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EXHIBIT 1.9
CAPSTEAD MORTGAGE CORPORATION
4,500,000 Shares
$1.26 Cumulative Convertible Preferred Stock, Series B
($0.10 par value)
AMENDED AND RESTATED SALES AGENCY AGREEMENT
March 30, 1998
PAINEWEBBER INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Gentlemen:
Capstead Mortgage Corporation, a Maryland corporation (the "Company"),
confirms its agreement with PaineWebber Incorporated (the "Agent"), originally
set forth in a Sales Agency Agreement dated September 17, 1996, which agreement
is hereby amended and restated as follows:
SECTION 1. Description of Securities. The Company proposes to issue and
sell through the Agent, as sales agent, up to 4,500,000 shares (the "Maximum
Amount") of $1.26 Cumulative Convertible Preferred Stock, Series B, par value
$0.10 per share (the "Stock"), on the terms set forth in Section 3 hereof.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Agent that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and the rules and regulations thereunder
("Rules and Regulations"). A registration statement on Form S-3 (Registration
No. 33-62212) with respect to, among other securities, the Stock, including a
form of prospectus, has been prepared by the Company in conformity with the
requirements of the Act and the Rules and Regulations and filed with the
Securities and Exchange Commission (the "Commission") and has become effective.
Such registration statement and prospectus may have been amended or supplemented
prior to the date of this Agreement. Any such amendment or supplement was so
prepared and filed, and any such amendment or supplement filed after the
effective date of such registration statement has become effective. No stop
order suspending the effectiveness of the registration statement has been
issued, and no proceeding for that purpose has been instituted or threatened by
the Commission. Copies of such registration statement and prospectus, any such
amendment or supplement and all documents
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incorporated by reference therein that were filed with the Commission on or
prior to the date of this Agreement have been delivered to the Agent. Such
registration statement, as it may have heretofore been amended, is referred to
herein as the "Registration Statement," and the final form of prospectus
included in the Registration Statement, as amended or supplemented from time to
time, is referred to herein as the "Prospectus." Any reference herein to the
Registration Statement, the Prospectus, or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated (or deemed to
be incorporated) by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement
or Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein.
(b) Each part of the Registration Statement, when such part became or
becomes effective, and the Prospectus and any amendment or supplement thereto,
on each Filing Date (as hereinafter defined), conformed or will conform in all
material respects with the requirements of the Act and the Rules and
Regulations; each part of the Registration Statement, when such part became or
becomes effective, did not or will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and the Prospectus and any
amendment or supplement thereto, on each Filing Date, did not or will not
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; except that the foregoing shall not
apply to statements in or omissions from any such document in reliance upon, and
in conformity with, written information relating to the Agent and furnished to
the Company by or on behalf of the Agent, specifically for use in the
Registration Statement, the Prospectus or any amendment or supplement thereto.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, when they
became or become effective under the Act or were or are filed with the
Commission under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), as the case may be, conformed or will conform in all material respects
with the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder.
(d) The financial statements of the Company and its subsidiaries,
together with the related notes and schedules, set forth or incorporated by
reference in the Registration Statement and Prospectus fairly present the
financial condition and the results of operations and cash flows of the Company
and its subsidiaries as of the dates indicated or for the periods therein
specified and were prepared in conformity with generally accepted
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accounting principles consistently applied throughout the periods involved
(except as otherwise stated therein).
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of its incorporation
with power and authority (corporate and other) to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and Prospectus; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify and be in good standing, considering all such cases in the aggregate,
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(f) Each significant subsidiary (as defined in Section 1-02 of
Regulation S-X) of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement and Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify and
be in good standing would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise; and all of the
issued and outstanding capital stock of each subsidiary has been duly authorized
and validly issued, is fully paid and nonassessable and (except as otherwise
stated in the Registration Statement) is owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. The significant subsidiaries (as defined in
Section 1-02 of Regulation S-X) of the Company are CMC Securities Corporation
III, Capstead Securities Corporation IV and Capstead Inc.
(g) The outstanding shares of capital stock of the Company and the
Stock have been duly authorized and are, or when issued as contemplated hereby
will be, validly issued, fully paid and nonassessable and conform, or when so
issued will conform, to the description thereof in the Prospectus. Upon issuance
and delivery of the Stock as contemplated by this Agreement, the Stock will be
convertible at the option of the holder thereof for shares of common stock, par
value $0.01 per share ("Common Stock"), of the Company in accordance with the
terms of the Articles Supplementary relating to the Stock; the shares of Common
Stock issuable upon conversion of the Stock have been duly
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authorized and reserved for issuance upon such conversion by all necessary
corporate action and such shares, when issued upon such conversion, will be
validly issued and will be fully paid and non-assessable. The shareholders of
the Company have no preemptive rights with respect to the Stock or the shares of
Common Stock issuable upon conversion of the Stock.
