[ ] SHARES
RESOURCE CAPITAL CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
[ ], 2005
Credit Suisse First Boston LLC
Xxxxxxxx Xxxxxxxx Xxxxxx &Co., Inc.
Citigroup Global Markets Inc.
X.X. Xxxxxx Securities Inc.,
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Resource Capital Corp., a Maryland corporation
("COMPANY") proposes to issue and sell [ ] shares of its common stock, par value
$0.001 per share ("SECURITIES") and the stockholders listed in SCHEDULE A hereto
("SELLING STOCKHOLDERS") propose severally to sell an aggregate of [ ]
outstanding shares of the Securities (such [ ] shares of Securities being
hereinafter referred to as the "FIRM SECURITIES") to Credit Suisse First Boston
LLC ("CSFB"), Xxxxxxxx Xxxxxxxx Xxxxxx & Co., Inc. ("FBR"), Citigroup Global
Markets Inc. ("CITIGROUP"), X.X. Xxxxxx Securities Inc. ("X.X. XXXXXX") and each
of the other underwriters named in SCHEDULE B hereto (collectively, the
"UNDERWRITERS"), for whom CSFB, FBR, Citigroup and X.X. Xxxxxx are acting as
representatives, (in such capacity, the "REPRESENTATIVES"). The Company also
proposes to sell to the Underwriters, at the option of the Underwriters, an
aggregate of not more than [ ] additional shares of its Securities, as set forth
below (such [ ] additional shares being hereinafter referred to as the "OPTIONAL
SECURITIES"). The Firm Securities and the Optional Securities are herein
collectively called the "OFFERED SECURITIES." As part of the offering
contemplated by this Agreement, CSFB (the "DESIGNATED UNDERWRITER") has agreed
to reserve out of the Firm Securities purchased by it under this Agreement, up
to [ ] shares, for sale to the Company's directors, officers, employees and
other parties associated with the Company (collectively, "PARTICIPANTS"), as set
forth in the Prospectus (as defined herein) under the heading "Underwriting"
(the "DIRECTED SHARE PROGRAM"). The Firm Securities to be sold by the Designated
Underwriter pursuant to the Directed Share Program (the "DIRECTED SHARES") will
be sold by the Designated Underwriter pursuant to this Agreement at the public
offering price. Any Directed Shares not subscribed for by the end of the
business day on which this Agreement is executed will be offered to the public
by the Underwriters as set forth in the Prospectus. The Company, Resource
Capital Manager, Inc. (the "MANAGER"), Resource America, Inc. ("RESOURCE
AMERICA") and the Selling Stockholders hereby agree with the Underwriters as
follows:
2. Representations and Warranties of the Company, the Manager and
the Selling Stockholders.
(a) The Company represent and warrant to, and agree with, the
several Underwriters that:
(i) A registration statement (No. 333-126517) relating to
the Offered Securities, including a form of prospectus, has
been filed with the Securities and Exchange Commission
("COMMISSION") and either (A) has been declared effective under
the Securities Act of 1933, as amended (the "ACT") and is not
proposed to be amended or (B) is proposed to be amended by
amendment or post-effective amendment. If such registration
statement (the "INITIAL REGISTRATION STATEMENT") has been
declared effective, either (A) an additional registration
statement (the "ADDITIONAL REGISTRATION STATEMENT") relating to
the Offered Securities may have been filed with the Commission
pursuant to Rule 462(b) ("RULE 462(B)") under the Act and, if
so filed, has become effective upon filing pursuant to such
Rule and the Offered Securities all have been duly registered
under the Act pursuant to the initial registration statement
and, if applicable, the additional registration statement or
(B) such an additional registration statement is proposed to be
filed with the Commission pursuant to Rule 462(b) and will
become effective upon filing pursuant to such Rule and upon
such filing the Offered Securities will all have been duly
registered under the Act pursuant to the initial registration
statement and such additional registration statement. If the
Company does not propose to amend the initial registration
statement or if an additional registration statement has been
filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement
has been filed with the Commission prior to the execution and
delivery of this Agreement, the most recent amendment (if any)
to each such registration statement has been declared effective
by the Commission or has become effective upon filing pursuant
to Rule 462(c) ("RULE 462(C)") under the Act or, in the case of
the additional registration statement, Rule 462(b). For
purposes of this Agreement, "EFFECTIVE TIME" with respect to
the initial registration statement or, if filed prior to the
execution and delivery of this Agreement, the additional
registration statement means (A) if the Company has advised the
Representatives that it does not propose to amend such
registration statement, the date and time as of which such
registration statement, or the most recent post-effective
amendment thereto (if any) filed prior to the execution and
delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule
462(c), or (B) if the Company has advised the Representatives
that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as
of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is
declared effective by the Commission. If an additional
registration statement has not been filed prior to the
execution and delivery of this Agreement but the Company has
advised the Representatives that it proposes to file one,
"EFFECTIVE TIME" with respect to such additional registration
statement means the date and time as of which such registration
statement is filed and becomes effective pursuant to Rule
462(b). "EFFECTIVE DATE" with respect to the initial
registration statement or the additional registration statement
(if any) means the date of the Effective Time thereof. The
initial registration statement, as amended at its Effective
Time, including all information contained in the additional
registration statement (if any) and deemed to be a part of the
initial registration statement as of the Effective Time of the
additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial
registration statement as of its Effective Time pursuant to
Rule 430A(b) ("RULE 430A(B)") under the Act, is hereinafter
referred to as the "INITIAL REGISTRATION STATEMENT." The
additional registration statement, as amended at its Effective
Time, including the contents of the Initial Registration
Statement incorporated by reference therein and including all
information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to
Rule 430A(b), is hereinafter referred to as the "ADDITIONAL
REGISTRATION STATEMENT." The Initial Registration Statement and
the Additional Registration are hereinafter referred to
collectively as the "REGISTRATION STATEMENTS" and individually
as a "REGISTRATION STATEMENT." The form of prospectus relating
to the Offered Securities, as first filed with the Commission
pursuant to and in accordance with Rule 424(b) ("RULE 424(B)")
under the Act or (if no such filing is required) as included in
a Registration Statement, is hereinafter referred to as the
"PROSPECTUS." No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this
Agreement: (A) on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and
the rules and regulations of the Commission ("RULES AND
REGULATIONS") and did not include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein
(with respect to the Prospectus only, in light of the
circumstances under which they were made) not misleading, (B)
on the Effective Date of the Additional Registration Statement
(if any), each Registration Statement conformed or will
conform, in all respects to the requirements of the Act and the
Rules and Regulations and did not include, or will not include,
any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (C) on the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and
delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of the
Prospectus pursuant to Rule 424(b) or (if no such filing is
required) at the Effective Date of the Additional Registration
Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will
include, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated
therein or necessary to make the statements therein (with
respect to the Prospectus only, in light of the circumstances
under which they were made) not misleading. If the Effective
Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement: on the Effective Date
of the Initial Registration Statement, the Initial Registration
Statement and the Prospectus will conform in all respects to
the requirements of the Act and the Rules and Regulations,
neither of such documents will include any untrue statement of
a material fact or will omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading, and no Additional
Registration Statement has been or will be filed. The two
preceding sentences do not apply to statements in or omissions
from a Registration Statement or the Prospectus based upon
written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it
being understood and agreed that the only such information is
that described as such in Section 7(c) hereof.
(iii) The Company is a corporation duly organized and
validly existing and in good standing under the laws of the
State of Maryland with full power and authority to own, lease
or operate its assets and to conduct its business as described
in the Prospectus and to execute and deliver this Agreement and
to consummate the transactions contemplated hereby (including
the issuance, sale and delivery of the Offered Securities) and
thereby.
3
(iv) Each subsidiary of the Company (the "SUBSIDIARIES")
has been duly incorporated or formed and is an existing
corporation or limited liability company in good standing under
the laws of the jurisdiction of its incorporation or formation,
with power and authority (corporate and other) to own, lease or
operate its assets and conduct its business as described in the
Prospectus; all of the issued and outstanding capital stock or
membership interests, as applicable, of each Subsidiary of the
Company has been duly authorized and validly issued and is
fully paid and nonassessable; and the capital stock or
membership interests, as applicable, of each Subsidiary is
owned entirely by the Company, directly or through
subsidiaries, and is free from liens, encumbrances and defects.
The Company does not own any capital stock of or other equity
interest in any other corporation, limited liability company,
partnership, joint venture, trust or other entity or
association.
(v) The Company had, as of the date of the Prospectus, the
duly authorized and outstanding capitalization, as set forth in
the Prospectus under the caption "Capitalization;" all of the
issued and outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully
paid and non-assessable and have been issued in compliance with
all federal and state securities laws and, except as disclosed
in the Prospectus, free of preemptive rights and other rights
to subscribe for or purchase securities; except as disclosed in
the Prospectus, there are no outstanding (i) securities or
obligations of the Company or the Subsidiaries convertible into
or exchangeable for any capital stock of the Company or the
Subsidiaries, (ii) warrants, rights or options to subscribe for
or purchase from the Company or the Subsidiaries any such
capital stock or any such convertible or exchangeable
securities or obligations or (iii) obligations of the Company
or the Subsidiaries to issue or sell any shares of capital
stock, partnership interests or membership interests, as
applicable, any such convertible or exchangeable securities or
obligation, or any such warrants, rights or options.
(vi) The Offered Securities have been duly authorized for
issuance and sale and, when issued by the Company and delivered
against payment therefor in accordance with the terms of this
Agreement, will be validly issued, fully paid and
non-assessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim, and the
issuance, sale and delivery of the Offered Securities by the
Company is not subject to any preemptive right, co-sale right,
registration right, resale right, right of first refusal or
other similar rights arising by operation of law, under the
Company Charter Documents, as such term is defined in Section
2(xiv), (other than as set forth therein) or under any
agreement to which the Company is a party or otherwise, other
than as provided for in the Lock-Up Agreements (as defined
below).
(vii) Each of the Company and the Subsidiaries is duly
qualified or licensed by, and is in good standing in, each
jurisdiction in which it currently conducts its business or in
which it owns or leases property or maintains an office and in
which such qualification or licensing is necessary and in which
the failure, individually or in the aggregate, to be so
qualified or licensed could have, individually or in the
aggregate, a material adverse effect on the condition
(financial or other), business, earnings, management,
properties, results of operations (as described in the
Prospectus), assets or prospects of the Company and the
Subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT").
4
(viii) The Company has good and marketable title in fee
simple to all real property and good title to all personal
property owned by it, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances, mortgages
and defects, except such as are disclosed in the Prospectus or
such as would not reasonably be expected to materially and
adversely affect the value of such property or interfere with
the use made or proposed to be made of such property by the
Company; any real property or personal property held under
lease by the Company is held under a lease which is valid,
binding and enforceable against the Company and, to the
Company's knowledge, the other party thereto, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally, and by
general principles of equity, or as otherwise disclosed in the
Prospectus or exceptions that are not, individually or in the
aggregate, material to the Company and would not reasonably be
expected to interfere with the use made or proposed to be made
of such property by the Company.
