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EXHIBIT 1.1
6,500,000 Shares
AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
Common Stock
UNDERWRITING AGREEMENT
October __, 1997
PAINEWEBBER INCORPORATED
XXXXXXXXXXX & CO., INC.
EVEREN SECURITIES, INC.
SUTRO & CO. INCORPORATED
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
American Residential Investment Trust, Inc., a Maryland
corporation (the "Company") proposes to sell an aggregate of 6,500,000 shares
(the "Firm Shares") of the Company's Common Stock, $0.01 par value per share
(the "Common Stock"), to you and to the other underwriters named in Schedule I
(collectively, the "Underwriters"), for whom you are acting as representatives
(the "Representatives"). The Company has also agreed to grant to you and the
other Underwriters an option (the "Option") to purchase up to an additional
975,000 shares of Common Stock (the "Option Shares") on the terms and for the
purposes set forth in Section 1(b). The Firm Shares and the Option Shares are
hereinafter collectively referred to as the "Shares."
The initial public offering price per share for the Shares and
the purchase price per share for the Shares to be paid by the several
Underwriters shall be agreed upon by the Company and the Representatives, acting
on behalf of the several Underwriters, and such agreement shall be set forth in
a separate written instrument substantially in the form of Exhibit A hereto (the
"Price Determination Agreement"). The Price Determination Agreement may take the
form of an exchange of any standard form of written telecommunication among the
Company and the Representatives and shall specify such applicable information as
is indicated in Exhibit A hereto. The offering of the Shares will be governed by
this Agreement, as supplemented by the Price Determination Agreement. From and
after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and, unless the
context otherwise indicates, all references contained herein to "this Agreement"
and to the phrase "herein" shall be deemed to include the Price Determination
Agreement.
The Company and Home Asset Management Corp., a Delaware
corporation (the "Manager") confirm their respective agreements with
Representatives and the several other Underwriters.
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1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Company and the Manger herein contained and subject to all the
terms and conditions of this Agreement, (i) the Company agrees to sell to each
Underwriter named below, and (ii) each Underwriter, severally and not jointly,
agrees to purchase from the Company, at the purchase price per share for the
Firm Shares to be agreed upon by the Representatives and the Company in
accordance with Section 1(c) or 1(d) hereof and set forth in the Price
Determination Agreement, the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I, plus such additional number of Firm Shares
which such Underwriter may become obligated to purchase pursuant to Section 8
hereof. Schedule I may be attached to the Price Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement,
the Company grants the Option to the several Underwriters to purchase, severally
and not jointly, up to 975,000 Option Shares from the Company at the same price
per share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement (or, if
the Company has elected to rely on Rule 430A, on or before the 30th day after
the date of the Price Determination Agreement), upon written or telegraphic
notice (the "Option Shares Notice") by the Representatives to the Company no
later than 12:00 noon, New York City time, at least two and no more than five
business days before the date specified for closing in the Option Shares Notice
(the "Option Closing Date") setting forth the aggregate number of Option Shares
to be purchased and the time and date for such purchase. On the Option Closing
Date, the Company will issue and sell to the Underwriters the number of Option
Shares set forth in the Option Shares Notice, and each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of Firm
Shares that such Underwriter is purchasing, as adjusted by the Representatives
in such manner as they deem advisable to avoid fractional shares.
(c) The initial public offering price per share for the Firm
Shares and the purchase price per share for the Firm Shares to be paid by the
several Underwriters shall be agreed upon and set forth in the Price
Determination Agreement, if the Company has elected to rely on Rule 430A. In the
event such price has not been agreed upon and the Price Determination Agreement
has not been executed by the close of business on the fourteenth business day
following the date on which the Registration Statement (as hereinafter defined)
becomes effective, this Agreement shall terminate forthwith, without liability
of any party to any other party except that Section 6 shall remain in effect.
(d) If the Company has elected not to rely on Rule 430A, the
initial public offering price per share for the Firm Shares and the purchase
price per share for the Firm Shares to be paid by the several Underwriters shall
be agreed upon and set forth in the Price Determination Agreement, which shall
be dated the date hereof, and an amendment to the Registration Statement
containing such per share price information shall be filed before the
Registration Statement becomes effective.
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2. Delivery and Payment.
