MFA FINANCIAL, INC. 50,000,000 Shares Common Stock ($0.01 Par Value) UNDERWRITING AGREEMENT July 29, 2009
Exhibit 1.1
50,000,000 Shares
Common Stock
($0.01 Par Value)
Common Stock
($0.01 Par Value)
July 29, 2009
July 29, 2009
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
DEUTSCHE BANK SECURITIES INC.
as Representatives of the several Underwriters,
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
DEUTSCHE BANK SECURITIES INC.
as Representatives of the several Underwriters,
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
MFA Financial, Inc., a Maryland corporation (the “Company”), proposes to issue and sell to the
several underwriters listed in Schedule A hereto (collectively, the “Underwriters”), for whom
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated (“▇▇▇▇▇▇ ▇▇▇▇▇▇▇”) and Deutsche Bank Securities Inc. (“Deutsche
Bank”) are acting as representatives, an aggregate of 50,000,000 shares (the “Firm Shares”) of
common stock, $0.01 par value (the “Common Stock”), of the Company. In addition, solely for the
purpose of covering over-allotments, the Company proposes to grant to the Underwriters the option
to purchase from the Company up to an additional 7,500,000 shares of Common Stock (the “Additional
Shares”). The Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the “Shares.” The Shares are described in the Prospectus which is referred to
below.
The Company has prepared and filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the “Securities Act”),
with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3
(File No. 333-146819) and a post-effective amendment thereto, including a base prospectus, with
respect to the Shares, which registration statement, as amended by such post-effective amendment,
incorporates by reference documents which the Company has filed, or will file, in accordance with
the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the “Exchange Act”). Such registration statement, as amended by such
post-effective amendment, has become effective under the Securities Act.
Except where the context otherwise requires, “Registration Statement,” as used herein, means
the registration statement, as amended (including by such post-effective amendment) at the time of
such registration statement’s effectiveness for purposes of Section 11 of the Securities Act, as
such section applies to the respective Underwriters (the “Effective Time”), including (i) all
documents filed as a part thereof or incorporated or deemed to be incorporated by reference
therein, (ii) any information contained or incorporated by reference in a prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities Act, to the extent such information is
deemed, pursuant to Rule 430B or Rule 430C under the Securities Act, to be part of the registration
statement (as amended by such post-effective amendment) at the Effective Time, and (iii) any
registration statement filed to register the offer and sale of Shares pursuant to Rule
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462(b) under the Securities Act. References herein to the or this “Agreement” refer to this
Underwriting Agreement.
The Company has furnished to you, for use by the Underwriters and by dealers in connection
with the offering of the Shares, copies of one or more preliminary prospectus supplements, and the
documents incorporated by reference therein, relating to the Shares. Except where the context
otherwise requires, “Pre-Pricing Prospectus,” as used herein, means each such preliminary
prospectus supplement, in the form so furnished, including any basic prospectus (whether or not in
preliminary form) furnished to you by the Company and attached to or used with such preliminary
prospectus supplement. Except where the context otherwise requires, “Basic Prospectus,” as used
herein, means any such basic prospectus and any basic prospectus furnished to you by the Company
and attached to or used with the Prospectus Supplement (as defined below).
Except where the context otherwise requires, “Prospectus Supplement,” as used herein, means
the final prospectus supplement, relating to the Shares, filed by the Company with the Commission
pursuant to Rule 424(b) under the Securities Act on or before the second business day after the
date hereof (or such earlier time as may be required under the Securities Act), in the form
furnished by the Company to you for use by the Underwriters and by dealers in connection with the
offering of the Shares.
Except where the context otherwise requires, “Prospectus,” as used herein, means the
Prospectus Supplement together with the Basic Prospectus attached to or used with the Prospectus
Supplement.
“Permitted Free Writing Prospectuses,” as used herein, means the documents listed on
Schedule B attached hereto and each “road show” (as defined in Rule 433 under the
Securities Act), if any, related to the offering of the Shares contemplated hereby that is a
“written communication” (as defined in Rule 405 under the Securities Act). The Underwriters have
not offered or sold and will not offer or sell, without the Company’s consent, any Shares by means
of any “free writing prospectus” (as defined in Rule 405 under the Securities Act) that is required
to be filed by the Underwriters with the Commission pursuant to Rule 433 under the Securities Act,
other than a Permitted Free Writing Prospectus.
“Disclosure Package,” as used herein, means any Pre-Pricing Prospectus or Basic Prospectus, in
either case together with any combination of one or more of the Permitted Free Writing
Prospectuses, if any.
Any reference herein to the registration statement, the Registration Statement, any Basic
Prospectus, any Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus or any Permitted
Free Writing Prospectus shall be deemed to refer to and include the documents, if any, incorporated
by reference, or deemed to be incorporated by reference, therein (the “Incorporated Documents”),
including, unless the context otherwise requires, the documents, if any, filed as exhibits to such
Incorporated Documents. Any reference herein to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement, any Basic Prospectus, any Pre-Pricing Prospectus, the
Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act on or after the initial
effective date of the Registration
Statement, or the date of such Basic Prospectus, such Pre-Pricing Prospectus, the Prospectus
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Supplement, the Prospectus or such Permitted Free Writing Prospectus, as the case may be, and
deemed to be incorporated therein by reference.
As used in this Agreement, “business day” shall mean a day on which the New York Stock
Exchange (the “NYSE”) is open for trading. The terms “herein,” “hereof,” “hereto,” “hereinafter”
and similar terms, as used in this Agreement, shall in each case refer to this Agreement as a whole
and not to any particular section, paragraph, sentence or other subdivision of this Agreement. The
term “or,” as used herein, is not exclusive.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the
respective Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase
from the Company the respective number of Firm Shares (subject to such adjustment as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
may determine to avoid fractional shares) set forth opposite the name of such Underwriter in
Schedule A annexed hereto at a purchase price of $6.73275 per Share. The Company is
advised by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ that the Underwriters intend (i) to make a public offering of their
respective portions of the Firm Shares as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered and (ii) initially to offer the Firm Shares upon the
terms set forth in the Prospectus. The Underwriters may from time to time increase or decrease the
public offering price after the initial public offering to such extent as they may determine.
In addition, the Company hereby grants to the several Underwriters the option to purchase, and
upon the basis of the warranties and representations and subject to the terms and conditions herein
set forth, the Underwriters shall have the right to purchase, severally and not jointly, from the
Company ratably in accordance with the number of Firm Shares to be purchased by each of them
(subject to such adjustment as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may determine to avoid fractional shares), all or a
portion of the Additional Shares as may be necessary to cover over-allotments made in connection
with the offering of the Firm Shares, at the same purchase price per share to be paid by the
Underwriters to the Company for the Firm Shares. This option may be exercised by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on
behalf of the several Underwriters at any time (but not more than once) on or before the thirtieth
day following the date hereof, by written notice to the Company. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised and the date and
time when the Additional Shares are to be delivered (such date and time being hereinafter referred
to as the “additional time of purchase”); provided, however, that the additional
time of purchase shall not be (i) earlier than the time of purchase (as defined below) or (ii)
later than the tenth business day after the date on which the option shall have been exercised.
The number of Additional Shares to be sold to each Underwriter shall be the number which bears the
same proportion to the aggregate number of Additional Shares being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule A hereto bears to the
aggregate number of Firm Shares (subject, in each case, to such adjustment as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may
determine to eliminate fractional shares), subject to adjustment in accordance with Section 8
hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares shall be
made to the Company by federal funds wire transfer against delivery of the certificates for the
Firm Shares to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ through the facilities of The Depository Trust Company (“DTC”) for
the respective accounts of the Underwriters. Such payment and delivery shall be made at
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10:00
A.M., New York City time, on August 4, 2009 (unless another time shall be agreed to by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and the Company or unless postponed in accordance with the provisions of Section 8 hereof).
The time at which such payment and delivery are actually made is hereinafter sometimes called the
“time of purchase.” Electronic transfer of the Firm Shares shall be made to you at the time of
purchase in such names and in such denominations as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall specify.
Payment of the purchase price for the Additional Shares shall be made at the additional time
of purchase in the same manner and at the same office as the payment for the Firm Shares.
Electronic transfer of the Additional Shares shall be made to you at the additional time of
purchase in such names and in such denominations as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall specify.
Deliveries of the documents described in Section 6 hereof with respect to the purchase of the
Shares shall be made at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., New York City time, on the date of the closing of the purchase of the
Firm Shares or the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company represents and warrants
to and, where applicable, agrees with, each of the Underwriters that:
(a) The Registration Statement, as amended (including by the first post-effective amendment
thereto), has heretofore become effective under the Securities Act or, with respect to any
registration statement to be filed to register the offer and sale of Shares pursuant to Rule 462(b)
under the Securities Act, will be filed with the Commission and become effective under the
Securities Act no later than 10:00 P.M., New York City time, on the date of this Agreement; no stop
order of the Commission preventing or suspending the use of any Basic Prospectus, any Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus, or
the effectiveness of the Registration Statement, as amended (including by such post-effective
amendment), has been issued, and no proceedings for such purpose have been instituted or, to the
Company’s knowledge, are contemplated by the Commission.