(ix) Each of the Company and the Subsidiaries is in
compliance with all applicable federal, state, local and
foreign laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with
affiliates, except where the failure to so comply could not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(x) Neither the Company nor any of the Subsidiaries has
violated, received notice of or knows of any violation by the
Company or the Subsidiaries with respect to any federal or
state law relating to discrimination in the hiring, promotion
or pay of employees performing services for the Company, nor
any applicable federal or state wages and hours law, the
violation of any of which could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(xi) Neither the Company nor any officer or director
purporting to act on behalf of the Company has at any time (a)
made any contributions to any candidate for political office,
or failed to disclose fully any such contributions, in
violation of law, (b) made any payment to any state, federal or
foreign governmental officer or official, or other person
charged with similar public or quasi-public duties, other than
payments required or allowed by applicable law, or (c) engaged
in any transactions, maintained any Company bank account or
used any corporate funds except for transactions, bank accounts
and funds which have been and are reflected in the normally
maintained books and records of the Company.
(xii) Except as otherwise disclosed in the Prospectus,
there are no outstanding loans or advances or guarantees of
indebtedness by the Company to or for the benefit of any of the
officers, directors, affiliates or representatives of the
Company or any of the members of the families of any of them.
(xiii) Except for the Underwriter's discount and any other
compensation payable by the Company to the Underwriters in
connection with the transactions contemplated herein or as
otherwise disclosed in the Prospectus, the Company has not
incurred any liability for any finder's fees or similar
payments in connection with the transactions herein
contemplated.
5
(xiv) Each of the Company and the Subsidiaries is not (a)
in breach of, or in default under (nor has any event occurred
which with notice, lapse of time, or both would constitute a
breach of, or default under), its articles of incorporation,
by-laws, certificate of formation, operating agreement or
similar organizational documents, as applicable (collectively,
the "COMPANY CHARTER Documents") or (b) in breach or default
(nor has any event occurred which with notice, lapse of time or
both would constitute a breach or default) in the performance
or observance of any of its obligations, agreements, covenants
or conditions contained in any license, indenture, mortgage,
deed of trust, bank loan or credit agreement or other agreement
or instrument to which the Company or the Subsidiaries is a
party or by which it or its assets may be bound or affected
except, in the case of clause (b) only, for breaches or
defaults that could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;
the execution, delivery and performance of this Agreement, the
issuance, sale and delivery of the Offered Securities by the
Company, the consummation by the Company of the transactions
contemplated hereby and compliance by the parties thereto
(other than the Underwriters) with the terms and provisions
hereunder will not conflict with, or result in any breach of or
constitute a default under (nor constitute any event which with
notice, lapse of time, or both would constitute a breach of, or
default under), (A) any provision of the Company Charter
Documents, (B) any of the Company's and the Subsidiaries' and
any of their respective affiliates' obligations under any
provision of any license, indenture, mortgage, deed of trust,
bank loan or credit agreement or other agreement or instrument
to which any such party is a party or by which it or its assets
may be bound or affected, or (C) under any federal, state,
local or foreign law, regulation or rule or any decree,
judgment, permit or order applicable to the Company or the
Subsidiaries except, in the case of clauses (B) and (C) only,
for such conflicts, breaches or defaults that could not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(xv) This Agreement has been duly authorized, executed and
delivered by the Company and Resource America, assuming due
authorization, execution and delivery of this Agreement by the
Underwriters, is a legal, valid and binding agreement of the
Company and Resource America, enforceable in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights generally, and by general principles of equity, and
except to the extent that the indemnification provisions hereof
may be limited by federal or state securities laws and public
policy considerations in respect thereof; the Registration
Rights Agreement ("REGISTRATION RIGHTS AGREEMENT"), dated March
8, 2005, among the Company on one hand, and CSFB for the
benefit of the Holders, on the other hand, and the Management
Agreement ("MANAGEMENT AGREEMENT"), dated March 8, 2005, by and
among the Company, the Manager and Resource America, have been
duly authorized, executed and delivered by the Company and
Resource America, as applicable, and, assuming due
authorization, execution and delivery by such other parties,
constitute legal, valid and binding agreements of the Company
and Resource America, as applicable, enforceable against the
Company and Resource America, as applicable, in accordance with
their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and by general
principles of equity, and except to the extent that the
indemnification provisions thereof may be limited by federal or
state securities laws and public policy considerations in
respect thereof.
6
(xvi) The capital stock of the Company, including the
Offered Securities, conforms in all material respects to the
descriptions thereof contained in the Prospectus; the form of
certificates used to evidence the Offered Securities complies
in all material respects with all applicable statutory
requirements and any requirements of the New York Stock
Exchange (the "NYSE") and with any applicable requirements of
the Company Charter Documents and has been duly authorized and
approved by the directors of the Company.
(xvii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and
any person that would give rise to a valid claim against the
Company or any Underwriter for a brokerage commission, finder's
fee or other like payment in connection with this offering.
(xviii) Except for the Registration Rights Agreement and
the Management Agreement, there are no contracts, agreements or
understandings between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a registration statement or in any securities being
registered pursuant to any other registration statement filed
by the Company under the Act.
(xix) The Securities have been approved for listing subject
to notice of issuance on the NYSE.
(xx) No approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental
or regulatory commission, board, body, authority or agency is
required for the execution, delivery and performance by the
Company of this Agreement, the consummation by the Company of
the transactions contemplated hereby, or the issuance, sale and
delivery of the Offered Securities as contemplated hereby,
except such as have been obtained and made, or as may be
required, under the Act, under the rules and regulations of the
National Association of Securities Dealers (the "NASD"), and
such as may be required under state or foreign securities laws.
(xxi) Each of the Company and the Subsidiaries has all
necessary licenses, authorizations, consents and approvals and
has made all necessary filings required under any federal,
state, local or foreign law, regulation or rule, and has
obtained all necessary licenses, authorizations, consents and
approvals from other persons, required in order to conduct its
business as it is being conducted at this time, and will obtain
all necessary licenses, authorizations, consents and approvals
and make all necessary filings required under any federal,
state, local or foreign law, regulation or rule, and will
obtain all necessary licenses, authorizations, consents and
approvals from other persons, required in order to conduct its
business as it is proposed to be conducted as described in the
Prospectus except, in each case, where the failure to obtain
any such license, authorization, consent or approval could not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; each of the Company and
the Subsidiaries is not in violation of, or in default under,
any of its obligations under any such license, authorization,
consent or approval of any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment
applicable to the Company and the Subsidiaries except where
such violation or default could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect.
7
(xxii) No labor dispute with the employees of the Company
or any Subsidiary exists or, to the knowledge of the Company,
is imminent that might have a Material Adverse Effect.
(xxiii) The Company and the Subsidiaries own, possess or
can acquire on reasonable terms, adequate trademarks, trade
names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual
property (collectively, "INTELLECTUAL PROPERTY RIGHTS")
necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with
respect to any intellectual property rights that, if determined
adversely to the Company or any of the Subsidiaries, would
individually or in the aggregate have a Material Adverse
Effect.
(xxiv) The Prospectus contains summaries, which are
complete and accurate in all material respects, of all material
contracts, agreements, instruments and other documents, if any,
of the Company that would be required to be described in a
prospectus included in a registration statement on Form S-11
under the Act, and the copies of all such contracts,
agreements, instruments and other documents (including all
amendments or waivers relating to any of the foregoing) that
have been previously furnished to the Underwriters or its
counsel are complete and genuine and include all material
collateral and supplemental agreements thereto.
(xxv) There are no actions, suits, proceedings, inquiries
or investigations pending or, to the knowledge of the Company,
threatened against the Company or the Subsidiaries, or any of
their respective assets, and to the knowledge of the Company,
its respective directors, officers or employees at law or in
equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, arbitration
panel, authority or agency the adverse outcome of which could
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(xxvi) Since the date of the Prospectus, there has not been
(a) any event, circumstance or change that could reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect, (b) any transaction, other than in the ordinary
course of business, which is material to the Company
contemplated or entered into by or on behalf of the Company or
the Subsidiaries, (c) any liability or obligation, contingent
or otherwise, directly or indirectly incurred by the Company or
the Subsidiaries, other than liabilities and obligations
incurred in the ordinary course of business, (d) any dividend
or distribution of any kind declared, paid or made by the
Company on any class of its capital stock, (e) any purchase or
pledge by the Company or the Subsidiaries of any of the
Company's or the Subsidiaries' outstanding capital stock or (f)
any change in the capital stock, long-term debt (including
off-balance sheet activities or transactions) or, outside the
ordinary course of business, short-term debt of the Company or
the Subsidiaries.
(xxvii) The Company is not, and the sale of the Offered
Securities as herein contemplated and the receipt of the net
proceeds therefrom will not cause the Company to become, an
"investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(xxviii) Neither the Company nor any of its directors,
officers, representatives or affiliates has taken, directly or
indirectly, any action intended, or which might reasonably be
expected, to cause or result in, or which has constituted, any
unlawful stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Offered Securities; and the Company acknowledges that the
Underwrites may engage in passive market making transactions in
the Offered Securities on the NYSE in accordance with
Regulation M under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT").
8
(xxix) Xxxxx Xxxxxxxx LLP is an independent registered
public accounting firm with respect to the Company within the
meaning of the Act and the applicable published rules and
regulations thereunder, and the rules and regulations of the
Public Company Accounting Oversight Board ("PCAOB") of the
United States.
(xxx) The Company has not taken any action, nor have any
other steps been taken or have any legal proceedings been
commenced, nor to the knowledge of the Company, threatened,
against the Company, for the winding up, liquidation or
dissolution of the Company.
(xxxi) Each of the independent directors named in the
Prospectus has not since the formation of the Company been
employed by or affiliated, directly or indirectly with, the
Company whether by ownership of, ownership interest in,
employment by, any material business or professional
relationship with, or serving as an officer or director of the
Company or any of its affiliates named in the Prospectus and
satisfies the independence standards established by the
Securities and Exchange Commission and the NYSE.
(xxxii) The Company's investment guidelines and operating
policies described in the Prospectus accurately reflect the
current intentions of the Company and the Manager with respect
to the operation of its business, and no material deviation
from such guidelines or policies is contemplated.
(xxxiii) The Company has not authorized anyone to make any
representations regarding the offer and sale of the Offered
Securities, or regarding the Company in connection therewith,
except as set forth in the Prospectus or any related marketing
materials developed jointly and approved by the Company and the
Underwriters; the Company has not received notice of any stop
order or other similar order or decree preventing the use of
the Prospectus or any amendment or supplement thereto, and no
proceeding for that purpose has commenced or is pending or, to
the Company's knowledge, is contemplated.
(xxxiv) The Company will make a timely election to be
subject to tax as a real estate investment trust (a "REIT")
pursuant to Sections 856 through 860 of the Internal Revenue
Code of 1986, as amended (the "CODE") for its taxable year
ending December 31, 2005 and commencing with its initial
taxable year ending December 31, 2005, the Company has been
organized and operated in conformity with the requirements for
qualification and taxation as a REIT under the Code, and the
Company's current and proposed method of operation will enable
it to continue to meet the requirements for qualification and
taxation as a REIT under the Code; and all statements in the
Prospectus regarding the Company's qualification and taxation
as a REIT are true, complete and correct in all material
respects.
9
(xxxv) The Company and each of the Subsidiaries have filed
on a timely basis all federal, state, local and foreign income
and franchise tax returns, if any such returns were required to
be filed, through the date hereof, any such returns are correct
and complete, and the Company has paid all taxes shown as due
thereon; and no tax deficiency has been asserted against the
Company or any of the Subsidiaries, nor does the Company or any
of the Subsidiaries know of any tax deficiency which could
reasonably be expected to be asserted against it; all tax
liabilities, if any, are adequately provided for on the
consolidated books of the Company.
