of the defense on which a conflict exists or may
exist on behalf of the indemnified party) or (iii) the indemnifying party shall
not in fact have employed counsel reasonably satisfactory to such indemnified
party to assume the defense of such action, in any of which events such fees and
expenses to the extent applicable shall be borne, and shall be paid as incurred,
by the indemnifying party. If at any time such indemnified party shall have
requested such indemnifying party under Section 7(a) or 7(b) hereof to reimburse
such indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a) or 7(b) hereof effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of such request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request for
reimbursement prior to the date of such settlement. No such indemnifying party
shall, without the written consent of such indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not such
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of such indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any such indemnified party.
In no event shall an indemnifying party be liable for the fees and expenses of
more than one counsel, including any local counsel, for all such indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to indemnify or hold harmless an indemnified
party under Section 7(a) or 7(b) hereof in respect of any losses, damages or
liabilities (or actions or claims in respect thereof) referred to therein,
25
then each indemnifying party under Section 7(a) or 7(b) hereof shall contribute
to the amount paid or payable by such indemnified party as a result of such
losses, damages or liabilities (or actions or claims in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriter, on the other hand, from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under Section 7(c) hereof and such
indemnifying party was prejudiced in a material respect by such failure, then
each such indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault, as applicable, of the
Company, on the one hand, and the Underwriter, on the other hand, in connection
with the statements or omissions that resulted in such losses, damages or
liabilities (or actions or claims in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by, as
applicable, the Company, on the one hand, and the Underwriter, on the other
hand, shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriter.
The relative fault, as applicable, of the Company, on the one hand, and the
Underwriter, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or the Underwriter, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriter agree that it would not be just and equitable if contribution
pursuant to this Section 7(d) were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to above in this Section 7(d). The amount paid or
payable by such an indemnified party as a result of the losses, damages or
liabilities (or actions or claims in respect thereof) referred to above in this
Section 7(d) shall be deemed to include any legal or other expenses incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(d), the
Underwriter shall not be required to contribute any amount in excess of the
total discounts and commissions received by the Underwriter with respect to the
Shares. 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.
(e) The obligations of the Company under this Section 7 shall be
in addition to any liability that the Company may otherwise have and shall
extend, upon the same terms and conditions, to each officer, director, employee,
agent or other representative and to each Person, if any, who controls the
Underwriter within the meaning of the 1933 Act; and the obligations of the
Underwriter under this Section 7 shall be in addition to any liability that the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company who signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the 1933 Act.
(f) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including, without limitation, the
provisions of this Section 7, and are fully informed regarding such provisions.
They further acknowledge that the provisions of this Section 7 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement, the Prospectus, and any supplement or amendment thereof,
as required by the 1933 Act.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. The
respective representations, warranties, agreements and statements of the
Company, the Manager and the Underwriter, as set forth in
26
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain operative and in full force and effect regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Underwriter or any controlling person of the Underwriter, or the Company
or any of its officers, directors or any controlling persons, and shall survive
delivery of and payment for the Shares hereunder.
9. TERMINATION.
(a) This Agreement may be terminated by the Underwriter at any
time at or prior to the Closing Date by notice to the Company if any condition
specified in Section 6 hereof shall not have been satisfied on or prior to the
Closing Date. Any such termination shall be without liability of any party to
any other party except as provided in Sections 7 and 10 hereof.
(b) This Agreement also may be terminated by the Underwriter by
notice to the Company, as to any obligation of the Underwriter to purchase the
Option Shares, if any condition specified in Section 6 hereof shall not have
been satisfied on or prior to the Option Closing Date.
If the Underwriter terminates this Agreement as provided in this Section
9, the Underwriter shall notify the Company by telephone or telegram, confirmed
by letter.
