U.S.$220,000,000 4.00% Convertible
Senior Notes Due 2014 *
J.P. Morgan
Securities Inc.
Citigroup Global Markets Inc.
Wells Fargo Securities, LLC
As Representatives of the Initial Purchasers
J.P. Morgan
Securities Inc.
383 Madison Avenue
New York, New York 10179
Citigroup
Global Markets Inc.
388 Greenwich Street
New York, New York 10013
PHH Corporation, a
corporation organized under the laws of Maryland (the
“Company”), proposes to issue and sell to the several
parties named in Schedule I hereto (the “Initial
Purchasers”), for whom you (the
“Representatives”) are acting as representatives, U.S.
$220,000,000 principal amount of its 4.00% Convertible Senior Notes
due 2014 (the “Firm Securities”). The Company also
proposes to grant to the Initial Purchasers an option to purchase
up to U.S.$30,000,000 additional principal amount of such Senior
Notes to cover over-allotments, if any (the “Option
Securities” and, together with the Firm Securities, the
“Securities”). The Securities are convertible into
shares of Common Stock, par value U.S.$0.01 per share (the
“Common Stock”), of the Company at the conversion price
set forth herein. The Securities are to be issued under an
indenture (the “Indenture”), to be dated as of the
Closing Date, between the Company and The Bank of New York Mellon,
as trustee (the “Trustee”). To the extent there are no
additional parties listed on Schedule I other than you, the
term Representatives as used herein shall mean you as the Initial
Purchasers, and the terms Representatives and Initial Purchasers
shall mean either the singular or plural as the context
|
|
|
*
|
Plus an option
to purchase up to U.S.$30,000,000 additional principal amount from
the Company to cover over-allotments.
|
requires. The
use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used herein are
defined in Section 24 hereof.
The sale of the
Securities to the Initial Purchasers will be made without
registration of the Securities or the Common Stock issuable upon
conversion thereof under the Act in reliance upon exemptions from
the registration requirements of the Act.
In connection with
the sale of the Securities, the Company has prepared a preliminary
offering memorandum, dated September 23, 2009 (as amended or
supplemented through the date hereof, including any and all
exhibits thereto and any information incorporated by reference
therein, the “Preliminary Memorandum”), and a final
offering memorandum, to be dated September 23, 2009 (as
amended or supplemented through the Execution Time, including any
and all exhibits thereto and any information incorporated by
reference therein, the “Final Memorandum”). Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain
information concerning the Company, the Securities and the Common
Stock issuable upon conversion thereof. The Company hereby confirms
that it has authorized the use of the Disclosure Package, the
Preliminary Memorandum and the Final Memorandum, and any amendment
or supplement thereto, in connection with the offer and sale of the
Securities by the Initial Purchasers. Unless stated to the
contrary, any references herein to the terms “amend”,
“amendment” or “supplement” with respect to
the Final Memorandum shall be deemed to refer to and include any
information filed under the Exchange Act subsequent to the
Execution Time that is incorporated by reference
therein.
1.
Representations and Warranties . The Company represents and
warrants to, and agrees with, each Initial Purchaser as set forth
below in this Section 1.
(a) The
Preliminary Memorandum, at the date thereof, did not contain any
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. At the
Execution Time, on the Closing Date and on any settlement date, the
Final Memorandum did not and will not (and any amendment or
supplement thereto, at the date thereof, at the Closing Date and on
any settlement date, will not) contain any untrue statement of a
material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; provided ,
however , that the Company makes no representation or
warranty as to the information contained in or omitted from the
Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of
the Initial Purchasers through the Representatives specifically for
inclusion therein, it being understood and agreed that the only
such information furnished by or on behalf of any Initial Purchaser
consists of the information described as such in Section 8(b)
hereof.
(b) (i) The
Disclosure Package, and (ii) each electronic road show when
taken together as a whole with the Disclosure Package, as of the
Execution Time, does not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does
not apply to statements in or omissions from the Disclosure Package
based upon and in conformity with written information furnished to
the
2
Company by any
Initial Purchaser through the Representatives specifically for use
therein, it being understood and agreed that the only such
information furnished by or on behalf of any Initial Purchaser
consists of the information described as such in Section 8(b)
hereof.