(b) The Registration Statement complied when it became effective, complies as of the date
hereof and, as amended or supplemented, at the time of purchase, each additional time of purchase,
if any, and at all times during which a prospectus is required by the Securities Act to be
delivered (whether physically or through compliance with Rule 172 under the Securities Act or any
similar rule) in connection with any sale of Shares, will comply, in all material respects, with
the requirements of the Securities Act; the conditions to the use of Form S-3 in connection with
the offering and sale of the Shares as contemplated hereby have been satisfied; the Registration
Statement constitutes an “automatic shelf registration statement” (as defined in Rule 405 under the
Securities Act); the Company has not received, from the Commission, a notice, pursuant to Rule
401(g)(2), of objection to the use of the automatic shelf registration statement form; as of the
determination date applicable to the Registration Statement (and any amendment thereof) and the
offering contemplated hereby, the Company is a “well-known
seasoned issuer” as defined in Rule 405 under the Securities Act; the Registration Statement
meets, and the offering and sale of the Shares as contemplated hereby complies with, the
requirements of Rule 415 under the Securities Act (including, without limitation, Rule 415(a)(5)
under the Securities Act, if applicable); the Registration Statement did not, as of the Effective
Time, 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; each Pre-Pricing
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Prospectus complied, at the time it was filed with the Commission, and complies as of the date
hereof, in all material respects with the requirements of the Securities Act; at no time during the
period that begins on the earlier of the date of such Pre-Pricing Prospectus and the date such
Pre-Pricing Prospectus was filed with the Commission and ends at the time of purchase did or will
any Pre-Pricing Prospectus, as then amended or supplemented, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, and at no time during
such period did or will any Pre-Pricing Prospectus, as then amended or supplemented, together with
any combination of one or more of the then issued Permitted Free Writing Prospectuses, if any,
include an untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not
misleading; each Basic Prospectus complied or will comply, as of its date and the date it was or
will be filed with the Commission, complies as of the date hereof (if filed with the Commission on
or prior to the date hereof) and, at the time of purchase, each additional time of purchase, if
any, and at all times during which a prospectus is required by the Securities Act to be delivered
(whether physically or through compliance with Rule 172 under the Securities Act or any similar
rule) in connection with any sale of Shares, will comply, in all material respects, with the
requirements of the Securities Act; at no time during the period that begins on the earlier of the
date of such Basic Prospectus and the date such Basic Prospectus was filed with the Commission and
ends at the time of purchase did or will any Basic Prospectus, as then amended or supplemented,
include an untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not
misleading, and at no time during such period did or will any Basic Prospectus, as then amended or
supplemented, together with any combination of one or more of the then issued Permitted Free
Writing Prospectuses, if any, include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; each of the Prospectus Supplement and the Prospectus
will comply, as of the date that it is filed with the Commission, the date of the Prospectus
Supplement, the time of purchase, each additional time of purchase, if any, and at all times during
which a prospectus is required by the Securities Act to be delivered (whether physically or through
compliance with Rule 172 under the Securities Act or any similar rule) in connection with any sale
of Shares, in all material respects, with the requirements of the Securities Act (in the case of
the Prospectus, including, without limitation, Section 10(a) of the Securities Act); at no time
during the period that begins on the earlier of the date of the Prospectus Supplement and the date
the Prospectus Supplement is filed with the Commission and ends at the later of the time of
purchase, the latest additional time of purchase, if any, and the end of the period during which a
prospectus is required by the Securities Act to be delivered (whether physically or through
compliance with Rule 172 under the Securities Act or any similar rule) in connection with any sale
of Shares did or will any Prospectus Supplement or the Prospectus, as then amended or supplemented,
include an untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of
the circumstances under which they were made, not misleading; at no time during the period
that begins on the date of such Permitted Free Writing Prospectus and ends at the time of purchase
did or will any Permitted Free Writing Prospectus include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however, that the Company
makes no representation or warranty in this Section 3(b) with respect to any statement contained in
the Registration Statement, any Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus in reliance upon and in conformity with information
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concerning an Underwriter
and furnished in writing by or on behalf of such Underwriter through you to the Company expressly
for use in the Registration Statement, such Pre-Pricing Prospectus, the Prospectus or such
Permitted Free Writing Prospectus; each Incorporated Document, at the time such document was filed
with the Commission or at the time such document became effective, as applicable, complied, in all
material respects, with the requirements of the Exchange Act and did not include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
(c) Prior to the execution of this Agreement, the Company has not, directly or indirectly,
offered or sold any Shares by means of any “prospectus” (within the meaning of the Securities Act)
or used any “prospectus” (within the meaning of the Securities Act) in connection with the offer or
sale of the Shares, in each case other than the Pre-Pricing Prospectuses and the Permitted Free
Writing Prospectuses, if any; the Company has not, directly or indirectly, prepared, used or
referred to any Permitted Free Writing Prospectus except in compliance with Rule 163 or with Rules
164 and 433 under the Securities Act; assuming that such Permitted Free Writing Prospectus is so
sent or given after the Registration Statement was filed with the Commission (and after such
Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under the Securities
Act, filed with the Commission), the sending or giving, by any Underwriter, of any Permitted Free
Writing Prospectus will satisfy the provisions of Rule 164 and Rule 433 under the Securities Act
(without reliance on subsections (b), (c) and (d) of Rule 164); assuming a free-writing prospectus
(as defined in Rule 405 under the Securities Act) is sent or given, the conditions set forth in one
or more of subclauses (i) through (iv), inclusive, of Rule 433(b)(1) under the Securities Act are
satisfied, and the registration statement relating to the offering of the Shares contemplated
hereby, as initially filed with the Commission, includes a prospectus that, other than by reason of
Rule 433 or Rule 431 under the Securities Act, satisfies the requirements of Section 10 of the
Securities Act; the Company is not disqualified, by reason of subsection (f) or (g) of Rule 164
under the Securities Act, from using, in connection with the offer and sale of the Shares, “free
writing prospectuses” (as defined in Rule 405 under the Securities Act) pursuant to Rules 164 and
433 under the Securities Act; the Company is not an “ineligible issuer” (as defined in Rule 405
under the Securities Act) as of the eligibility determination date for purposes of Rules 164 and
433 under the Securities Act with respect to the offering of the Shares contemplated by the
Registration Statement; and the parties hereto agree and understand that the content of any and all
“road shows” (as defined in Rule 433 under the Securities Act) related to the offering of the
Shares contemplated hereby is solely the property of the Company.
(d) The consolidated financial statements of the Company, together with the related schedules
and notes thereto, set forth or included or incorporated by reference in the
Registration Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, are accurate in all material respects and fairly present the
financial condition of the Company as of the dates indicated and the results of operations, changes
in financial position, stockholders’ equity and cash flows for the periods therein specified are in
conformity with generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise stated therein). The selected financial and statistical data
included or incorporated by reference in the Registration Statement, the Pre-Pricing Prospectuses,
the Prospectus and the Permitted Free Writing Prospectuses, if any, 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
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financial statements of the Company, and the related notes thereto, included or incorporated by
reference in the Registration Statement, the Pre-Pricing Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, present fairly the information shown therein, have
been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the basis described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to therein. The Company
and, to the Company’s knowledge, the Subsidiaries (as defined below) do not have any material
liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not
disclosed in the Registration Statement and the Prospectus. No other financial statements are
required to be set forth or to be incorporated by reference in the Registration Statement, the
Pre-Pricing Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, under
the Securities Act.
(e) The Prospectus delivered to the Underwriters for use in connection with this offering will
be identical to the versions of the Prospectus created to be transmitted to the Commission for
filing via ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(f) The Company has been duly formed and incorporated and is validly existing as a corporation
in good standing under the laws of the State of Maryland and is duly qualified to do business and
is in good standing as a foreign corporation in each jurisdiction 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 operations 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 Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, and to enter into and perform its
obligations under this Agreement and to consummate the transactions contemplated hereby, and the
Company is in compliance in all material respects with the laws, orders, rules, regulations and
directives issued or administered by any jurisdictions in which it owns or leases property or
conducts business.
(g) The Company has no “significant subsidiaries” (as such term is defined in Rule 1-02 of
Regulation S-X promulgated under the Securities Act) and 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, except that
it owns (a) (i) a 100% ownership interest in PF One Corporation, a Nebraska
corporation (“PF One”), which in turn owns an 1.766% ownership interest in ▇▇▇▇▇▇▇ Place, LLC,
a Georgia limited liability company (“▇▇▇▇▇▇▇” or, as the case may be, the “Property Entities”),
(ii) a 100% ownership interest in Retirement Centers Corporation, a Delaware corporation (“RCC”),
which in turn owns an 88.3% ownership interest in ▇▇▇▇▇▇▇, (iii) a 100% ownership interest in MFA
▇▇▇▇▇▇ ▇▇▇▇▇, Inc., a Delaware corporation (“MFA Owings”), which in turn owns a 1% general partner
interest in ▇▇▇▇▇▇ ▇▇▇▇▇ Limited Partnership, a Maryland limited partnership (“▇▇▇▇▇▇ ▇▇▇▇▇”),
which in turn owns a 9.934% ownership interest in ▇▇▇▇▇▇▇, (iv) a 99% limited partner interest in
▇▇▇▇▇▇ ▇▇▇▇▇, (v) a 100% ownership interest in MFA Spartan, Inc., a Delaware corporation (“Spartan
Inc.”), which in turn owns a 100% ownership interest in MFA Spartan II, LLC, a Delaware limited
liability company (“Spartan II LLC”), (vi) a 100% ownership interest in MFA Manager (Incentive),
LLC, a Delaware limited
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liability company (“Incentive LLC”), (vii) a 100% ownership interest in MFA
Spartan Manager, LLC, a Delaware limited liability company (“Spartan Manager LLC”), (viii) a 100%
ownership interest in MFResidential Investments, Inc., a Maryland corporation (“MFResidential”),
which in turn owns 100% of the ownership interest of MFR Operating Company, LLC, a Delaware limited
liability company (“MFR OC”), which in turn owns a 100% ownership interest in each of MFR Asset
(TRS), Inc., a Delaware corporation (“Asset TRS”), MFR Asset I, LLC, a Delaware limited liability
company (“Asset I”), and MFR Asset II, LLC, a Delaware limited liability company (“Asset II”) and
(ix) a 100% ownership interest in MFResidential Assets I, LLC, a Delaware limited liability company
(together with PF One, RCC, MFA ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Spartan Inc., Spartan II LLC, Incentive LLC,
Spartan Manger LLC, MFResidential, MFR OC, Asset TRS, Asset I and Asset II, the “Subsidiaries”);
(b) the securities comprising the Investment Portfolio (as defined below); and (c) as otherwise
disclosed in (or incorporated by reference into) the Registration Statement and/or Prospectus.
Complete and correct copies of the articles of incorporation and of the bylaws or other formation
documents of the Company and each of the Subsidiaries, as applicable, and all amendments thereto
have been made available to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and/or its counsel and, except as set forth in the
exhibits to, or incorporated by reference into, the Registration Statement, no changes therein will
be made subsequent to the date hereof and prior to the time of purchase or, if applicable, the
additional time of purchase. To the Company’s knowledge, each Subsidiary has been duly formed and
incorporated or organized and is validly existing as a corporation, partnership or limited
liability company in good standing under the laws of the jurisdiction of its incorporation or
formation or organization and is duly qualified to do business and is in good standing as a foreign
corporation, partnership or limited liability company in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such qualification, except where
the failure to be so qualified would not have a Material Adverse Effect and to the Company’s
knowledge, each Subsidiary has full corporate, partnership or limited liability power and
authority, as applicable, necessary to own, hold, lease and/or operate its assets and properties
and to conduct its business in which it is engaged and as described in the Registration Statement,
the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any,
and, to the Company’s knowledge, each Subsidiary is in compliance in all material respects with the
laws, orders, rules, regulations and directives issued or administered by jurisdictions in which it
owns or leases property or conducts business; to the Company’s knowledge, all of the outstanding
shares of capital stock or other equity interests, as the case may be, of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable with respect to the
corporate Subsidiaries, and 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 and are not subject to any security interest, other encumbrance or adverse claims; and
to the Company’s knowledge, 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.