(h) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, neither the Company nor any of its subsidiaries has incurred
any liabilities or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are material to the
Company and its subsidiaries considered as a whole, and there has not been any
material change in the capital stock, short-term debt or long-term debt of the
Company and its subsidiaries, or any material change, or any development
involving a prospective material change, in the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(i) Except as set forth in the Prospectus, there is not pending or, to
the knowledge of the Company, threatened any action, suit or proceeding to which
the Company or any of its subsidiaries is a party, before or by any court or
governmental agency or body, that could reasonably be expected to result in any
material adverse change in the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or that could reasonably be expected
to materially and adversely affect the properties or assets thereof considered
as a whole.
(j) There are no contracts or documents of the Company or any of its
subsidiaries that are required to be filed as exhibits to the Registration
Statement or to any of the documents incorporated by reference therein by the
Act or the Exchange Act or by the rules and regulations of the Commission
thereunder that have not been so filed.
(k) All necessary action has been duly and validly taken by the Company
to authorize the execution, delivery and performance of this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(l) The performance of this Agreement and the consummation of the
transactions contemplated herein will not result in a
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breach or violation of any of the terms and provisions of, or constitute a
default under, any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it is bound or to which any of the property
of the Company or any of its subsidiaries is subject except for such breaches or
defaults that would not in the aggregate have a material adverse effect on the
Company's ability to perform its obligations under this Agreement or on the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise, nor
will such action result in the violation of the Company's charter or by-laws, or
any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or any
of its properties; no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the consummation
by the Company of the transactions contemplated by this Agreement, except such
as may be required by state securities or blue sky laws.
(m) Each of the Company and its subsidiaries has (i) good and
indefeasible title to all of the properties and assets described in the
Prospectus as owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
to the business, condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, (ii) peaceful and undisturbed possession under all material
leases to which it is party as lessee, (iii) all governmental or regulatory
licenses, certificates, permits, authorizations, approvals, franchises or other
rights necessary to engage in the business currently conducted by it, except
such as are not material to the business, condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, (iv) no reason to believe that any
governmental body or agency is considering limiting, suspending or revoking any
such license, certificate, permit, authorization, approval, franchise or right
and (v) not received any notice of and has no reason to believe that any
governmental body or agency is considering enacting, amending or repealing any
statute, law, ordinance or regulation required to be described in the
Registration Statement and Prospectus that is not so described as required. All
material leases to which the Company or any of its subsidiaries is a party are
valid and binding and no default has occurred and is continuing thereunder, and,
to the best knowledge of the Company, no material defaults by the landlord are
existing under any such leases.
(n) Each of the Company and its subsidiaries owns or possesses all of
the patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks
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and trade names presently employed by them in connection with the business now
operated by them, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, if singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(o) The Company and its subsidiaries have not violated and are in
compliance in all material respects with all material laws, statutes,
ordinances, regulations, rules and orders of any foreign, federal, state or
local government and any other governmental department or agency, and any
judgment, decision, decree or order of any court or governmental agency,
department or authority, including, without limitation, environmental laws.
Neither the Company nor any of its subsidiaries has received any notice to the
effect that, or otherwise been advised that, it is not in compliance with any
such statutes, regulations, rules, judgments, decrees, orders, ordinances or
other laws, and the Company is not aware of any existing circumstances which are
likely to result in material violations of any of the foregoing.
(p) The Company and its qualified real estate investment trust
subsidiaries are organized in conformity with the requirements for qualification
as, and operate in a manner that qualifies them as, a real estate investment
trust under the Internal Revenue Code of 1986, as amended (the "Code"), and the
rules and regulations thereunder and will be so qualified after consummation of
the transactions contemplated by this Agreement.
SECTION 3. Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
through the Agent, as non-exclusive sales agent, and the Agent agrees to sell,
as sales agent for the Company, on a reasonable efforts basis, up to the Maximum
Amount of Stock on the terms set forth herein.
The Stock, up to the Maximum Amount, is to be sold on a daily basis or
otherwise as shall be agreed to by the Company and the Agent. The Company will
designate the maximum amount of Stock to be sold by the Agent daily as
reasonably agreed to by the Agent and in any event not in excess of the amount
available for issuance under the currently effective Registration Statement.