(c) None of
the Company, its Affiliates, or any person acting on its or their
behalf has directly or indirectly, made offers or sales of any
security, or solicited offers to buy, any security under
circumstances that would require the registration of the Securities
or the Common Stock issuable upon conversion thereof under the
Act.
(d) None of
the Company, its Affiliates, or any person acting on its or their
behalf has: (i) engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities or
(ii) engaged in any directed selling efforts (within the
meaning of Regulation S) with respect to the Securities or the
Common Stock issuable upon conversion thereof.
(e) The
Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.
(f) Intentionally
omitted.
(g) Assuming
the accuracy of the representations and warranties of the Initial
Purchasers contained in Section 4 and their compliance with
their agreements set forth herein, no registration under the Act of
the Securities or the Common Stock issuable upon conversion thereof
is required for the offer and sale of the Securities to or by the
Initial Purchasers in the manner contemplated herein, in the
Disclosure Package and the Final Memorandum.
(h) The
Company is not, and after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as
described in the Disclosure Package and the Final Memorandum will
not be, an “investment company” as defined in the
Investment Company Act.
(i) The
Company is subject to and in compliance in all material respects
with the reporting requirements of Section 13 or Section 15(d)
of the Exchange Act.
(j) The
Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any of the
Securities (except as contemplated in this Agreement).
(k) The
Company has not taken, directly or indirectly, any action designed
to or that has constituted or that might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the
Securities.
(l) Each of
the Company and its significant subsidiaries (as listed in Annex A
hereto) has been duly incorporated and is validly existing as a
corporation or other entity in good standing under the laws of the
jurisdiction in which it is incorporated or formed with full
corporate or other power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business as
described in the Disclosure Package and the Final
3
Memorandum, and
is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction that requires
such qualification, except for such jurisdictions where the failure
to so qualify or to be in good standing would not result in a
Material Adverse Effect (as defined below in
Section 1(t)).
(m) All the
outstanding shares of capital stock or other equity or ownership
interests of each significant subsidiary have been duly authorized
and validly issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Disclosure Package and the
Final Memorandum (exclusive of any amendment or supplement thereto)
and except for the equity or ownership interests of the
Company’s significant subsidiaries with Securitization
Indebtedness (as defined in the Preliminary Memorandum and Final
Memorandum), all outstanding shares of capital stock or other
equity or ownership interests of the significant subsidiaries that
are owned by the Company either directly or through a subsidiary
controlled by the Company are free and clear of any security
interest, claim, lien or encumbrance.
(n) The
Company’s authorized capital stock is as set forth in the
Disclosure Package and the Final Memorandum as of the dates set
forth therein; the capital stock of the Company conforms in all
material respects to the description thereof contained in the
Disclosure Package and the Final Memorandum; the outstanding shares
of Common Stock have been duly authorized and validly issued and
are fully paid and nonassessable; the shares of Common Stock
initially issuable upon conversion of the Securities have been duly
authorized and, when issued upon conversion of the Securities, will
be validly issued, fully paid and nonassessable; the Board of
Directors of the Company has duly and validly adopted resolutions
reserving such shares of Common Stock for issuance upon conversion
of the Securities; the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive or other rights
to subscribe for the Securities or the shares of Common Stock
issuable upon conversion thereof; and, except as set forth in the
Disclosure Package and the Final Memorandum (exclusive of any
amendment or supplement thereto), no options, warrants or other
rights to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the
Company are outstanding other than for subsequent issuances, if
any, pursuant to employee benefit plans described in the Disclosure
Package and the Final Memorandum or upon exercise of outstanding
options described in the Disclosure Package and the Final
Memorandum.
(o) Intentionally
omitted.