10. COSTS AND EXPENSES. The Company, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, will bear
and pay the costs and expenses incident to the registration of the Shares and
public offering thereof, including, without limitation, (a) all expenses
(including stock transfer taxes) incurred in connection with the delivery to the
Underwriter of the Shares, the filing fees of the SEC and the fees and expenses
of the Company's counsel and accountants, (b) the preparation, printing, filing,
delivery and shipping of the Registration Statement, the Prospectus and any
amendments or supplements thereto and the printing, delivery and shipping of
this Agreement and other underwriting documents, including the Blue Sky
Memorandum, and any instruments or documents related to any of the foregoing,
(c) the furnishing of copies of such documents to the Underwriter, (d) the
registration or qualification of the Shares for offering and sale under the
securities laws of the various states and other jurisdictions, including the
fees and disbursements of counsel to the Underwriter relating to such
registration or qualification and in connection with preparing any Blue Sky
Memoranda or related analysis, (e) the filing fees of the NASD (if any) and fees
and disbursements of counsel to the Underwriter relating to any review of the
offering by the NASD, (f) all printing and engraving costs related to
preparation of the certificates for the Shares, including transfer agent and
registrar fees, (g) all fees and expenses relating to the authorization of the
Shares for trading on the NYSE, (h) all travel expenses, including air fare and
accommodation expenses, of representatives of the Company in connection with the
offering of the Shares, and (i) all of the other costs and expenses incident to
the performance by the Company of the registration and offering of the Shares;
provided, that the Underwriter will bear and pay the fees and expenses of the
Underwriter's counsel (except as provided in this Section 10), the Underwriter's
out-of-pocket expenses, and any advertising costs and expenses incurred by the
Underwriter incident to the public offering of the Shares.
If this Agreement is terminated by the Underwriter in accordance with the
provisions of Section 9(a), the Company shall reimburse the Underwriter for all
of their out-of-pocket expenses, including the fees and disbursements of counsel
to the Underwriter.
11. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriter shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Director, Corporate Finance,
facsimile number
27
(000) 000-0000 (with a copy to Xxxxxxxx Chance US LLP, Attention: Xxxxxxx X.
Xxxxx, facsimile number (000) 000-0000), or if sent to the Company shall be
mailed, delivered, sent by facsimile transmission, or telegraphed and confirmed
to the Company at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xx, Xxx Xxxxxx 00000,
Attention: Xxxxx Xxxxxxxxx, President (with a copy to Dechert, Attention:
Xxxxxxx Xxxxxxx, facsimile number (000) 000-0000).
12. INFORMATION FURNISHED BY THE UNDERWRITER. The statements set forth
in (i) the second to last paragraph of the cover page of the Prospectus
Supplement and (ii) the statements in the third and sixth paragraphs, the first
sentence of the tenth paragraph and the first and third sentence of the twelfth
paragraph under the caption "Underwriting" in the Prospectus Supplement
constitute the only information furnished by the Underwriter, as such
information is referred to in Section 4(c) and Section 7 hereof.
13. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Underwriter, the Company and, to the extent provided in Sections 7 and
8, the officers and directors of the Company and each person who controls the
Company or the Underwriter and their respective heirs, executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, corporation or
other entity any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns and said controlling persons and said officers and directors, and for
the benefit of no other person, corporation or other entity. No purchaser of any
of the Shares from the Underwriter shall be construed a successor or assign by
reason merely of such purchase.
14. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
15. PRONOUNS. Whenever a pronoun of any gender or number is used herein,
it shall, where appropriate, be deemed to include any other gender and number.
16. TIME OF ESSENCE. Time shall be of the essence of this Agreement.
17. APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect to
the choice of law or conflict of laws principles thereof.
28
If the foregoing correctly sets forth the understanding among the Company,
the Manager and the Underwriter, please so indicate in the space provided below
for the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company, the Manager and the Underwriter.
Very truly yours,
XXXXXXXXX MORTGAGE, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President and Chief Operating Officer
X.X. XXXXXXX & SONS, INC.
By: /s/ A. Xxxxxxx Xxxxx, III
-------------------------------------
Name: A. Xxxxxxx Xxxxx, III
Title: Vice President
Accepted and agreed to as of the date
first above written, only as to the
representations and warranties of the
Manager as set forth in Section 4 hereof.