(xxxvi) The description of the Company's organization and
current and proposed method of operation set forth in the
Initial Registration Statement and the Additional Registration
Statement under the heading "Federal Income Tax Consequences of
our Qualification as a REIT" is an accurate and fair summary of
the matters referred to therein.
(xxxvii) The Company and the Subsidiaries, in the
aggregate, carry, or are covered by, insurance (issued by
insurers of recognized financial responsibility to the best
knowledge of the Company and the Manager) against such losses
and risks and in such amounts as are generally deemed adequate
for the respective businesses in which they are engaged;
neither the Company nor any of the Subsidiaries has been
refused any insurance coverage sought or applied for; and
neither the Company nor any of the Subsidiaries has any reason
to believe that the Company or the Subsidiaries would 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, individually or in the aggregate have a
Material Adverse Effect, except as described in or contemplated
by the Prospectus. All such insurance is fully in force on the
date hereof and will be fully in force at the First Closing
Date and any Optional Closing Date.
(xxxviii) The Company and each of the Subsidiaries are in
compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"), and the
employee benefits provisions of the Code with which compliance
is intended; no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any of the Subsidiaries have or
would reasonably be expected to have any liability; the Company
and the Subsidiaries have not incurred and do not expect to
incur liability under (x) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (y)
Sections 412 or 4971 of the Code; and each "pension plan" for
which the Company would have any liability that is intended to
be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the
effect that it is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act,
which would cause the plan to not be adversely affected by such
determination.
(xxxix) Except as set forth in the Prospectus, (a) no
person has the right, contractual or otherwise, to cause the
Company to issue or sell to it any shares of common stock or
shares of any other capital stock or other equity interests of
the Company, (b) no person has any preemptive rights, co-sale
rights, registration rights, resale rights, rights of first
refusal or other similar rights arising by operation of law to
purchase any shares of common stock or shares of any other
capital stock or other equity interests of the Company or the
Subsidiaries, and (c) no person has the right to act as an
underwriter or as a financial advisor to the Company or the
Subsidiaries in connection with the offer and sale of the
Offered Securities or capital stock or other equity interests
of the Subsidiaries; and, except as set forth in the
Prospectus, no person has the right, contractual or otherwise,
to cause the Company or the Subsidiaries to register under the
Act any shares of common stock or shares of any other capital
stock or other equity interests of the Company or the
Subsidiaries.
10
(xl) Each of the Company and the Subsidiaries are in
compliance, in all material respects, with applicable
Environmental Laws (as defined below) and is in compliance, in
all material respects, with the material terms of any required
permits, licenses, authorizations and approvals required under,
applicable Environmental Laws, except to the extent that
failure to so comply or to hold such permits, authorizations or
approvals would not reasonably be expected to have a Material
Adverse Effect; there are no past or present or, to the
Company's knowledge, reasonably anticipated material future
events, conditions, circumstances, activities, practices,
actions, omissions or plans that could reasonably be expected
to give rise to any material costs or liabilities to the
Company or the Subsidiaries under, or to interfere with or
prevent compliance by the Company or the Subsidiaries with,
applicable Environmental Laws; except as would not reasonably
be expected to have a Material Adverse Effect, and except that
no representation is made with respect to any property
underlying loans originated or held by the Company or any of
the Subsidiaries, other than properties on which the Company or
any Subsidiary has foreclosed and currently holds as an asset
("FORECLOSURE PROPERTY"), neither the Company nor any of the
Subsidiaries (a) is the subject of any investigation, (b) has
received any notice or claim, (c) is a party to or affected by
any pending or threatened action, suit or proceeding, (d) is
bound by any judgment, decree or order or (e) has entered into
any agreement, in each case relating to any alleged violation
of any applicable Environmental Law or any actual or alleged
release or, to the knowledge of the Company, threatened release
or cleanup at any location of any Hazardous Materials (as
defined below) (as used herein, "ENVIRONMENTAL LAW" means any
federal, state, local or foreign law, statute, ordinance, rule,
regulation, order, decree, judgment, injunction, or other
binding requirement, or common law, relating to health, safety
or the protection, cleanup or restoration of the environment or
natural resources, including those relating to the
distribution, processing, generation, treatment, storage,
disposal, transportation, other handling or release or
threatened release of Hazardous Materials, and "HAZARDOUS
MATERIALS" means any material (including, without limitation,
pollutants, contaminants, hazardous or toxic substances or
wastes) that is regulated by or may give rise to liability
under any Environmental Law).
(xli) The assets of the Company and the Subsidiaries do not
constitute "plan assets" of an ERISA regulated employee benefit
plan.
(xlii) The financial statements included in the
Registration Statement and the Prospectus present fairly the
financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and, except as
otherwise disclosed in the Prospectus, such financial
statements have been prepared in conformity with the generally
accepted accounting principles ("GAAP") in the United States
applied on a consistent basis; and the assumptions used in
preparing the pro forma financial statements included in each
Registration Statement and the Prospectus provide a reasonable
basis for presenting the significant effects directly
attributable to the transactions or events described therein,
the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect
the proper application of those adjustments to the
corresponding historical financial statement amounts.
11
(xliii) Except as disclosed in the Prospectus, since the
date of the latest audited financial statements included in the
Prospectus there has been no material adverse change, nor any
development or event involving a prospective material adverse
change, in the condition (financial or other), business,
properties or results of operations of the Company and the
Subsidiaries taken as a whole, and, except as disclosed in or
contemplated by the Prospectus, there has been no dividend or
distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(xliv) As of the First Closing Date, the Company will be
subject to the reporting requirements of either Section 13 or
Section 15(d) of the Exchange Act, and thereafter will file
reports with the Commission on the Electronic Data Gathering,
Analysis, and Retrieval (XXXXX) system.
(xlv) To the Company's or any of the Subsidiaries'
knowledge, except for Anthem Securities, Inc. and Xxxxxxxx
Securities, Inc., there are no affiliations or associations
between any member of the NASD and any of the Company's or any
of the Subsidiaries' officers, directors or 5% or greater
securityholders, except as set forth in the Prospectus.
(xlvi) The Company represents and warrants to the
Underwriters that (i) the Registration Statement, the
Prospectus and any preliminary prospectus comply, and any
further amendments or supplements thereto will comply, with any
applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended
or supplemented, if applicable, are distributed in connection
with the Directed Share Program, and that (ii) no
authorization, approval, consent, license, order, registration
or qualification of or with any government, governmental
instrumentality or court, other than such as have been
obtained, is necessary under the securities law and regulations
of foreign jurisdictions in which the Directed Shares are
offered outside the United States.
(xlvii) The Company has not offered, or caused the
Underwriters to offer, any Offered Securities to any person
pursuant to the Directed Share Program with the specific intent
to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or
publication to write or publish favorable information about the
Company or its products.
(xlviii) The Company solely determined, without any direct
or indirect participation by the Underwriters, the persons who
will purchase the Offered Securities (including the amounts to
be purchased by such persons) sold in the offering by the
Underwriters pursuant to the Directed Share Program.
(xlix) Each of the Company and the Subsidiaries (i) makes
and keeps accurate books and records in all material respects
and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions
are recorded as necessary to permit preparation of its and the
Subsidiaries' financial statements in conformity with GAAP and
to maintain accountability for its and the Subsidiaries'
assets, (C) access to its assets is permitted only in
accordance with management's authorization, (D) the reported
accountability for its and the Subsidiaries' assets is compared
with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences and (E)
management is made aware of all material transactions
concerning the Company and the Subsidiaries and their
respective properties.
12
(l) Neither the Company nor the Subsidiaries, or, to the
knowledge of the Company and the Manager, any director,
officer, agent, employee or other person associated with or
acting on behalf of the Company or the Subsidiaries has: used
any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political
activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision
or the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment; and the Company, the Subsidiaries and, to the
knowledge of the Company, its affiliates have conducted their
businesses in compliance in all material respects with the
Foreign Corrupt Practices Act of 1977 and have instituted and
maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued
compliance therewith.
(li) To the knowledge of the Company, neither it nor any of
the Subsidiaries nor any of its properties or assets has any
immunity from the jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution or otherwise) under
the laws of New York.
(lii) 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 in all material respects
with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated in connection therewith (the
"XXXXXXXX-XXXXX ACT"), including Section 402 related to loans
and Sections 302 and 906 related to certifications.
(liii) Any industry, statistical and market-related data
included in the Registration Statement and the Prospectus are
based on or derived from sources that the Company believes to
be reliable and accurate, and the Company has obtained the
written consent to the use of such data from such sources to
the extent required.
(liv) Any advertising, sales literature or other
promotional material (including "prospectus wrappers", "broker
kits," "road show slides" and "road show scripts" and
"electronic road show presentations") authorized in writing by
or prepared by the Company used in connection with the public
offering of the Offered Securities (collectively, "sales
material") does 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. Moreover, all sales material complied and will
comply in all material respects with the applicable
requirements of the Act and the rules and interpretations of
the NASD.
(lv) Any certificate signed by any officer of the Company
or any of the Subsidiaries delivered pursuant to this Agreement
to the Representatives or to counsel for the Underwriters shall
be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
13
(b) The Manager represents and warrants to, and agrees with,
the several Underwriters that:
(i) The Manager is a limited liability company duly
organized and validly existing and in good standing under the
laws of the State of Delaware with full power and authority to
own, lease or operate its assets and to conduct its business as
described in the Prospectus and to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby and thereby.
(ii) The Manager is duly qualified or licensed by, and is
in good standing in, each jurisdiction in which it currently
conducts its business or in which it owns or leases property or
maintains an office and in which such qualification or
licensing is necessary and in which the failure, individually
or in the aggregate, to be so qualified or licensed could have,
individually or in the aggregate, a Material Adverse Effect.
(iii) The Manager is in compliance with all applicable
federal, state, local and foreign laws, rules, regulations,
orders, decrees and judgments, including those relating to
transactions with affiliates, except where the failure to so
comply could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(iv) Neither the Manager nor any officer or director
purporting to act on behalf of the Manager has at any time (a)
made any contributions to any candidate for political office,
or failed to disclose fully any such contributions, in
violation of law, (b) made any payment to any state, federal or
foreign governmental officer or official, or other person
charged with similar public or quasi-public duties, other than
payments required or allowed by applicable law, or (c) engaged
in any transactions, maintained any Company bank account or
used any corporate funds except for transactions, bank accounts
and funds which have been and are reflected in the normally
maintained books and records of the Manager.
(v) The Manager is not (a) in breach of, or in default
under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under),
its articles of incorporation or by-laws (collectively, the
"MANAGER CHARTER DOCUMENTS") or (b) in breach or default (nor
has any event occurred which with notice, lapse of time or both
would constitute a breach or default) in the performance or
observance of any of its obligations, agreements, covenants or
conditions contained in any license, indenture, mortgage, deed
of trust, bank loan or credit agreement or other agreement or
instrument to which the Manager is a party or by which it or
its assets may be bound or affected except, in the case of
clause (b) only, for breaches or defaults that could not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; the execution, delivery
and performance of this Agreement, the consummation by the
Manager of the transactions contemplated hereby and compliance
by the parties thereto (other than the Underwriters) with the
terms and provisions hereunder will not conflict with, or
result in any breach of or constitute a default under (nor
constitute any event which with notice, lapse of time, or both
would constitute a breach of, or default under), (A) any
provision of the Manager Charter Documents, (B) any of the
Manager's and any of their respective affiliates' obligations
under any provision of any license, indenture, mortgage, deed
of trust, bank loan or credit agreement or other agreement or
instrument to which any such party is a party or by which it or
its assets may be bound or affected, or (C) under any federal,
state, local or foreign law, regulation or rule or any decree,
judgment, permit or order applicable to the Manager except, in
the case of clauses (B) and (C) only, for such conflicts,
breaches or defaults that could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect.