(h) Neither the Company nor, to the Company’s knowledge, any of the Subsidiaries is in breach
or violation of or in default under (nor has any event occurred which with notice, lapse of time or
both would result in any breach or violation of or constitute a default under or give the holder of
any indebtedness (or a person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness under) (i) its respective charter,
bylaws, certificate of formation, partnership agreement or limited liability company agreement, as
the case may be, or (ii) any indenture, mortgage, deed of trust,
-8-
bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which any of them or any of their
properties may be bound or affected the effect of which breach, violation or default under clause
(ii) could reasonably be expected to result in a Material Adverse Effect, and 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, result in any breach
or violation of or constitute a default under (nor constitute any event which with notice, lapse of
time or both would result in any breach or violation of or constitute a default under) (i) the
charter, bylaws, certificate of formation, partnership agreement or limited liability company
agreement, as the case may be, of the Company or, to the Company’s knowledge, any of the
Subsidiaries, or (ii) any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other agreement or instrument to
which the Company or, to the Company’s knowledge, any of the Subsidiaries is a party or by which
any of them or any of their respective properties may be bound or affected, the effect of which
breach, violation or default under clause (ii) could reasonably be expected to result in a Material
Adverse Effect or (iii) any federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or, to the Company’s knowledge, any of the
Subsidiaries.
(i) As of June 30, 2009, as of the date of this Agreement, as of the time of purchase, and as
of the additional time of purchase, the Company had, has and will have, as applicable, an
authorized, issued and outstanding capitalization as set forth in the sections of the Registration
Statement, the Pre-Pricing Prospectuses and the Prospectus entitled “Capitalization” (and any
similar sections or information, if any, contained in any Permitted Free Writing Prospectus)
(subject to, in the case of the additional time of purchase, the issuance of Additional Shares to
the Underwriters). All of the issued and outstanding shares of capital stock, including the Common
Stock, of the Company have been duly and validly authorized and issued and are fully paid and
nonassessable, 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.
(j) This Agreement has been duly authorized, executed and delivered by the Company and is a
legal, valid and binding agreement of the Company enforceable in accordance with its terms, except
to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and
by general equitable principles and (ii) the indemnification and contribution provisions of
Section 9 hereof may be limited by federal or state securities laws and public policy
considerations in respect thereof.
(k) The capital stock of the Company, including the Shares, conforms in all material respects
to the description thereof contained in the Registration Statement, the Pre-Pricing Prospectuses,
the Prospectus and the Permitted Free Writing Prospectuses, if any, 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.
(l) 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 nonassessable, free and clear of any
pledge, lien, encumbrance, security interest or other claim, including any
-9-
statutory or contractual
preemptive rights, resale rights, rights of first refusal or other similar rights, and will be
registered pursuant to Section 12 of the Exchange Act.
(m) No approval, authorization, consent or order of or filing with any national, state or
local governmental or regulatory commission, board, body, authority or agency is required in
connection with the issuance and sale of the Shares or the consummation by the Company of the
transaction contemplated hereby other than (i) registration of the Shares under the Securities Act,
which has been effected (or, with respect to any registration statement to be filed hereunder
pursuant to Rule 462(b) under the Securities Act, will be effected in accordance herewith), (ii)
any necessary qualification under the securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters, or (iii) such approvals obtained in
connection with the approval of the listing of the Shares on the NYSE.
(n) Except as set forth in the Registration Statement, each Pre-Pricing Prospectus and the
Prospectus, (i) no person, as such term is defined in Rule 1-02 of Regulation S-X promulgated under
the Securities Act (each, a “Person”), has the right, contractual or otherwise, to cause the
Company to issue or sell to such Person any shares of Common Stock or shares of any other capital
stock or other securities of the Company, (ii) no Person has any preemptive rights, resale rights,
rights of first refusal or other rights to purchase any shares of Common Stock or shares of any
other capital stock or other securities of the Company, and (iii) no Person has the right to act as
an underwriter or as a financial advisor to the Company in connection with the offer and sale of
the Shares, in the case of each of the foregoing clauses (i), (ii) and (iii), whether as a result
of the filing or effectiveness of the Registration Statement or the sale of the Shares as
contemplated thereby or otherwise; except for registration rights granted to certain former
shareholders of America First Mortgage Advisory Corporation, a Maryland corporation (“America
First”), in connection with the consummation of the transactions contemplated in that certain
Agreement and Plan of Merger, dated September 24, 2001, among the Company, America First and the
other parties thereto (the “Merger Agreement”), no Person has the right, contractual or otherwise,
to require the Company to register under the Securities Act any shares of Common Stock or shares of
any other capital stock or other securities of the Company, or to include any such shares or other
securities in the Registration Statement or the offering contemplated thereby, whether as a result
of the filing or effectiveness of the Registration Statement or the sale of the Shares as
contemplated thereby or otherwise.
(o) Ernst & Young LLP, whose report on the consolidated financial statements of the Company is
filed with the Commission as part of the Registration Statement, the Pre-Pricing Prospectuses and
the Prospectus, is the Company’s independent registered public accounting firm as required by the
Securities Act and by the rules of the Public Company Accounting Oversight Board.
(p) The Company and, to the Company’s knowledge, each Subsidiary has all necessary licenses,
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 such as could not have a Material Adverse Effect. Neither the
Company nor, to the Company’s knowledge, any Subsidiary is in violation of, or in default under,
any such license, permit, authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to the Company or such
Subsidiary, the effect of which could have a Material Adverse Effect. The Company is not required
by any applicable law to obtain accreditation or certification from any
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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 Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, except such accreditations or
certifications that the Company has already obtained.
(q) The descriptions in the Registration Statement and the Prospectus of the legal or
governmental proceedings, affiliate transactions, off-balance sheet transactions, contracts, leases
and other legal documents therein described present fairly the information required to be shown,
and there are no legal or governmental proceedings, affiliate transactions, off-balance sheet
transactions, contracts, leases, or other documents of a character required to be described in the
Registration Statement, the Pre-Pricing Prospectuses, the Prospectus or the Permitted Free Writing
Prospectuses, if any, or to be filed as exhibits to the Registration Statement which are not
described or filed as required. All agreements between the Company and third parties expressly
referenced in the Registration Statement, the Pre-Pricing Prospectuses, the Prospectus or the
Permitted Free Writing Prospectuses, if any, are legal, valid and binding obligations of the
Company 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.
(r) There are no actions, suits, claims, investigations, inquiries or proceedings pending or,
to the best of the Company’s knowledge, threatened to which either the Company or, to the Company’s
knowledge, any Subsidiaries or any of their respective officers or directors is a party or of which
any of their respective properties or other assets 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 having individually or in the aggregate
a Material Adverse Effect or prevent, or interfere in any material respect with, the consummation
of the transactions contemplated hereby.
(s) During the 24 calendar months prior to the date of this Agreement, the Company has timely
filed with the Commission all documents and other material required to be filed pursuant to
Sections 13, 14 and 15(d) under the Exchange Act. During the 36 calendar months preceding the
filing of the Registration Statement, the Company filed all reports required
to be filed pursuant to Sections 13, 14 and 15(d) under the Exchange Act. Without prejudice
to the representations and warranties contained in Section 3(b), 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.
(t) Subsequent to the respective dates as of which information is given in the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, there has not been (i) any material adverse change, or any development which
in the Company’s reasonable judgment is likely to cause a material adverse change, in the business,
properties, management or assets described or referred to in the Registration Statement or the
Prospectus, or the results of operations, condition (financial or otherwise), net worth, business
or operations of the Company and the Subsidiaries taken as a whole, (ii) any transaction which is
material to the Company and the Subsidiaries taken as a whole, except transactions in the ordinary
course of business, (iii) any obligation, direct or contingent (including off-balance sheet
obligations), which is material to the Company and the Subsidiaries taken as a whole, except
obligations incurred in the ordinary course of business, (iv) any change in the capital stock or,
except obligations incurred in the ordinary course, outstanding indebtedness of the Company or (v)
any dividend or distribution of any kind
-11-
declared, paid or made by the Company on any class of its
capital stock. The Company has no material contingent obligation (including off-balance sheet
obligations) which is not disclosed in the Registration Statement, the Pre-Pricing Prospectuses and
the Prospectus.
(u) The Company has not 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.
The Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the
filing of its last Annual Report on Form 10-K, 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.
(v) Neither the Company nor, to the Company’s knowledge, any of the Subsidiaries nor any of
their respective directors, officers or controlling persons has taken, directly or indirectly, any
action designed, or which has constituted or might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares.
(w) At the time of purchase, the Shares will be approved for listing on the NYSE, subject to
official notice of issuance. The Company has not received any notice from the NYSE regarding the
delisting of the Common Stock from the NYSE.
(x) Neither the Company nor any of its affiliates (i) is required to register as a “broker” or
“dealer” in accordance with the provisions of the Exchange Act or (ii) directly or indirectly
through one or more intermediaries, controls or has any other association with (within the meaning
of Article I of the Bylaws of the Financial Industry Regulatory Authority (“FINRA”)) any member
firm of the FINRA.
(y) The Company has not relied upon ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or legal counsel for the Underwriters for
any legal, tax or accounting advice in connection with the offering and sale of the Shares.
(z) Any certificate signed by any officer of the Company delivered to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or to
counsel for the Underwriters pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters covered thereby.
(aa) As of June 30, 2009, the investment portfolio (the “Investment Portfolio”) of the Company
consisted of the investments described in the Company’s quarterly report on Form 10-Q for the
quarter ended June 30, 2009. 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 Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, including making any change to any guidelines applicable to investment
percentages or the assets-to-equity ratio currently employed by the Company; the Company and, to
the Company’s knowledge, the Subsidiaries have good and marketable title to all properties and
assets owned directly by them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects (except for any security interest, lien
encumbrance or claim that may otherwise exist under any applicable
-12-
repurchase agreement or as
otherwise disclosed in the Registration Statement, the Pre-Pricing Prospectuses and the
Prospectus), except such as do not interfere with the use made or proposed to be made of such asset
or property by the Company or any Subsidiary, as the case may be; the Company does not directly own
any real property; any real property and buildings held under lease directly by the Company are
held under valid, existing and enforceable leases, with such exceptions, liens, security interests,
pledges, charges, encumbrances, mortgages and defects, as are not material and do not interfere
with the use made or proposed to be made of such property and buildings by the Company.
(bb) The Company and, to the Company’s knowledge, each of the Subsidiaries has filed on a
timely basis (taking into account all applicable extensions) all necessary federal, state, local
and foreign income and franchise tax returns, if any such returns were required to be filed,
through the date hereof and have paid all taxes shown as due thereon; and no tax deficiency has
been asserted against the Company or any of the Subsidiaries, nor does the Company know of any tax
deficiency which is likely to be asserted against any such entity which, if determined adversely to
any such entity, could have a Material Adverse Effect; all tax liabilities, if any, are adequately
provided for on the books of the Company and, to the Company’s knowledge, the Subsidiaries.