Delivery of the Firm Shares shall be made to the Representatives
for the accounts of the Underwriters at the office of PaineWebber Incorporated,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, against payment of the
purchase price by wire transfer of federal funds or similar same day funds to an
account designated in writing by the Company to PaineWebber Incorporated at
least one business day prior to the First Closing Date (as hereinafter defined).
Such payment shall be made at 10:00 a.m., New York City time, on the third
business day (or fourth business day, if the Price Determination Agreement is
executed after 4:30 p.m.) after the date of the Price Determination Agreement or
at such time on such other date, not later than ten business days after such
date, as may be agreed upon by the Company and the Representatives (such date is
hereinafter referred to as the "First Closing Date," and together with the
Option Closing Date, the "Closing Dates").
To the extent the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (in the manner specified above) will
take place at the offices specified above for the First Closing Date at the time
and date (which may be the First Closing Date) specified in the Option Shares
Notice.
If the Underwriters request that the Shares be delivered in
certificated form, then certificates representing the Shares shall be in
definitive form and shall be registered in such names and in such denominations
as the Representatives shall request at least two business days prior to the
First Closing Date or the Option Closing Date, as the case may be, by written
notice to the Company. For the purpose of expediting the checking and packaging
of certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the First Closing Date or
the Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with
the issuance and delivery of the Firm Shares and Option Shares by the Company to
the respective Underwriters shall be borne by the Company. The Company will pay
and save each Underwriter and any subsequent holder of the Shares harmless from
any and all liabilities with respect to or resulting from any failure or delay
in paying federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company and the Manager.
The Company and the Manager, jointly and severally, represent,
warrant and covenant to each Underwriter that:
(a) The Company meets the requirements for use of Form S-11 and a
registration statement (Registration No. 333-33679) on Form S-11 relating to the
Shares, including a preliminary prospectus and such amendments to such
registration statement as may have been required to the date of this Agreement,
has been prepared by the Company under the provisions of the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The term "preliminary prospectus" as used herein means a preliminary
prospectus as contemplated by Rule 430 or Rule
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430A ("Rule 430A") of the Rules and Regulations included at any time as part of
the registration statement. Copies of such registration statement and amendments
and of each related preliminary prospectus have been delivered to the
Representatives. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including financial statements and all exhibits and any information
deemed to be included by Rule 430A or Rule 434 of the Rules and Regulations. If
the Company files a registration statement to register a portion of the Shares
and relies on Rule 462(b) of the Rules and Regulations for such registration
statement to become effective upon filing with the Commission (the "Rule 462
Registration Statement"), then any reference to the "Registration Statement"
shall be deemed to include the Rule 462 Registration Statement, as amended from
time to time. The term "Prospectus" means the prospectus as first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no such
filing is required, the form of final prospectus included in the Registration
Statement at the Effective Date. The Prospectus, brochures, wrappers and other
materials, if any, preceded or accompanied by the Prospectus, any letters and
other informational material sent to securities dealers, commercial banks and
other nominees and other offering materials and information that the Company may
use specifically in connection with the solicitation contemplated by this
Agreement, approve, prepare or authorize for use in connection with the public
offering, are collectively referred to hereinafter as the "Offering Materials."
(b) On the Effective Date, the date the Prospectus is first filed
with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the First Closing Date and, if later, the Option
Closing Date and when any post-effective amendment to the Registration Statement
becomes effective or any amendment or supplement to the Prospectus is filed with
the Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included or
incorporated by reference in the Prospectus, did or will comply with all
applicable provisions of the Securities Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the rules and regulations thereunder (the
"Exchange Act Rules and Regulations") and the Rules and Regulations and will
contain all statements required to be stated therein in accordance with the
Securities Act, the Exchange Act, the Exchange Act Rules and Regulations and the
Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement or any such amendment did or will contain 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 not
misleading. At the Effective Date, the date the Prospectus or any amendment or
supplement to the Prospectus is filed with the Commission and at the First
Closing Date and, if later, the Option First Closing Date, the Prospectus did
not and will not contain any 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. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. For all purposes of this
Agreement, the legend regarding stabilization on the inside front cover of the
of the Prospectus, the list of Underwriters under the section "Underwriters" in
the Prospectus, and the information in Paragraphs 3, 8, 9, 10, 12, 13, 14 and 15
(with respect to the Underwriters) constitute the only information relating to
any Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement, the preliminary
prospectus or the Prospectus. The Company has not
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distributed any Offering Material in connection with the offering or sale of the
Shares other than the Registration Statement, the preliminary prospectus, the
Prospectus or any other materials, if any, permitted by the Securities Act.