14
(vi) No approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental
or regulatory commission, board, body, authority or agency is
required for the execution, delivery and performance by the
Manager of this Agreement, the consummation by the Manager of
the transactions contemplated hereby, or the issuance, sale and
delivery of the Offered Securities as contemplated hereby,
except such as have been obtained and made, or as may be
required, under the Act, under the rules and regulations of the
National Association of Securities Dealers (the "NASD"), and
such as may be required under state or foreign securities laws.
(vii) The Manager has all necessary licenses,
authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all necessary
licenses, authorizations, consents and approvals from other
persons, required in order to conduct its business as it is
being conducted at this time, and will obtain all necessary
licenses, authorizations, consents and approvals and make all
necessary filings required under any federal, state, local or
foreign law, regulation or rule, and will obtain all necessary
licenses, authorizations, consents and approvals from other
persons, required in order to conduct its business as it is
proposed to be conducted as described in the Prospectus except,
in each case, where the failure to obtain any such license,
authorization, consent or approval could not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect; the Manager is not in violation of, or in
default under, any of its obligations under any such license,
authorization, consent or approval of any federal, state, local
or foreign law, regulation or rule or any decree, order or
judgment applicable to the Manager except where such violation
or default could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(viii) No labor dispute with the employees of the Manager
exists or, to the knowledge of the Manager, is imminent that
might have a Material Adverse Effect.
(ix) There are no actions, suits, proceedings, inquiries or
investigations pending or, to the knowledge of the Manager,
threatened against the Manager or the Subsidiaries, or any of
their respective assets, and to the knowledge of the Manager,
its respective directors, officers or employees at law or in
equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, arbitration
panel, authority or agency the adverse outcome of which could
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(x) Since the date of the Prospectus, there has not been
any event, circumstance or change that could reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect.
15
(xi) The Manager and its subsidiaries, in the aggregate,
carry, or are covered by, insurance (issued by insurers of
recognized financial responsibility to the best knowledge of
the Manager) against such losses and risks and in such amounts
as are generally deemed adequate for the respective businesses
in which they are engaged; neither the Manager nor any of its
subsidiaries has been refused any insurance coverage sought or
applied for; and neither the Manager nor any of its
subsidiaries has any reason to believe that the Manager or its
subsidiaries would 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, individually or in the
aggregate have a Material Adverse Effect, except as described
in or contemplated by the Prospectus. All such insurance is
fully in force on the date hereof and will be fully in force at
the First Closing Date and any Optional Closing Date.
(xii) Neither the Manager, or, to the knowledge of the
Manager, any director, officer, agent, employee or other person
associated with or acting on behalf of the Manager has: used
any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political
activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision
or the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment; and the Manager and, to the knowledge of the Manager,
its affiliates have conducted their businesses in compliance in
all material respects with the Foreign Corrupt Practices Act of
1977 and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith.
(xiii) This Agreement has been duly authorized, executed
and delivered by the Manager and, assuming due authorization,
execution and delivery of this Agreement by the Underwriters,
is a legal, valid and binding agreement of the Manager,
enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally, and by
general principles of equity, and except to the extent that the
indemnification provisions hereof may be limited by federal or
state securities laws and public policy considerations in
respect thereof; the Management Agreement has been duly
authorized, executed and delivered by the Manager and, assuming
due authorization, execution and delivery by such other
parties, constitutes a legal, valid and binding agreement of
the Manager enforceable against the Manager in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights generally, and by general principles of equity, and
except to the extent that the indemnification provisions
thereof may be limited by federal or state securities laws and
public policy considerations in respect thereof.
(c) Each Selling Stockholder severally represents and
warrants to, and agrees with, the several Underwriters that:
(i) Such Selling Stockholder has and on the First Closing
Date hereinafter mentioned will have valid and unencumbered
title to the Firm Securities to be delivered by such Selling
Stockholder on such Closing Date and full right, power and
authority to enter into this Agreement and to sell, assign,
transfer and deliver the Firm Securities to be delivered by
such Selling Stockholder on the First Closing Date hereunder;
and upon the delivery of and payment for the Firm Securities on
the First Closing Date hereunder the several Underwriters will
acquire valid and unencumbered title to the Firm Securities to
be delivered by such Selling Stockholder on the First Closing
Date.
16
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this
Agreement: (A) on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and
the Rules and Regulations and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading, (B) on the Effective Date of
the Additional Registration Statement (if any), each
Registration Statement conformed, or will conform, in all
respects to the requirements of the Act and the Rules and
Regulations did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not
omit, to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and
(C) on the date of this Agreement, the Initial Registration
Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery
of this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant
to Rule 424(b) or (if no such filing is required) at the
Effective Date of the Additional Registration Statement in
which the Prospectus is included, each Registration Statement
and the Prospectus will conform, in all respects to the
requirements of the Act and the Rules and Regulations, and
neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state
any material fact required to be stated therein or necessary to
make the statements therein (with respect to the Prospectus
only, in light of the circumstances under which they were made)
not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and
delivery of this Agreement: on the Effective Date of the
Initial Registration Statement, the Initial Registration
Statement and the Prospectus will conform in all respects to
the requirements of the Act and the Rules and Regulations,
neither of such documents will include any untrue statement of
a material fact or will omit to state any material fact
required to be stated therein or necessary to make the
statements therein (with respect to the Prospectus only, in
light of the circumstances under which they were made) not
misleading. The two preceding sentences apply only to the
extent that any statements in or omissions from a Registration
Statement or the Prospectus are based on written information
furnished to the Company by such Selling Stockholder
specifically for use therein.
(iii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between such Selling
Stockholder and any person that would give rise to a valid
claim against such Selling Stockholder or any Underwriter for a
brokerage commission, finder's fee or other like payment in
connection with this offering.
(iv) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder.
(v) The Power of Attorney and Custody Agreement, in the
form heretofore furnished to the Representatives (the "POWER OF
ATTORNEY AND CUSTODY AGREEMENT"), has been duly authorized,
executed and delivered by such Selling Stockholder and is the
valid and binding agreement of such Selling Stockholder.
17
(vi) The execution and delivery of this Agreement and the
Power of Attorney and Custody Agreement and the sale and
delivery of the Firm Securities to be sold by such Selling
Stockholder and the consummation of the transactions
contemplated herein and compliance by such Selling Stockholder
with its obligations hereunder do not and will not, whether
with or without the giving of notice or passage of time or
both, (a) conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any tax,
lien, charge or encumbrance upon the Firm Securities to be sold
by such Selling Stockholder or any property or assets of such
Selling Stockholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note,
license, lease or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling
Stockholder may be bound, or to which any of the property or
assets of such Selling Stockholder is subject, nor (b) will
such action result in any violation of the provisions of the
charter or bylaws or other organizational instrument of such
Selling Stockholder, if applicable, or any applicable treaty,
law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over such Selling
Stockholder or any of its properties except, in the case of
clause (a), for such conflicts, breaches or defaults that would
not have, or reasonably be expected to have, a material adverse
effect on the condition (financial or otherwise), business,
earnings, properties, results of operations (as described in
the Prospectus), assets or prospects of such Selling
Stockholder and its subsidiaries taken as a whole ("SELLING
STOCKHOLDER MATERIAL ADVERSE EFFECT").
(vii) Such Selling Stockholder has and at the Closing will
have, valid title to the Firm Securities to be sold by such
Selling Stockholder free and clear of all security interests,
claims, liens, equities or other encumbrances and the legal
right and power, and all authorization and approval required by
law, to enter into this Agreement and the Power of Attorney and
Custody Agreement and to sell, transfer and deliver the Firm
Securities to be sold by such Selling Stockholder.
(viii) Such Selling Stockholder has not taken, and will not
take, directly or indirectly, any action which is designed to
or which has constituted or might reasonably be expected to
cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale
of the Firm Securities in violation of Regulation M of the Act.
(ix) To the knowledge of such Selling Stockholder, no
filing with, or consent, approval, authorization, order,
registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is
necessary or required for the performance by each Selling
Stockholder of its obligations hereunder or in the Power of
Attorney and Custody Agreement, or in connection with the sale
and delivery of the Firm Securities hereunder or the
consummation of the transactions contemplated by this
Agreement, except (a) such as may have previously been made or
obtained or as may be required under the Act or the Rules and
Regulations or state securities laws and (b) such as have been
obtained under the laws and regulations of jurisdictions
outside the United States in which the Firm Securities are
offered or the absence of which would not have, or reasonably
be expected to have, a Selling Stockholder Material Adverse
Effect.
(x) Except as otherwise provided in the Registration
Statement, neither such Selling Stockholder nor any of its
affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under
common control with, or is a person associated with (within the
meaning of Article I(dd) of the By-laws of the National
Association of Securities Dealers, Inc.), any member firm of
the NASD.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and each Selling Stockholder
agree, severally and not jointly, to sell to each Underwriter, and each
18
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Stockholder, at a purchase price of $[ ] per share, that number of
Firm Securities (rounded up or down, as determined by the Representatives in
their discretion, in order to avoid fractions) obtained by multiplying [ ] Firm
Securities in the case of the Company and the number of Firm Securities set
forth opposite the name of such Selling Stockholder in SCHEDULE A hereto, in the
case of a Selling Stockholder, in each case by a fraction the numerator of which
is the number of Firm Securities set forth opposite the name of such Underwriter
in SCHEDULE B hereto and the denominator of which is the total number of Firm
Securities. American Stock Transfer & Trust Company shall act as custodian (the
"CUSTODIAN") of the Firm Securities to be sold by the Selling Stockholders
pursuant to the Power of Attorney and Custody Agreement.
The Company and the Custodian will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, against payment of the
purchase price in Federal (same day) funds by wire transfer to an account at a
bank acceptable to the Representatives at the office of Xxxxxxxx Chance US LLP,
00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New York time, on [ ],
2005, or at such other time not later than seven full business days thereafter
as the Representatives and the Company determine, such time being herein
referred to as the "FIRST CLOSING DATE." For purposes of Rule 15c6-1 under the
Exchange Act, the First Closing Date (if later than the otherwise applicable
settlement date) shall be the settlement date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering. The
certificates for the Firm Securities so to be delivered will be in definitive
form, in such denominations and registered in such names as the Representatives
request and will be made available for checking and packaging at the above
office of Xxxxxxxx Chance US LLP at least 24 hours prior to the First Closing
Date.