(cc) The Company and, to the Company’s knowledge, each Subsidiary owns or possesses adequate
license or other rights to use all patents, trademarks, service marks, trade names, copyrights,
software and design licenses, trade secrets, manufacturing processes, other intangible property
rights and know-how, if any (collectively “Intangibles”), necessary to entitle the Company and, to
the Company’s knowledge, each Subsidiary to conduct its business as described in the Prospectus,
and neither the Company nor, to the Company’s knowledge, any Subsidiary has received notice of
infringement of or conflict with (and 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.
(dd) Except as otherwise disclosed in the Registration Statement, the Pre-Pricing Prospectuses
and the Prospectus, neither the Company nor, to the Company’s knowledge, any of the Property
Entities has authorized or conducted or has knowledge of the generation, transportation, storage,
presence, use, treatment, disposal, release, or other handling of any hazardous substance,
hazardous waste, hazardous material, hazardous constituent, toxic substance, pollutant,
contaminant, asbestos, radon, polychlorinated biphenyls, petroleum product or waste (including
crude oil or any fraction thereof), natural gas, liquefied gas, synthetic gas or other material
defined, regulated, controlled or potentially subject to any remediation requirement under any
environmental law (collectively, “Hazardous Materials”), on, in, under or affecting any real
property currently leased or owned or by any means controlled by the Company or any Property
Entity, including any real property underlying any loan held by any Property Entity (collectively,
the “Real Property”), except in material compliance with applicable laws; to the knowledge of the
Company, the Real Property, and the Company’s and the Property Entities’ operations with respect to
the Real Property, are in compliance with all federal, state and local laws, ordinances, rules,
regulations and other governmental requirements relating to pollution, control of chemicals,
management of waste, discharges of materials into the environment, health, safety, natural
resources, and the environment (collectively, “Environmental Laws”), and the Company and, to the
Company’s knowledge, the Property Entities are in material compliance with, all licenses, permits,
registrations and government authorizations necessary to operate under all applicable Environmental
Laws; except as otherwise disclosed in the Prospectus, neither the
-13-
Company nor, to the Company’s
knowledge, the Property Entities has received any written or oral notice from any governmental
entity or any other Person and there is no pending or threatened claim, litigation or any
administrative agency proceeding that: alleges a violation of any Environmental Laws by the Company
or any of the Property Entities; or that the Company or any of the Property Entities is a liable
party or a potentially responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss. 9601, Et seq., or any state superfund law; has
resulted in or could result in the attachment of an environmental lien on any of the Real Property;
or alleges that the Company or any of the Property Entities is liable for any contamination of the
environment, contamination of the Real Property, damage to natural resources, property damage, or
personal injury based on their activities or the activities of their predecessors or third parties
(whether at the Real Property or elsewhere) involving Hazardous Materials, whether arising under
the Environmental Laws, common law principles, or other legal standards.
(ee) The Company has established and maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act) and
“internal control over financial reporting” (as such term is defined in Rules 13a-15 and 15d-15
under the Exchange Act); such disclosure controls and procedures are designed to ensure that
material information relating to the Company, including its consolidated subsidiaries, is made
known to the Company’s Chief Executive Officer and its Chief Financial Officer by others within
those entities, and such disclosure controls and procedures are effective to perform the functions
for which they were established; the principal executive officers (or their equivalents) and
principal financial officers (or their equivalents) of the Company have made all certifications
required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”) and any
related rules and regulations promulgated by the Commission, and the statements contained in
each such certification are complete and correct; the Company, the Subsidiaries and the Company’s
directors and officers are each in compliance in all material respects with all applicable
effective provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and regulations of the Commission and
the NYSE promulgated thereunder.
(ff) The Company and, to the Company’s knowledge, each of the Subsidiaries maintains insurance
(issued by insurers of recognized financial responsibility) of the types and in the amounts
generally deemed adequate, if any, for their respective businesses and consistent with insurance
coverage maintained by similar companies in similar businesses, including, but not limited to,
insurance covering real and personal property owned or leased by the Company and the Subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect.
(gg) Neither the Company nor, to the Company’s knowledge, any Subsidiary is in violation, and
none of them has received notice of any violation with respect to, any applicable environmental,
safety or similar law applicable to its business and which, in the case of the Property Entities,
could reasonably expect to result in a Material Adverse Effect. The Company and, to the Company’s
knowledge, each Subsidiary have received all permits, licenses or other approvals required of them
under applicable federal and state occupational safety and health and environmental laws and
regulations to conduct their businesses, and the Company and, to the Company’s knowledge, each
Subsidiary 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
-14-
conditions of such permits, licenses or
approvals which could not, singly or in the aggregate, have a Material Adverse Effect.
(hh) The Company has not incurred any liability for any finder’s fees or similar payments in
connection with the transactions herein contemplated, except as may otherwise exist with respect to
the Underwriters pursuant to this Agreement.
(ii) There are no existing or threatened labor disputes with the employees of the Company or,
to the Company’s knowledge, any Subsidiary which are likely to have individually or in the
aggregate a Material Adverse Effect.
(jj) None of the Company or, to the Company’s knowledge, any Subsidiary or any employee or
agent of the Company or any Subsidiary, has made any payment of funds or received or retained any
funds in violation of any law, rule or regulation or of a character required to be disclosed in the
Registration Statement, the Pre-Pricing Prospectuses, the Prospectus or the Permitted Free Writing
Prospectuses, if any. No relationship, direct or indirect, exists between or among the Company or,
to the Company’s knowledge, any Subsidiary or any affiliate of any of them, on the one hand, and
the directors, officers and stockholders of the Company or, to the Company’s knowledge, any
Subsidiary, on the other hand, which is required by the Securities Act to be described in the
Registration Statement, the Pre-Pricing Prospectuses, the Prospectus or the Permitted Free Writing
Prospectuses, if any, that is not so described.
(kk) The Company has been, and upon the sale of the Shares will continue to be, organized and
operated in conformity with the requirements for qualification and taxation as a
“real estate investment trust” (a “REIT”) under Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the “Code”), for all taxable years commencing with its taxable
year ended December 31, 1998. The proposed method of operation of the Company as described in the
Registration Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, 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.
(ll) Neither the Company, nor to the knowledge of the Company, the Property Entities, 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”).
(mm) No relationship, direct or indirect, exists between or among the Company or any
Subsidiary or any affiliate of them, on the one hand, and the directors, officers, stockholders or
directors of the Company or any Subsidiary, on the other hand, which is required by the rules of
the FINRA to be described in the Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus or the Permitted Free Writing Prospectuses, if any, which is not so described. Except
as otherwise disclosed in the Registration Statement, the Pre-Pricing Prospectuses and the
Prospectus, there are no material outstanding loans or advances or material guarantees of
indebtedness by the Company or, to the Company’s knowledge, any Subsidiary or
-15-
any affiliate of them
to or for the benefit of any of the officers or directors of the Company or any Subsidiary or any
of the members of the families of any of them.
(nn) Neither the Company nor, to the Company’s knowledge, any of the Subsidiaries has
sustained since the date of the last audited financial statements included in the Registration
Statement and the Prospectus any loss or interference with its respective 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.
(oo) The Company has obtained for the benefit of the Underwriters the agreements (the “Lock-Up
Agreements”), dated July 29, 2009, in substantially the form set forth as Exhibit A hereto,
of each of its directors and officers and each stockholder named in Exhibit A-1 hereto.
(pp) The Company has a signed copy of the Registration Statement, as initially filed with the
Commission, and of all amendments thereto (including all exhibits thereto and documents
incorporated by reference therein).
4. Certain Covenants of the Company. The Company hereby covenants and agrees with
each of the Underwriters that:
(a) The Company will furnish such information as may be required and otherwise will cooperate
in qualifying the Shares for offering and sale under the securities or blue
sky laws of such jurisdictions (both domestic and foreign) as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may designate and
to maintain such qualifications in effect so long as required for the distribution of the Shares,
provided that the Company shall not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such jurisdiction (except service of process with
respect to the offering and sale of the Shares). The Company will promptly advise ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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 make available to the Underwriters in New York City, as soon as
practicable after this Agreement becomes effective, and furnish to the Underwriters, as many 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) as
the Underwriters may request from time to time for the purposes contemplated by the Securities Act;
in case any Underwriter is required to deliver (whether physically or through compliance with Rule
172 under the Securities Act or any similar rule), in connection with the sale of the Shares, a
prospectus after the nine-month period referred to in Section 10(a)(3) of the Securities Act, or
after the time a post-effective amendment to the Registration Statement is required pursuant to
Item 512(a) of Regulation S-K under the Securities Act, the Company will prepare, at its expense,
promptly upon request such amendment or amendments to the Registration Statement and the Prospectus
as may be necessary to permit compliance with the requirements of Section 10(a)(3) of the
Securities Act or Item 512(a) of Regulation S-K under the Securities Act, as the case may be.
(c) The Company will advise ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ immediately, confirming such advice in writing, of
(i) the receipt of any comments from the Commission relating to any filing of the Company under the
Securities Act or the Exchange Act, (ii) any request by the
-16-
Commission for amendments or
supplements to the Registration Statement, the Pre-Pricing Prospectuses, the Prospectus or the
Permitted Free Writing Prospectuses, if any, or for additional information with respect thereto,
(iii) the issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of the Pre-Pricing
Prospectuses, the Prospectus or the Permitted Free Writing Prospectuses, if any, (iv) the
suspension of the qualification of the Shares for offering or sale in any jurisdiction, (v) the
initiation, threatening or contemplation of any proceedings for any of such purposes and, if the
Commission or any other governmental agency or authority should issue any such order, the Company
will make every reasonable effort to obtain the lifting or removal of such order as soon as
possible, for so long as the delivery of a prospectus is required in connection with the offering
or sale of the Shares. The Company will advise ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ promptly of any proposal to amend or
supplement the Registration Statement, the Pre-Pricing Prospectuses, the Prospectus or the
Permitted Free Writing Prospectuses, if any, including by filing any documents that would be
incorporated therein by reference and, for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares, to file no such amendment or supplement to
which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall, after discussion with the Company, reasonably object in writing.
(d) If, at the time this Agreement is executed and delivered, it is necessary or appropriate
for a post-effective amendment to the Registration Statement, or a Registration Statement under
Rule 462(b) under the Securities Act, to be filed with the Commission and
become effective before the Shares may be sold, the Company will use its best efforts to cause
such post-effective amendment or such Registration Statement to be filed and become effective, and
will pay any applicable fees in accordance with the Securities Act, as soon as possible; and the
Company will advise you promptly and, if requested by you, will confirm such advice in writing, (i)
when such post-effective amendment or such Registration Statement has become effective, and (ii) if
Rule 430A under the Securities Act is used, when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Securities Act (which the Company agrees to file in a timely
manner in accordance with such Rules).