Subject to the terms and conditions hereof, the Agent shall use its reasonable
efforts to sell all of the designated Stock up to the Maximum Amount.
Notwithstanding the foregoing the Company may instruct the Agent by
telephone (confirmed promptly by telecopy) not to sell Stock if such sales
cannot be effected at or above the price
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designated by the Company in any such instruction; furthermore, the Company
shall not authorize the issuance and sale of, and the Agent shall not be
obligated to use its reasonable efforts to sell, any Stock at a price lower than
the minimum price therefor designated from time to time by the Company's Board
of Directors and notified to the Agent in writing. In addition, the Company or
the Agent may, upon notice to the other party hereto by telephone (confirmed
promptly by telecopy), suspend the offering of the Stock; provided, however,
that such suspension or termination shall not affect or impair the parties'
respective obligations with respect to the Stock sold hereunder prior to the
giving of such notice.
If either party has reason to believe that the exemptive provisions set
forth in Rule 101(c)(1) of Regulation M under the Securities Exchange Act of
1934 (the "Exchange Act"), are not satisfied with respect to the Stock, the
amount of Stock that may be sold on any day pursuant to this Agreement and any
other sales agency agreement shall not exceed 10% of the average daily trading
volume of the Stock for the sixty days prior to such day (provided, that any
Stock purchased by the Agent as principal during such period shall not be
included in the calculation of trading volume). Unless otherwise agreed by the
Company and the Agent, the Agent shall sell the Stock only by means of ordinary
brokers' transactions on the New York Stock Exchange (the "NYSE"). Unless
otherwise agreed to by the Company and the Agent, the Agent shall not solicit or
arrange for the solicitation of customer's orders in anticipation of or in
connection with such transactions, nor shall it sell short as principal shares
of Stock of the Company, except in connection with customary market making
activities in the Company's outstanding securities. The Agent shall not engage
in any special selling efforts or selling methods relating to the Stock within
the meaning of Rule 100 of Regulation M under the Exchange Act. The Agent shall
calculate on a weekly basis the average daily trading volume of the Stock.
The compensation to the Agent for sales of Stock shall be 1.375% of the
gross sales price of the Stock sold, in the form of a commission. The remaining
proceeds, after further deduction for any transaction fees imposed by any
governmental or self-regulatory organization in respect of such sales, shall
constitute the net proceeds to the Company for such Stock (the "Net Proceeds").
The Agent shall provide written confirmation to the Company following
the close of trading on the NYSE each day in which Stock is sold under this
Agreement setting forth the amount of Stock sold on such day, the Net Proceeds
to the Company, and the compensation payable by the Company to the Agent with
respect to such sales.
Settlement for sales of Stock will occur on the third business day
following the date on which such sales are made
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(each such day, a "Settlement Date"). On each Settlement Date, the Stock sold
through the Agent for settlement on such date shall be delivered by the Company
to the Agent against payment of the Net Proceeds for the sale of such Stock.
Settlement for all Stock shall be effected by free delivery of Stock to the
Agent's account at The Depository Trust Corporation in return for payments in
same day funds delivered to the account designated by the Company. If the
Company shall default on its obligation to deliver Stock on any Settlement Date,
the Company shall (i) hold the Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii) pay the
Agent any commission to which it would otherwise be entitled absent such
default. If the Agent breaches this Agreement by failing to deliver proceeds on
any Settlement Date for Stock delivered by the Company, the Agent will pay the
Company interest based on the effective overnight Federal Funds rate.
At each Settlement Date, the Company shall be deemed to have affirmed
each representation, warranty, covenant and other agreement contained in this
Agreement, and on each Filing Date (as defined below), the Company shall affirm
in writing each representation, warranty, covenant and other agreement contained
in this Agreement. The Company covenants and agrees with the Agent that on or
prior to the second business day after the end of each calendar week during
which sales of Stock were made by the Agent (each such week a "Reporting
Period"), the Company will (i) file a prospectus supplement with the Commission
under the applicable paragraph of Rule 424(b) (each a "Filing Date"), which
prospectus supplement will set forth, with regard to such Reporting Period, the
dates included within the Reporting Period, the amount of Stock sold through the
Agent, the Net Proceeds to the Company and the compensation payable by the
Company to the Agent with respect to sales of Stock pursuant to this Agreement
(all as provided in writing by the Agent for inclusion in each such prospectus
supplement) and (ii) deliver such number of copies of each such prospectus
supplement to the New York Stock Exchange as are required by such Exchange. Any
obligation of the Agent to use its best efforts to sell the Stock shall be
subject to the continuing accuracy of the representations and warranties of the
Company herein, to the performance by the Company of its obligations hereunder
and to the continuing satisfaction of the additional conditions specified in
Section 5 of this Agreement."