In addition, upon written notice from CSFB given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of Optional Securities specified
in such notice and the Underwriters agree, severally and not jointly, to
purchase such Optional Securities. Such Optional Securities shall be purchased
from the Company for the account of each Underwriter in the same proportion as
the number of Firm Securities set forth opposite such Underwriter's name bears
to the total number of Firm Securities (subject to adjustment by the
Representatives to eliminate fractions) and may be purchased by the Underwriters
only for the purpose of covering over-allotments made in connection with the
sale of the Firm Securities. No Optional Securities shall be sold or delivered
unless the Firm Securities previously have been, or simultaneously are, sold and
delivered. The right to purchase the Optional Securities or any portion thereof
may be exercised from time to time and to the extent not previously exercised
may be surrendered and terminated at any time upon notice by the Representatives
to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by the
Representatives but shall be not later than five full business days after
written notice of election to purchase Optional Securities is given. The Company
will deliver the Optional Securities being purchased on each Optional Closing
Date to the Representatives for the accounts of the several Underwriters,
against payment of the purchase price therefor in Federal (same day) funds by
wire transfer to an account at a bank acceptable to the Representatives, at the
above office of Xxxxxxxx Chance US LLP. The certificates for the Optional
Securities being purchased on each Optional Closing Date will be in definitive
form, in such denominations and registered in such names as the Representatives
requests upon reasonable notice prior to such Optional Closing Date and will be
made available for checking and packaging at the above office of Xxxxxxxx Chance
US LLP at a reasonable time in advance of such Optional Closing Date.
19
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company, the Manager and the Selling
Stockholders. The Company and the Manager, for so long as the Manager is the
manager under the Management Agreement, hereby jointly and severally agree with
the several Underwriters and, with respect to subsections (h) and (i), each
Selling Stockholder agrees with the Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with subparagraph
(1) (or, if applicable and if consented to by the Representatives, subparagraph
(4)) of Rule 424(b) not later than the earlier of (A) the second business day
following the execution and delivery of this Agreement or (B) the fifteenth
business day after the Effective Date of the Initial Registration Statement.
The Company will advise the Representatives promptly of any such filing
pursuant to Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and an
Additional Registration Statement is necessary to register a portion of the
Offered Securities under the Act but the Effective Time thereof has not occurred
as of such execution and delivery, the Company will file the Additional
Registration Statement or, if filed, will file a post-effective amendment
thereto with the Commission pursuant to and in accordance with Rule 462(b) on or
prior to 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and distributed to
any Underwriter, or will make such filing at such later date as shall have been
consented to by the Representatives.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the initial or any Additional Registration
Statement as filed or the related prospectus or the Initial Registration
Statement, the Additional Registration Statement (if any) or the Prospectus and
will not effect such amendment or supplementation without the consent of the
Representatives; and the Company will also advise the Representatives promptly
of the effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any amendment
or supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the issuance of
any such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with sales by
any Underwriter or dealer, 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 any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify the Representatives of such event
and will promptly prepare and file with the Commission, at its own expense, an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither Representatives' consent
to, nor the Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12 months
beginning after the Effective Date of the Initial Registration Statement (or, if
later, the Effective Date of the Additional Registration Statement) which will
satisfy the provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "AVAILABILITY DATE" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "AVAILABILITY DATE" means the 90th day after the end of
such fourth fiscal quarter.
20
(e) The Company will furnish to the Representatives copies of each
Registration Statement (one of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
the Representatives request. The Prospectus shall be so furnished on or prior to
3:00 P.M., New York time, on the business day following the later of the
execution and delivery of this Agreement or the Effective Time of the Initial
Registration Statement. All other such documents shall be so furnished as soon
as available. The Company and the Selling Stockholders will pay the expenses of
printing and distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as required
for the distribution.
(g) For the period specified below (the "LOCK-UP PERIOD"), the
Company will not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the Commission a registration statement
under the Act relating to, any additional shares of its Securities or securities
convertible into or exchangeable or exercisable for any shares of its
Securities, or publicly disclose the intention to make any such offer, sale,
pledge, disposition or filing, without the prior written consent of the
Representatives. The initial Lock-Up Period will commence on the date hereof and
will continue and include the date 180 days after the date hereof or such
earlier date that the Representatives consent to in writing; provided, however,
that if (1) during the last 17 days of the initial Lock-Up Period, the Company
releases earnings results or material news or a material event relating to the
Company occurs or (2) prior to the expiration of the initial Lock-Up period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the initial Lock-Up Period, then in each case the
Lock-Up Period will be extended until the expiration of the 18-day period
beginning on the date of release of the earnings results or the occurrence of
the material news or material event, as applicable, unless the Representatives
waive, in writing, such extension. The Company will provide the Representatives
with notice of any announcement described in clause (2) of the preceding
sentence that gives rise to an extension of the Lock-Up Period. The provisions
of this subsection (g) shall not apply to (A) the Offered Securities to be sold
hereunder, (B) the registration of shares of capital stock in accordance with
the terms of the Registration Rights Agreement and (C) issuances of shares of
restricted stock, stock options and other awards and the issuance of shares
underlying such awards under the Resource Capital Corp. Stock Incentive Plan
(the "INCENTIVE PLAN"), as each of (A) through (C) above is described in the
Prospectus.
(h) The Company and each Selling Stockholder agree with the several
Underwriters that the Company and such Selling Stockholder will pay all expenses
incident to the performance of the obligations of the Company and such Selling
Stockholder, as the case may be, under this Agreement, for any filing fees,
taxes and other expenses (including fees and disbursements of its respective
counsel) in connection with (i) the preparation of the preliminary prospectus
and the Prospectus, and any amendments or supplements thereto, and the printing
and furnishing of copies of each thereof to the Underwriters (including costs of
mailing and shipment), (ii) the preparation, issuance, sale and delivery of the
Offered Securities, including any stock or other transfer taxes or duties
payable upon the sale of the Offered Securities to the Underwriters, (iii) the
qualification of the Offered Securities for offering and sale under state laws
and the determination of their eligibility for investment under state law as
aforesaid (including any filing fees and the reasonable legal fees and filing
fees and other disbursements of counsel for the Underwriters solely with respect
to blue sky matters) and the printing and furnishing of copies of any blue sky
surveys or legal investment surveys to the Underwriters and to dealers, (iv) for
the filing fee incident to the review by the NASD of the Offered Securities, (v)
the fees and expenses of any transfer agent or registrar for the Offered
Securities, and (vi) for any travel expenses of the Company's officers and
employees and any other expenses of the Company in connection with attending or
hosting meetings with prospective purchasers of the Offered Securities,
including the cost of any aircraft chartered in connection with attending or
hosting such meetings.
21
(i) Each Selling Stockholder agrees during the Selling Stockholder
Lock-Up Period (as defined below) not to offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, any additional shares of the
Securities of the Company or securities convertible into or exchangeable or
exercisable for any shares of Securities, enter into a transaction which would
have the same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Securities, whether any such aforementioned transaction is to be settled by
delivery of the Securities or such other securities, in cash or otherwise, or
publicly disclose the intention to make any such offer, sale, pledge or
disposition, or enter into any such transaction, swap, hedge or other
arrangement, without, in each case, the prior written consent of the
Representatives. The Selling Stockholder Lock-Up Period will commence on the
date hereof and will continue and include the date 60 days after the date hereof
or such earlier date that the Representatives consent to in writing; provided,
however, that if (1) during the last 17 days of the initial Lock-Up Period, the
Company releases earnings results or material news or a material event relating
to the Company occurs or (2) prior to the expiration of the Selling Stockholder
Lock-up Period, the company announces that it will release earnings results
during the 16-day period beginning on the last day of the initial Lock-Up
Period, then in each case the Lock-Up Period will be extended until the
expiration of the 18 day period beginning on the date of release of the earnings
results or the occurrence of the material news or material event, as applicable,
unless the Representatives waive, in writing, such extension.
(j) In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent required by the
NASD or the NASD rules from sale, transfer, assignment, pledge or hypothecation
for a period of three months following the date of the effectiveness of the
Registration Statement. The Designated Underwriter will notify the Company as to
which Participants will need to be so restricted. The Company will direct the
transfer agent to place stop transfer restrictions upon such securities for such
period of time.
(k) The Company will pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Shares Program and
stamp duties, similar taxes or duties or other taxes, if any, incurred by the
underwriters in connection with the Directed Share Program. The company
covenants with the Underwriters that the company will comply with all applicable
securities and other applicable laws, rules and regulations in each foreign
jurisdiction in which the Directed Shares are offered in connection with the
Directed Share Program.
(l) The Company agrees to furnish to the Underwriters for a period
of two (2) years from the First Closing Date (if such reports are not available
to the public electronically on the SEC's website) (i) copies of all annual,
quarterly and current reports of the Company (if such reports are not available
to the public electronically on the SEC's website) and (ii) such other material
reports and documents of the Company as the Underwriters may reasonably request;
provided, however, that the Company shall have no obligation under clause (ii)
for so long as the Company is subject to Sections 13 or 15(d) of the Exchange
Act.
(m) The Company's board of directors shall be comprised of a
majority of independent directors, as such term is defined under the rules and
regulations of the NYSE and the SEC, at the First Closing Date.
22
(n) The Company, the Manager and Resource America agree to make all
necessary filings required under any federal, state, local or foreign law,
regulation or rule and obtain and maintain all necessary licenses,
authorizations, consents and approvals from other persons, required in order to
conduct its proposed business as described in the Prospectus, except when the
failure to make a necessary filing or to maintain a license, authorization,
consent or approval could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(o) The Company will use its best efforts to meet the requirements
to qualify, for its taxable year ending December 31, 2005 and thereafter, for
taxation as a REIT under the Code.
(p) The Company will use its best efforts to effect the listing of
the Offered Securities on the NYSE.
(q) To apply the net proceeds from the sale of the Offered
Securities in the manner set forth under the caption "Use of Proceeds" in the
Prospectus.
(r) To use its commercially reasonable efforts in cooperation with
the Representatives to obtain permission for the Offered Securities to be
eligible for clearance and settlement through DTC.
(s) The Company will use its best efforts to conduct its affairs in
such a manner so as not to become required to register as an investment company
under the Investment Company Act of 1940, as amended.
(t) The Company will not take any action prohibited by Rules 101 or
102 of Regulation M under the Act in connection with the distribution of the
Offered Securities contemplated hereby.
(u) The Company shall maintain a transfer agent and registrar for
the Securities.
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities on the First Closing Date and the Optional Securities to be purchased
on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company and the
Selling Stockholders of their obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter (including an
"agreed-upon procedures" letter), dated the date of delivery thereof (which, if
the Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement, shall be on or prior to the date of
this Agreement or, if the Effective Time of the Initial Registration Statement
is subsequent to the execution and delivery of this Agreement, shall be prior to
the filing of the amendment or post-effective amendment to the registration
statement to be filed shortly prior to such Effective Time), of Xxxxx Xxxxxxxx
LLP confirming that they are an independent registered public accounting firm
within the meaning of the Act and the applicable published Rules and Regulations
thereunder and the rules and regulations of the PCAOB and stating to the effect
that:
(i) in their opinion the financial statements and schedules
examined by them and included in the Registration Statements comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
23
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards
No. 100, Interim Financial Information, on the unaudited financial
statements included in the Registration Statements;
(iii) on the basis of the review referred to in clause (ii) above,
a reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements included in the
Registration Statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations or any material
modifications should be made to such unaudited financial statements
for them to be in conformity with generally accepted accounting
principles;
(B) the unaudited consolidated net revenue, net operating
income, net income and net income per share amounts for the
three-month periods ended included in the Prospectus do not agree
with the amounts set forth in the unaudited consolidated financial
statements for those same periods or were not determined on a basis
substantially consistent with that of the corresponding amounts in
the audited statements of income;
(C) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than
three business days prior to the date of this Agreement, there was
any change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its consolidated
subsidiaries or, at the date of the latest available balance sheet
read by such accountants, there was any decrease in consolidated
net current assets or net assets, as compared with amounts shown on
the latest balance sheet included in the Prospectus; or
(D) for the period from the closing date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there
were any decreases, as compared with the corresponding period of
the previous year and with the period of corresponding length ended
the date of the latest income statement included in the Prospectus,
in consolidated net sales or net operating income in the total or
per share amounts of consolidated income before extraordinary items
or net income;
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
24
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statements is subsequent to the execution and delivery of
this Agreement, "REGISTRATION STATEMENTS" shall mean the Initial Registration
Statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statements is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration Statement
is subsequent to such execution and delivery, "REGISTRATION STATEMENTS" shall
mean the Initial Registration Statement and the Additional Registration
Statement as proposed to be filed or as proposed to be amended by the
post-effective amendment to be filed shortly prior to its Effective Time, and
(iii) "PROSPECTUS" shall mean the prospectus included in the Registration
Statements.