(p) This
Agreement has been duly authorized, executed and delivered by the
Company; the Indenture has been duly authorized and, assuming due
authorization, execution and delivery thereof by the Trustee, when
executed and delivered by the Company, will constitute a legal,
valid, binding instrument enforceable against the Company in
accordance with its terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors’ rights generally from time to time in effect and
to general principles of equity); the Securities have been duly
authorized, and, when executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by
the Initial Purchasers as provided herein, will have been duly
executed and delivered by the Company and will constitute the
legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture (subject, as to enforcement, to
applicable bankruptcy, reorganization, insolvency,
4
moratorium or
other laws affecting creditors’ rights generally from time to
time in effect and to general principles of equity) and will be
convertible into Common Stock in accordance with their
terms;
(q) No
consent, approval, authorization, filing with or order of any court
or governmental agency or body is required in connection with the
transactions contemplated herein or in the Indenture, except
(i) such as may be required under the Act, the Trust Indenture
Act and the rules and regulations promulgated thereunder and
(ii) such as have been obtained or made by the Company and are
in full force and effect under the Act, applicable state securities
or blue sky laws and from FINRA.
(r) None of
the execution and delivery of the Indenture or this Agreement, the
issuance and sale of the Securities or the issuance of the Common
Stock upon conversion thereof, or the consummation of any other of
the transactions herein or therein contemplated, or the fulfillment
of the terms hereof or thereof will conflict with, result in a
breach or violation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, (i) the charter or by-laws or
comparable constituting documents of the Company or any of its
subsidiaries; (ii) the terms of any material indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other material agreement, obligation, condition,
covenant or instrument to which the Company or any of its
subsidiaries is a party or bound or to which its or their property
is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
subsidiaries or any of its or their properties except in the case
of this clause (iii) for any such default or violation that
would not, individually or in the aggregate, have a Material
Adverse Effect or a material adverse effect upon the consummation
of the transactions contemplated hereby.
(s) The
consolidated historical financial statements and schedules of the
Company and its consolidated subsidiaries included or incorporated
by reference in the Disclosure Package and the Final Memorandum
present fairly in all material respects the financial condition,
results of operations and cash flows of the Company and its
consolidated subsidiaries as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of Regulation S-X and have been prepared in conformity
with generally accepted accounting principles in the United States
(U.S. GAAP) applied on a consistent basis throughout the periods
involved (except as otherwise noted therein); and the selected
financial data set forth under the caption “SELECTED
CONSOLIDATED FINANCIAL DATA” in the Preliminary Memorandum
and the Final Memorandum fairly present, on the basis stated in the
Preliminary Memorandum and the Final Memorandum, the information
included or incorporated by reference therein.
(t) No
action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries or its or their property is pending or,
to the knowledge of the Company, threatened that (i) could
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the Indenture, or the consummation
of any of the transactions contemplated hereby or thereby or
(ii) could reasonably be expected to have a material adverse
effect on the condition (financial or
5
otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a “Material
Adverse Effect”), except as set forth in or contemplated in
the Disclosure Package and the Final Memorandum (exclusive of any
amendment or supplement thereto).
(u) Each of
the Company and its significant subsidiaries owns or leases all
such properties as are necessary to the conduct of its operations
as presently conducted, except where such failure would not have a
Material Adverse Effect.
(v) Neither
the Company nor any of its significant subsidiaries is in violation
or default of (i) any provision of its charter or bylaws or
comparable constituting documents; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of
its significant subsidiaries is a party or bound or to which its or
their property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or
any of its significant subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator having
jurisdiction over the Company or such significant subsidiary or any
of its properties, as applicable, except, with respect to clauses
(ii) and (iii), as would not result in a Material Adverse
Effect.
(w) Deloitte
& Touche LLP, which has audited certain financial statements of
the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial
statements and schedules included or incorporated by reference in
the Disclosure Package and the Final Memorandum, is an independent
registered public accounting firm with respect to the Company
within the meaning of the Act.
(x) There are
no stamp or other issuance or transfer taxes or duties or other
similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale of
the Securities or upon the issuance of Common Stock upon the
conversion thereof.
(y) The
Company has filed all applicable tax returns that are required to
be filed or has requested extensions thereof (except in any case in
which the failure so to file would not, individually or in the
aggregate, have a Material Adverse Effect and except as set forth
in or contemplated in the Disclosure Package and the Final
Memorandum (exclusive of any amendment or supplement thereto)) and
has paid all taxes due and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due
and payable, except for any such tax or assessment, fine or penalty
that is currently being contested in good faith or as would not,
individually or in the aggregate, have a Material Adverse Effect or
except as set forth in or contemplated in the Disclosure Package
and the Final Memorandum (exclusive of any amendment or supplement
thereto).