(e) If, at any time during the period when a prospectus is required by the Securities Act to
be delivered (whether physically or through compliance with Rule 172 under the Securities Act or
any similar rule) in connection with any sale of Shares, the Registration Statement shall cease to
comply with the requirements of the Securities Act with respect to eligibility for the use of the
form on which the Registration Statement was filed with the Commission or the Registration
Statement shall cease to be an “automatic shelf registration statement” (as defined in Rule 405
under the Securities Act) or the Company shall have received, from the Commission, a notice,
pursuant to Rule 401(g)(2), of objection to the use of the form on which the Registration Statement
was filed with the Commission, the Company will (i) promptly notify you, (ii) promptly file with
the Commission a new registration statement under the Securities Act, relating to the Shares, or a
post-effective amendment to the Registration Statement, which new registration statement or
post-effective amendment shall comply with the requirements of the Securities Act and shall be in a
form satisfactory to you, (iii) use its best efforts to cause such new registration statement or
post-effective amendment to become effective under the Securities Act as soon as practicable, (iv)
promptly notify you of such effectiveness and (v) take all other action necessary or appropriate to
permit the public offering and sale of the Shares to continue as contemplated in the Prospectus;
all references herein to the Registration Statement shall be deemed to include each such new
registration statement or post-effective amendment, if any.
-17-
(f) If the third anniversary of the initial effective date of the Registration Statement
(within the meaning of Rule 415(a)(5) under the Securities Act) shall occur at any time during the
period when a prospectus is required by the Securities Act to be delivered (whether physically or
through compliance with Rule 172 under the Securities Act or any similar rule) in connection with
any sale of Shares, the Company will file with the Commission, prior to such third anniversary, a
new registration statement under the Securities Act relating to the Shares, which new registration
statement shall comply with the requirements of the Securities Act (including, without limitation,
Rule 415(a)(6) under the Securities Act) and shall be in a form satisfactory to you; such new
registration statement shall constitute an “automatic shelf registration statement” (as defined in
Rule 405 under the Securities Act); provided, however, that if the Company is not
then eligible to file an “automatic shelf registration statement” (as defined in Rule 405 under the
Securities Act), then such new registration statement need not constitute an “automatic shelf
registration statement” (as defined in Rule 405 under the Securities Act), but the Company shall
use its best efforts to cause such new registration statement to become effective under the
Securities Act as soon as practicable, but in any event within 180 days after such third
anniversary and promptly notify you of such effectiveness; the Company shall take all other action
necessary or appropriate to permit the public offering and sale of the Shares to continue as
contemplated in the Prospectus; all references herein to the Registration Statement shall be deemed
to include each such new registration statement, if any.
(g) The Company will pay the fees applicable to the Registration Statement in connection with
the offering of the Shares within the time required by Rule 456(b)(1)(i) under the Securities Act
(without reliance on the proviso to Rule 456(b)(1)(i) under the Act) and in compliance with Rule
456(b) and Rule 457(r) under the Securities Act.
(h) The Company will advise the Underwriters promptly of the happening of any event known to
the Company within the time during which a Prospectus relating to the Shares is required to be
delivered (whether physically or through compliance with Rule 172 under the Securities Act or any
similar rule) under the Securities Act which would require the making of any change in the
Prospectus then being used, or in the information incorporated by reference therein, so that the
Prospectus would not include an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with any law. If within the time during which a
Prospectus relating to the Shares is required to be delivered under the Securities Act any event
shall occur or condition shall exist which, in the reasonable opinion of the Company, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ or their respective counsel, would require the making of any change in the Prospectus then
being used, or in the information incorporated by reference therein, so that the Prospectus would
not include an untrue statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company will promptly prepare and furnish to the
Underwriters copies of the proposed amendment or supplement before filing any such amendment or
supplement with the Commission and thereafter promptly furnish, at the Company’s own expense, to
the Underwriters and to dealers copies in such quantities and at such locations as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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.
-18-
(i) The Company will make generally available to its stockholders as soon as practicable, and
in the manner contemplated by Rule 158 of the Securities Act but in any event not later than 15
months after the end of the Company’s current fiscal quarter, an earnings statement (which need not
be audited) covering a 12-month period beginning after the date upon which the Prospectus
Supplement is filed pursuant to Rule 424(b) under the Securities Act that shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder and will advise the
Underwriters in writing when such statement has been made available.
(j) 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 Supplement.
(k) The Company will furnish to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, not less than two business days before a
filing with the Commission during the period referred to in paragraph (e) above, a copy of any
amendment to the Registration Statement following the date hereof and a copy of any document
proposed to be filed pursuant to Section 13, 14 or 15(d) of the Exchange Act and during such period
will file all such documents in a manner and within the time periods required by the Exchange Act.
(l) The Company will not sell, offer, contract to sell, pledge, register, 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
for a period of 60 days after the date hereof (the “Lock-Up Period”), without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Deutsche Bank. The foregoing sentence shall not apply to (i) the
Shares to be sold hereunder, (ii) any shares of Common Stock issued by the Company upon the
exercise of an option outstanding on the date hereof and referred to in the Prospectus, (iii) the
granting of Equity Compensation pursuant to the Company’s 2004 Equity Compensation Plan, provided
that all of such Equity Compensation granted during the Lock-Up Period, taken together, would not
entitle the recipients thereof to receive in excess of 500,000 shares of common stock, (iv) the
payment in stock to directors of the Company of a portion of their annual or other directors fees,
(v) the filing of any shelf registration statement after thirty days from the date hereof, or (vi)
shares of Common Stock issued pursuant to the Company’s existing Discount Waiver, Direct Stock
Purchase and Dividend Reinvestment Plan. For purposes of this paragraph, “Equity Compensation”
shall mean options not exercisable during the Lock-Up Period, restricted shares or other restricted
equity compensation based on shares of common stock, in each case, issued under the Company’s 2004
Equity Compensation Plan.
(m) 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.
(n) The Company will engage and maintain, at its expense, a registrar and transfer agent for
the Shares.
(o) The Company will pay all expenses, fees and taxes (other than any transfer taxes and fees
and disbursements of counsel for the Underwriters, except as set forth under Section 5 hereof or in
clause (iii) or (iv) below) in connection with (i) the preparation and filing of the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, and any amendments or supplements thereto, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including costs of mailing and
shipment), (ii) the issuance, sale and delivery of the Shares by the Company,
-19-
(iii) the qualification, if any, of the Shares for offering and sale under state laws and the
determination of their eligibility for investment under state law as aforesaid (the legal fees and
filing fees and other disbursements of counsel to the Underwriters) and the printing and furnishing
of copies of any blue sky surveys or legal investment surveys to the Underwriters and to dealers,
(iv) any listing of the Shares on the NYSE and any registration thereof under the Exchange Act, (v)
the filing, if any, for review of the public offering of the Shares by the FINRA, (vi) the costs
and expenses of the Company relating to presentations or meetings undertaken in connection with the
marketing of the offering and sale of the Shares to prospective investors and the Underwriters’
sales forces, including, without limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged by the Company in connection with
the road show presentations, travel, lodging and other expenses incurred by the officers of the
Company and any such consultants, and (vii) the performance of the Company’s other obligations
hereunder.
(p) The Company will comply with Rule 433(d) under the Securities Act (without reliance on
Rule 164(b) under the Securities Act) and with Rule 433(g) under the Securities Act with respect to
any free-writing prospectus (as defined in Rule 405 under the Securities Act).
(q) The Company will not (i) take, directly or indirectly, prior to termination of the
underwriting syndicate contemplated by this Agreement, 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) prior to the expiration
of the Lock-Up Period or any applicable waiver thereof granted after the date hereof, pay or agree
to pay to any Person any compensation for soliciting any order to purchase any other securities of
the Company, excluding any such compensation relating to the Company’s existing Discount Waiver,
Director Stock Purchase and Dividend Reinvestment Plan.
(r) 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. In
addition, the Company will not engage in any activities which might be subject to the Commodity
Exchange Act, as amended, unless such activities are exempt from that act or otherwise comply with
that act or with an applicable no-action letter to the Company from the Commodities Futures Trading
Commission.
(s) The Company will comply with all of the provisions of any undertakings in the Registration
Statement.
(t) The Company has 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.
-20-
(u) The Company will not be or become, at any time prior to the expiration of three years
after the date of the Agreement, an “investment company,” as such term is defined in the Investment
Company Act.
(v) The Company has retained Ernst & Young LLP as its qualified accountants and qualified tax
experts (i) to test procedures and conduct annual compliance reviews designed to determine
compliance with the REIT provisions of the Code and (ii) to otherwise assist the Company in
monitoring appropriate accounting systems and procedures designed to determine compliance with the
REIT provisions of the Code.
(w) The Company will comply with all requirements imposed upon it by the Securities Act and
the Exchange Act as from time to time in force, so far as necessary to permit the continuance of
sales of, or dealings in, the Shares as contemplated by the provisions hereof and the Prospectus.
(x) The Company will maintain such controls and other procedures, including, without
limitation, those required by Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ 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 Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commission’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 Exchange Act is
accumulated and communicated to the Company’s management, including its chief executive officer and
chief 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 is made known to them by others within those entities, particularly during the period in
which such periodic reports are being prepared.
(y) The Company will comply with all applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
5. Reimbursement of Underwriters’ Expenses. If the Shares are not delivered for any
reason other than the termination of this Agreement pursuant to the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company shall, in addition to
paying the amounts described in Section 4(o) hereof, reimburse the Underwriters for all of their
out-of-pocket expenses, including the fees and disbursements of their counsel.
6. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and warranties on the
part of the Company on the date hereof and at the time of purchase (and the several obligations of
the Underwriters at the additional time of purchase are subject to the accuracy of the
representations and warranties on the part of the Company on the date hereof, at the time of
purchase (unless previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Company shall furnish to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at the time of purchase and at the additional
time of purchase, as the case may be, opinions of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Company,
addressed to the Underwriters, and dated the time of purchase or the
-21-
additional time of purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form satisfactory to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters,
substantially in the forms of Exhibit B-1 and Exhibit B-2 attached hereto.
(b) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have received from Ernst & Young LLP letters dated the date of this
Agreement and the time of purchase and the additional time of purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of the Underwriters) in the forms
heretofore approved by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ relating to the financial statements, including any pro forma
financial statements of the Company and such other matters customarily covered by comfort letters
issued in connection with a registered public offering.
In the event that the letters referred to above set forth any such changes, decreases or
increases, it shall be a further condition to the obligations of the Underwriters that (i) such
letters shall be accompanied by a written explanation from the Company as to the significance
thereof, unless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ such explanation unnecessary, and (ii) such changes, decreases
or increases do not, in the sole judgment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, make it impractical or inadvisable to
proceed with the purchase and delivery of the Shares as contemplated by the Registration Statement,
the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any.