SECTION 4. Covenants of the Company. The Company covenants and agrees
with the Agent that:
(a) During the period in which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will notify the Agent
promptly of the time when any subsequent amendment to the Registration Statement
has become effective or any subsequent supplement to the Prospectus has been
filed and of any request by the Commission for any amendment or supplement to
the Registration Statement or Prospectus or for additional information; it will
prepare and file with the Commission,
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promptly upon the Agent's request, any amendments or supplements to the
Registration Statement or Prospectus that, in the Agent's reasonable opinion,
may be necessary or advisable in connection with the distribution of the Stock
by the Agent; the Company will not file any amendment or supplement to the
Registration Statement or Prospectus (other than any prospectus supplement
relating to the offering of other securities registered under the Registration
Statement) unless a copy thereof has been submitted to the Agent a reasonable
period of time before the filing and the Agent has not reasonably objected
thereto; and it will furnish to the Agent at the time of filing thereof a copy
of any document that upon filing is deemed to be incorporated by reference in
the Registration Statement or Prospectus; and the Company will cause each
amendment or supplement to the Prospectus to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations or, in the case of any document to be incorporated therein by
reference, to be filed with the Commission as required pursuant to the Exchange
Act, within the time period prescribed.
(b) The Company will advise the Agent, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Stock for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its best efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such a stop order should be
issued.
(c) Within the time during which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will comply as far as it is
able with all requirements imposed upon it by the Act and by the Rules and
Regulations, as from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Stock as contemplated by the
provisions hereof and the Prospectus. If during such period any event occurs as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the Act, the
Company will promptly notify the Agent to suspend the offering of Stock during
such period and the Company will amend or supplement the Registration Statement
or Prospectus (at the expense of the Company, unless the misstatements or
omissions in question were made solely in reliance on written information
furnished to the Company by the Agent expressly for use in the Registration
Statement or Prospectus in which case such amendment or supplement shall be at
the expense of the Agent) so as to correct such statement or omission or effect
such compliance.
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(d) The Company will use its best efforts to qualify the Stock and the
shares of Common Stock issuable upon conversion of Stock for sale under the
securities laws of such jurisdictions as the Agent designates and to continue
such qualifications in effect so long as required for the distribution of the
Stock, except that the Company shall not be required in connection therewith to
qualify as a foreign corporation or to execute a general consent to service of
process in any jurisdiction.
(e) The Company will furnish to the Agent and its counsel (at the
expense of the Company) copies of the Registration Statement, the Prospectus
(including all documents incorporated by reference therein) and all amendments
and supplements to the Registration Statement or Prospectus that are filed with
the Commission during the period in which a prospectus relating to the Stock is
required to be delivered under the Act (including all documents filed with the
Commission during such period that are deemed to be incorporated by reference
therein), in each case as soon as available and in such quantities as the Agent
may from time to time reasonably request and will also furnish copies of the
Prospectus to the NYSE in accordance with Rule 153 of the Rules and Regulations.
(f) The Company will make generally available to its security holders
as soon as practicable, 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 that satisfies the provisions of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.
(g) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all of its expenses
incident to the performance of its obligations hereunder (including, but not
limited to, any transaction fees imposed by any governmental or self-regulatory
organization with respect to transactions contemplated by this Agreement and any
blue sky fees) and will pay the expenses of printing all documents relating to
the offering. The Agent will pay its own out-of-pocket costs and expenses
incurred in connection with the entering into of this Agreement and the
transactions contemplated by this Agreement, including, without limitation,
travel, reproduction, printing and similar expenses; provided, however, that the
Company will promptly, upon the request of the Agent, reimburse the Agent for
the reasonable fees and disbursements of the Agent's legal counsel incurred in
connection with the establishment of the structured equity shelf program
established by this Agreement.
(h) The Company will apply the net proceeds from the sale of the Stock
as set forth in the Prospectus.