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or such later date as shall have been consented to by the
Representatives. If the Effective Time of the Additional Registration Statement
(if any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York time, on
the date of this Agreement or, if earlier, the time the Prospectus is printed
and distributed to any Underwriter, or shall have occurred at such later date as
shall have been consented to by the Representatives. If the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this Agreement.
Prior to such Closing Date, no stop order suspending the effectiveness of a
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of any Selling
Stockholder, the Company or the Representatives, shall be contemplated by the
Commission nor shall there be any suspension of the qualification of the Offered
Securities for sale in any jurisdiction or institution or threatening of any
proceeding for such purpose.
(c) Subsequent to the execution and delivery of this Agreement there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, earnings,
properties, results of operations (as described in the Prospectus), assets or
prospects of the Company and the Subsidiaries taken as one enterprise which, in
the judgment of a majority in interest of the Underwriters including the
Representatives, is material and adverse and makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and payment for
the Offered Securities; (ii) any downgrading in the rating of any debt
securities or preferred stock of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred stock of
the Company (other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such rating); (iii)
any change in U.S. or international financial, political or economic conditions
or currency exchange rates or exchange controls as would, in the judgment of a
majority in interest of the Underwriters including the Representatives, be
likely to prejudice materially the success of the proposed issue, sale or
distribution of the Offered Securities, whether in the primary market or in
respect of dealings in the secondary market; (iv) any material suspension or
material limitation of trading in securities generally on the NYSE, or any
25
setting of minimum prices for trading on such exchange; (v) or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market; (vi) any banking moratorium declared by U.S. Federal or
New York authorities; (vii) any major disruption of settlements of securities or
clearance services in the United States or (viii) any attack on, outbreak or
escalation of hostilities or act of terrorism involving the United States, any
declaration of war by Congress or any other national or international calamity
or emergency if, in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the public offering or the sale of and
payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated such
Closing Date, of Ledgewood Law Firm, P.C., counsel for the Company, in the form
reasonably satisfactory to the representatives as set forth on EXHIBIT A hereto.
In rendering such opinion, Ledgewood Law Firm, P.C. may rely as to the
incorporation of the Company and all other matters governed by Maryland law upon
the opinion of DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP.
(e) The Representatives shall have received (i) an opinion, dated such
Closing Date, of Ledgewood Law Firm, P.C., for the benefit of the Selling
Stockholders who are natural persons in a form reasonably satisfactory to the
Representatives as set forth on EXHIBIT B-1 hereto and (ii) an opinion, on or
prior to the First Closing Date, of counsel to each Selling Stockholder that is
not a natural person in a form reasonably satisfactory to the Representatives
with respect to the matters set forth on EXHIBIT B-2 hereto.
(f) The Representatives shall have received an opinion, dated such
Closing Date, of DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP, special Maryland counsel
for the Company, in the form reasonably satisfactory to the Representatives as
set forth on EXHIBIT C hereto.
(g) The Representatives shall have received a tax opinion, dated such
Closing Date, of Ledgewood Law Firm, P.C., counsel for the Company, in the form
reasonably satisfactory to the representatives as set forth on EXHIBIT D hereto.
(h) The Representatives shall have received from Xxxxxxxx Chance US
LLP, counsel for the Underwriters, such opinion or opinions, dated such Closing
Date, with respect to the incorporation of the Company, the validity of the
Offered Securities delivered on such Closing Date, the Registration Statements,
the Prospectus and other related matters as the Representatives may require, and
the Selling Stockholders and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass upon
such matters. In rendering such opinion, Xxxxxxxx Chance US LLP may rely as to
the incorporation of the Company and all other matters governed by Maryland law
upon the opinion of Xxxxx Xxxxxxx Xxxx Xxxx US LLP referred to above.
(i) The Representatives shall have received a certificate, dated such
Closing Date, of the Chief Executive Officer or President and a principal
financial or accounting officer of the Company in which such officers, to the
best of their knowledge after reasonable investigation, shall state that: (i)
the representations and warranties of the Company and the Manager in this
Agreement are true and correct; (ii) the Company and the Manager have complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date; (iii) no stop order
suspending the effectiveness of any Registration Statement has been issued and
no proceedings for that purpose have been instituted or are contemplated by the
Commission; (iv) the Additional Registration Statement (if any) satisfying the
requirements of subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to
26
Rule 462(b), including payment of the applicable filing fee in accordance with
Rule 111(a) or (b) under the Act, prior to the time the Prospectus was printed
and distributed to any Underwriter; and (v) subsequent to the respective dates
of the most recent financial statements in the Prospectus, there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
earnings, management, properties, results of operations (as described in the
Prospectus), assets or prospects of the Company and the Subsidiaries taken as a
whole except as set forth in the Prospectus or as described in such certificate.
In addition to the matters set forth in this subsection (h), the certificate
shall also address certain matters, representations, warranties, covenants
agreements and conditions addressed in this Agreement or as may be reasonably
requested.
(j) The Representatives shall have received a letter (including
an "agreed-upon procedures" letter), dated such Closing Date, of Xxxxx Xxxxxxxx
LLP which meets the requirements of subsection (a) of this Section, except that
the specified date referred to in such subsection will be a date not more than
three days prior to such Closing Date for the purposes of this subsection.
(k) On or prior to the date of this Agreement, the
Representatives shall have received lock-up letters in substantially the form
attached hereto as EXHIBIT E from each of the executive officers and directors
of the Company, members of the Company's investment committee, the Manager, and
Resource America.
(l) The Custodian will deliver to CSFB a letter stating that
they will deliver to each Selling Stockholder a United States Treasury
Department Form 1099 (or other applicable form or statement specified by the
United States Treasury Department regulations in lieu thereof) on or before
January 31 of the year following the date of this Agreement.
(m) On each Closing Date, the Representatives shall have
received a certificate of an attorney-in-fact designated in the Power of
Attorney on behalf of such Selling Stockholder, dated as of the First Closing
Date, to the effect that (i) the representations and warranties of such Selling
Stockholder contained in Section 2(c) hereof are true and correct in all
respects with the same force and effect as though expressly made at and as of
each Closing Date and (ii) such Selling Stockholder has complied in all material
respects with all agreements and all conditions on its part to be performed
under this Agreement at or prior to each Closing Date.
(n) The NASD shall have confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(o) The Offered Securities shall have been approved for listing
on the NYSE, subject only to official notice of issuance.
(p) The Company shall have furnished to the Representatives at
the First Closing Date and each Optional Closing Date (if any) such further
customary information, opinions, certificates, letters and documents as the
Representatives may reasonably request.
The Selling Stockholders and the Company will furnish the
Representatives with such conformed copies of such opinions, certificates,
letters and documents as the Representatives reasonably request. The
Representatives may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder,
whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company, the Manager and
Resource America, joint and severally, will indemnify and hold harmless each
Underwriter, its partners, members, directors officers and its affiliates and
each person, if any who controls such Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
breach of any of the representations and warranties of the Company or the
Manager contained herein or any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company, the
27
Manager and Resource America will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below; and provided, further
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus if the Company had previously furnished copies thereof to such
Underwriter.
The Company, the Manager and Resource America agree to indemnify and
hold harmless the Designated Underwriter and each person, if any, who controls
the Designated Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act (the "DESIGNATED ENTITIES"), from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii) related to, arising out of, or
in connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
the Designated Entities.
(b) The Selling Stockholders, jointly and severally, will
indemnify and hold harmless each Underwriter, its partners, members, directors
officers and its affiliates and each person who controls such Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
28
such expenses are incurred; but only insofar as any such loss, claim, damage or
liability arise out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in and in
conformity with information furnished in writing by such Selling Stockholder to
the Company for use in the Registration Statement or the Prospectus; provided,
however, that the Selling Stockholders will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with written information furnished to the Company by an Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below.
(c) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company, the Manager, Resource America and their directors
and officers and each person, if any, who controls the Company, the Manager or
Resource America within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, and each Selling Stockholder against any losses, claims,
damages or liabilities to which the Company, the Manager, Resource America or
such Selling Stockholder may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company, the Manager, Resource America
and each Selling Stockholder in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred, it
being understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus furnished on
behalf of each Underwriter: the information contained in the fourth, fifteenth
and sixteenth paragraphs under the caption "Underwriting."
(d) Promptly after receipt by an indemnified party under this
Section or Section 10 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under subsection (a), (b) or (c) above or Section 10, notify
the indemnifying party of the commencement thereof; but the failure to notify
the indemnifying party shall not relieve it from any liability that it may have
under subsection (a), (b) or (c) above or Section 10 except to the extent that
it has been materially prejudiced by such failure; and provided further that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under subsection (a),
(b) or (c) above or Section 10. In case any such action is brought against any
indemnified party and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section or Section 10, as the case may be, for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
29
Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to the last paragraph in Section 7(a) hereof in respect of such
action or proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate firm (in addition to any local counsel)
for the Designated Underwriter for the defense of any losses, claims, damages
and liabilities arising out of the Directed Share Program, and all persons, if
any, who control the Designated Underwriter within the meaning of either Section
15 of the Act of Section 20 of the Exchange Act. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such (i) settlement includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
(e) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or (c)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholders bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Stockholders or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (e) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (e). Notwithstanding the provisions of this
subsection (e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(f) The obligations of the Company, the Manager, Resource
America and the Selling Stockholders under this Section or Section 10 shall be
in addition to any liability which the Company, the Manager, Resource America
and the Selling Stockholders may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter or
the QIU (as hereinafter defined) within the meaning of the Act; and the
obligations of the Underwriters under this Section shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each director of the Company, to each
officer of the Company who has signed a Registration Statement and to each
person, if any, who controls the Company within the meaning of the Act or the
Exchange Act. The liability under this Section 7 of each Selling Stockholder
shall be limited to an amount equal to the aggregate gross proceeds to such
Selling Stockholder from the sale of Securities sold by such Selling Stockholder
hereunder.