(c) Neither the Company nor the Manager has any subsidiaries;
provided, however, the Manager has an interest in MDC REIT Holdings, LLC.
(d) The Company and the Manager are, and at each Closing Date
will be, corporations duly organized, validly existing and in good standing
under the laws of their jurisdiction of incorporation. The Company and the
Manager have, and at each Closing Date will have, full power and authority to
conduct all the activities conducted by them, to own or lease all the assets
owned or leased by them and to conduct their businesses as described in the
Registration Statement and the Prospectus. The Company and the Manager are, and
at each Closing Date will be, duly licensed or qualified to do business and in
good standing as foreign corporations in all jurisdictions in which the nature
of the activities conducted by them or the character of the assets owned or
leased by them make such licensing or qualification necessary. Except as
disclosed in the Registration Statement and in Section 3(c) above, the Company
and the Manager do not own, and at each Closing Date will not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity. Complete and correct copies of the
certificates (or articles) of incorporation and of the by-laws of the Company
and the Manager and all amendments thereto have been delivered to the
Representatives, and no changes therein will be made subsequent to the date
hereof and prior to the First Closing Date or, if later, the Option Closing
Date.
(e) The Company has authorized and outstanding Capital Stock as
set forth under the heading "Capitalization" in the Prospectus. All of the
outstanding shares of Common Stock have been, and the Shares to be issued and
sold by the Company upon such issuance will be, duly authorized, validly issued,
fully paid and nonassessable and will not be subject to any preemptive or
similar right. The description of the Common Stock in the Registration Statement
and the Prospectus is, and at each Closing Date will be, complete and accurate
in all material respects. Except as set forth in the Prospectus, the Company
does not have outstanding, and at each Closing Date will not have outstanding,
any options to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, any shares of Common Stock, any shares of capital stock of any
subsidiary or any such warrants, convertible securities or obligations,
provided, however, that the Company may have outstanding options issued pursuant
to its employees stock option plans described in the Prospectus. No stockholder
of the Company has any right which has not been waived to require the Company to
register the sale of any shares owned by such stockholder under the Securities
Act in the public offering contemplated by this Agreement. No further approval
or authority of the stockholders or the Board of Directors of the Company will
be required for the issuance and sale of the Shares to be sold by the Company as
contemplated herein. The description of the Company's share option, share bonus
and other share plans or arrangements and the options or other rights granted
and exercised thereunder, set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.
(f) The financial statements and schedules included or
incorporated by reference in the Registration Statement or the Prospectus
present fairly in all material respects the financial condition of the Company
as of the respective dates thereof and the results of operations
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and cash flows of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise disclosed in
the Prospectus. Any pro forma financial statements and any other pro forma
financial information included in the Registration Statement or the Prospectus
(i) present fairly in all material respects the information shown therein, (ii)
have been prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and (iii) have been properly computed
on the bases described therein. The assumptions used in the preparation of the
pro forma financial statements and other pro forma financial information
incorporated by reference in the Registration Statement or the Prospectus are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein. No other financial
statements or schedules of the Company are required by the Securities Act, the
Exchange Act or the Rules and Regulations to be incorporated by reference in the
Registration Statement or the Prospectus. KPMG Peat Marwick LLP (the
"Accountants") who have reported on such financial statements and schedules, are
independent accountants with respect to the Company as required by the
Securities Act and the Rules and Regulations. The statements included in the
Registration Statement with respect to the Accountants pursuant to Rule 509 of
Regulation S-K of the Rules and Regulations are true and correct in all material
respects. The selected financial data set forth in the Prospectus under the
captions "Summary Financial Information," "Capitalization," and "Selected
Financial Data" fairly present the information set forth therein on the basis
stated in the Registration Statement.
(g) The Company and the Manager maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the First
Closing Date and, if later, the Option Closing Date, except as set forth in or
contemplated by the Registration Statement and the Prospectus: (i) there has not
been and will not have been any change in the capitalization of the Company, or
in the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company, arising for any reason
whatsoever; (ii) neither the Company nor the Manager has incurred nor it incur
any material liabilities or obligations, direct or contingent, nor has it
entered into nor will it enter into any material verbal or written agreements or
other transactions other than pursuant to this Agreement and the transactions
referred to herein; (iii) the Company has not and will not have paid or declared
any dividends or other distributions of any kind on any class of capital stock,
and the Company is not in default in the payment of principal or interest on any
outstanding debt obligations; (iv) the Company have not sustained any material
loss or interference with their business or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance; and
(v) there has not been any material adverse change in the condition (financial
or otherwise), business, properties, results of operations or prospects of the
Company.