(i) The Company will not, directly or indirectly, offer or sell any
shares of Common Stock (other than (i) the shares of
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Common Stock issuable upon conversion of the Stock, or (ii) the shares of Common
Stock offered by the Agent under the Company's structured equity shelf programs
relating to the Common Stock that commenced on December 6, 1995 and November 19,
1997) or securities convertible into (other than the Stock) or exchangeable for,
or any rights to purchase or acquire, Common Stock during the period from the
date of this Agreement through the final Filing Date for the sale of Stock
hereunder without (a) giving the Agent at least three business days' prior
written notice specifying the nature of the proposed sale and the date of such
proposed sale and (b) suspending activity under this program for such period of
time as may reasonably be determined by agreement of the Company and the Agent;
provided, however, that no such notice and suspension shall be required in
connection with the Company's issuance or sale of (i) shares of Stock or Common
Stock pursuant to any employee or director stock option or benefits plan, stock
ownership plan, dividend reinvestment plan or Stockholder Investment Program of
the Company now in effect as such plans may be amended from time to time, and
(ii) Common Stock issuable upon conversion of securities or the exercise of
warrants, options or other rights in effect or outstanding on the date hereof.
(j) The Company will, at any time during the term of this Agreement, as
supplemented from time to time, advise the Agent immediately after it shall have
received notice or obtain knowledge thereof, of any information or fact that
would alter or affect any opinion, certificate, letter and other document
provided to the Agent pursuant to Section 5 herein.
(k) Each time that (i) the Registration Statement or the Prospectus
shall be amended or supplemented (other than a supplement filed pursuant to Rule
424(b) under the Act that contains solely the information set forth in the final
paragraph of Section 3 of this Agreement) or (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus (other
than any Quarterly Report on Form 10-Q or a Current Report on Form 8-K, unless
the Agent shall otherwise reasonably request), the Company shall furnish or
cause to be furnished to the Agent forthwith a certificate dated the date of
filing with the Commission of such amendment, supplement or other document, the
date of effectiveness of amendment, as the case may be, in form satisfactory to
the Agent to the effect that the statements contained in the certificate
referred to in Section 5(f) hereof which were last furnished to the Agent are
true and correct at the time of such amendment, supplement, filing, as the case
may be, as though made at and as of such time (except that such statements shall
be deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to such time) or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in said Section 5(f), modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such certificate.
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(l) Each time that (i) the Registration Statement or the Prospectus is
amended or supplemented (other than a supplement filed pursuant to Rule 424(b)
under the Act that contains solely the information set forth in the final
paragraph of Section 3 of this Agreement) or (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus (other
than any Quarterly Report on Form 10-Q or a Current Report on Form 8-K, unless
the Agent shall otherwise reasonably request), the Company shall furnish or
cause to be furnished forthwith to the Agent and to counsel to the Agent (1) a
written opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel to the Company ("Company
Counsel"), or other counsel satisfactory to the Agent, dated the date of filing
with the Commission of such amendment, supplement or other document and the date
of effectiveness of such amendment, as the case may be, in form and substance
satisfactory to the Agent, of the same tenor as the opinion referred to in
Section 5(d) hereof, but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion and (2) a written opinion of Piper & Marbury L.L.P., Maryland
counsel to the Company ("Maryland Counsel"), or other counsel satisfactory to
the Agent, dated the date of filing with the Commission of such amendment,
supplement or other document and the date of effectiveness of such amendment, as
the case may be, in form and substance satisfactory to the Agent, of the same
tenor as the opinion referred to in Section 5(g) hereof, but modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such opinion.
(m) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented to include additional amended financial information
or there is filed with the Commission any document incorporated by reference
into the Prospectus which contains additional amended financial information, the
Company shall cause Ernst & Young LLP, or other independent accountants
satisfactory to the Agent, forthwith to furnish the Agent a letter, dated the
date of effectiveness of such amendment, or the date of filing of such
supplement or other document with the Commission, as the case may be, in form
satisfactory to the Agent, of the same tenor as the letter referred to in
Section 5(e) hereof but modified to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.
(n) The Company hereby consents to the Agent trading in the Company's
Series B Preferred Stock and the Common Stock for its own account on the same
side of the market and at the same time as the Company's sales pursuant to this
Agreement.
SECTION 5. Conditions of Agent's Obligations. The obligations of the
Agent to sell the Stock as provided herein shall be subject to the accuracy, as
of the date hereof, and as
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of each Settlement Date, of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or the Agent, threatened by
the Commission, and any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the Agent's satisfaction.
(b) The Agent shall not have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact that in the Agent's reasonable opinion is material, or
omits to state a fact that in the Agent's reasonable opinion is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there shall not have been any material change, on a
consolidated basis, in the capital stock of the Company and its subsidiaries, or
any material adverse change, or any development that may reasonably be expected
to cause a material adverse change, in the condition (financial or other),
business, prospects, net worth or results of operations of the Company and its
subsidiaries, or any change in the rating assigned to any securities of the
Company.