(z) No labor
problem or dispute with the employees of the Company or any of its
subsidiaries exists or, to the Company’s knowledge, is
threatened, except as would not have a Material Adverse Effect, and
except as set forth in or contemplated in the Disclosure Package
and the Final Memorandum (exclusive of any amendment or supplement
thereto).
6
(aa) The
Company and each of its subsidiaries is insured against such losses
and risks and in such amounts as are customary in the businesses in
which they are engaged; all material policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company
and its subsidiaries are in compliance in all material respects
with the terms of such policies and instruments; there are no
material claims by the Company or any of its significant
subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a
reservation of rights clause; neither the Company nor any of its
subsidiaries has been refused any insurance coverage sought or
applied for; and neither the Company nor any of its subsidiaries
has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material
Adverse Effect except as set forth in or contemplated in the
Disclosure Package and the Final Memorandum (exclusive of any
amendment or supplement thereto).
(bb) Except
for generally applicable restrictions arising under applicable
corporate law, no subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to
the Company, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary’s property or assets to
the Company or any other subsidiary of the Company, except as
described in or contemplated in the Disclosure Package and the
Final Memorandum (exclusive of any amendment or supplement
thereto).
(cc) The
Company and its subsidiaries possess all licenses, certificates,
permits and other authorizations issued by all applicable
authorities necessary to conduct their respective businesses,
except as would not result in a Material Adverse Effect or as set
forth in or contemplated in the Disclosure Package and the Final
Memorandum (exclusive of any amendment or supplement thereto).
Neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, except as set forth
in or contemplated in the Disclosure Package and the Final
Memorandum (exclusive of any amendment or supplement
thereto).
(dd) The
Company and each of its subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with U.S. GAAP
and to maintain asset accountability; (iii) access to assets
is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. The Company and its subsidiaries’ internal
controls over financial reporting were effective as of
December 31, 2008, and to the Company’s knowledge, are
effective as of the date hereof and the Company is not aware of any
material weakness in their internal control over financial
reporting.
7
(ee) The
Company and its subsidiaries maintain “disclosure controls
and procedures” (as such term is defined in
Rule 13a-15(e) under the Exchange Act); such disclosure
controls and procedures were effective as of June 30, 2009,
and, to the Company’s knowledge, are effective as of the date
hereof.
(ff) The
Company and its subsidiaries are (i) in compliance with any
and all applicable laws and regulations relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants
(“Environmental Laws”); (ii) have received and are
in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) have not received
notice of any actual or potential liability under any Environmental
Law, except where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals,
or liability would not, individually or in the aggregate, have a
Material Adverse Effect, except as set forth in or contemplated in
the Disclosure Package and the Final Memorandum (exclusive of any
amendment or supplement thereto). Except as set forth in the
Disclosure Package and the Final Memorandum (exclusive of any
amendment or supplement thereto), neither the Company nor any of
its subsidiaries has been named as a “potentially responsible
party” under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(gg) Intentionally
omitted.
(hh) The
subsidiaries listed on Annex A attached hereto are the only
“significant subsidiaries” of the Company (as defined
in Rule 1-02 of Regulation S-X).
(ii) None of
the Company, its subsidiaries or, to the knowledge of the Company,
any director, officer, agent, employee or Affiliate of the Company
or any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such
persons of the Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder (the “FCPA”),
including, without limitation, making use of the mails or any means
or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA.
(jj) The
operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements and money laundering
statutes and the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental agency (collectively, the
“Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.
(kk) None of
the Company, any of its subsidiaries or, to the knowledge of the
Company, any director, officer, agent, employee or Affiliate of the
Company or any of its
8
subsidiaries is
currently subject to any sanctions administered by the Office of
Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering of the Securities
hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(ll) There is
and has been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such,
to comply with any provision of the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith (the
“Sarbanes-Oxley Act”), including Section 402
related to loans and Sections 302 and 906 related to
certifications, except where the failure to be in compliance, would
not individually or in the aggregate, have a Material Adverse
Effect.
(mm) Prior to
the date hereof, the Company has furnished to the Representatives
letters, each substantially in the form of Exhibit A hereto,
duly executed by each officer and director of the Company listed in
Annex B and addressed to the Representatives.
 |