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(i) Neither the Company nor the Manager is, and if operated in
the manner described in the Prospectus neither will be, an "investment company,"
an entity "controlled" by an "investment company" or an "affiliated person" of,
or "promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"). The Manager is not, and if operated in the manner
described in the Prospectus will not be, an "investment advisor," as such term
is defined in the Investment Advisors Act of 1940, as amended.
(j) Except as set forth in the Registration Statement and the
Prospectus, there are no legal or governmental actions, suits or proceedings
pending or, to the knowledge of the Company and the Manager, threatened against
or affecting the Company, the Manager or any of their respective officers in
their capacity as such, or of which property owned or leased by the Company or
the Manager is or may be the subject, or related to environmental or
discrimination matters, which actions, suits or proceedings might, individually
or in the aggregate, prevent or adversely affect the transactions contemplated
by this Agreement or result in a material adverse change in the condition
(financial or otherwise), properties, business, results of operations or
prospects of the Company; and no labor disturbance by the employees of the
Company or the Manager exists or, to the knowledge of the Company and the
Manager, is imminent which might be expected to affect adversely such condition,
properties, business, results of operations or prospects. The Company and the
Manager are not a party or subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body, administrative agency
or other governmental body.
(k) Each of the Company and the Manager has, and at each Closing
Date will have, (i) all governmental licenses, permits, consents, orders,
approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, (ii) complied in material all respects with all
laws, regulations and orders applicable to it or its business and (iii)
performed in all material respects all the obligations required to be performed
by it, and is not, and at each Closing Date will not be, in default, under any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement, lease, contract or other agreement or
instrument (collectively, a "contract or other agreement") to which it is a
party or by which its property is bound or affected. To the best knowledge of
the Company and the Manager, no other party under any contract or other
agreement to which either of them is a party is in default in any respect
thereunder. The Company and the Manager are not, and at each Closing Date will
not be, in violation of any provision of their certificates of incorporation or
by-laws.
(l) The Company and the Manager are in compliance with all
applicable laws, rules and regulations of the jurisdictions in which they are
conducting business, including, without limitation, all applicable local, state
and federal environmental laws and regulations; except where failure to be so in
compliance would not, individually or in the aggregate, materially and adversely
affect the condition (financial or otherwise), business, results of operations
or prospects of the Company.
(m) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
in connection with the authorization, issuance, transfer, sale or delivery of
the Shares by the Company, in connection with the execution, delivery and
performance of this Agreement by the Company or in connection with the taking by
the Company of any action contemplated hereby, except such as have been obtained
under the Securities Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws
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or the bylaws and rules of the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the purchase and distribution by the
Underwriters of the Shares to be sold by the Company.
(n) Each of the Company and the Manager has full corporate power
and authority to enter into this Agreement. This Agreement has been duly
authorized, executed and delivered by each of the Company and the Manager and
constitutes a valid and binding agreement of each of them and is enforceable
against each of them in accordance with the terms hereof. The performance of
this Agreement and the consummation of the transactions contemplated hereby and
the application of the net proceeds from the offering and sale of the Shares to
be sold by the Company in the manner set forth in the Prospectus under "Use of
Proceeds" will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company pursuant to the terms or
provisions of, or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, the certificate of incorporation or by-laws of the Company,
any contract or other agreement to which the Company is a party or by which the
Company or any of its properties is bound or affected, or violate or conflict
with any judgment, ruling, decree, order, statute, rule or regulation of any
court or other governmental agency or body applicable to the business or
properties of the Company.
(o) Each of the agreements listed on Schedule II hereto (each a
"Principal Agreement") to which the Company or the Manager is a party has been,
or will be upon execution and delivery thereof, duly authorized, executed and
delivered by the Company and/or the Manager, as applicable. The Company and the
Manager, each has full legal right, power and authority to enter into each such
agreement and to consummate the transactions contemplated therein. Each
Principal Agreement to which the Company or the Manager is a party does or will,
as applicable, constitute a valid and binding agreement of the Company and the
Manager, as applicable, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles. Neither the Company
nor the Manager is, or upon completion of the offering and all related
transactions will be, in breach of or default under any Principal Agreement.