(d) The Agent shall have received at every date specified in Section
4(l) hereof, opinions of Company Counsel, dated as of such date, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, has full corporate power and authority
to conduct its business as described in the Registration Statement and
Prospectus and is duly qualified to do business in each jurisdiction
set forth on a schedule thereto; to their knowledge, such jurisdictions
are the only jurisdictions in which the Company's ownership or leasing
of real property or conduct of its business requires such
qualification;
(ii) Each subsidiary of the Company has been duly incorporated
(or formed, in the case of a partnership) and has corporate (or
partnership) power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and Prospectus; each of Capstead Inc. and the Company's other
"significant subsidiaries" (as such term is defined in Rule 1-02 of
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Regulation S-X under the Act) is validly existing as a corporation (or
partnership, as the case may be) in good standing under the laws of the
jurisdiction of its incorporation; and all of the issued outstanding
capital stock (or other equity interests) of each subsidiary of the
Company has been duly authorized and validly issued, is fully paid and
nonassessable (except for the general partner interests in CMC
Investment Partnership, which are assessable in accordance with its
partnership agreement and applicable law), and, except for (A) a 1%
general partner interest in CMC Investment Partnership held by Capstead
Holdings, Inc. and (B) shares of Capstead Holdings, Inc. which are
owned by parties other than the Company (which will be set forth in a
schedule to the opinion), is owned by the Company, directly or
indirectly, free and clear of any mortgage, pledge, lien, encumbrance,
claim or equity;
(iii) The shares of Stock have been duly and validly
authorized, and, when issued and delivered to and paid for by the
purchasers thereof pursuant to this Agreement, will be fully paid and
nonassessable and conform to the description thereof in the Prospectus;
upon issuance and delivery of the Stock as contemplated by the Sales
Agency Agreement, the Stock will be convertible at the option of the
holder thereof for shares of Common Stock in accordance with the terms
of the Article Supplementary governing the Stock; the shares of Common
Stock issuable upon conversion of the Stock have been duly authorized
and reserved for issuance upon such conversion by all necessary
corporate action; such shares, when issued upon such conversion, will
be validly issued and will be fully paid and non-assessable; and the
shareholders of the Company have no preemptive rights with respect to
the Stock or the shares of Common Stock issuable upon conversion of the
Stock; all corporate action required to be taken for the authorization,
issue and sale of the Stock has been validly and sufficiently taken;
and the shares of Stock are the subject of an effective registration
statement permitting their sale in the manner contemplated by this
Agreement;
(iv) The Registration Statement has become effective under the
Act; to the knowledge of such counsel no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or threatened by the
Commission;
(v) The Registration Statement, when it became effective, and
the Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission (and at each Filing Date on or prior
to the date of the opinion), complied as to form in all material
respects with the requirements of the Act and the Rules and
Regulations; and the documents incorporated by reference in the
Registration Statement or Prospectus or any amendment or
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supplement thereto, when filed with the Commission under the Exchange
Act, complied as to form in all material respects with the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder;
(vi) The description in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents are accurate in all material respects and fairly
present the information required to be shown; and such counsel do not
know of any statutes or legal or governmental proceedings required to
be described in the Prospectus that are not described as required, or
of any contracts or documents of a character required to be described
in the Registration Statement or Prospectus (or required to be filed
under the Exchange Act if upon such filing they would be incorporated
by reference therein) or to be filed as exhibits to the Registration
Statement that are not described and filed as required;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
(viii) The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated herein by the Company do not and will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a party or
by which it is bound or to which any of the property of the Company or
any of its subsidiaries is subject except for such breaches or defaults
that would not in the aggregate have a material adverse effect on the
Company's ability to perform its obligations under this Agreement or on
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, nor will such action result in the
violation of the Company's charter or by-laws, or any statute or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of its properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance or sale
of the Stock by the Company, except such as have been obtained under
the Act and such as may be required under state securities or blue sky
laws in connection with the sale and distribution of the Stock by the
Agent;
(ix) Except for permits and similar authorizations required
under the securities or blue sky laws of certain
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states, no consent, waiver, approval, authorization or other order of
any regulatory body, administrative agency or other governmental body
is legally required for the sale of the Stock by the Agent and the
issuance of shares of Common Stock upon conversion of Stock as
contemplated hereby and by the Prospectus;
(x) Such counsel knows of no actions, suits or proceedings
pending or threatened against or affecting the Company or any of its
subsidiaries or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company or any
of its subsidiaries, or any of their respective officers in their
capacities as such, before or by any Federal or state or foreign court,
commission, regulatory body, wherein an unfavorable ruling, decision or
finding might materially and adversely affect the Company or any of its
subsidiaries or its business, properties, business prospects, condition
(financial or otherwise) or results of operations; and
(xi) For all taxable years beginning September 5, 1985 (the
date of the Company's initial public offering of Common Stock) and
ending December 31, 1995, Capstead REIT (as defined below) has met the
requirements for qualification as a REIT under the Code. Capstead REIT
will be able to qualify as a REIT for the taxable year beginning
January 1, 1996, provided that after the date hereof, ▇▇▇▇▇▇▇▇ REIT
continues to be organized and operated as described in the Registration
Statement and according to representations made to us in a certificate
of an officer of the Company and therefore continues to satisfy the
income tests, and distribution, shareholder, recordkeeping and other
applicable REIT requirements under the Code. "Capstead REIT" means the
Company, as aggregated with such wholly-owned subsidiaries as were in
existence during the period for which reference is made. The
information presented in the Registration Statement under the caption
"Taxation," to the extent it constitutes matters of law or legal
conclusions, is accurate in all material respects.
In addition, such counsel shall state that such counsel has no reason
to believe that either the Registration Statement, at the time it (including
each Post-Effective Amendment thereto) became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus and any amendments or supplements thereto, on the date of
filing thereof with the Commission and at each Filing Date on or prior to the
date of the opinion, included an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; it being
understood that such counsel need express no opinion as to the financial
statements or other
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financial and statistical data included in any of the documents mentioned in
this paragraph.
(e) At the dates specified in Section 4(m) hereof, the Agent shall have
received a letter from ▇▇▇▇▇ & Young LLP, independent public accountants for the
Company, or other independent accountants satisfactory to the Agent, dated the
date of delivery thereof, substantially in the form attached hereto as Annex I
and otherwise in form and substance satisfactory to Agent.
(f) The Agent shall have received from the Company a certificate, or
certificates, signed by the Chairman of the Board, the President or a Vice
President and by the principal financial or accounting officer of the Company,
dated as of the next business day following each Filing Date (each, a
"Certificate Date"), to the effect that, to the best of their knowledge based
upon reasonable investigation:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the Certificate
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to each such Certificate Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or, to the knowledge of such officer after
due inquiry, is threatened, by the Commission;
(iii) Since the date of this Agreement there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not been so set forth and
there has been no document required to be filed under the Exchange Act
and the rules and regulations of the Commission thereunder that upon
such filing would be deemed to be incorporated by reference in the
Prospectus that has not been so filed; and
(iv) Since the date of this Agreement, there has not been any
material adverse change, on a consolidated basis, in the business,
financial condition or results of operations of the Company and its
subsidiaries considered as one enterprise which has not been described
in an amendment or supplement to the Registration Statement or
Prospectus (directly or by incorporation).
In addition, on each Certificate Date the certificate shall also state
that the shares of Stock to be sold on that date have been duly and validly
authorized by the Company and that all corporate action required to be taken for
the authorization,
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issuance and sale of the Stock on that date has been validly and sufficiently
taken.
(g) The Agent shall have received at every date specified in Section
4(l) hereof, opinions of Maryland Counsel, dated as of such date, in form and
substance satisfactory to the Agent.
(h) On each Filing Date, the Company shall have furnished to the Agent
such appropriate further information, certificates and documents as the Agent
may reasonably request.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Agent. The Company will furnish the Agent with such conformed
copies of such opinions, certificates, letters and other documents as the Agent
shall reasonably request.
SECTION 6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Agent and
each person, if any, who controls the Agent within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the reasonable fees and
disbursements of counsel chosen by the Agent), reasonably incurred in
investigating, preparing or
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defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Agent expressly for use in the Registration Statement (or any amendment thereto)
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) The Agent agrees to indemnify and hold harmless the Company and its
directors and each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendments thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by the Agent
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Any indemnified party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section 6 and (ii) any
liability that it may have to any indemnified party under the foregoing
provision of this Section 6 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly
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with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Agent, the Company
and the Agent will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Agent, such as persons who
control the Company within the meaning of the Act, officers of the Company who
signed the Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company and any one or more of the
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Agent may be subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and the Agent on the
other. The relative benefits received by the Company on the one hand and the
Agent on the other hand shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company bear to the total compensation (before deducting expenses) received by
the Agent from the sale of Stock on behalf of the Company. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Agent, on the other, with respect to the statements or omission which
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Agent, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Agent agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 6(d)
shall be deemed to include, for the purpose of this Section 6(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
foregoing provisions of this Section 6(d), the Agent shall not be required to
contribute any amount in excess of the amount by which the total actual sales
price at which Stock sold by the Agent exceeds the amount of any damages that
the Agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or
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parties from whom contribution may be sought, but the omission so to notify
will not relieve that party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 6(d). No party will
be liable for contribution with respect to any action or claim settled without
its written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution provided by this Section 6 shall not
relieve the Company and the Agent from any liability the Company and the Agent
may otherwise have (including, without limitation, any liability the Agent may
have for a breach of its obligations under Section 3 hereof).
SECTION 7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Agent
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Agent or any
controlling persons, or the Company (or any of their officers, directors or
controlling persons), and shall survive delivery of and payment for the Stock.
SECTION 8. Termination.
(a) The Agent shall have the right by giving notice as hereinafter
specified in Section 9 at any time at or prior to any Filing Date, to terminate
this Agreement if (i) any material adverse change, or any development that has
actually occurred and that is reasonably expected to cause material adverse
change, in the business, financial condition or results of operations of the
Company and its subsidiaries has occurred which, in the judgment of such Agent,
materially impairs the investment quality of the Stock, (ii) the Company shall
have failed, refused or been unable, at or prior to the Filing Date, to perform
any agreement on its part to be performed hereunder, (iii) any other condition
of the Agent's obligations hereunder is not fulfilled, (iv) any suspension or
limitation of trading in the Stock on the NYSE, or any setting of minimum prices
for trading of the Stock on such exchange, shall have occurred, (v) any banking
moratorium shall have been declared by Federal or New York authorities or (vi)
an outbreak or material escalation of major hostilities in which the United
States is involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Agreement that, in the
judgment of the Agent, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Stock to be sold by the Agent on
behalf of the Company. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 4(g), Section 6
and Section 7 hereof shall remain in full force and effect notwithstanding such
termination. If the Agent elects to terminate this Agreement as
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provided in this Section, the Agent shall provide the required notice as
specified herein.
(b) The Company shall have the right, by giving thirty (30) days prior
written notice as hereinafter specified in Section 9, to terminate this
Agreement in its sole discretion at any time. Any such termination shall be
without liability of any party to any other party except that the provisions of
Section 4(g), Section 6 and Section 7 hereof shall remain in full force and
effect notwithstanding such termination.
(c) The Agent shall have the right, by giving thirty (30) days prior
written notice as hereinafter specified in Section 9, to terminate this
Agreement in its sole discretion at any time. Any such termination shall be
without liability of any party to any other party except that the provisions of
Section 4(g), Section 6 and Section 7 hereof shall remain in full force and
effect notwithstanding such termination.
(d) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 8(a), (b) or (c) above or otherwise by mutual
agreement of the parties; provided that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 4(g), Section 6 and Section
7 shall remain in full force and effect.
(e) Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Agent or the Company, as the case may be. If such termination
shall occur prior to the Settlement Date for any sale of Stock, such sale shall
settle in accordance with the provisions of the second-to-last paragraph of
Section 3 hereof.
SECTION 9. Notices. All notices or communications hereunder shall be in
writing and if sent to the Agent shall be mailed, delivered, telexed or
telecopied and confirmed to the Agent at PaineWebber Incorporated, ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇, c/o
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or if sent to the Company, shall be mailed, delivered,
telexed or telecopied and confirmed to the Company at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇. Each party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for
such purpose.
SECTION 10. Parties. This Agreement shall inure to the benefit of and
be binding upon the Company and the Agent and their respective successors and
the controlling persons, officers and directors referred to in Section 6 hereof,
and no other person will have any right or obligation hereunder.
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SECTION 11. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all other prior and contemporaneous agreements and
undertakings, both written and oral, among the parties hereto with regard to the
subject matter hereof.
SECTION 12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth the understanding between the
Company and the Agent, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and the Agent. Alternatively, the execution of this Agreement by the
Company and its acceptance by or on behalf of the Agent may be evidenced by an
exchange of telegraphic or other written communications.
Very truly yours,
CAPSTEAD MORTGAGE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: Senior Vice President and Treasurer
------------------------------------
ACCEPTED as of the date
first above written
PAINEWEBBER INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Title: Vice President
-----------------------------
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