XXXXXXXXX MORTGAGE ADVISORY CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chief Executive Officer
29
SCHEDULE A
LIST OF JURISDICTIONS IN WHICH XXXXXXXXX MORTGAGE, INC.
IS QUALIFIED AS A FOREIGN CORPORATION
New Mexico
Schedule A-1
SCHEDULE B
LIST OF JURISDICTIONS IN WHICH EACH SUBSIDIARY IS QUALIFIED
AS A FOREIGN CORPORATION
Subsidiaries of Xxxxxxxxx Mortgage, Inc.:
Xxxxxxxxx Mortgage Acceptance Corporation - None
Xxxxxxxxx Mortgage Funding Corporation - None
Xxxxxxxxx Mortgage Home Loans, Inc. - Arizona
California
Connecticut
Delaware
Florida
Georgia
Idaho
Illinois
Kentucky
Louisiana
Maine
Massachusetts
Michigan
Minnesota
Montana
New Mexico
New York
North Carolina
North Dakota
Oregon
Rhode Island
South Carolina
Tennessee
Utah
Vermont
Virginia
West Virginia
Wisconsin
(See Schedule F for jurisdictions in which Xxxxxxxxx Mortgage Home Loans, Inc.
is authorized or licensed to originate loans.)
Subsidiaries of Xxxxxxxxx Mortgage Home Loans, Inc.:
Xxxxxxxxx Mortgage Acceptance Corporation II - None
Xxxxxxxxx Mortgage Funding Corporation II - None
Schedule B-1
SCHEDULE C
LIST OF JURISDICTIONS IN WHICH XXXXXXXXX MORTGAGE ADVISORY CORPORATION
IS QUALIFIED AS A FOREIGN CORPORATION
New Mexico
Schedule C-1
SCHEDULE D
None.
Schedule D-1
SCHEDULE E
REQUIREMENTS TO REGISTER AS BROKER/DEALER;
RELATIONSHIPS WITH MEMBER FIRMS OF NASD
Xxxxxxxxx Securities Corporation, an affiliate of Xxxxxxxxx Mortgage, Inc., is
registered as a broker/dealer and is a member of the NASD.
Schedule E-1
SCHEDULE F
JURISDICTIONS IN WHICH XXXXXXXXX MORTGAGE HOME LOANS, INC.
IS AUTHORIZED OR LICENSED TO ORIGINATE LOANS
STATES WHERE TMHL HAS OBTAINED LICENSES TO LEND:
Alabama Massachusetts
Alaska Michigan
Arizona Minnesota
California Nebraska
Connecticut New Mexico
Delaware North Carolina
Florida North Dakota
Georgia Oregon
Idaho South Dakota
Illinois Tennessee
Iowa Utah
Louisiana* Vermont
Maine Virginia
Maryland West Virginia
Wisconsin
STATES WHERE LICENSING IS NOT REQUIRED:
Colorado Montana
Indiana South Carolina
Kentucky Wyoming
STATES WITH A LICENSE EXEMPTION:
Arkansas Ohio
Mississippi Missouri
Oklahoma Texas
Nevada
STATES IN WHICH APPLICATIONS ARE PENDING:
New York
* Under Louisiana law, Xxxxxxxxx Mortgage Home Loans, Inc. is exempt. However,
if a company is exempt it is required to obtain a registration certificate which
the state calls a "license."
Schedule F-1
SCHEDULE G
Pursuant to Section 6(f) of the Underwriting Agreement, PWC shall furnish
a letter to the Underwriter to the effect that:
(1) They are independent certified public accountants with respect to the
Company, the Subsidiaries and the Trusts within the meaning of the 1933
Act and such accountants are not in violation of the auditor independence
requirements of the Xxxxxxxx-Xxxxx Act.