(p) The Company owns no real property. The Company has good and
marketable title to all the properties and assets reflected as owned in the
financial statements hereinafter described (or elsewhere in the Prospectus),
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
(i) those, if any, reflected in such financial statements (or elsewhere in the
Prospectus), or (ii) those which are not material in amount and do not
materially adversely affect the use made and proposed to be made of such
property by the Company. The Company holds its leased properties under valid and
binding leases, with such exceptions as are not materially significant in
relation to the business of the Company. Except as disclosed in the Prospectus,
the Company owns or leases all such properties as are necessary to its
operations as now conducted or as proposed to be conducted.
(q) There is no document or contract of a character required to
be described or incorporated by reference in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which is
not described, filed or incorporated by reference as required. All such
contracts to which either the Company or the Manager is a party have been duly
authorized,
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executed and delivered by the Company and/or the Manager, as applicable,
constitute valid and binding agreements of the Company and/or the Manager, as
applicable, and are enforceable against the Company and the Manager in
accordance with the terms thereof.
(r) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect.
(s) Neither the Company, the Manager nor any of their directors,
officers or controlling persons have taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under the
Securities Act or otherwise, in, or which has constituted, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(t) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(u) Prior to each Closing Date, the Shares to be sold on such
Closing Date will be duly authorized for listing by the New York Stock Exchange
upon official notice of issuance.
(v) Each of the Company and the Manager has all necessary
trademarks, trade names, patent rights, mask works, copyrights, licenses,
approvals and governmental authorizations to conduct its business as now
conducted or proposed to be conducted; the expiration of any trademarks, trade
names, patent rights, mask works, copyrights, licenses, approvals or
governmental authorizations would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise), business,
results of operations or prospects of the Company; and the Company and the
Manager have no actual knowledge of any material infringement by either of them
of trademark, trade name rights, patent rights, mask works, copyrights,
licenses, trade secret or other similar rights of others, and there is no claim
or claims being made against either of them regarding trademark, trade name,
patent, mask work, copyright, license, trade secret or other infringement which,
individually or in the aggregate, could have a material adverse effect on the
condition (financial or otherwise), business, results of operations or prospects
of the Company.
(w) Neither the Company, the Manager nor, to the Company's or
Manager's knowledge, any employee or agent of the Company or the Manager have
made any payment of funds of the Company or the Manager or received or retained
any funds in violation of any law, rule or regulation or of a character required
to be disclosed in the Prospectus.
(x) Neither the Company nor its officers, directors, employees
and agents have distributed or will distribute, prior to the First Closing Date
or, if later, the Option Closing Date, any Offering Material in connection with
the offering and sale of the Shares other than the Prospectus, the Registration
Statement and other materials permitted by the Securities Act.
(y) The Company and the Manager have filed all necessary federal,
state and foreign income and franchise tax returns and has paid all taxes shown
as due thereon; and the Company and the Manager have no knowledge of any tax
deficiency which has been or might be asserted or threatened against the Company
or the Manager which could materially and adversely affect the business,
operations or properties of the Company.
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(z) Neither the Company, the Manager nor to the knowledge of the
Company or the Manager any officers, directors, employees or agents acting on
behalf of the Company has at any time (i) made any contributions to any
candidate for political office in violation of law, or failed to disclose fully
any contributions to any candidate for political office in accordance with any
applicable statute, rule, regulation or ordinance requiring such disclosure,
(ii) made any payment to any local, state, federal or foreign governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or allowed by applicable law, (iii) made
any payment outside the ordinary course of business to any purchasing or selling
agent or person charged with similar duties of any entity to which the Company
sells or from which the Company buys products for the purpose of influencing
such agent or person to buy products from or sell products to the Company, or
(iv) except as described in the Prospectus, engaged in any transaction,
maintained any bank account or used any corporate funds except for transactions,
bank accounts and funds which have been and are reflected in the normally
maintained books and records of the Company.
(aa) As of the First Closing Date and, if later, the Option
Closing Date, the Company and the Manager shall be insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the business in which they propose to
engage as described in the Prospectus; the Company and the Manager have not been
refused any insurance coverage sought or applied for; and the Company and the
Manager have no reason to believe that they will not be able to renew their
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue their
proposed business at a cost that would not result in a material adverse effect.
(bb) The Company has operated and will continue to operate in
such a manner as to qualify as a REIT under Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated and interpretations published thereunder (the "Tax Code"); and the
Company intends to elect to and will elect to be taxed as a REIT under the Tax
Code beginning with its taxable year ending December 31, 1997. The Company knows
of no event or condition which would cause or is likely to cause the Company to
fail to qualify as a REIT at any time.
(cc) Neither the Company nor the Manager is a "broker" within the
meaning of Section 3(a)(4) of the Exchange Act or a "dealer" within the meaning
of Section 3(a)(5) of the Exchange Act or required to be registered pursuant to
Section 15(a) of the Exchange Act.
(dd) Neither the Company nor any affiliate has incurred any
liability for a fee, commission or other compensation on account of the
employment of a broker or finder in connection with the transactions
contemplated by this Agreement other than as disclosed in the Prospectus.
(ee) There are no business relationships or related-party
transactions involving the Company, the Manager or any other person required to
be described in the Prospectus which have not been described as required.
(ff) The Company and the Manager and any "employee benefit plan"
(as defined under the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the
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Company, the Manager or their "ERISA Affiliates" (as defined below) are in
compliance in all material respects with ERISA. "ERISA Affiliate" means, with
respect to the Company or the Manager, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Tax Code, of which the
Company or the Manager is a member. No "reportable event" (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, the Manager or
any of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, the Manager or any of their ERISA Affiliates, if such
"employee benefit plan" were terminated, would have any "amount of unfunded
benefit liabilities" (as defined under ERISA). Neither the Company, its the
Manager nor any of their ERISA Affiliates has incurred or reasonably expects to
incur any liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "employee benefit plan" or (ii) Sections 412, 4971, 4975
or 4980B of the Tax Code. Each "employee benefit plan" established or maintained
by the Company, the Manager or any of their ERISA Affiliates that is intended to
be qualified under Section 401(a) of the Tax Code is so qualified and nothing
has occurred, whether by action or failure to act, which would cause the loss of
such qualification.
(gg) Neither the Company nor the Manager is subject to any
collective bargaining agreements.
(hh) The Manager has available to it the resources (financial and
otherwise) necessary for the performance of its services and obligations as
contemplated by the Prospectus.
In addition, any certificate signed by an officer of the Company
or the Manager and delivered to the Representatives or to counsel for the
Underwriters shall be deemed to be a representation and warranty by the Company
or the Manager, respectively, to each Underwriter as to the matters set forth
therein.
4. Covenants and Agreements of the Company.
The Company covenants and agrees with the Underwriters as
follows:
(a) The Company will cause the Prospectus to be filed as required
by Section 3(a) hereof (but only if the Representatives have not reasonably
objected thereto by notice to the Company after having been furnished a copy a
reasonable time prior to filing) and will notify the Representatives promptly of
such filing; it will notify the Representatives promptly of the time when any
subsequent amendment to the Registration Statement has become effective or any
supplement to the Prospectus has been filed and of any request by the Commission
for any amendment or supplement to the Registration Statement or Prospectus or
for additional information; it will prepare and file with the Commission,
promptly upon the Representatives' reasonable request, any amendments or
supplements to the Registration Statement or Prospectus that, in the reasonable
opinion of the Representatives, may be necessary or advisable in connection with
the distribution of the Shares by the Underwriters; and it will file no
amendment or supplement to the Registration Statement or Prospectus to which the
Representatives shall reasonably object by notice to the Company after having
been furnished a copy at a reasonable time prior to the filing.
(b) The Company will advise the Representatives, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement, of the suspension of the qualification of the Shares
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for offering or sale in any jurisdiction, or of the initiation or threatening of
any proceeding for any purpose; and it will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued.
(c) Within the time during which a Prospectus relating to the
Shares is required to be delivered under the Securities Act, the Company will
comply with all requirements imposed upon it by the Securities Act and by the
Rules and Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Shares as contemplated by
the provisions hereof and the Prospectus. If during such period any event occurs
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company will promptly notify the Underwriters and will amend
or supplement the Registration Statement or Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.
(d) The Company will furnish to the Representatives, without
charge, one signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any post effective amendment thereto, including
financial statements and schedules but without exhibits.