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have received at the time of purchase and at the additional time of
purchase, as the case may be, the favorable opinion and letter of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel
for the Underwriters, addressed to the Underwriters, dated the time of purchase or the additional
time of purchase, as the case may be, with respect to such matters as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall
reasonably request, and such counsel shall have received such papers and information as they may
reasonably require to enable them to pass upon such matters. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have received at
the time of purchase and at the additional time of purchase, as the case may be, an opinion of
▇▇▇▇▇▇▇ LLP, special Maryland counsel for the Underwriters, addressed to the Underwriters and dated
the time of purchase or the additional time of purchase, as the case may be, with reproduced copies
for each of the other Underwriters, with respect to such matters as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall reasonably
request, and such counsel shall have received such papers and information as they may reasonably
require to enable them to pass upon such matters.
(d) No amendment or supplement to the Registration Statement or the Prospectus, including
documents deemed to be incorporated by reference therein, shall be filed to which the Underwriters
object in writing.
(e) Prior to the time of purchase or the additional time of purchase, as the case may be, (i)
no stop order with respect to the effectiveness of the Registration Statement shall have been
issued under the Securities Act or proceedings initiated under Section 8(d) or 8(e) of the
Securities Act; (ii) the Registration Statement and all amendments thereto, or modifications
thereof, if any, shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading; and (iii) none of the Pre-Pricing Prospectuses, the Prospectus and no amendment or
supplement thereto, or modification thereof shall contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made, not misleading; (iv) no
Disclosure Package, and no amendment or supplement thereto, shall include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in
-22-
the light of the circumstances under which they are made, not misleading; and (v) none of the
Permitted Free Writing Prospectuses, if any, shall include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading.
(f) All filings with the Commission required by Rule 424 under the Securities Act to have been
filed by the time of purchase or the additional time of purchase, as the case may be, shall have
been made within the applicable time period prescribed for such filing by Rule 424.
(g) Between the time of execution of this Agreement and the time of purchase or the additional
time of purchase, as the case may be, (i) no material and unfavorable change, financial or
otherwise (other than as referred to in the Registration Statement and the Prospectus on the date
hereof), in the business, condition, net worth or prospects of the Company and the Subsidiaries
taken as a whole shall have occurred or become known and (ii) no transaction which is material and
unfavorable to the Company shall have been entered into by the Company.
(h) The Company will, at the time of purchase or additional time of purchase, as the case may
be, deliver to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ a certificate of two of its executive officers to the effect that the
representations and warranties of the Company as set forth in this Agreement are true and correct
as of each such date, that the Company shall perform such of its obligations under this Agreement
as are to be performed at or before the time of purchase and at or before the additional time of
purchase, as the case may be, and that the conditions set forth in paragraphs (e) and (g) of this
Section 6 have been met.
(i) The Company shall have furnished to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ such other documents and certificates,
including as to the accuracy and completeness of any statement in the Registration Statement and
the Prospectus as of the time of purchase and the additional time of purchase, as the case may be,
as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may reasonably request.
(j) The Shares shall have been approved for listing on the NYSE, subject only to notice of
issuance at or prior to the time of purchase or the additional time of purchase, as the case may
be.
(k) The FINRA shall not have raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(l) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have received the Lock-Up Agreements referred to in Section 3(oo),
and such Lock-Up Agreements shall be in full force and effect.
7. Termination. The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Deutsche Bank Securities Inc., at
any time prior to the time of purchase or, if applicable, the additional time of purchase, (i) if
any of the conditions specified in Section 6 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, (ii) if any material adverse and unfavorable change (financial or
otherwise) or any development involving a material adverse and unfavorable change (financial or
otherwise) (in each case, other than disclosed, or incorporated by reference into the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus or the Permitted Free Writing Prospectuses,
if any, on the date hereof), in the operations, business, net worth, financial
-23-
condition or prospects of the Company and the Subsidiaries taken as a whole shall have
occurred which would, in the sole judgment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Deutsche Bank Securities Inc.,
make it impracticable to market the Shares on the terms and in the manner contemplated in the
Registration Statement, the Pre-Pricing Prospectuses and the Prospectus, (iii) if the United States
shall have declared war in accordance with its constitutional processes or there has occurred an
outbreak or escalation of hostilities or other national or international calamity or crisis or
change in economic, political or other conditions the effect of which on the financial markets of
the United States is such as to make it, in the sole judgment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Deutsche Bank
Securities Inc., impracticable or inadvisable to market the Shares on the terms and in the manner
contemplated in the Registration Statement, the Pre-Pricing Prospectuses and the Prospectus or
enforce contracts for the sale of the Shares, (iv) if trading in any securities of the Company has
been suspended by the Commission or by the NYSE, or if trading generally on the NYSE has been
suspended (including an automatic halt in trading pursuant to market-decline triggers other than
those in which solely program trading is temporarily halted), or limitations on or minimum prices
for trading (other than limitations on hours or numbers of days of trading) shall have been fixed,
or maximum ranges for prices for securities have been required, by such exchange or the FINRA or
Nasdaq or by order of the Commission or any other governmental authority, (v) if a banking
moratorium shall have been declared by New York or United States authorities or a material
disruption has occurred in commercial banking or securities settlement or clearance services in the
United States, (vi) if there shall have occurred any downgrading, or any notice or announcement
shall have been given or made of (a) any intended or potential downgrading or (b) any review or
possible change that does not indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company by any “nationally recognized statistical rating organization,” as that
term is defined in Rule 436(g)(2) under the Securities Act, (vii) if any federal or state statute,
regulation, rule or order of any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated which, in the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, materially adversely
affects or will materially adversely affect the business or operations of the Company or (viii) if
any action has been taken by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which, in the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Deutsche Bank Securities
Inc., has a material adverse effect on the securities markets in the United States.
If ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Deutsche Bank Securities Inc. elect to terminate this Agreement as
provided in this Section 7, the Company and each other Underwriter shall be notified promptly by
telephone, which shall be promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement or if such sale is
not carried out because the Company shall be unable to comply with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this Agreement (except
to the extent provided in Sections 4(o), 5 and 9 hereof), and the Underwriters shall be under no
obligation or liability to the Company under this Agreement (except to the extent provided in
Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters’ Commitments. If any Underwriter shall default in its
obligation under this Agreement to take up and pay for the Shares to be purchased by it under this
Agreement (otherwise than for reasons sufficient to justify the termination of this Agreement under
the provisions of Section 7 hereof), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have the right, within 36 hours after
such default, to make arrangements for one or more of the non-defaulting Underwriters, or
-24-
any other underwriters, to purchase all, but not less than all, of the Shares which such
Underwriter shall have agreed but failed to take up and pay for (the “Defaulted Shares”). Absent
the completion of such arrangements within such 36-hour period, (i) if the total number of
Defaulted Shares does not exceed 10% of the total number of Shares to be purchased at the time of
purchase or the additional time of purchase, as the case may be, each non-defaulting Underwriter
shall take up and pay for (in addition to the number of Shares which it is otherwise obligated to
purchase on such date pursuant to this Agreement) the number of Shares agreed to be purchased by
all such defaulting Underwriters in such amount or amounts as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may designate with the
consent of each Underwriter so designated or, in the event no such designation is made, such Shares
shall be taken up and paid for by all non-defaulting Underwriters pro rata in proportion to the
aggregate number of Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A; and (ii) if the total number of Defaulted Shares exceeds 10% of such total
number of Shares to be purchased at the time of purchase or the additional time of purchase, as the
case may be, and if neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period from the date of default for the purchase of such Defaulted
Shares, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may terminate this Agreement by notice to the Company, without liability of
any party to any other party, except that the provisions of Sections 4(o), 5 and 9 shall at all
times be effective and shall survive such termination. Nothing in this paragraph, and no action
taken hereunder, shall relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
Without relieving any defaulting Underwriter from its obligations hereunder, the Company
agrees with the non-defaulting Underwriters that they will not sell any Shares hereunder unless all
of the Shares are purchased by the Underwriters (or by substituted Underwriters selected by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ with the approval of the Company or selected by the Company with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇’▇
approval).
If a new Underwriter is, or new Underwriters are, substituted for a defaulting Underwriter or
Underwriters in accordance with the foregoing provisions, the Company or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have
the right to postpone the time of purchase or the additional time of purchase, as the case may be,
for a period not exceeding five business days from the date of substitution in order that any
necessary changes in the Registration Statement and the Prospectus and other documents may be
effected.
The term Underwriter as used in this Agreement shall refer to and include any underwriter
substituted under this Section 8 with like effect as if such substituted underwriter had originally
been named in Schedule A.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each Underwriter, its partners,
directors and officers, and any Person who controls any Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, and the successors and assigns of all
of the foregoing persons from and against any loss, damage, expense, liability or claim (including,
but not limited to, the reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such Person may incur under the Securities Act, the Exchange Act, federal or
state statutory law or regulation, common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective
-25-
amendment thereof by the Company) or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as any such loss, damage, expense, liability or claim arises
out of or is based upon any untrue statement or alleged untrue statement of a material fact
contained in, and in conformity with information concerning such Underwriter furnished in writing
by or on behalf of such Underwriter through you (that information being limited to that described
in the last sentence of the first paragraph of Section 9(b) hereof) to the Company expressly for
use in, the Registration Statement or arises out of or is based upon any omission or alleged
omission to state a material fact in the Registration Statement in connection with such
information, which material fact was not contained in such information and which material fact was
required to be stated in such Registration Statement or was necessary to make such information not
misleading or (ii) any untrue statement or alleged untrue statement of a material fact included in
any Prospectus (the term Prospectus for the purpose of this Section 9 being deemed to include any
Basic Prospectus, any Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus and any
amendments or supplements to the foregoing), in any Permitted Free Writing Prospectus, in any
“issuer information” (as defined in Rule 433 under the Securities Act) of the Company or in any
Prospectus together with any combination of one or more of the Permitted Free Writing Prospectuses,
if any, or arises out of or is based upon any omission or alleged omission to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except, with respect to such Prospectus or Permitted Free Writing
Prospectus, insofar as any such loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact contained in, and in
conformity with information concerning such Underwriter furnished in writing by or on behalf of
such Underwriter through you to the Company expressly for use in, such Prospectus or Permitted Free
Writing Prospectus or arises out of or is based upon any omission or alleged omission to state a
material fact in such Prospectus or Permitted Free Writing Prospectus in connection with such
information, which material fact was not contained in such information and which material fact was
necessary in order to make the statements in such information, in the light of the circumstances
under which they were made, not misleading.