(2) In their opinion, the financial statements and any supplementary financial
information and schedules audited (and, if applicable, prospective
financial statements and/or pro forma financial information examined) by
them and included or incorporated by reference in the Prospectus or the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act with respect to
Registration Statement on Form S-3; and, if applicable, they have made a
review in accordance with standards established by the American Institute
of Certified Public Accountants ("AICPA") of the unaudited consolidated
interim financial statements, selected financial data, pro forma financial
information, prospective financial statements and/or condensed financial
statements derived from audited financial statements of the Company for
the periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the Underwriter.
(3) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, performing the procedures specified by the AICPA for a
review of interim financial information as discussed in SAS No. 71,
Interim Financial Information, on the latest available interim financial
statements of the Company, Subsidiaries and the Trusts, inspection of the
minute books of the Company, the Subsidiaries and the Trusts since the
date of the latest audited financial statements included in the
Prospectus, inquiries of officials of the Company, the Subsidiaries and
the Trusts responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came
to their attention that caused them to believe that:
(a) any material modifications should be made to the unaudited statements of
consolidated income, statements of consolidated financial position and
statements of consolidated cash flows included or incorporated by
reference in the Prospectus for them to be in conformity with generally
accepted accounting principles, or the unaudited statements of
consolidated income, statements of consolidated financial position and
statements of consolidated cash flows included in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act.
(b) any other unaudited income statement data and balance sheet items included
or incorporated by reference in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited data
and items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the Prospectus.
(c) the unaudited financial statements which were not included or incorporated
by reference in the Prospectus but from which were derived any unaudited
condensed financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the Prospectus
and referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included or incorporated by reference in the Prospectus.
(d) any unaudited pro forma consolidated condensed financial statements
included or incorporated by reference in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements.
(e) as of a specified date not more than five days prior to the date of such
letter, there have been any changes in the consolidated capital stock or
any increase in the consolidated long-term debt of the Company, the
Subsidiaries and the Trusts, or any decreases in consolidated working
capital, net current assets or net assets, or any changes in any other
items specified by the Underwriter, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter.
(f) for the period from the date of the latest financial statements included
or incorporated by reference in the Prospectus to the specified date
referred to in Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or any changes in any other items specified by the
Underwriter, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified
by the Underwriter, except in each case for changes, decreases or
increases which the Prospectus discloses have occurred or may occur or
which are described in such letter.
(4) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraph (iii) above, they have carried out certain specified procedures,
not constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriter, which are derived from the
general accounting records of the Company, the Subsidiaries and the Trusts
for the periods covered by their reports and any interim or other periods
since the latest period covered by their reports, which appear or are
incorporated by reference in the Prospectus, or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Underwriter, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company, the
Subsidiaries and the Trusts and have found them to be in agreement.
Schedule G-2
EXHIBIT A
December [ - ], 2002
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
In consideration of the agreement of X.X. Xxxxxxx & Sons, Inc. ("X.X.
Xxxxxxx") to underwrite a proposed public offering (the "Offering") of shares
(the "Shares") of common stock, par value $0.01 per share (the "Common Stock"),
of Xxxxxxxxx Mortgage, Inc., a Maryland corporation (the "Company"), as
contemplated by a registration statement on Form S-3 (File No. 333-61966),
including a prospectus (the "Registration Statement"), with respect to the
Shares, the undersigned hereby agrees that the undersigned will not, for a
period of 45 days after the commencement of the public offering of such Shares,
without the prior written consent of X.X. Xxxxxxx (which consent will not be
unreasonably withheld), offer, sell, contract to sell, pledge, grant any option
to purchase or otherwise dispose of, directly or indirectly, any shares of
capital stock, or any securities convertible into, or exercisable, exchangeable
or redeemable for, shares of capital stock, except that no consent shall be
required for sales of any shares of Common Stock sold by any officer or director
to the Company, at the current market value, as reported on the NYSE, at the
time of any such sale, pursuant to a stock repurchase plan instituted by the
Company and approved by the Company's Board of Directors, which is in compliance
with all applicable securities laws and the rules and regulations of the NYSE.
Very truly yours,
By _________________________________
Name:
Title: