CAPITAL LEASE FUNDING, INC. Shares of Common Stock UNDERWRITING AGREEMENT
CAPITAL
LEASE FUNDING, INC.
Shares
of Common Stock
April
25,
2006
FRIEDMAN,
BILLINGS, XXXXXX & CO., INC.
WACHOVIA
CAPITAL MARKETS, LLC
as
Representatives of the several Underwriters
c/o
Friedman, Billings, Xxxxxx & Co., Inc.
0000
00xx
Xxxxxx Xxxxx
Xxxxxxxxx,
Xxxxxxxx 00000
Dear
Sirs:
The
Company understands that the Underwriters propose to make a public offering
of
the Shares as soon as the Underwriters deem advisable after this Underwriting
Agreement (this “Agreement”)
has
been executed and delivered.
The
Company has filed with the Securities and Exchange Commission (the “Commission”),
a
registration statement on Form S-3 (No. 333-124003), including a related
prospectus, for the registration of securities, including the Shares, under
the
Securities Act of 1933, as amended (the “Securities
Act”),
and
the rules and regulations thereunder (the “Securities
Act Regulations”).
The
Company has prepared and filed such amendments to the registration statement
and
such amendments or supplements to the related prospectus as may have been
required to the date hereof, and will file such additional amendments or
supplements as may hereafter be required. The registration statement has been
declared effective under the Securities Act by the Commission. The registration
statement, as amended at the time it was declared effective by the Commission
(and, if the Company files a post-effective amendment to such registration
statement which becomes effective prior to the Initial Closing Time (as defined
below), such registration statement as so amended) and including all information
deemed to be a part of the registration statement pursuant to incorporation
by
reference or Rule 430B of the Securities Act Regulations is hereinafter called
the “Registration
Statement.”
Any
registration statement filed pursuant to Rule 462(b) of the Securities Act
Regulations is hereinafter called the “Rule
462(b) Registration Statement,”
and
after such filing the term “Registration
Statement”
shall
include the 462(b) Registration Statement. The term “Base
Prospectus”
means
the prospectus dated May 20, 2005 included in the Registration Statement,
including all information incorporated by reference therein. The term
“Prospectus
Supplement”
means
the prospectus supplement specifically relating to the Shares in the form first
filed with the Commission pursuant to Rule 424 of the Securities Act
Regulations, including all information incorporated by reference therein. The
term “Prospectus”
means
the Base Prospectus together with the Prospectus Supplement. The term
“Preliminary
Prospectus”
means
any preliminary form of the Prospectus in the form filed with the Commission
pursuant to Rule 424 of the Securities Act Regulations.
The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
The
term
“Disclosure
Package”
means
(a) the Base Prospectus, the Preliminary Prospectus, as most recently amended
or
supplemented immediately prior to the Initial Sale Time (as defined herein),
(b)
the Issuer
Free Writing Prospectuses (as defined below),
if any,
identified in Schedule
IIA,
(c) the
information contained on Schedule
IIB
and (d)
any other Free Writing Prospectus (as defined below) that the parties hereto
shall hereafter expressly agree to treat as part of the Disclosure Package.
The
term
“Issuer
Free Writing Prospectus”
means
any issuer free writing prospectus, as defined in Rule 433 of the Securities
Act
Regulations. The term “Free
Writing Prospectus”
means
any free writing prospectus, as defined in Rule 405 of the Securities Act
Regulations.
All
references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration
Statement, the Disclosure Package, the Preliminary Prospectus or the Prospectus
shall be deemed to mean and include all such financial statements and schedules
and other information that is incorporated by reference in or otherwise deemed
by Securities Act Regulations to be a part of or included in the Registration
Statement, the Disclosure Package, the Preliminary Prospectus or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, the Disclosure Package, the
Preliminary Prospectus or the Prospectus shall be deemed to mean and include
the
filing of any document under the Securities Exchange Act of 1934 (the
“Exchange
Act”)
that
is incorporated by reference in or otherwise deemed by Securities Act
Regulations to be a part of or included in the Registration Statement, the
Disclosure Package, the Preliminary Prospectus or the Prospectus, as the case
may be.
1
The
Company and the Underwriters agree as follows:
1. Sale
and Purchase:
(a) Initial
Shares. Upon
the
basis of the warranties and representations and other terms and conditions
herein set forth, at the purchase price per share of $10.0225,
the Company agrees to sell to the Underwriters the Initial Shares, and each
Underwriter agrees, severally and not jointly, to purchase from the Company
the
number of Initial Shares set forth in Schedule
I
opposite
such Underwriter’s name, plus any additional number of Initial Shares that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 8 hereof, subject in each case, to such adjustments among the
Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional shares.
(b) Option
Shares.
In
addition, upon the basis of the warranties and representations and other terms
and conditions herein set forth, at the purchase price per share set forth
in
paragraph (a), less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Shares but not payable on
the
Option Shares, the Company hereby grants an option to the Underwriters, acting
severally and not jointly, to purchase from the Company, all or any part of
the
Option Shares, plus any additional number of Option Shares that such Underwriter
may become obligated to purchase pursuant to the provisions of Section 8 hereof.
The option hereby granted will expire 30 days after the date hereof and may
be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Shares upon notice by the Representatives to the
Company setting forth the number of Option Shares as to which the several
Underwriters are then exercising the option and the time and date of payment
and
delivery for such Option Shares. Any such time and date of delivery (an
“Option
Closing Time”)
shall
be determined by the Representatives, but shall not be later than five full
business days after the exercise of such option, nor in any event prior to
the
Initial Closing Time (as hereinafter defined). If the option is exercised as
to
all or any portion of the Option Shares, the Company will sell that number
of
Option Shares then being purchased, and each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number
of
Option Shares then being purchased which the number of Initial Shares set forth
in Schedule
I
opposite
the name of such Underwriter bears to the total number of Initial Shares,
subject in each case to such adjustments among the Underwriters as the
Representatives in their sole discretion shall make to eliminate any sales
or
purchases of fractional shares.
2. Payment
and Delivery
(a) Initial
Shares.
The
Initial Shares to be purchased by each Underwriter hereunder, in definitive
form, and in such authorized denominations and registered in such names as
the
Representatives may request upon at least 48 hours’ prior notice to the Company
shall be delivered by or on behalf of the Company to the Representatives,
including, at the option of the Representatives, through the facilities of
The
Depository Trust Company (“DTC”)
for
the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified in writing to the Representatives
by
the Company upon at least 48 hours’ prior notice. The Company will cause the
certificates representing the Initial Shares to be made available for checking
and packaging at least 24 hours prior to the Initial Closing Time with respect
thereto at the office of Friedman, Billings, Xxxxxx & Co., Inc., 0000 X.
Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or at the office of DTC or its
designated custodian, as the case may be (the “Designated
Office”).
The
time and date of such delivery and payment shall be 9:30 a.m., New York City
time, on the third (fourth, if pricing occurs after 4:00 p.m., New York
City time) business day after the date hereof (unless another time and date
shall be agreed to by the Representatives and the Company). The time at which
such payment and delivery are actually made is hereinafter sometimes called
the
“Initial
Closing Time.”
2
(b) Option
Shares.
Any
Option Shares to be purchased by each Underwriter hereunder, in definitive
form,
and in such authorized denominations and registered in such names as the
Representatives may request upon at least 48 hours’ prior notice to the Company
shall be delivered by or on behalf of the Company to the Representatives,
including, at the option of the Representatives, through the facilities of
DTC
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified in writing to the Representatives
by
the Company upon at least 48 hours’ prior notice. The Company will cause the
certificates representing the Option Shares to be made available for checking
and packaging at least 24 hours prior to the Option Closing Time with respect
thereto at the Designated Office. The time and date of such delivery and payment
shall be 9:30 a.m., New York City time, on the date specified by the
Representatives in the notice given by the Representatives to the Company of
the
Underwriters’ election to purchase such Option Shares or on such other time and
date as the Company and the Representatives may agree upon in
writing.
3. Representations
and Warranties of the Company:
The
Company represents and warrants to the Underwriters that:
(a) the
authorized, issued and outstanding shares of capital stock of the Company are
as
set forth in the column entitled “Actual” in the “Capitalization” section of the
Disclosure Package and the Prospectus (except for subsequent issuances thereof,
if any, contemplated by this Agreement or pursuant to employee benefit plans
referred to in the Disclosure Package and the Prospectus or as otherwise
disclosed in the Disclosure Package and the Prospectus); the outstanding shares
of stock or, as applicable, partnership, membership or other equity interests,
of the Company and each of the subsidiaries of the Company (each, a
“Subsidiary”
and
collectively, the “Subsidiaries”),
have
been duly authorized and validly issued and are fully paid and, with respect
to
shares of capital stock, limited partnership interests and membership interests,
non-assessable (except to the extent such non-assessability may be affected
by
Section 17-607 of the Delaware Revised Uniform Limited Partnership Act or
Section 18-607 of the Delaware Limited Liability Company Act), and, except
as
disclosed in the Disclosure Package and the Prospectus, all of the outstanding
shares of capital stock or partnership, membership or other equity interests
of
the Subsidiaries are directly or indirectly owned of record and beneficially
by
the Company, free and clear of any pledge, lien, encumbrance, security interest
or other claim, and, except as disclosed in the Disclosure Package and the
Prospectus and as otherwise set forth below, there are no outstanding (i)
securities or obligations of the Company or any of the Subsidiaries convertible
into or exchangeable or redeemable for any capital stock or other equity
interests of the Company or any Subsidiary, (ii) warrants, rights or
options to subscribe for or purchase from the Company or any Subsidiary any
such
capital stock or other equity interests or any such convertible or exchangeable
securities or obligations (except for warrants, rights or options issued under
incentive, benefit or share purchase plans of the Company referred to in the
Disclosure Package and the Prospectus for officers, employees and others
performing or providing similar services), or (iii) obligations of the
Company or any Subsidiary to issue any shares of capital stock or other equity
interests, any such convertible or exchangeable or redeemable securities or
obligations, or any such warrants, rights or options;
3
(b) each
of
the Company and the Subsidiaries (all of which Subsidiaries are named on
Schedule
III,
except
for those Subsidiaries that, considered in the aggregate as a single subsidiary,
do not constitute a “significant subsidiary” as defined in Rule 1-02 of
Regulation S-X promulgated by the Commission) has been duly incorporated or
organized and is validly existing as a corporation, limited partnership, limited
liability company or business trust, as applicable, in good standing under
the
laws of its respective jurisdiction of incorporation or organization with full
corporate or other power and authority to own its respective assets and to
conduct its respective businesses as described in the Disclosure Package and
the
Prospectus and, in the case of the Company, to execute and deliver this
Agreement and to consummate the transactions contemplated herein;
(c) each
of
the Company and the Subsidiaries is duly qualified and is in good standing
in
each jurisdiction in which the nature or conduct of its business requires such
qualification and in which the failure, individually or in the aggregate, to
be
so qualified could reasonably be expected to have a material adverse effect
on
the assets, business, operations, earnings or financial condition of the Company
and the Subsidiaries taken as a whole (a “Material
Adverse Effect”);
except as disclosed in the Disclosure Package and the Prospectus, no Subsidiary
is prohibited or restricted, directly or indirectly, from paying dividends
to
the Company, or from making any other distribution with respect to such
Subsidiary’s capital stock or other equity interests or from repaying to the
Company or any other Subsidiary any amounts that may from time to time become
due under any loans or advances to such Subsidiary from the Company or such
other Subsidiary;
(d) the
Company and the Subsidiaries are in compliance in all material respects with
all
applicable federal, state, local or foreign laws, regulations,
rules,
decrees, judgments and orders, including those relating to transactions with
affiliates, except where any failures to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect;
4
(e) none
of
the Company and the Subsidiaries is in breach of or in default under (nor has
any event occurred which with notice, lapse of time, or both would constitute
a
breach thereof, or default thereunder by the Company or the Subsidiaries) its
respective organizational documents, or in the performance or observance of
any
obligation, agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or other agreement
or instrument to which the Company or any of the Subsidiaries is a party or
by
which any of them or their respective properties is bound, except for such
breaches or defaults that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect;
(f) the
execution, delivery and performance of this Agreement and consummation of the
transactions contemplated herein will not (i) 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 organizational documents of the Company or any
Subsidiary, or (B) any provision of any license, indenture, mortgage, deed
of
trust, loan or credit agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or their respective
assets may be bound or affected, or under any federal, state, local or foreign
law, regulation or rule or any decree, judgment or order applicable to the
Company or any Subsidiary, except in the case of this clause (B) for such
conflicts, breaches or defaults that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect; or (ii) result
in
the creation or imposition of any lien, charge, claim or encumbrance upon any
asset of the Company or any Subsidiary that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
(g) this
Agreement has been duly authorized, executed and delivered by the Company and
is
a legal, valid and binding agreement of the Company enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general equitable principles (collectively, the “Exceptions”),
and
except to the extent that the indemnification and contribution provisions of
Section 9 hereof may be limited by federal or state securities laws and public
policy considerations in respect thereof;
(h) 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 or any other third party is required in connection with the Company’s
execution, delivery and performance of this Agreement, its consummation of
the
transactions contemplated herein or the Company’s sale and delivery of the
Shares, other than (i) such as have been obtained, or will have been obtained
at
the Initial Closing Time or the relevant Option Closing Time, as the case may
be, under the Securities Act and the Exchange Act, (ii) such approvals as have
been obtained in connection with the approval of the listing of the Shares
on
the New York Stock Exchange, (iii) any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the Shares
are
being offered by the Underwriters, (iv) filings with and approvals by the
National Association of Securities Dealers, Inc. and (v) such approvals,
authorizations, consents or orders or filings, the absence of which,
individually or in the aggregate, could not reasonably be expected to have
a
Material Adverse Effect;
5
(i) 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 authorizations, consents and approvals from other persons, required
in
order to conduct the business described in the Disclosure Package and the
Prospectus, except to the extent that any failure to have any such licenses,
authorizations, consents or approvals, to make any such filings or to obtain
any
such authorizations, consents or approvals could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; none of
the
Company and the Subsidiaries is in violation of, in default under, or has
received any notice regarding a possible violation, default or revocation of
any
such license, authorization, consent or approval or any federal, state, local
or
foreign law, regulation or rule or any decree, judgment or order applicable
to
the Company or any of the Subsidiaries, the effect of which could reasonably
be
expected to result in a Material Adverse Effect; and no such license,
authorization, consent or approval contains a materially burdensome restriction
that is not adequately disclosed in the Disclosure Package and the
Prospectus;
(j) the
Company and the transactions contemplated by this Agreement meet the
requirements for the use of Form S-3 under the Securities Act; each of the
Registration Statement and any Rule 462(b) Registration Statement has become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the Securities Act and no proceedings for that
purpose have been instituted or are pending or, to the Company’s knowledge, are
threatened by the Commission, and, to the Company’s knowledge, the Company has
complied with any request on the part of the Commission for additional
information;
(k) the
Preliminary Prospectus when filed and the Registration Statement as of its
initial effective date, the filing date of the Company’s Annual Report on Form
10-K for year ended December 31, 2005, any subsequent effective date in
connection with the Shares and as of the date hereof complied or will comply,
and the Prospectus and any further amendments or supplements to the Registration
Statement, the Preliminary Prospectus or the Prospectus filed in connection
with
the Shares will, when they become effective or are filed with the Commission,
as
the case may be, comply, in all material respects with the requirements of
the
Securities Act and the Securities Act Regulations;
(l) the
Registration Statement, as of its initial effective date, the filing date of
the
Company’s Annual Report on Form 10-K for year ended December 31, 2005 and as of
the date hereof, did not, does not and will not contain an untrue statement
of a
material fact or omit to state a material fact required to be stated therein
or
necessary to make the statements therein not misleading; and the Preliminary
Prospectus does not, and the Prospectus or any amendment or supplement thereto
will not, as of the applicable filing date, the date hereof and at the Initial
Closing Time and at the Option Closing Time (if any), contain an untrue
statement of a material fact or omit to state a material fact necessary to
make
the statements therein, in the light of the circumstances under which they
were
made, not misleading; provided, however, that the Company makes no warranty
or
representation with respect to any statement contained in or omitted from the
Registration Statement, the Preliminary Prospectus or the Prospectus in reliance
upon and in conformity with the information concerning the Underwriters and
furnished in writing by or on behalf of the Underwriters through the
Representatives to the Company expressly for use therein (that information
being
limited to that described in Schedule
IV;
6
(m) the
Company is not an Ineligible Issuer (as defined in Rule 405 of the Securities
Act Regulations), without taking into account any determination by the
Commission pursuant to such Rule 405 that it is not necessary that the Company
be considered an Ineligible Issuer; each document incorporated by reference
in
the Prospectus or the Disclosure Package, when it was filed with the Commission,
conformed in all material respects to the requirements of the Securities Act
and
the Securities Act Regulations, or the Exchange Act and the rules and
regulations promulgated under the Exchange Act (the “Exchange
Act Regulations”),
as
applicable, and
none
of such documents contained an untrue statement of a material fact or omitted
to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading; and, until the completion of the public offer and
sale of the Shares, any further documents so filed and incorporated by reference
in the Prospectus or the Disclosure Package or any further amendment or
supplement thereto, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Securities Act
and
the Securities Act Regulations, or the Exchange Act and the Exchange Act
Regulations, as applicable, and
will
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(n) as
of
7:15 pm (Eastern time) on the date of this Agreement (the “Initial
Sale Time”),
the
Disclosure Package did not, and at the Initial Closing Time and any Option
Closing Time, the Disclosure Package will not, contain any untrue statement
of a
material fact or omit to state any material fact necessary in order to make
the
statements therein, in the light of the circumstances under which they were
made, not misleading; as of its issue date or date of first use and at all
subsequent times through the Initial Sale Time, each Issuer Free Writing
Prospectus did not, and at the Initial Closing Time and any Option Closing
Time,
each such Issuer Free Writing Prospectus will not, contain any untrue statement
of a material fact or omit to state any material fact necessary in order to
make
the statements therein, in the light of the circumstances under which they
were
made, not misleading; provided, however, that the Company makes no warranty
or
representation with respect to any statement contained in or omitted from the
Disclosure Package in reliance upon and in conformity with the information
concerning the Underwriters and furnished in writing by or on behalf of the
Underwriters through the Representatives to the Company expressly for use
therein (that information being limited to that described in the last sentence
of Schedule
IV);
7
(o) each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times
through the completion of the public offer and sale of the Shares or until
any
earlier date that the Company notifies the Representatives in writing did not,
does not and will not include any information that conflicted, conflicts or
will
conflict with the information contained in the Registration Statement, including
any document incorporated by reference therein that has not been superseded
or
modified;
(p) the
Company is eligible to use Free Writing Prospectuses in connection with this
offering pursuant to Rules 164 and 433 of the Securities Act Regulations; any
Free Writing Prospectus that the Company is required to file pursuant to Rule
433(d) of the Securities Act Regulations has been, or will be, filed with the
Commission in accordance with the requirements of the Securities Act and the
Securities Act Regulations; and each Free Writing Prospectus that the Company
has filed, or is required to file, pursuant to Rule 433(d) of the Securities
Act
Regulations or that was prepared by or on behalf of or used by the Company
complies or will comply in all material respects with the requirements of the
Securities Act and the Securities Act Regulations;
(q) except
for the Issuer Free Writing Prospectuses identified in Schedule
IIA
hereto,
and any electronic road show relating to the public offering of the Shares
contemplated herein, the Company has not prepared, used or referred to, and
will
not, without the prior consent of the Representatives, prepare, use or refer
to,
any Free Writing Prospectus;
(r) the
Preliminary Prospectus, the Prospectus and any Issuer Free Writing Prospectuses
(to the extent any such Issuer Free Writing Prospectus was required to be filed
with the Commission) delivered to the Underwriters for use in connection with
the public offering of the Shares contemplated herein have been and will be
identical to the versions of such documents transmitted to the Commission for
filing via the Electronic Data Gathering Analysis and Retrieval System
(“XXXXX”),
except to the extent permitted by Regulation S-T;
(s) the
Company filed the Registration Statement with the Commission before using any
Issuer Free Writing Prospectus (it being hereby acknowledged that, subject
to
the other representations, warranties and covenants in this Agreement, documents
incorporated by reference may be filed after using any Issuer Free Writing
Prospectus);
(t) the
financial statements, including the related supporting schedules and notes,
included in (or incorporated by reference into) the Disclosure Package and
the
Prospectus present fairly the consolidated financial position of the entities
to
which such financial statements relate (the “Covered
Entities”)
as of
the dates indicated and the consolidated results of operations and changes
in
financial position and cash flows of the Covered Entities for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States and
on
a consistent basis during the periods involved (except as may be expressly
stated in the related notes thereto) and in accordance with Regulation S-X
promulgated by the Commission; the financial data in the Disclosure Package
and
the Prospectus fairly presents the information shown therein and has been
compiled on a basis consistent with the financial statements included in the
Disclosure Package and the Prospectus; no other financial statements or
supporting schedules are required to be included in the Disclosure Package
or
the Prospectus; the unaudited pro forma financial information (including the
related notes) included in the Disclosure Package and the Prospectus complies
as
to form in all material respects with the applicable accounting requirements
of
the Securities Act and the Securities Act Regulations and the Exchange Act
and
Exchange Act Regulations, as applicable, and management of the Company believes
that the assumptions underlying the pro forma adjustments are reasonable; such
pro forma adjustments have been properly applied to the historical amounts
in
the compilation of the information; no other pro forma financial information
is
required to be included in the Disclosure Package or the
Prospectus;
8
(u) Ernst
& Young LLP and McGladrey
& Xxxxxx, LLP,
whose
reports on the consolidated financial statements of the Company and the
Subsidiaries and the Company’s predecessor are filed with the Commission as part
of the Disclosure Package and the Prospectus or are incorporated by reference
therein, were during the periods covered by their reports independent registered
public accountants as required by the Securities Act, the Securities Act
Regulations, the Exchange Act and the Exchange Act Regulations;
(v) subsequent
to the respective dates as of which information is given in the Disclosure
Package and the Prospectus, and except as may be otherwise stated in the
Disclosure Package and the Prospectus, there has not been (i) any Material
Adverse Effect or any change or event that reasonably could be expected to
have
a Material Adverse Effect, whether or not arising in the ordinary course of
business, (ii) any obligation, contingent or otherwise, directly or indirectly
incurred by the Company or any of the Subsidiaries that reasonably could be
expected to result in a Material Adverse Effect or (iii) except for regular
quarterly dividends on the Common Stock and the Company’s 8.125% Series A
Cumulative Redeemable Preferred Stock, $.01 par value per share (the
“Preferred
Stock”),
described in the Disclosure Package and the Prospectus, any dividend or
distribution of any kind declared, paid or made by the Company on any class
of
its capital stock;
(w) the
Shares conform in all material respects to the description thereof contained
in
the Disclosure Package and the Prospectus;
(x) the
Shares have been duly authorized and, when issued and duly delivered against
payment therefor as contemplated by this Agreement, will be validly issued,
fully paid and non-assessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim created by or known to the Company, and the
issuance and sale of the Shares by the Company is not subject to preemptive
or
other similar rights arising by operation of law, under the organizational
documents of the Company or under any agreement to which the Company or any
Subsidiary is a party or otherwise;
(y) at
or
before the Initial Closing Time, the Shares will have been registered under
Section 12(b) of the Exchange Act;
9
(z) all
securities issued by the Company or any of the Subsidiaries prior to the date
hereof have been issued and sold in compliance with (i) all applicable federal
and state securities laws, and (ii) to the extent applicable to the issuing
entity, the requirements of the New York Stock Exchange;
(aa) the
Company has not taken, and will not take, directly or indirectly, any action
that is designed to or that has constituted or that 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 Shares;
(bb) in
connection with the offering of the Shares, the Company has not offered and
will
not offer its Common Stock or any other securities convertible into or
exchangeable or exercisable or redeemable for Common Stock in a manner in
violation of the Securities Act; and
the
Company has not distributed and will not distribute any offering material in
connection with the offer and sale of the Shares except for the Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus permitted by
Section 3(q) and the Registration Statement;
(cc) except
as
set forth on Schedule
V,
neither
the Company nor any of its affiliates (i) is required to register as a “broker”
or “dealer” in accordance with the provisions of the Exchange Act, or the
Exchange Act Regulations, or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning
of Article I of the Bylaws of the National Association of Securities Dealers,
Inc. (the “NASD”))
any
member firm of the NASD;
(dd) the
Company has not relied upon the Representatives or legal counsel for the
Representatives for any legal, tax or accounting advice in connection with
the
offering and sale of the Shares;
(ee) there
are
no actions, suits, proceedings, inquiries or investigations pending or, to
the
Company’s knowledge, threatened against the Company or any of the Subsidiaries
or any of their respective officers and directors or to which the assets of
any
such entity are subject, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority,
arbitral panel or agency, that could result in a judgment, decree, award or
order which could reasonably be expected to have a Material Adverse
Effect;
(ff) the
descriptions in the Disclosure Package and the Prospectus of the legal or
governmental proceedings, contracts, leases and other legal documents therein
described present fairly in all material respects the information required
to be
disclosed, and there are no legal or governmental proceedings, contracts,
leases, or other documents of a character required to be described in the
Disclosure Package or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required; all
agreements between the Company or any of the Subsidiaries and third parties
expressly referenced in the Disclosure Package or the Prospectus are legal,
valid and binding obligations of the Company or one or more of the Subsidiaries,
enforceable in accordance with their respective terms, except to the extent
enforceability may be limited by the Exceptions and, to the Company’s knowledge,
no party is in breach or default under any such agreements that could reasonably
be expected to have a Material Adverse Effect;
10
(gg) the
Company and the Subsidiaries own or possess adequate licenses or other rights
to
use all patents, trademarks, service marks, trade names, copyrights, software
and design licenses, trade secrets, manufacturing processes, other intangible
property rights and know-how (collectively “Intangibles”)
necessary to entitle the Company and the Subsidiaries to conduct their business
as described in the Disclosure Package and the Prospectus, and none of the
Company and the Subsidiaries has received notice of infringement of or conflict
with (and the Company knows of no such infringement of or conflict with)
asserted rights of others with respect to any Intangibles that, individually
or
in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
(hh) the
Company and the Subsidiaries have established and maintain disclosure controls
and procedures (as such term is defined in Rule 13a-15 and 15d-15 of the
Exchange Act Regulations); such disclosure controls and procedures are designed
to ensure that material information relating to the Company and its Subsidiaries
is made known to the Company's Chief Executive Officer and its Chief Financial
Officer by others within those entities, and such disclosure controls and
procedures are effective to perform the functions for which they were
established; the Company and the Subsidiaries have established and maintain
internal control over financial reporting (as such term is defined in Rule
13a-15 and 15d-15 of the Exchange Act Regulations); such internal control over
financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles, including providing reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on the financial statements;
the Company's auditors and the audit committee of the board of directors have
been advised of: (i) any significant deficiencies and material weaknesses in
the
design or operation of internal controls which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report
financial data; and (ii) any fraud, whether or not material, that involves
management or other employees who have a material role in the Company’s internal
controls; since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no changes in internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting;
(ii) each
of
the Company
and the
Subsidiaries has filed on a timely basis (including in accordance with any
applicable extensions) all necessary federal, state, local and foreign income
and franchise tax returns required to be filed through the date hereof or have
properly requested extensions thereof, and have paid all taxes shown as due
thereon, and if due and payable, any related or similar assessment, fine or
penalty levied against the Company or any of the Subsidiaries, except for any
failure to file that, individually or in the aggregate, could not reasonably
be
expected to have a Material Adverse Effect; no tax deficiency has been asserted
against any such entity, and the Company does not know of any tax deficiency
that is likely to be asserted against the Company or any of the Subsidiaries
that, individually or in the aggregate, if determined adversely to any such
entity, could reasonably be expected to have a Material Adverse Effect; all
tax
liabilities are adequately provided for on the respective books of the Company
and the Subsidiaries;
11
(jj) commencing
with the taxable year ended December 31, 2004, the Company has been organized
and operated in conformity with the requirements for qualification as a real
estate investment trust (“REIT”)
under
the Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (“Code”),
and
the current and proposed method of operation of the Company and the Subsidiaries
as described in the Disclosure Package and the Prospectus will enable the
Company to continue to meet the requirements for qualification and taxation
as a
REIT under the Code; the Company intends to continue to qualify as a REIT under
the Code for all subsequent years, and the Company does not know of any event
that could reasonably be expected to cause the Company to fail to qualify as
a
REIT under the Code at any time;
(kk) the
Company and the Subsidiaries maintain, and, to the Company’s knowledge, their
borrowers maintain, insurance (issued by insurers of recognized financial
responsibility) of the types and in the amounts generally deemed adequate for
the business of the Company and the Subsidiaries;
(ll) each
of
the Company and the Subsidiaries is in compliance in all material respects
with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder (“ERISA”);
no
“reportable event” (as defined in ERISA) has occurred with respect to any
“pension plan” (as defined in ERISA) for which the Company or any of the
Subsidiaries would have any material liability; none of the Company and the
Subsidiaries has incurred or expects to incur material liability under (i)
Title
IV of ERISA with respect to the termination of, or withdrawal from, any “pension
plan” (as defined in ERISA and subject to Title IV of ERISA) or (ii) Section 412
or 4971 of the Code; and each “pension plan” for which the Company or any of the
Subsidiaries would have any material liability and that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
that
would cause the loss of such qualification;
(mm) none
of
the Company and the Subsidiaries, or, to the Company’s knowledge, any officer or
director purporting to act on behalf of the Company or any of the Subsidiaries
has at any time (i) made any payment outside the ordinary course of
business to any investment officer or loan broker or person charged with similar
duties of any entity to which the Company or any of the Subsidiaries sells
or
from which the Company or any of the Subsidiaries buys loans or servicing
arrangements for the purpose of influencing such agent, officer, broker or
person to buy loans or servicing arrangements from or sell loans or servicing
arrangements to the Company or any of the Subsidiaries, (ii) engaged in any
transactions, maintained any bank account or used any corporate funds except
for
transactions, bank accounts and funds that have been and are reflected in the
normally maintained books and records of the Company and the Subsidiaries;
or
(iii) made any other payment of funds of the Company or any of the Subsidiaries
or received or retained any funds in violation of any law, rule or regulation
or
of a character required to be disclosed in the Disclosure Package or the
Prospectus;
12
(nn) except
as
otherwise disclosed in the Disclosure Package and the Prospectus, there are
no
outstanding loans or advances or guarantees of indebtedness by the Company
or
any of the Subsidiaries to or for the benefit of any of the officers or
directors of the Company or any of the Subsidiaries or any of the members of
the
families of any of them; except as otherwise disclosed in the Disclosure Package
and the Prospectus, no other relationship, direct or indirect, exists between
or
among the Company or any of the Subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of the
Subsidiaries on the other hand, that is required by the Securities Act and
the
Securities Act Regulations to be described in the Disclosure Package or the
Prospectus and that is not so described;
(oo) except
as
disclosed in the Disclosure Package and the Prospectus, none of the Company
and
the Subsidiaries has incurred any liability for any finder’s fees or similar
payments in connection with the transactions herein contemplated;
(pp) none
of
the Company and the Subsidiaries is and, after giving effect to the offering
and
sale of the Shares, will be an “investment company” or an entity “controlled” by
an “investment company”, as such terms are defined in the Investment Company Act
of 1940, as amended (the “Investment
Company Act”);
(qq) any
statistical and market-related data included in the Prospectus and the
Disclosure Package are based on or derived from sources that the Company
believes to be reliable and accurate;
(rr) there
are
no persons with registration or other similar rights to have any equity or
debt
securities, including securities that are convertible into or exchangeable
or
redeemable for equity securities, registered pursuant to the Registration
Statement or otherwise registered by the Company under the Securities Act except
for those registration or similar rights that have been waived or that are
inapplicable with respect to the offering contemplated by this
Agreement;
(ss) except
as
disclosed in the Disclosure Package and the Prospectus: (i) the Company and
the
Subsidiaries have good title to (and are the sole legal, beneficial and
equitable owner of) all loan assets and other personal property described in
the
Disclosure Package or the Prospectus or shown on the financial statements
included in the Disclosure Package and the Prospectus, and own fee simple title
to or have a valid leasehold interest in, as applicable, all real property
(other than real property not purported to be owned or leased by the Company
or
the Subsidiaries) described in the Disclosure Package or the Prospectus or
shown
on the financial statements included in the Disclosure Package and the
Prospectus, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, encroachments, restrictions, mortgages and
defects, except as do not 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 and the Subsidiaries; and (ii) any real property improvements,
equipment and personal property held under lease by the Company or any of the
Subsidiaries are held under valid, existing and enforceable leases, with such
exceptions as are not material and do not interfere with the use made or
proposed to be made of such real property improvements, equipment and personal
property by the Company or such Subsidiary;
13
(tt) other
than with respect to development loans, the Company or a Subsidiary has
obtained, from a title insurance company licensed to issue such policy, a
lender’s title insurance policy on any real property in respect of which the
Company or any of the Subsidiaries has a loan in its portfolio as of the date
hereof, the Initial Closing Time or the Option Closing Time secured thereby
that
insures the lien of its mortgage on the real property with coverage equal to
the
maximum aggregate principal amount of any indebtedness held by the Company
or a
Subsidiary and so secured by the real property;
the
Company or a Subsidiary has obtained, from a title insurance company licensed
to
issue such policy, an owner’s or leasehold title insurance policy on any real
property owned in fee or leased, as the case may be, by the Company or any
of
the Subsidiaries as of the date hereof, the Initial Closing Time or the Option
Closing Time that insures its fee simple title or leasehold interest
with
coverage in an amount at least equal to the amount generally deemed in the
Company’s industry to be commercially reasonable in the market where the
property is located;
(uu) there
are
no real property interests or loans in respect of real property that any of
the
Company and the Subsidiaries directly or indirectly intends to acquire, lease,
originate or underwrite or any contracts, letters of intent, term sheets,
agreements, arrangements or understandings with respect to the direct or
indirect acquisition, disposition, origination or underwriting by the Company
or
the Subsidiaries of interests in real property or loans in respect of real
property that are required to be described in the Disclosure Package or the
Prospectus and are not so described;
(vv) except
as
set forth in the
Disclosure Package and
the
Prospectus, the mortgages and deeds of trust encumbering any real property
owned
in fee or leased by the Company or a Subsidiary (i) are not convertible (in
the
absence of foreclosure) into an equity interest in such real property or in
the
Company or any Subsidiary, (ii) are not and will not be cross-defaulted to
any
indebtedness other than indebtedness of the Company or any of the Subsidiaries,
and (iii) are not and will not be cross-collateralized to any property not
owned
by the Company or any of the Subsidiaries;
(ww) except
as
otherwise disclosed in the Disclosure Package and the Prospectus, (i) none
of
the Company and the Subsidiaries has at any time, handled, stored, treated,
transported, manufactured, spilled, leaked, discharged, dumped, transferred
or
otherwise disposed of Hazardous Materials (as hereinafter defined) on, in,
under, to or from any of the Real Property (as hereinafter defined), except
as
could not reasonably be expected, individually or in the aggregate, to have
a
Material Adverse Effect; (ii) the Company has not received any notice of any
seepage, leak, discharge, release, emission, spill, or dumping of Hazardous
Materials into waters on or adjacent to any of the Real Property, except as
could not reasonably be expected, individually or in the aggregate, to have
a
Material Adverse Effect; (iii) none of the Company and the Subsidiaries has
received any notice of any occurrence or circumstance that, with notice or
passage of time or both, would give rise to a claim under or pursuant to any
federal, state or local environmental statute, regulation or rule under common
law, pertaining to Hazardous Materials on or originating from any of the Real
Property or any assets described in the Disclosure Package or the Prospectus
or
arising out of the conduct of any of the Company and the Subsidiaries, including
without limitation a claim under or pursuant to any Environmental Statute (as
hereinafter defined), except for claims that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect; (iv) none
of
the Real Property is included or, to the Company’s knowledge, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA (as
hereinafter defined) by the United States Environmental Protection Agency or,
to
the Company’s knowledge, proposed for inclusion on any similar list or inventory
issued pursuant to any other Environmental Statute or issued by any other
governmental authority; and (v) in the operation of the Company’s and its
predecessor’s businesses, the Company or its predecessor has acquired, before
the acquisition or origination of any loan in respect of real property or the
acquisition of any real property, an environmental assessment of the real
property and, to the extent that any condition was revealed that could
reasonably have been expected to result in material liability associated with
the presence or release of a Hazardous Material, or any violation or potential
violation of any Environmental Statute, the Company or its predecessor took,
or
required its borrower to take, all commercially reasonable action necessary
or
advisable (including any capital improvements) for clean-up, closure or other
compliance with such Environmental Statute;
14
as
used
herein, “Real
Property”
means
collectively any real property underlying any loan held by the Company or any
of
the Subsidiaries or any real property leased or owned by any of
them;
as
used
herein, “Hazardous
Material”
means,
without limitation, any flammable explosives, radioactive materials, hazardous
substances, hazardous wastes, toxic substances, asbestos or any hazardous
material as defined by any applicable federal, state or local environmental
law,
regulation or rule, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended,
42
U.S.C. Sections 9601-9675 (“CERCLA”),
the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections
1801-1819, the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
Sections 6901-6992K, the Emergency Planning and Community Right-to-Know Act
of
1986, 42 U.S.C. Sections 11001-11050, the Toxic Substances Control Act, 15
U.S.C. Sections
2601-2671,
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
Sections
136-136y, the Clean Air Act, 42 U.S.C. Sections 7401-7642, the Clean Water
Act
(Federal Water Pollution Control Act), 33 U.S.C. Sections 1251-1387, the Safe
Drinking Water Act, 42 U.S.C. Sections 300f-300j-26, and the Occupational Safety
and Health Act, 29 U.S.C. Sections 651-678, as any of the above statutes may
be
amended from time to time, and in the regulations promulgated pursuant to each
of the foregoing (individually, an “Environmental
Statute”
and
collectively the “Environmental
Statutes”)
or by
any federal, state or local governmental authority having or claiming
jurisdiction over the properties described in the Disclosure Package or the
Prospectus;
(xx) to
the
Company’s knowledge, there are no costs or liabilities associated with any of
the Real Property arising under any Environmental Statute (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with any Environmental Statute or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties) that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
15
(yy) none
of
the entities that prepared Phase I or other environmental assessments with
respect to the Real Property was employed for such purpose on a contingent
basis
or has any substantial profit or equity interest in the Company or any of the
Subsidiaries, and none of their directors, officers or employees is connected
with the Company or any of the Subsidiaries as a promoter, selling agent,
trustee, officer, director, employee or significant shareholder;
(zz) except
as
disclosed in the Disclosure Package and the Prospectus, (i) the Company does
not
know of any violation of any municipal, state or federal law, rule or regulation
concerning the Real Property or any part thereof that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;
(ii)
to the Company’s knowledge, the Real Property complies with all applicable
zoning laws, ordinances, regulations and deed restrictions or other covenants
in
all material respects and, if and to the extent there is a failure to comply,
such failure does not materially impair the value of any of the Real Property
and will not result in a forfeiture or reversion of title; (iii) the Company
has
not received any written notice of any condemnation of or zoning change
affecting the Real Property or any part thereof, and the Company does not know
of any such condemnation or zoning change that is threatened and that,
individually or in the aggregate, if consummated could reasonably be expected
to
have a Material Adverse Effect; (iv) to the Company’s knowledge, all
improvements constituting a part of the Real Property are free of material
structural defects and all building systems contained therein are in good
working order in all material respects, subject to ordinary wear and tear,
except as could not reasonably be expected to have Material Adverse Effect,
(v)
all liens, charges, encumbrances, claims, or restrictions on or affecting the
assets of the Company or any of the Subsidiaries that are required to be
described in the Disclosure Package or the Prospectus are disclosed therein;
(vi) all leases of any of the Real Property constitute the legal, valid and
binding agreements of each party thereto (subject to the Exceptions), to the
Company’s knowledge no tenant under any of such leases is in default thereunder
and there is no event that, but for the passage of time or the giving of notice
or both would constitute a default thereunder, except for such defaults that,
individually or in the aggregate, could not reasonably be expected to have
a
Material Adverse Effect; (vii) all notes and other loan agreements, mortgages,
assignments of leases and rents, subordination agreements and other security
agreements in favor of the Company and the Subsidiaries with respect to any
of
the Real Property constitute the legal, valid and binding agreements of each
party thereto (subject to the Exceptions), except for such failures to be legal,
valid and binding that, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect, and to the Company’s knowledge no
party to any such agreement is in default thereunder and there is no event
that,
but for the passage of time or the giving of notice or both would constitute
a
default thereunder, except for such defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect
and (viii) no tenant under any lease pursuant to which any of the Real Property
is leased has an option or right of first refusal to purchase the premises
leased thereunder or the building of which such premises are a part, except
for
such options or rights of first refusal that, individually or in the aggregate,
if exercised, could not reasonably be expected to have a Material Adverse
Effect; and
16
(aaa) any
certificate signed by any officer of the Company delivered to the
Representatives or to counsel for the Underwriters pursuant to or in connection
with this Agreement shall be deemed a representation and warranty by the Company
to each Underwriter as to the matters covered thereby.
4. Certain
Covenants:
The
Company hereby agrees with each Underwriter:
(a) to
furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky
laws of such jurisdictions (both domestic and foreign) as the Representatives
may designate and to maintain such qualifications in effect as long as requested
by the Representatives for the distribution of the Shares; provided that the
Company shall not be required to qualify as a foreign corporation or to take
any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be subject
to
taxation as a foreign corporation;
(b) if,
at
the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be declared effective
before the offering of the Shares may commence, the Company will endeavor to
cause such post-effective amendment to become effective as soon as
possible;
(c) to
prepare the Prospectus in a form reasonably approved by the Underwriters and
file such Prospectus with the Commission pursuant to Rule 424(b) not
later
than 10:00 a.m. (New York City time), on the second day following the execution
and delivery of this Agreement or on such other day as the parties may mutually
agree and to furnish promptly (and with respect to the initial delivery of
such
Prospectus, not later than 10:00 a.m. (New York City time) on the second day
following the execution and delivery of this Agreement, or on such other day
as
the parties may mutually agree) to the Underwriters copies of the Prospectus
(or
of the Prospectus as amended or supplemented if the Company shall have made
any
amendments or supplements thereto) in such quantities and at such locations
as
the Underwriters may reasonably request for the purposes contemplated by the
Securities Act Regulations, which Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the version created
to be transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T;
17
(d) during
the time in which a prospectus relating to the Shares is required to be
delivered under the Securities Act or the Securities Act Regulations (or in
lieu
thereof the notice referred to in Rule 173(a) of the Securities Act
Regulations), to advise the Representatives promptly and, if requested by the
Representatives, to confirm such advice in writing, when any post-effective
amendment to the Registration Statement becomes effective under the Securities
Act Regulations;
(e) to
furnish a copy of each proposed Free Writing Prospectus to the Representatives
and counsel for the Underwriters and obtain the consent of the Representatives
prior to referring to, using or filing with the Commission any Free Writing
Prospectus pursuant to Rule 433(d) of the Securities Act Regulations, other
than
the Issuer Free Writing Prospectuses, if any, identified in Schedule
IIA;
(f) to
comply
with the requirements of Rules 164 and 433 of the Securities Act Regulations
applicable to any Issuer Free Writing Prospectus, including timely filing with
the Commission, legending and record keeping, as applicable;
(g) during
the time in which a prospectus relating to the Shares is required to be
delivered under the Securities Act or the Securities Act Regulations (or in
lieu
thereof the notice referred to in Rule 173(a) of the Securities Act
Regulations), to advise the Representatives immediately, and, if requested
by
the Representatives, confirming such advice in writing, of (i) the receipt
of
any comments from, or any request by, the Commission for amendments or
supplements to the Registration Statement, the Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus or for additional information
with respect thereto, or (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or cease-and-desist
order in connection with the public offering of the Shares or of any order
preventing or suspending the use of the Preliminary Prospectus, the Prospectus
or any Issuer Free Writing Prospectus, or of the suspension of the qualification
of the Shares for offering or sale in any jurisdiction, or of the initiation
or
threatening of any proceedings for any of such purposes and, if the Commission
or any other government agency or authority should issue any such order, to
make
every reasonable effort to obtain the lifting or removal of such order as soon
as possible; and to advise the Representatives promptly of any proposal to
amend
or supplement the Registration Statement, the Preliminary Prospectus, the
Prospectus
or any Issuer Free Writing Prospectus and to file no such amendment or
supplement to which the Representatives shall reasonably object in writing
(unless required to do so by law);
(h) to
advise
the Underwriters promptly of the happening of any event known to the
Company
within
the time during which a prospectus relating to the Shares is required to be
delivered under the Securities Act or the Securities Act Regulations (or in
lieu
thereof the notice referred to in Rule 173(a) of the Securities Act Regulations)
that, in the judgment of the Company or in the reasonable opinion of the
Representatives or counsel for the Underwriters, (i) would require the making
of
any change in the Prospectus or the Disclosure Package so that the Prospectus
or
the Disclosure Package would not include an untrue statement of a material
fact
or omit to state a material fact required to be stated therein or necessary
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading, (ii) as a result of which any Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the
Registration Statement, or (iii) if it is necessary to amend or supplement
the
Prospectus to comply with the Securities Act and the Securities Act Regulations
and, during such time, to prepare and furnish promptly to the Underwriters
copies of the proposed amendment or supplement before filing any such amendment
or supplement with the Commission and thereafter promptly furnish at the
Company’s own expense to the Underwriters and to dealers, copies in such
quantities and at such locations as the Representatives may from time to time
reasonably request of an appropriate amendment to the Registration Statement
or
supplement to the Prospectus or the Disclosure Package so that the Prospectus
or
the Disclosure Package as so amended or supplemented will not, in the light
of
the circumstances when it (or in lieu thereof the notice referred to in Rule
173(a) of the Securities Act Regulations) is so delivered, be misleading, or,
in
the case of any Issuer Free Writing Prospectus, conflict with the information
contained in the Registration Statement, or so that the Prospectus or the
Disclosure Package will comply with the Securities Act and the Securities Act
Regulations;
18
(i) during
the time in which a prospectus relating to the Shares is required to be
delivered under the Securities Act or the Securities Act Regulations (or in
lieu
thereof the notice referred to in Rule 173(a) of the Securities Act
Regulations), to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required
by
the Securities Act or requested by the Commission;
(j) prior
to
filing with the Commission any amendment to the Registration Statement or
supplement to the Prospectus, the Preliminary Prospectus or any Issuer Free
Writing Prospectus relating to the Shares, to furnish for review a copy thereof
to the Representatives and counsel for the Underwriters and not to file any
such
proposed amendment or supplement to which the Representatives reasonably object
(unless required to do so by law);
(k) to
furnish promptly to the Representatives, upon request, such number of conformed
copies of the Registration Statement, as initially filed with the Commission,
and of all amendments or supplements thereto relating to the Shares (including
all exhibits filed therewith or incorporated by reference therein) as the
Representatives may reasonably request;
(l) to
furnish to the Representatives, not less than one business day before filing
with the Commission subsequent to the date of the Prospectus and during the
period in which a prospectus relating to the Shares is required to be delivered
under the Securities Act or the Securities Act Regulations (or in lieu thereof
the notice referred to in Rule 173(a) of the Securities Act Regulations), a
copy
of any document proposed to be filed with the Commission pursuant to Section
13,
14, or 15(d) of the Exchange Act and during such period to file all such
documents in the manner and within the time periods required by the Exchange
Act
and the Exchange Act Regulations;
19
(m) to
apply
the net proceeds of the sale of the Shares in accordance with its statements
under the caption “Use of Proceeds” in the Disclosure Package and the
Prospectus;
(n) to
make
generally available to its security holders as soon as practicable, but in
any
event not later than 45 days after the end of the fiscal quarter first occurring
after the first anniversary of the effective date of the Registration Statement
(or later than 90 days, if such fiscal quarter is the last fiscal quarter of
the
Company’s fiscal year) an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act (in such form, at the option of the Company,
as complies with Rule 158 under the Securities Act Regulations) covering a
period of 12 months beginning after the effective date of the Registration
Statement;
(o) to
use
its best efforts to list the Shares on the New York Stock Exchange;
(p) to
engage
and maintain, at its expense, a registrar and transfer agent for the
Shares;
(q) to
refrain during a period
of
90 days
from the
date of the Prospectus, without the prior written consent of the
Representatives, from, directly or indirectly, (i) offering, pledging,
selling, contracting to sell, selling any option or contract to purchase,
purchasing any option or contract to sell, granting any option for the sale
of,
or otherwise disposing of or transferring (or entering into any transaction
or
device which is designed to, or reasonably could be expected to, result in
the
disposition by any person at any time in the future of), any share of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (including units of limited partnership interest in Caplease,
LP)
or such securities, or filing any registration statement under the Securities
Act with respect to any of the foregoing, or (ii) entering into any swap or
any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of Common Stock
or
such other securities, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise; provided, however, that the Company may (A)
issue shares of Common Stock pursuant to the Company’s 2004 Stock Incentive
Plan, as it may be amended and restated from time to time, (B) file or amend
a
registration statement on Form S-8 relating to the Company’s 2004 Stock
Incentive Plan, as it may be amended and restated from time to time, and (C)
issue units of limited partnership in Caplease, LP as consideration for the
acquisition of real estate properties by Company;
(r) not
to,
and to use its best efforts to cause its officers and directors not to, (i)
take, directly or indirectly, prior to termination of the underwriting syndicate
contemplated by this Agreement, any action designed to stabilize or manipulate
the price of any security of the Company, or which may cause or result in,
or
which might in the future reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company,
to
facilitate the sale or resale of any of the Shares, (ii) sell, bid for, purchase
or pay anyone any compensation for soliciting purchases of the Shares or (iii)
pay or agree to pay to any person any compensation for soliciting any order
to
purchase any other securities of the Company;
20
(s) to
use
its best efforts to meet the requirements to qualify as a REIT under the Code,
unless it is determined by the Company’s board of directors to be in the best
interest of the Company for the Company to no longer so qualify;
and
(t) to
use
its best efforts not to invest, or otherwise use the proceeds received by the
Company from its sale of the Shares in such a manner as would require the
Company or any of its Subsidiaries to register as an investment company under
the Investment Company Act.
5. Payment
of Expenses:
(a) The
Company
agrees to pay all costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, including expenses
and fees in connection with: (i) the preparation and filing of the Registration
Statement, the Preliminary Prospectus, the Prospectus, any Issuer Free Writing
Prospectus and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment); (ii) the preparation, issuance and
delivery of the certificates for the Shares to the Underwriters, including
any
stock or other transfer taxes or duties payable upon the sale of the Shares
to
the Underwriters (other than transfer taxes on resales by the Underwriters);
(iii) the qualification of the Shares for offering and sale under state laws
that the Company and the Representatives have mutually agreed are appropriate
and the determination of their eligibility for investment under state law as
aforesaid, and the printing and furnishing of copies of any blue sky surveys
or
legal investment surveys to the Underwriters and to dealers; (iv) filing for
review of the public offering of the Shares by the NASD; (v) the fees and
expenses of any transfer agent or registrar for the Shares and miscellaneous
expenses referred to in the Registration Statement; (vi) the fees and expenses
incurred in connection with the inclusion of the Shares in the New York Stock
Exchange; (vii) all costs and expenses incident to the travel and accommodation
of employees of the Company in making road show presentations with respect
to
the offering of the Shares; (viii) costs and expenses of any internet road
show;
(ix) preparing and distributing three copies of bound volumes of transaction
documents for the Representatives and their legal counsel; and (x) the
performance of the Company’s
other
obligations hereunder; provided that, except as provided in this Section 5
or in
Section 9, the Underwriters shall pay their own costs and expenses.
(b) If
this
Agreement shall be terminated by the Representatives
pursuant
to clause (a) of Section 7, the Company will reimburse the Underwriters for
all
out-of-pocket expenses (such as printing, facsimile, courier service, direct
computer expenses, accommodations and travel, including the fees and expenses
of
DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP) reasonably incurred by such Underwriters
in
connection with this Agreement or the transactions contemplated herein, up
to a
maximum amount set forth on Schedule
VI.
21
6. Conditions
of the Underwriters’ Obligations:
The
obligations of the Underwriters hereunder to purchase Shares at the Initial
Closing Time or at the Option Closing Time, as applicable, are subject to the
accuracy of the representations and warranties on the part of the Company
hereunder on the date hereof and at the Initial Closing Time and at the Option
Closing Time, as applicable, the performance by the Company of its obligations
hereunder and the satisfaction of the following further conditions at the
Initial Closing Time or at the Option Closing Time, as applicable:
(a) The
Company shall furnish to the Representatives at the Initial Closing Time and
at
the Option Closing Time opinions of Hunton & Xxxxxxxx LLP, counsel for the
Company and the Subsidiaries, addressed to the Representatives and dated the
Initial Closing Time and Option Closing Time, as set forth on Schedule
VII.
(b) The
Company shall furnish to the Representatives at the Initial Closing Time and
at
the Option Closing Time an opinion of the Company’s Vice President, General
Counsel and Corporate Secretary, addressed to the Representatives, dated the
Initial Closing Time and Option Closing Time and otherwise in form and substance
satisfactory to DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP, counsel for the
Underwriters, stating as set forth on Schedule
VIII.
(c) The
Company shall furnish to the Representatives at the Initial Closing Time and
at
the Option Closing Time an opinion of Xxxxxxx LLP, special Maryland counsel
of
the Company, addressed to the Representatives, dated the Initial Closing Time
and Option Closing Time and in form and substance satisfactory to DLA Xxxxx
Xxxxxxx Xxxx Xxxx US LLP, counsel for the Underwriters, stating that:
(i) the
Company is a corporation duly incorporated and existing under and by virtue
of
the laws of the State of Maryland and in good standing with the State Department
of Assessments and Taxation of Maryland;
(ii) the
Company has the corporate power to own its assets and to conduct its businesses
as described in the Prospectus under the caption “Prospectus Summary” and to
execute and deliver this Agreement and perform the obligations
thereunder;
(iii) the
authorized stock of the Company is as set forth under the caption
“Capitalization” in the Prospectus;
(iv) the
Initial Shares (or Option Shares, as applicable) have been duly authorized
and,
when issued in exchange for the consideration recited in this Agreement, will
be
validly issued, fully paid and non-assessable;
22
(v) no
holder
of outstanding shares of Common Stock or Preferred Stock has any statutory
preemptive right under the Maryland General Corporation Law or any similar
right
under the charter of the Company (the “Charter”)
or
bylaws of the Company (the “Bylaws”)
to
subscribe for any of the Shares;
(vi) this
Agreement has been duly authorized, executed and, so far as is known to such
counsel, delivered on behalf of the Company;
(vii) the
Common Stock conforms as to legal matters in all material respects to the
description thereof set forth in the Prospectus under the caption “Description
of Common Stock”; and the statements under the captions “Description of Common
Stock,” “Certain Provisions of Maryland Law and of our Charter and Bylaws,” and
“Restrictions on Ownership and Transfer” in the Prospectus and under Item 15 of
the Registration Statement, insofar
as such statements constitute a summary of the Charter or Bylaws or of Maryland
law, constitute accurate summaries thereof in all material
respects;
(viii) the
execution, delivery and performance by the Company of this Agreement, and the
consummation of the transactions contemplated herein, do not and will not
conflict with, or result in any breach of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would constitute
a breach of or default under) (A) the Charter or Bylaws of the Company,
(B) any provision of the Maryland General Corporation Law, or (C) so far as
is
known to such counsel, any Maryland court or administrative order, judgment
or
decree applicable to the Company; and
(ix) no
approval, authorization, consent or order of or filing with any Maryland
regulatory agency is required to be obtained or made by the Company under
the Maryland General Corporation Law in connection with the execution, delivery
and performance, on the date hereof, by the Company of this Agreement, the
consummation of the transactions contemplated herein or the sale and delivery
of
the Shares as contemplated herein, except as have been made, obtained or waived,
if any.
Counsel
may call attention to the fact that, in connection with the delivery of its
opinion, counsel has not ordered or reviewed judgment, lien or any other
searches of public or private records of the Company or its properties.
(d) The
Representatives shall have received from Ernst & Young LLP and McGladrey
& Xxxxxx, LLP, letters dated, respectively, as of the date of this
Agreement, the Initial Closing Time and the Option Closing Time, as the case
may
be, addressed to the Representatives, in form and substance satisfactory to
the
Representatives, relating to the financial statements, including pro forma
financial statements, of the Company, and such other matters customarily covered
by comfort letters issued in connection with registered public
offerings.
(e) The
Representatives shall have received at the Initial Closing Time and the Option
Closing Time the favorable opinion of DLA Piper Xxxx Xxxx US LLP, dated the
Initial Closing Time and Option Closing Time, addressed to the Representatives
and in form and substance satisfactory to the Representatives.
23
(f) No
amendment or supplement to the Registration Statement, the Disclosure Package
or
the Prospectus shall have been filed to which the Underwriters shall have
reasonably objected in writing.
(g) Prior
to
the Initial Closing Time and the Option Closing Time (i) no stop order
suspending the effectiveness of the Registration Statement or cease-and-desist
order in connection with the public offering of the Shares or any order
preventing or suspending the use of the Prospectus or any document in the
Disclosure Package shall have been issued, and no proceedings for such purpose
shall have been initiated or threatened, by the Commission, and no suspension
of
the qualification of the Shares for offering or sale in any jurisdiction, or
the
initiation or threatening of any proceedings for any of such purposes, shall
have occurred; (ii) all requests for additional information on the part of
the
Commission shall have been complied with to the reasonable satisfaction of
the
Representatives; and (iii) none of the Registration Statement, the Disclosure
Package and the Prospectus shall contain an untrue statement of a material
fact
or omit to state a material fact required to be stated therein or necessary
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading.
(h) All
filings with the Commission required by Rule 424 of the Securities Act
Regulations to have been filed by the Initial Closing Time shall have been
made
within the applicable time period prescribed for such filing by such rule
(without reliance on Rule 424(b)(8) of the Securities Act
Regulations).
(i) The
NASD
shall not have raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(j) The
Representatives shall have received executed lockup agreements from each of
the
executive officers and directors of the Company substantially in the form of
Schedule
IX.
(k) The
Representatives shall have received at or before the Initial Closing Time and
at
the Option Closing Time, a certificate of the Company’s Chief Executive Officer
or Chief Financial Officer, in each case on behalf of the Company and not
individually, to the effect that:
(i) the
representations and warranties of the Company in this Agreement that are not
qualified by materiality or Material Adverse Effect are true and correct in
all
material respects and those representations and warranties of the Company in
this Agreement that are qualified by materiality or Material Adverse Effect
are
true and correct in all respects, as if made on and as of such date, and the
Company has complied with all the agreements in all material respects and all
the conditions on its part to be performed or satisfied at or prior to the
date
of such certificate;
24
(ii) no
stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto has been issued and no proceedings for that
purpose have been instituted or are pending or, to such officer’s knowledge,
threatened under the Securities Act; and
(iii) the
Registration Statement, at its initial effective date, the filing date of the
Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and
any subsequent effective date in connection with the Shares did not, the
Disclosure Package, as of the Initial Sale Time and the date of such
certificate, did not and does not, and the Prospectus, as of its date and the
date of such certificate, did not and does not include any untrue statement
of a
material fact or omit to state a material fact required to be stated therein
or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
7. Termination:
The
obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representatives, at any time
prior
to the Initial Closing Time or the Option Closing Time, (a) if any of the
conditions specified in Section 6 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, or (b) if there has been since
the
respective dates as of which information is given in the Registration Statement,
any change or event that has had, or reasonably could be expected to have,
a
Material Adverse Effect, whether or not arising in the ordinary course of
business, or (c) if there has occurred any outbreak or escalation of hostilities
or other national or international calamity or crisis or change in economic,
political or other conditions, the effect of which on the financial markets
of
the United States is such as to make it, in the judgment of the Representatives,
impracticable to market the Shares or enforce contracts for the sale of the
Shares, or (d) if trading in any securities of the Company has been suspended
by
the Commission or by the New York Stock Exchange, or if trading generally on
the
New York Stock Exchange has been suspended (including an automatic halt in
trading pursuant to market-decline triggers, other than those in which solely
program trading is temporarily halted), or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been fixed,
or maximum ranges for prices for securities have been required, by such exchange
or by order of the Commission or any other governmental authority or (e) a
general banking moratorium shall have been declared by any federal, Maryland
or
New York authorities, or (f) any federal or state statute, regulation, rule
or
order of any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated that, in the reasonable opinion of the
Representatives, will have a Material Adverse Effect.
If
the
Representatives elect to terminate this Agreement as provided in this Section
7,
the Company and the Underwriters shall be notified promptly by telephone,
promptly confirmed by facsimile.
If
the
purchase by the Underwriters of the Shares, as contemplated by this Agreement,
is not consummated by the Underwriters for any reason permitted under this
Agreement or if such sale is not consummated because the Company shall be unable
to comply in all material respects with any of the terms of this Agreement,
the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 5 and 9 hereof) and the Underwriters
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 9 hereof) or to one another
hereunder.
25
8. Increase
in Underwriters’ Commitments:
If
any
Underwriter shall default at the Initial Closing Time or at an Option Closing
Time in its obligation to take up and pay for the Shares to be purchased by
it
under this Agreement on such date, the Representatives shall have the right,
within 48 hours after such default, to make arrangements for one or more of
the
non-defaulting Underwriters, or any other underwriters, to purchase all, but
not
less than all, of the Shares which such Underwriter shall have agreed but failed
to take up and pay for (the “Defaulted
Shares”).
Absent the completion of such arrangements within such 48-hour period, (a)
if
the total number of Defaulted Shares does not exceed 10% of the total number
of
Shares to be purchased on such date, each non-defaulting Underwriter shall
take
up and pay for (in addition to the number of Shares which it is otherwise
obligated to purchase on such date pursuant to this Agreement) the portion
of
the total number of Shares agreed to be purchased by the defaulting Underwriter
on such date in the proportion that its underwriting obligations hereunder
bear
to the underwriting obligations of all non-defaulting Underwriters; and (b)
if
the total number of Defaulted Shares exceeds 10% of such total, the
Representatives may terminate this Agreement by notice to the Company, without
liability of any party to any other party (other than the defaulting
Underwriter), except that the provisions of Sections 5 and 9 hereof shall at
all
times be effective and shall survive such termination.
If
a new
Underwriter or Underwriters are substituted for a defaulting Underwriter in
accordance with the foregoing provision, the Company or the non-defaulting
Underwriters shall have the right to postpone the Initial Closing Time or
relevant Option Closing Time for a period not exceeding five business days
in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The
term
“Underwriter”
as
used
in this Agreement shall refer to and include any Underwriter substituted under
this Section 8 with the same effect as if such substituted Underwriter had
originally been named in this Agreement. Nothing in this Section 8 shall relieve
a defaulting Underwriter from liability for its default.
9. Indemnity
and Contribution by the Company and the Underwriters:
(a) The
Company agrees to indemnify, defend and hold harmless each Underwriter and
any
person who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any loss,
expense, liability, damage or claim (including the reasonable cost of
investigation) that, jointly or severally, any such Underwriter or controlling
person may incur under the Securities Act, the Exchange Act or otherwise,
insofar as such loss, expense, liability, damage or claim arises out of or
is
based upon (i) any failure on the part of the Company to comply with any
applicable law, rule or regulation relating to the offering of securities being
made pursuant to the Prospectus (the term Prospectus for the purpose of this
Section 9 being deemed to include any preliminary prospectus, the Prospectus
and
any amendment or supplement thereto and any prospectus wrapper material), (ii)
any untrue statement or alleged untrue statement of a material fact contained
in
the Registration Statement, any Issuer Free Writing Prospectus or the
Prospectus, or (iii) any omission or alleged omission to state a material fact
required to be stated in the Registration Statement, any Issuer Free Writing
Prospectus or the Prospectus or necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading;
except insofar as any such loss, expense, liability, damage or claim arises
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 the Underwriters through the Representatives
to the Company expressly for use in the Registration Statement, any Issuer
Free
Writing Prospectus or the Prospectus. The indemnity agreement set forth in
this
Section 9(a) shall be in addition to any liabilities that the Company may
otherwise have.
26
If
any
action is brought against an Underwriter or controlling person in respect of
which indemnity may be sought against the Company pursuant to the foregoing
paragraph, such Underwriter shall promptly notify the Company in writing of
the
institution of such action, and the Company shall assume the defense of such
action, including the employment of counsel and payment of expenses; provided,
however, that any failure or delay to so notify the Company will not relieve
the
Company of any obligation hereunder, except to the extent that its ability
to
defend is actually impaired by such failure or delay. Such Underwriter or
controlling person shall have the right to employ its or their own counsel
in
any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter or such controlling person unless the employment of such
counsel shall have been authorized in writing by the Company in connection
with
the defense of such action, or the Company shall not have employed counsel
to
have charge of the defense of such action within a reasonable time or such
indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which
are
different from or additional to those available to the Company (in which case
the Company shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Company and paid as incurred (it being
understood, however, that the Company shall not be liable for the expenses
of
more than one separate firm of attorneys for the Underwriters or controlling
persons in any one action or series of related actions in the same jurisdiction
(other than local counsel in any such jurisdiction) representing the indemnified
parties who are parties to such action).
(b) Each
Underwriter agrees, severally and not jointly, to indemnify, defend and hold
harmless the Company, the Company’s directors, the Company’s officers that
signed the Registration Statement and any person who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any loss, expense, liability, damage or claim (including
the reasonable cost of investigation) that, jointly or severally, the Company
or
any such person may incur under the Securities Act, the Exchange Act or
otherwise, but only insofar as such loss, expense, liability, damage or claim
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by such Underwriter through the Representatives to the
Company expressly for use in the Registration Statement, any Issuer Free Writing
Prospectus or the Prospectus, or (ii) any omission or alleged omission to state
a material fact in connection with such information required to be stated in
the
Registration Statement, any Issuer Free Writing Prospectus or the Prospectus
or
necessary to make such information, in the light of the circumstances under
which made, not misleading; provided, however, that the statements identified
in
Schedule
IV
attached
hereto constitute the only information furnished by or on behalf of any
Underwriter through the Representatives to the Company for purposes of this
Section 9. The indemnity agreement set forth in this Section 9(b) shall be
in
addition to any liabilities that such Underwriter may otherwise
have.
27
If
any
action is brought against the Company or any such person in respect of which
indemnity may be sought against any Underwriter pursuant to the foregoing
paragraph, the Company or such person shall promptly notify the Representatives
in writing of the institution of such action and the Representatives, on behalf
of the Underwriters, shall assume the defense of such action, including the
employment of counsel and payment of expenses; provided, however, that any
failure or delay to so notify the Representatives will not relieve the
Underwriters of any obligation hereunder, except to the extent that their
ability to defend is actually impaired by such failure or delay. The Company
or
such person shall have the right to employ its own counsel in any such case,
but
the fees and expenses of such counsel shall be at the expense of the Company
or
such person unless the employment of such counsel shall have been authorized
in
writing by the Representatives in connection with the defense of such action
or
the Representatives shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them that are different from or
additional to those available to the Underwriters (in which case the
Representatives shall not have the right to direct the defense of such action
on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Underwriters and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the expenses
of more than one separate firm of attorneys in any one action or series of
related actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action).
(c) The
indemnifying party under this Section 9 shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with
such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify (to the extent provided in this Section 9) the
indemnified party against any loss, expense, liability, damage or claim by
reason of such settlement or judgment. No indemnifying party shall, without
the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could
have been a party and indemnity was or could have been sought hereunder by
such
indemnified party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and does not
include a statement as to, or an admission of, fault, culpability or a failure
to act by or on behalf of any indemnified party.
28
(d) If
the
indemnification provided for in this Section 9 is unavailable or insufficient
to
hold harmless an indemnified party under subsections (a), (b) and (c) of this
Section 9 in respect of any losses, expenses, liabilities, damages or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, expenses,
liabilities, damages or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and by the Underwriters
from the offering of the Shares or (ii) if (but only 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 of the Underwriters in
connection with the statements or omissions that resulted in such losses,
expenses, liabilities, damages or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
by
the Underwriters shall be deemed to be in the same proportion as the total
proceeds from the sale of the Shares (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bear to
the
underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company and of the Underwriters shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Company or by the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such statement or omission. The amount paid or payable by a party as
a
result of the losses, claims, damages and liabilities referred to above shall
be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any claim or
action.
(e) The
Company and the Underwriters agree that it would not be just and equitable
if
contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by
any
other method of allocation that does not take account of the equitable
considerations referred to in clause (i) and, if applicable clause (ii), of
subsection (d) above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter. No person guilty of fraudulent misrepresentation (within
the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint. For purposes of this Section 9, each officer and director of
an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Section 15 of the Securities Act and Section 20 of the Exchange
Act shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act shall
have the same rights to contribution as the Company.
29
10. Survival:
The
indemnity and contribution agreements contained in Section 9 and the covenants,
warranties and representations of the Company contained in Sections 3, 4 and
5
of this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, or any person who
controls any Underwriter within the meaning of Section 15 of the Securities
Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors and officers or any person who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, and
shall
survive any termination of this Agreement or the sale and delivery of the
Shares. The Company and each Underwriter agree promptly to notify the others
of
the commencement of any litigation or proceeding against it and, in the case
of
the Company, against any of the Company’s officers and directors, in connection
with the sale and delivery of the Shares, or in connection with the Registration
Statement or Prospectus.
11. Notices:
Except
as
otherwise herein provided, all statements, requests, notices and agreements
shall be in writing or by telegram and, if to the Underwriters, shall be
sufficient in all respects if delivered to Friedman, Billings, Xxxxxx & Co.,
Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Syndicate
Department and to Wachovia Capital Markets, LLC, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx
Xxxx 00000, Attention: Equity Syndicate Department, or if to the Company shall
be sufficient in all respects if delivered to the Company at the offices of
the
Company at 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General
Counsel.
12. Governing
Law; Headings:
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF
THE STATE OF NEW YORK,
WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
The
section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
13. Duties:
Nothing
in this Agreement shall be deemed to create a partnership, joint venture or
agency relationship between the parties. The Underwriters undertake to
perform such duties and obligations only as expressly set forth herein.
Such duties and obligations of the Underwriters with respect to the Shares
shall be determined solely by the express provisions of this Agreement, and
the
Underwriters shall not be liable except for the performance
of such duties and obligations with respect to the Shares as are specifically
set forth in this Agreement. The Company acknowledges and agrees that: (a)
the purchase and sale of the Shares pursuant to this Agreement, including the
determination of the public offering price of the Shares and any related
discounts and commissions, is an arm’s-length commercial transaction between the
Company, on the one hand, and the several Underwriters, on the other hand,
and
the Company is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated by
this
Agreement; (b) in connection with each transaction contemplated hereby and
the
process leading to such transaction each Underwriter is and has been acting
solely as a principal and is not the financial advisor, agent or fiduciary
of
the Company or its affiliates, stockholders, creditors or employees or any
other
party; (c) no Underwriter has assumed or will assume an advisory, agency or
fiduciary responsibility in favor of the Company with respect to any of the
transactions contemplated hereby or the process leading thereto (irrespective
of
whether such Underwriter has advised or is currently advising the Company on
other matters); and (d) the several Underwriters and their respective affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of the Company and that the several Underwriters have no
obligation to disclose any of such interests. The Company acknowledges that
the
Underwriters disclaim any implied
duties
(including any fiduciary duty), covenants or obligations arising from the
Underwriters’ performance of the duties and obligations expressly set forth
herein. The
Company hereby waives and releases, to the fullest extent permitted by law,
any
claims that the Company may have against the several Underwriters with respect
to any breach or alleged breach of agency or fiduciary duty.
30
14. Parties
at Interest:
The
Agreement herein set forth has been and is made solely for the benefit of the
Underwriters, the Company and the controlling persons, directors and officers
referred to in Sections 9 and 10 hereof, and their respective successors,
assigns, executors and administrators. No other person, partnership, association
or corporation (including a purchaser, as such purchaser, from any of the
Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
15. Counterparts
and Facsimile Signatures:
This
Agreement may be signed by the parties in counterparts, which together shall
constitute one and the same agreement among the parties. A facsimile signature
shall constitute an original signature for all purposes.
16. U.S.A.
Patriot Act Notification:
The
Company acknowledges that federal law, to help fight the funding of terrorism
and money laundering activities, requires the Underwriters to obtain, verify
and
record vital information that identifies each person or entity that opens an
account and/or enters into a business relationship with such financial
institutions.
[Signature
page follows.]
31
If
the
foregoing correctly sets forth the understanding among the Company and the
Underwriters, please so indicate in the space provided below for the purpose,
whereupon this Agreement shall constitute a binding agreement
among the Company and the Underwriters.
Very
truly yours,
CAPITAL
LEASE FUNDING, INC.
By:
/s/
Xxxx X. XxXxxxxx
Name:
Xxxx X. XxXxxxxx
Title:
Chief Executive Officer
Accepted
and agreed to as
of
the
date first above written:
FRIEDMAN,
BILLINGS, XXXXXX & CO., INC.
WACHOVIA
CAPITAL MARKETS, LLC
By:
Friedman, Billings, Xxxxxx & Co., Inc.
By:
/s/
Xxxxx X. Xxxxxxxxx
Name: Xxxxx
X.
Xxxxxxxxx
Title:
Senior Managing Director
By:
Wachovia Capital Markets, LLC
By:
/s/
Xxxxx X. Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Director
For
themselves and as the Representatives of the other
Underwriters
named on Schedule
I
hereto.
32