If any action, suit or proceeding (together, a “Proceeding”) is brought against an Underwriter
or any such Person in respect of which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such Underwriter or such Person shall promptly notify the Company in writing
of the institution of such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified party and payment
of all fees and expenses; provided, however, that the omission to so notify the
Company shall not relieve the Company from any liability which the Company may have to any
Underwriter or any such Person or otherwise. Such Underwriter or such controlling Person shall
have the right to employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or of such Person unless the employment of
such counsel shall have been authorized in writing by the Company in connection with the defense of
such Proceeding or the Company shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may be defenses available
to it or them which are different from, additional to or in conflict with those available to the
Company (in which case the Company shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties), in any of which events such fees and
expenses shall be borne by the Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses
-26-
of more than one separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the indemnified parties who are
parties to such Proceeding). The Company shall not be liable for any settlement of any such
Proceeding effected without its written consent (which shall not be unreasonably withheld) but if
settled with the written consent of the Company, the Company agrees to indemnify and hold harmless
any Underwriter and any such Person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel
as contemplated by the second sentence of this paragraph, then the indemnifying party agrees that
it shall be liable for any settlement of any Proceeding effected without its written consent if (i)
such settlement is entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days’ prior notice of its
intention to settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding in respect of
which any indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter of such Proceeding
and does not include an admission of fault, culpability or a failure to act, by or on behalf of
such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold harmless the Company, its
directors and officers and any Person who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act and the successors and assigns of all of the
foregoing Persons from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company or any such Person may
incur under the Securities Act, the Exchange Act, federal or state statutory law or regulation, the
common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or
is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in,
and in conformity with information concerning such Underwriter furnished in writing by or on behalf
of such Underwriter through you to the Company expressly for use in, the Registration Statement (or
in the Registration Statement as amended by any post-effective amendment thereof by the Company),
or arises out of or is based upon any omission or alleged omission to state a material fact in such
Registration Statement in connection with such information, which material fact was not contained
in such information and which material fact was required to be stated in such Registration
Statement or was necessary to make such information not misleading or (ii) any untrue statement or
alleged untrue statement of a material fact contained in, and in conformity with information
concerning such Underwriter furnished in writing by or on behalf of such Underwriter through you to
the Company expressly for use in, a Prospectus or a Permitted Free Writing Prospectus, or arises
out of or is based upon any omission or alleged omission to state a material fact in such
Prospectus or Permitted Free Writing Prospectus in connection with such information, which material
fact was not contained in such information and which material fact was necessary in order to make
the statements in such information, in the light of the circumstances under which they were made,
not misleading. The statements set forth in the fifth and eighth paragraphs under the caption
“Underwriting” in the Pre-Pricing Prospectuses, the Prospectus and the Disclosure Package (to the
extent such statements relate to the Underwriters) constitute the only information furnished by
-27-
or on behalf of any Underwriter to the Company for purposes of Section 3(b) hereof and this
Section 9.
If any Proceeding is brought against the Company or any such Person in respect of which
indemnity may be sought against any Underwriter pursuant to the foregoing paragraph, the Company or
such Person shall promptly notify such Underwriter in writing of the institution of such Proceeding
and such Underwriter shall assume the defense of such Proceeding, including the employment of
counsel reasonably satisfactory to such indemnified party and payment of all fees and expenses;
provided, however, that the omission to so notify such Underwriter shall not
relieve such Underwriter from any liability which such Underwriter may have to the Company or any
such Person or otherwise. The Company or such Person shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the
Company or such Person unless the employment of such counsel shall have been authorized in writing
by such Underwriter in connection with the defense of such Proceeding or such Underwriter shall not
have employed counsel to have charge of the defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to such Underwriter (in
which case such Underwriter shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may employ counsel and participate
in the defense thereof but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by such Underwriter and
paid as incurred (it being understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in any one Proceeding
or series of related Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). No Underwriter shall be liable for any settlement of any such
Proceeding effected without the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold harmless the Company and
any such Person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the indemnifying party agrees that it
shall be liable for any settlement of any Proceeding effected without its written consent if (i)
such settlement is entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days’ prior notice of its
intention to settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding in respect of
which any indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9 is unavailable to an indemnified
party under subsections (a) and (b) of this Section 9 or insufficient to hold an Indemnified Party
harmless with respect to any losses, damages, expenses, liabilities or claims referred to therein,
then in order to provide just and equitable contribution in such circumstance, each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
-28-
damages, expenses, liabilities or claims (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Underwriters on the other
hand from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company on the one hand
and of the Underwriters on the other in connection with the statements or omissions which resulted
in such losses, damages, expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same respective proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting expenses) received by
the Company and the total underwriting discounts and commissions received by the Underwriters, bear
to the aggregate public offering price of the shares. The relative fault of the Company on the one
hand and of the Underwriters on the other shall be determined by reference to, among other things,
whether the untrue statement or alleged untrue statement of a material fact or omission or alleged
omission relates to information supplied by the Company or by the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection with investigating,
preparing to defend or defending any claim or Proceeding.
(d) The Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred to in subsection (c) above.
Notwithstanding the provisions of this Section 9, no Underwriter shall be liable or responsible
for, or be required to contribute, any amount pursuant to this Section 9 in excess of the amount of
the underwriting discounts and commissions applicable to the Shares purchased by such Underwriter.
No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section
9 are several in proportion to their respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section 9 and the covenants,
warranties and representations of the Company contained in this Agreement shall remain in full
force and effect regardless of any investigation made by or on behalf of any Underwriter, its
directors and officers or any Person (including each partner, officer or director of such Person)
who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, or by or on behalf of the Company, its directors or officers or any Person who
controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the issuance and delivery of
the Shares. The Company and each Underwriter agree promptly to notify each other upon the
commencement of any Proceeding against it and, in the case of the Company, against any of the
Company’s officers or directors in connection with the issuance and sale of the Shares, or in
connection with the Registration Statement or the Prospectus.
-29-
10. Notices. Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by facsimile and, if to the Underwriters, shall be sufficient
in all respects if delivered or sent to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Equity Syndicate Desk, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to the
Legal Department; and if to the Company, shall be sufficient in all respects if delivered or sent
to the Company at the offices of the Company at ▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq., Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
11. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement (a
“Claim”), directly or indirectly, shall be governed by, and construed in accordance with, the laws
of the State of New York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in The
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect thereto. The Company
hereby consents to personal jurisdiction, service and venue in any court in which any Claim arising
out of or in any way relating to this Agreement is brought by any third party against ▇▇▇▇▇▇
▇▇▇▇▇▇▇ or any indemnified party. Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the Company (on its behalf and, to
the extent permitted by applicable law, on behalf of its stockholders and affiliates) waives all
right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort
or otherwise) in any way arising out of or relating to this Agreement. The Company agrees that a
final judgment in any such action, proceeding or counterclaim brought in any such court shall be
conclusive and binding upon the Company and may be enforced in any other courts in the jurisdiction
of which the Company is or may be subject, by suit upon such judgment.
13. Parties at Interest. The Agreement herein set forth has been and is made solely
for the benefit of the Underwriters, the Company and, to the extent provided in Section 9 hereof,
the controlling Persons, directors and officers referred to in such Section, and their respective
successors, assigns, heirs, personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this Agreement.
14. No Fiduciary Relationship. The Company hereby acknowledges that the Underwriters
are acting solely as underwriters in connection with the purchase and sale of the Company’s
securities. The Company further acknowledges that the Underwriters are acting pursuant to a
contractual relationship created solely by this Agreement entered into on an arm’s length basis,
and in no event do the parties intend that the Underwriters act or be responsible as a fiduciary to
the Company, its management, stockholders or creditors or any other person in connection with any
activity that the Underwriters may undertake or have undertaken in furtherance of the purchase and
sale of the Company’s securities, either before or after the date hereof. The Underwriters hereby
expressly disclaim any fiduciary or similar obligations to the Company, either in connection with
the transactions contemplated by this Agreement or any matters leading up to such transactions, and
the Company hereby confirms its understanding and agreement to that effect. The Company and the
Underwriters agree that they are each responsible for making their own independent judgments with
respect to any such transactions and that any
-30-
opinions or views expressed by the Underwriters to the Company regarding such transactions,
including, but not limited to, any opinions or views with respect to the price or market for the
Company’s securities, do not constitute advice or recommendations to the Company. The Company
hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may
have against the Underwriters with respect to any breach or alleged breach of any fiduciary or
similar duty to the Company in connection with the transactions contemplated by this Agreement or
any matters leading up to such transactions.
15. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among the parties.
16. Successors and Assigns. This Agreement shall be binding upon the Underwriters and
the Company and their successors and assigns and any successor or assign of any substantial portion
of the Company’s and any of the Underwriters’ respective businesses and/or assets.
-31-
If the foregoing correctly sets forth the understanding among the Company and the
Underwriters, please so indicate in the space provided below for the purpose, whereupon this
Agreement and your acceptance shall constitute a binding agreement among the Company and the
Underwriters, severally.
| Very truly yours, MFA FINANCIAL, INC. |
||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| Title: | Chief Executive Officer | |||
Accepted and agreed to as of the date
first above written, on behalf of itself
and the other several Underwriters
named in Schedule A
first above written, on behalf of itself
and the other several Underwriters
named in Schedule A
| ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED |
||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | Managing Director | |||
-32-
SCHEDULE A
| Number of | Maximum Number of | |||||||
| Underwriter | Firm Shares | Optional Shares | ||||||
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated |
16,250,000 | 2,437,500 | ||||||
Deutsche Bank Securities Inc. |
16,250,000 | 2,437,500 | ||||||
Credit Suisse Securities (USA) LLC |
4,125,000 | 618,750 | ||||||
JMP Securities LLC |
4,125,000 | 618,750 | ||||||
UBS Securities LLC |
4,125,000 | 618,750 | ||||||
Cantor ▇▇▇▇▇▇▇▇▇▇ & Co. |
2,562,500 | 384,375 | ||||||
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. |
2,562,500 | 384,375 | ||||||
Total |
50,000,000 | 7,500,000 | ||||||
Sch A
SCHEDULE B
MFA Financial, Inc. Press Release, dated July 29, 2009, entitled “MFA Financial, Inc. Announces
Pricing of Public Offering of Common Stock”.
Sch B
EXHIBIT A
LOCK-UP AGREEMENT
Common Stock
($0.01 Par Value)
($0.01 Par Value)
July 29, 2009
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Deutsche Bank Securities Inc.
as Representatives of the several Underwriters
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Deutsche Bank Securities Inc.
as Representatives of the several Underwriters
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This Lock-Up Agreement is being delivered to you in connection with the proposed Underwriting
Agreement (the “Underwriting Agreement”) to be entered into by MFA Financial, Inc. (the “Company”)
and you, as Representatives of the several Underwriters named therein, with respect to the public
offering (the “Offering”) of Common Stock, par value $0.01 per share, of the Company (the “Common
Stock”).
In order to induce you to enter into the Underwriting Agreement, the undersigned agrees that
for a period of 60 days after the date of the final prospectus supplement relating to the Offering
the undersigned will not, without the prior written consent of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated and Deutsche Bank Securities Inc. (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of,
directly or indirectly, or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission (the “Commission”) in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder with respect to, any Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock, (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock, whether any such transaction is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise, or (iii) publicly announce an
intention to effect any transaction specified in clause (i) or (ii). The foregoing sentence shall
not apply to (a) the registration of Common Stock for issuance and sale
pursuant to the Offering and the Underwriting Agreement or the filing of a registration
statement by the Company expressly permitted by Section 4(l) of the Underwriting Agreement, (b)
bona fide gifts, provided the recipient thereof agrees in writing with the Underwriters to be bound
by the terms of this Lock-Up Agreement or (c) dispositions to any trust for the direct or indirect
benefit of the undersigned and/or the immediate family of the undersigned, provided that such trust
agrees in writing with the Underwriters to be bound by the terms of this Lock-Up Agreement or (d)
the exercise (including, for the avoidance of doubt, on a cashless basis) by the undersigned of any
currently outstanding option to purchase shares of Common Stock from the Company, or (e) the sale
of shares of Common Stock by the undersigned to fund the option exercise referred to in clause (d)
above, provided that (A) the number of shares of Common Stock so sold does not exceed the number of
shares of Common Stock such option exercise entitles the undersigned to receive from the Company
and (B) no such sale occurs prior to the exercise or expiration, as the case may be, of the option
to purchase Additional Shares (as defined in the Underwriting Agreement) granted to you pursuant to
Section 1 of the Underwriting Agreement.
In addition, the undersigned hereby waives any rights the undersigned may have to require
registration of Common Stock in connection with the filing of a registration statement relating to
the Offering. The undersigned further agrees that, for a period of 60 days after the date of the
final prospectus relating to the Offering, the undersigned will not, without the prior written
consent of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Deutsche Bank Securities Inc., make any
demand for, or exercise any right with respect to, the registration of Common Stock of the Company
or any securities convertible into or exercisable or exchangeable for Common Stock, or warrants or
other rights to purchase Common Stock.
If (i) the Company notifies you in writing that it does not intend to proceed with the
Offering, (ii) the registration statement filed with the Securities and Exchange Commission with
respect to the Offering is withdrawn or (iii) for any reason the Underwriting Agreement shall be
terminated prior to the time of purchase (as defined in the Underwriting Agreement), this Lock-Up
Agreement shall be terminated and the undersigned shall be released from its obligations hereunder.
| Very truly yours, |
||||
| Name: | ||||
EXHIBIT A-1
List of parties to execute lock-up
Directors
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Executive Officers
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Ex ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
OPINION OF ▇▇▇▇▇▇▇▇ CHANCE US LLP
(i) The Company has, as of the date hereof, an authorized capitalization as set forth in the
Prospectus under the caption “Capitalization.” All of the outstanding shares of Common Stock and
preferred stock have been duly authorized and validly issued and are fully paid and non-assessable
and conform, in all material respects, to the description thereof contained in the Registration
Statement, the Disclosure Package and the Prospectus. Except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, or the documents incorporated therein by
reference, to our knowledge, there are no authorized and validly issued (a) securities or
obligations of the Company convertible into, or exchangeable for, shares of Common Stock or (b)
warrants, rights or other convertible or exchangeable securities or obligations of the Company.
Except as set forth in the Registration Statement, the Disclosure Package and the Prospectus, or
the documents incorporated therein by reference or contemplated by, or described in, the
Underwriting Agreement, to our knowledge, there are no outstanding obligations of the Company to
issue any shares of Common Stock, other capital stock or any warrants, rights, options or other
convertible or exchangeable securities.
(ii) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Maryland. The Company has full corporate power and
authority to own its assets and to conduct its business as described in the Registration Statement,
the Disclosure Package and the Prospectus.
(iii) The Company is duly qualified or registered as a foreign corporation to transact
business in each jurisdiction set forth on Schedule 1 to this opinion letter, except where
the failure, individually or in the aggregate, to be so qualified could not be reasonably expected
to have a material adverse effect on the assets, operations or financial condition, taken as a
whole, of the Company (a “Material Adverse Effect”). To our knowledge, other than the Company’s
interests in the Subsidiaries, or as otherwise disclosed in the Disclosure Package, the Prospectus
or the documents incorporated therein by reference, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any other corporation or any ownership
interest in any limited liability company, partnership, joint venture or other association.
(iv) The execution, delivery and performance of the Underwriting Agreement by the Company and
the consummation by the Company of the transactions contemplated thereby do 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 constitute a breach of or default under), (a) the charter or by-laws of
the Company, (b) the agreements set forth on Schedule 2 to this opinion letter, (c) any
agreement filed as Exhibits under Item 10 of Regulation S-K to the Company’s Forms 10-K for the
years ended December 31, 2007 and December 31, 2008 and Forms 10-Q for the quarters ended March 31,
2009 and June 30, 2009 or (d) to our knowledge, any Applicable Law, decree, judgment or order
applicable to the Company (other than state and foreign securities or blue sky laws, as to which we
express no opinion), except in the case of clauses (b), (c) and (d) for such conflicts, breaches or
defaults, which individually or in the aggregate could not be reasonably expected to have a
Material Adverse Effect.
(v) The Company has full corporate power and authority to enter into, and to perform its
obligations under, the Underwriting Agreement and to consummate the transactions
Ex B-1-1
contemplated therein. The execution and delivery of the Underwriting Agreement has been duly
authorized by all necessary corporate action of the Company and the Underwriting Agreement has been
duly executed and delivered by the Company.
(vi) No approval, authorization, consent or order of, or filing with, any federal, state
governmental or regulatory commission, board, body, authority or agency is required under
Applicable Law in connection with the execution, delivery and performance of the Underwriting
Agreement, or the consummation of the transactions contemplated thereby, by the Company, other than
such as have been obtained or made under the Securities Act or the Securities Exchange Act of 1934,
as amended, and such approvals as have been obtained in connection with the listing of the Shares
on the New York Stock Exchange; provided, however, that we do not express any opinion as to any
necessary qualification under the securities or blue sky laws of the various jurisdictions in which
the Shares are being offered by the Underwriters or any approval of the underwriting terms and
arrangements relating to the offering of the Shares by the FINRA.
(vii) The Shares have been duly authorized by the Company for issuance and sale pursuant to
the Underwriting Agreement. The Shares, when issued and delivered by the Company in accordance
with such authorization and pursuant to the Underwriting Agreement against payment of the
consideration specified in the Underwriting Agreement, will be validly issued, fully paid and
nonassessable under the General Corporation Law of the State of Maryland (the “MGCL”) and, except
for any action that may have been taken by the holder thereof, free and clear of any pledge, lien,
encumbrance, security interest or other claim.
(viii) The issuance and sale of the Shares by the Company is not subject to preemptive or
other similar rights arising by operation of the MGCL, under the charter or by-laws of the Company
or under any agreement known to us to which the Company is a party.
(ix) To our knowledge, except as otherwise described in the Registration Statement, the
Disclosure Package, the Prospectus or the documents incorporated therein by reference or the
exhibits filed in connection therewith or the registration right agreement set forth on
Schedule 2 to this opinion letter, there are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the Securities Act.
(x) The form of certificate used to evidence the Shares complies, in all material respects,
with all applicable statutory requirements of the MGCL, the charter and by-laws of the Company and
the rules of the New York Stock Exchange.
(xi) The Registration Statement and the Prospectus (except as to the financial statements,
related schedules, and other financial data derived therefrom, contained in or excluded from the
Registration Statement and the Prospectus, as to which we express no opinion) comply as to form in
all material respects with the requirements of the Securities Act (including, in the case of the
Prospectus, Section 10(a) of the Securities Act); and each of the documents incorporated therein by
reference, at the time such document was filed with the Commission or at the time such document
became effective, as applicable, complied as to form in all material respects with the requirements
of the Exchange Act (except as to the financial statements, related schedules, and other financial
data derived therefrom, contained in or excluded from such document, as to which we express no
opinion).
Ex B-1-2
(xii) The statements under the caption “Description of Common Stock and Preferred Stock” in
the Disclosure Package and the Prospectus, insofar as such statements constitute a summary of the
legal matters referred to therein, constitute accurate summaries thereof in all material respects.
(xiii) To our knowledge, there are no actions, suits or proceedings or inquiries or
investigations, pending or threatened, against the Company or any of its officers and directors or
to which the Company’s assets (excluding the Company’s direct or indirect interests in the
Subsidiaries) are subject, at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority, arbitration panel or agency that are
required to be described in the Registration Statement, the Disclosure Package and the Prospectus
or the documents incorporated therein by reference, but are not so described.
(xiv) The Company is not an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.
In addition, we have participated in the preparation of the Registration Statement, the Disclosure
Package and the Prospectus and in discussions with officers, directors, employees and other
representatives of the Company, with representatives of their independent public accountants, and
with you and your representatives, at which time the contents of the Registration Statement, the
Disclosure Package and the Prospectus and related matters were discussed, and we have reviewed
certain Company records, documents and proceedings. On the basis of the foregoing, nothing has
come to our attention that leads us to believe that (1) each part of the Registration Statement, at
the Effective Time, contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein not misleading, or
that (2)(A) the Disclosure Package, when considered together with the price to the public set forth
in the Prospectus, as of 5:30 P.M., New York City time, on July 29, 2009 (the “Applicable Time”),
or (B) the Prospectus, as of its date and as of the date of this opinion letter, included or
includes an untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading (it being understood that we express no belief with respect to the
financial statements, related schedules and other data derived from such financial statements,
schedules and other financial information included or incorporated by reference therein or excluded
therefrom).
The limitations inherent in the independent verification of factual matters and the character of
determinations involved in the preparation of a disclosure document are such, however, that (other
than with respect to paragraphs (i) and (xii) above) we do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Registration Statement, the
Disclosure Package or the Prospectus or any amendments or supplements to them (including any of the
documents incorporated by reference in them).
We have been informed by the Commission that the Registration Statement is effective under the
Securities Act and, to the best of our knowledge, (i) no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities Act and (ii) no proceedings seeking
the issuance of such a stop order have been initiated or threatened by the Commission.
Ex B-1-3
EXHIBIT B-2
OPINION OF ▇▇▇▇▇▇▇▇ CHANCE US LLP AS TO TAX MATTERS
The statements under the caption “Material U.S. federal income tax considerations” in the
Prospectus, insofar as such statements constitute a summary of the legal matters referred to
therein, constitute accurate summaries thereof in all material respects.
Commencing with its taxable year ended December 31, 1998, the Company was organized in conformity
with the requirements for qualification and taxation as a REIT under the Code and its method of
operation as described in the Registration Statement and as set forth in the Certificate of
Representations has enabled it to meet the requirements for qualification as a REIT under the Code,
and the Company’s proposed method of operation as described in the Registration Statement and the
Certificate of Representations will enable the Company to continue to so qualify. To the extent
that the foregoing opinion refers to any period beginning prior to January 1, 2002, it is based
solely on the Kutak Opinion (which we have relied upon with your express permission).
Ex B-2-1