30
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, the
Representatives may make arrangements satisfactory to the Company and the
Selling Stockholders for the purchase of such Offered Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by such Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Offered Securities that such defaulting Underwriters agreed but failed to
purchase on such Closing Date. If any Underwriter or Underwriters so default and
the aggregate number of shares of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to the Representatives, the Company and the
Selling Stockholders for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Stockholders, except as provided in Section 10 (provided
that if such default occurs with respect to Optional Securities after the First
Closing Date, this Agreement will not terminate as to the Firm Securities or any
Optional Securities purchased prior to such termination). As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 8. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. [Qualified Independent Underwriter. The Company hereby confirms
that at its request [ ] has without compensation acted as "qualified independent
underwriter" (in such capacity, the "QIU") within the meaning of Rule 2710 of
the Conduct Rules of the NASD in connection with the offering of the Offered
Securities. The Company and the Selling Stockholders will severally and not
jointly indemnify and hold harmless the QIU against any losses, claims, damages
or liabilities, joint or several, to which the QIU may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon the QIU's acting (or
alleged failing to act) as such "qualified independent underwriter" and will
reimburse the QIU for any legal or other expenses reasonably incurred by the QIU
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; and provided, however, that
each Selling Stockholder shall only be subject to liability under this Section 9
to the extent such liability arises out of or is based upon any untrue statement
or alleged untrue statement or upon an omission or alleged omission based upon
information provided by such Selling Stockholder or contained in a
representation or warranty given by such Selling Stockholder in this Agreement
or the Custody Agreement; and provided, further, that the liability under this
Section 9 of each Selling Stockholder shall be limited to an amount equal to the
aggregate gross proceeds to such Selling Stockholder from the sale of Securities
sold by such Selling Stockholder hereunder.]
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, of the Company or its officers, of the Manager and of the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company, the Manager or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Offered Securities by the Underwriters is not consummated, the Company and the
Selling Stockholders shall remain responsible for the expenses to be paid or
reimbursed by them pursuant to Section 5(h) and the respective obligations of
the Company and the Selling Stockholders, and the Underwriters pursuant to
Section 7 and the obligations of the Company and the Selling Stockholders
pursuant to Section 9 shall remain in effect, and if any Offered Securities have
been purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Underwriters is not consummated as a result of the
failure of any condition specified in Section 6 hereof, the Company and the
Selling Stockholders will, jointly and severally, reimburse the Underwriters for
all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities.
31
11. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representatives, c/o Credit Suisse First Boston LLC, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or,
if sent to the Company, will be mailed, delivered or telegraphed and confirmed
to it at 000 Xxxxx Xxxxxx, 00xx xxxxx, Xxx Xxxx, XX 00000, Attention: General
Counsel, or, if sent to the Selling Stockholders or any of them, will be mailed,
delivered or telegraphed and confirmed to Xxxxxxxx X. Xxxxx at Xxxxxx X.
Xxxxxxx; provided, however, that any notice to an Underwriter pursuant to
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal representatives
and successors and the officers and directors and controlling persons referred
to in Section 8, and no other person will have any right or obligation
hereunder.
13. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives jointly or by
CSFB will be binding upon all the Underwriters. Xxxxxxxx X. Xxxxx/Xxxxxx X.
Xxxxxxx will act for the Selling Stockholders in connection with such
transactions, and any action under or in respect of this Agreement taken by
Xxxxxxxx X. Xxxxx/Xxxxxx X. Xxxxxxx will be binding upon all the Selling
Stockholders.
14. Absence of Fiduciary Relationship. The Company and the Selling
Stockholders acknowledge and agree that:
(a) the Representatives, on behalf of the Underwriters, have
been retained solely to act as underwriters in connection with the sale of the
Offered Securities and that no fiduciary, advisory or agency relationship
between the Company, the Selling Stockholders and the Representatives have been
created in respect of any of the transactions contemplated by this Agreement,
irrespective of whether the Representatives have advised or are advising the
Company and the Selling Stockholders on other matters;
(b) the price of the Offered Securities set forth in this
Agreement was established by the Company and the Selling Stockholders following
discussions and arms-length negotiations with the Representatives (including the
QIU), and the Company and the Selling Stockholders are capable of evaluating and
understanding and understand and accept the terms, risks and conditions of the
transactions contemplated by this Agreement;
(c) they have been advised that the Representatives and their
affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company and the Selling Stockholders and
that the Representatives have no obligation to disclose such interests and
transactions to the Company and the Selling Stockholders by virtue of any
fiduciary, advisory or agency relationship; and
32
(d) they waive, to the fullest extent permitted by law, any
claims they may have against the Representatives, on behalf of themselves and
the other Underwriters, for breach of fiduciary duty or alleged breach of
fiduciary duty and agree that the Representatives, on behalf of themselves and
the other Underwriters, shall have no liability (whether direct or indirect) to
the Company and the Selling Stockholders in respect of such a fiduciary duty
claim or to any person asserting a fiduciary duty claim on behalf of or in right
of the Company, including stockholders, employees or creditors of the Company,
and the Selling Stockholders.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
16. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
33
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company, the
Manager and Resource America, one of the counterparts hereof, whereupon it will
become a binding agreement among the Selling Stockholders, the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
RESOURCE CAPITAL CORP.
By:
------------------------------------------
Name:
Title:
RESOURCE CAPITAL MANAGER, INC.
By:
------------------------------------------
Name:
Title:
RESOURCE AMERICA, INC.
By:
------------------------------------------
Name:
Title:
Xxxxxxxx X. Xxxxx/Xxxxxx X. Xxxxxxx, as
attorney-in-fact for the Selling Stockholders
listed on Schedule A hereto
By:
------------------------------------------
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
CREDIT SUISSE FIRST BOSTON LLC
XXXXXXXX XXXXXXXX XXXXXX & CO., INC.
CITIGROUP GLOBAL MARKETS INC.
X.X. XXXXXX SECURITIES INC.,
Acting on behalf of themselves and as the
Representatives of the several
Underwriters.
By: CREDIT SUISSE FIRST BOSTON LLC
By:
---------------------------------
Name:
Title:
SCHEDULE A
NUMBER OF
NUMBER OF FIRM OPTIONAL
SECURITIES TO SECURITIES TO BE
SELLING STOCKHOLDER BE SOLD SOLD
------------------- -------------- -----------
-------------- -----------
Total..................................
============== ===========
Sch. A-1
SCHEDULE B
NUMBER OF FIRM
SECURITIES TO BE
UNDERWRITER PURCHASED
---------------------------------------------------------------------------- ----------------
Credit Suisse First Boston LLC..............................................
Xxxxxxxx Xxxxxxxx Xxxxxx & Co., Inc. .......................................
Citigroup Global Markets Inc................................................
X.X. Xxxxxx Securities Inc..................................................
----------------
Total..............................................................
================
Sch. B-1
[FORM OF OPINION OF LEDGEWOOD LAW FIRM, P.C.]
EXHIBIT A
1. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction set forth on a schedule to
this opinion letter.
2. Each subsidiary set forth on a schedule to this opinion letter (each a
"Subsidiary") has been duly incorporated or formed and is validly existing as a
corporation or limited liability company in good standing under the laws of the
jurisdiction of its incorporation or formation, has corporate or other requisite
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation or limited liability company to transact business and is in good
standing in each jurisdiction set forth opposite their respective names on a
schedule to this opinion letter; all of the issued and outstanding capital stock
of each Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of such counsel's knowledge and information,
is owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity and, to
such counsel's knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
3. The Manager has been duly formed and is validly existing and in good
standing as a corporation under the laws of the State of Delaware and has full
corporate power and authority to conduct its business as described in the
Prospectus.
4. The Initial Registration Statement was declared effective under the Act
as of the date and time specified in such opinion, the Additional Registration
Statement (if any) was filed and became effective under the Act as of the date
and time (if determinable) specified in such opinion, the Prospectus either was
filed with the Commission pursuant to the subparagraph of Rule 424(b) specified
in such opinion on the date specified therein or was included in the Initial
Registration Statement or the Additional Registration Statement (as the case may
be), and, to the best of the knowledge of such counsel, no stop order suspending
the effectiveness of a Registration Statement or any part thereof has been
issued and no proceedings for that purpose have been instituted or are pending
or contemplated under the Act, and each Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their respective
effective or issue dates, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
5. Each of this Agreement, the Registration Rights Agreement and the
Management Agreement has been duly authorized, executed and delivered by the
Company and the Manager, as applicable, and constitute valid and legally binding
obligations of the Company and the Manager, as applicable, enforceable against
the Company and the Manager, as applicable, in accordance with their terms.
Exh. A-1
6. The issue and sale of the Offered Securities by the Company and the
execution, delivery and performance by the Company and the Manager of this
Agreement and the consummation of the transactions contemplated herein
(including the use of the proceeds from the sale of the Offered Securities as
described in the Prospectus under the caption "Use of Proceeds") and compliance
by the Company and the Manager with its obligations under this Agreement do not
and will not, whether with or without the giving of notice of lapse of time or
both (i) breach or result in a default under any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument identified on the annexed
schedule furnished to us by the Company and the Manager, (ii) violate any
federal or Pennsylvania or Delaware statute or any rule or regulation that has
been issued pursuant to any federal or Pennsylvania or Delaware statute or any
order known to us issued pursuant to any federal or Pennsylvania or Delaware
statute by any court or governmental agency or body having jurisdiction over the
Company and the Manager or any of its subsidiaries or any of their properties or
(iii) result in the creation or imposition of any lien, encumbrance, charge or
claim upon any property or assets of the Company and the Manager under any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument identified on the annexed schedule furnished to us by the Company and
the Manager.
7. No order, consent, permit, approval, authorization, registration or
qualification of or filing with any federal or governmental agency or body or,
to our knowledge, any federal or state court is required on the part of the
Company and the Manager for the execution, delivery and performance by the
Company and the Manager of their obligations under this Agreement and the Power
of Attorney and Custody Agreement, as applicable, or the consummation by the
Company and the Manager of the transactions contemplated thereby, including
without limitation, the issuance, sale and delivery of Offered Securities by the
Company, other than (a) any regulatory filings, consents or approvals made,
required to be made, obtained or required to be obtained so that the Company,
the Subsidiaries and the Manager will be duly licensed to conduct their business
as described in the Prospectus and (b) those that have been obtained and made
under the Act and those as may be required under state securities laws.
8. To the best of our knowledge, neither the Company, the Subsidiaries, nor
the Manager is in breach or violation of or in default under (nor has any event
occurred which with notice, lapse of time, or both would result in any breach
of, or constitute a default under, or give the holder of any indebtedness (or a
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness under) (1) its
respective charter or by-laws, (2) any provisions of any agreement attached on a
schedule to this opinion letter, or (3) any federal, state, local or foreign
law, regulation or rule or any decree, judgment or order applicable to the
Company, the Subsidiaries or the Manager.
9. The statements under the captions "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Contractual Obligations and
Commitments and - Off-Balance Sheet Arrangements," "Business - Our Financing
Strategy and - Legal Proceedings," "Management - Management Agreement, - 2005
Stock Incentive Plan, - Conflicts of Interest in Our Relationship with Resource
Capital and Resource America and - Resolution of Potential Conflicts of Interest
in Allocation of Investment Opportunities" "Certain Relationships and Related
Transactions" and "Description of Capital Stock - Registration Rights" in the
Prospectus, insofar as such statements constitute summaries of certain terms and
documents referred to therein, constitute fair summaries thereof in all material
respects.
10. To the best of our knowledge, there are no contracts or agreements
between the Company and any person granting such person the right to require the
Company or the Subsidiaries to include any securities of the Company owned or to
be owned by such person in the securities registered pursuant to a registration
statement, except such rights as are provided under the Registration Rights
Agreement and the Management Agreement.
11. The Company is not required, and upon the issuance and sale of the
Offered Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will not be required to,
register as "investment company" or an "entity controlled" by an "investment
company" under the 1940 Act.
Exh. A-2
12. To the best of our knowledge, there is not pending or, to the best of
our knowledge, threatened any action, suit, proceeding, inquiry or
investigation, to which the Company, the Manager or any Subsidiary or any of
their respective officers or directors is a party, or to which the property of
the Company, the Manager or any Subsidiary thereof is subject, before or brought
by any court or governmental agency or body, which would reasonably be expected
to result in a Material Adverse Effect, or which would reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company or the Manager of its obligations thereunder or the
transactions contemplated by the Prospectus.
13. All descriptions in the Prospectus of contracts and other documents to
which the Company, the Manager or any Subsidiary are a party are accurate in all
material respects; to the best of our knowledge, there are no affiliate
transactions, off-balance sheet transactions, franchises, contracts, licenses,
leases, indentures, mortgages, loan agreements, notes, leases or other
instruments that would be required to be described or referred to in the
Prospectus that are not described or referred to in the Prospectus other than
those described or referred to therein or incorporated by reference thereto, and
the descriptions thereof or references thereto are correct in all material
respects.
Such counsel shall state that such counsel has participated in conferences
with officers and other representatives of the Company, representatives of the
Underwriters and representatives of the independent certified public accountants
of the Company, at which conferences the contents of the Registration Statement
and the Prospectus and related matters were discussed and, although such counsel
is not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus, such counsel shall advise you that no facts have
come to its attention which lead such counsel to believe that (i) on the
Effective Date and as of the date of this Agreement, the Registration Statement
or any amendment thereto (except with respect to the financial statements and
related notes and schedules and other financial data derived therefrom included
therein or omitted therefrom, as to which such counsel need not express any
belief), contained any 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 (ii) at the date of the Prospectus, at the date of any
amended or supplemented Prospectus, as of the date of this Agreement or at the
Closing Date, the Prospectus or any amendment or supplement thereto (except with
respect to the financial statements and related notes and schedules and other
financial data derived therefrom included therein or omitted therefrom, as to
which such counsel need not express any belief), contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Exh. A-3
[FORM OF OPINION OF INDIVIDUAL SELLING STOCKHOLDER]
EXHIBIT B-1
Assuming (a) the Underwriters do not have notice of any "adverse claim"
(within the meaning of the NYUCC) with respect to the Selling Stockholder Shares
and (b) payment is made for the Selling Stockholder Shares by the Underwriters
in accordance with the Underwriting Agreement, then, upon indication by book
entry that the Selling Stockholder Shares have been credited by the Securities
Intermediary to a Securities Account of the Lead Underwriter at DTC, then the
Lead Underwriter will acquire a "securities entitlement" (within the meaning of
the NYUCC) in the Selling Stockholder Shares (the "Security Entitlement"), free
from any "adverse claim" (within the meaning of the NYUCC) against such Security
Entitlement, whether framed in conversion, replevin, constructive trust,
equitable lien or other theory.
Xxx. X-0-0
[FORM OF OPINION OF INSTITUTIONAL SELLING STOCKHOLDER]
EXHIBIT B-2
1. Each Selling Stockholder had valid and unencumbered title to the Firm
Securities delivered by such Selling Stockholder on such Closing Date and had
full right, power and authority to sell, assign, transfer and deliver the Firm
Securities delivered by such Selling Stockholder on such Closing Date hereunder;
and the several Underwriters have acquired valid and unencumbered title to the
Firm Securities purchased by them from the Selling Stockholders on such Closing
Date hereunder.
2. No consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required to be obtained or made by
any Selling Stockholder for the consummation of the transactions contemplated by
the Power of Attorney and Custody Agreement or this Agreement in connection with
the sale of the Firm Securities sold by the Selling Stockholders, except such as
have been obtained and made under the Act and such as may be required under
state securities laws.
3. The execution, delivery and performance of the Power of Attorney and
Custody Agreement and this Agreement and the consummation of the transactions
therein and herein contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any statute, any
rule, regulation or order of any governmental agency or body or any court having
jurisdiction over any Selling Stockholder or any of their properties or any
agreement or instrument to which any Selling Stockholder is a party or by which
any Selling Stockholder is bound or to which any of the properties of any
Selling Stockholder is subject, or the charter or by-laws of any Selling
Stockholder which is a corporation.
4. The Power of Attorney and Custody Agreement with respect to each Selling
Stockholder have been duly authorized, executed and delivered by such Selling
Stockholder and constitute valid and legally binding obligations of such Selling
Stockholder enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
5. This Agreement has been duly authorized, executed and delivered by each
Selling Stockholder.
Xxx. X-0-0
[FORM OF OPINION OF DLA XXXXX XXXXXXX XXXX XXXX US LLP]
EXHIBIT C
1. The Company is a corporation duly incorporated and existing under and by
virtue of the laws of the State of Maryland and is in good standing with the
State Department of Assessments and Taxation.
2. The Company has the corporate power to own, lease or operate its
properties and to conduct its business substantially as described in the
Prospectus under the caption "Business." The Company has the corporate power to
execute and deliver this Agreement and to perform its obligations thereunder.
3. The Company has the number of authorized and issued and outstanding
shares of stock as set forth in the Prospectus under the caption
"Capitalization." The outstanding shares of stock of the Company (immediately
prior to the issuance of the Offered Securities) have been duly authorized and
are validly issued, fully paid and nonassessable and are not subject to any
statutory preemptive rights under the Maryland General Corporation Law (the
"MGCL"), or the Company Charter Documents.
4. The sale and issuance of the Offered Securities have been duly
authorized for issuance and sale to the Underwriters pursuant to the
Underwriting Agreement and, when issued and delivered by the Company, in the
manner provided for in the resolutions of the Board of Directors authorizing the
sale and issuance of the Offered Securities and in the Underwriting Agreement
and against payment of the purchase price set forth therein, the Offered
Securities will be validly issued, fully paid and nonassessable and will not be
subject to any statutory preemptive rights arising under the MGCL or the Company
Charter Documents.
5. The statements under the captions "Risk Factors - Risks Related to our
Organization and Structure," "Management - Indemnification and Limitation of
Liability; Insurance," "Description of Capital Stock" and "Certain Provisions of
the Maryland General Corporation Law and Our Charter and Bylaws" in the
Prospectus, insofar as such statements constitute summaries of the Company
Charter Documents or of Maryland law, constitute fair summaries thereof in all
material respects.
6. This Agreement has been duly authorized, executed and, so far as is
known to such counsel, delivered by the Company.
7. The form of certificate representing the Offered Securities complies in
all material respects with the applicable requirements of the MGCL, the Company
Charter Documents and no personal liability will attach to the holders of the
Offered Securities for any debt or obligation of the Company solely as a result
of their status as stockholders of the Company. The Offered Securities conform
in all material respects to the description thereof contained in the Prospectus
under the caption "Description of Capital Stock."
8. No consent, approval, authorization or order of, or qualification or
filing with, any governmental agency or authority of the State of Maryland
(other than as may be required under the securities laws of the State of
Maryland, as to which no opinion is hereby expressed) is required to be obtained
or made by the Company in connection with the transactions contemplated under
this Agreement, except for such as have been obtained or waived, if any.
Exh. C-1
9. The execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated thereunder, do not and will not
result in any breach of (i) any provisions of the Company Charter Documents or
(ii) any Maryland law or regulation or, so far as is known to such counsel, any
order, judgment, writ or decree of any Maryland governmental authority (other
than any order, judgment, writ or decree in connection with the securities laws
of the State of Maryland, as to which no opinion is hereby expressed) applicable
to the Company.
Exh. C-2
[FORM OF TAX OPINION OF LEDGEWOOD LAW FIRM, P.C.]
EXHIBIT D
1. Commencing with the Company's taxable year ending December 31, 2005, the
Company has been organized and operated in conformity with the requirements for
qualification and taxation as a REIT pursuant to sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the Company's
current and proposed method of operation will enable it to continue to meet the
requirements for qualification and taxation as a REIT under the Code for its
taxable year ending December 31, 2005 and thereafter.
2. The descriptions of the law and the legal conclusions contained in the
Prospectus under the caption "Federal Income Tax Consequences of Our
Qualification As A REIT" are correct in all material respects and the
discussions thereunder fairly summarize the federal income tax considerations
that are likely to be material to a holder of the Common Stock.
Exh. D-1
[FORM OF LOCK-UP AGREEMENT]
EXHIBIT E
, 2005
Credit Suisse First Boston LLC
Xxxxxxxx Xxxxxxxx Xxxxxx &Co., Inc.
Citigroup Global Markets Inc.
X.X. Xxxxxx Securities Inc.,
c/o Credit Suisse First Boston LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting
Agreement, pursuant to which an offering will be made that is intended to result
in the establishment of a public an orderly market for the common stock (the
"SECURITIES") of Resource Capital Corp., and any successor (by merger or
otherwise) thereto, (the "COMPANY"), the undersigned hereby agrees that during
the period specified in the following paragraph (the "LOCK-UP PERIOD"), the
undersigned will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any shares of Securities or securities convertible
into or exchangeable or exercisable for any shares of Securities, enter into a
transaction which would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Securities, whether any such aforementioned
transaction is to be settled by delivery of the Securities or such other
securities, in cash or otherwise, or publicly disclose the intention to make any
such offer, sale, pledge or disposition, or to enter into any such transaction,
swap, hedge or other arrangement, without, in each case, the prior written
consent of Credit Suisse First Boston LLC ("CSFB"). In addition, the undersigned
agrees that, without the prior written consent of CSFB, it will not, during the
Lock-Up Period, make any demand for or exercise any right with respect to, the
registration of any Securities or any security convertible into or exercisable
or exchangeable for the Securities.
The initial Lock-Up Period will commence on the date of this Lock-Up
Agreement and continue and include the date 180 days after the public offering
date set forth on the final prospectus used to sell the Securities (the "PUBLIC
OFFERING DATE") pursuant to the Underwriting Agreement, to which you are or
expect to become parties; provided, however, that if (1) during the last 17 days
of the initial Lock-Up Period, the Company releases earnings results or material
news or a material event relating to the Company occurs or (2) prior to the
expiration of the initial Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the initial Lock-Up Period, then in each case the Lock-Up Period will be
extended until the expiration of the 18-day period beginning on the date of
release of the earnings results or the occurrence of the material news or
material event, as applicable, unless CSFB waives, in writing, such extension.
The undersigned hereby acknowledges and agrees that written notice of
any extension of the Lock-Up Period pursuant to the previous paragraph will be
delivered by CSFB to the Company (in accordance with Section 10 of the
Underwriting Agreement) and that any such notice properly delivered will be
deemed to have been given to, and received by, the undersigned. The undersigned
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this Lock-Up Agreement during the period
from the date of this Lock-Up Agreement to an including the 34th day following
the expiration of the initial Lock-Up Period, it will give notice thereof to the
Company and will not consummate such transaction or take any such action unless
it has received written confirmation from the Company that the Lock-Up Period
(as may have been extended pursuant to the previous paragraph) has expired.
Exh. E-1
Any Securities received upon exercise of options granted to the
undersigned will also be subject to this Agreement. Any Securities acquired by
the undersigned in the open market will not be subject to this Agreement. A
transfer of Securities to a family member or trust may be made, provided the
transferee agrees to be bound in writing by the terms of this Agreement prior to
such transfer and no filing by any party (donor, donee, transferor or
transferee) under the Securities Exchange Act of 1934 shall be required or shall
be voluntarily made in connection with such transfer (other than a filing on a
Form 5 made after the expiration of the Lock-Up Period).
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Securities if such transfer would constitute a violation or breach of this
Agreement
This Agreement shall be binding on the undersigned and the successors,
heirs, personal representatives and assigns of the undersigned. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
Very truly yours,
------------------------------
[Name of stockholder]
Exh. E-2