(e) The Company will comply in all material respects with all the
provisions of any undertakings contained in the Registration Statement.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter during the period when the Prospectus is required to be
delivered, the Company will deliver to each of the Underwriters, without charge,
as many copies of the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which in the judgment of the
Company or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Company will promptly advise the
Underwriters thereof and will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and will deliver to
each of the Underwriters, without charge, such number of copies thereof as the
Representatives may reasonably request.
(g) Prior to any public offering of the Shares by the
Underwriters, the Company shall cooperate with the Underwriters and their
counsel in order to qualify or register the Shares for sale under (or obtain
exemptions from the application of) the Blue Sky or state or Canadian securities
laws of such jurisdictions as the Representatives may reasonably designate, will
comply with such laws and will continue such qualifications, registrations and
exemptions in effect so long as reasonably required for the distribution of the
Shares. The Company shall not be required to qualify
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as a foreign corporation or to file a general consent to 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. The Company will advise the
Underwriters promptly of the suspension of the qualification or registration of
(or any such exemption relating to) the Shares for offering; sale or trading in
any jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company, with the cooperation of
the Underwriters, will use its commercially reasonable efforts to obtain the
withdrawal thereof.
(h) During the period of five years hereafter, the Company will
furnish to each of the Underwriters: (i) as soon as practicable after the end of
each fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and statements
of income, stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K
or other report filed by the Company with the Commission, the NASD or any
securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its Common Stock.
(i) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
effective date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
effective date, and satisfying the provisions of Section 11(a) of the Securities
Act (including Rule 158 of the Rules and Regulations). "Effective date" for
purposes of this Section 4(i) shall be as defined in Section 158 of the Rules
and Regulations.
(j) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Underwriters, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
but not limited to costs and expenses of or relating to (1) the preparation,
printing and filing of the Registration Statement and exhibits to it, each
preliminary prospectus, the Prospectus and any amendment or supplement to the
Registration Statement or the Prospectus, (2) the preparation and delivery of
certificates representing the Shares, (3) the printing of this Agreement, the
Agreement Among Underwriters, any Dealer Agreements and any Underwriters
Questionnaire, (4) furnishing (including costs of shipping, mailing and courier)
such copies of the Registration Statement, the Prospectus and any preliminary
prospectus, and all amendments and supplements thereto, as may be reasonably
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, (5) the listing of the
Shares on the New York Stock Exchange, (6) any filings required to be made by
the Underwriters with the NASD, and the fees, disbursements and other charges of
counsel for the Underwriters in connection therewith, (7) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions designated pursuant to Section 4(f), including the
fees, disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (8) counsel to the Company, (9) the
transfer agent for the Shares and (10) the Accountants.
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(k) If this Agreement shall be terminated by the Company pursuant
to any of the provisions hereof, except pursuant to Section 8, or if for any
reason the Company shall be unable to perform its obligations hereunder, the
Company will reimburse the Underwriters for all out-of-pocket expenses
(including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred in connection herewith.
(l) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the shares of
Common Stock to facilitate the sale or resale of any of the Shares.
(m) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds". The Company will not use the proceeds of the
sale of the Shares in such a manner as to require the Company to be registered
under the Investment Company Act.
(n) The Company will not, and will cause each of its executive
officers, directors and each beneficial owner of more than 5% of the outstanding
shares of Common Stock to enter into agreements with the Underwriter in the form
set forth in Exhibit B hereto to the effect that they will not, for a period of
180 days after the commencement of the public offering of the Shares, without
the prior written consent of PaineWebber Incorporated, sell, contract to sell or
otherwise dispose of any shares of Common Stock or rights to acquire such shares
(other than pursuant to employee and director stock option plans, or in
connection with other employee incentive compensation arrangements or any
dividend reinvestment or employee stock purchase plans).
(o) The Company will use its best efforts to list on the New York
Stock Exchange, the Shares to be issued and sold by the Company.
(p) The Company will continue to meet the requirements to qualify
as a REIT under the Tax Code and will not revoke its election to be a REIT
unless and until the Board of Directors of the Company determines that such
revocation is advantageous to the Company.
(q) The Company will not, and will not permit the Manager on
behalf of the Company to, invest in futures contracts, options on futures
contracts or options on commodities unless the Company or Manager, as
applicable, is exempt from the registration requirements of the Commodity
Exchange Act, as amended, or otherwise complies with the Commodity Exchange Act,
as amended.
(r) The Manager will not engage in any activity which would
require the Manager to register as an investment advisor under the Investment
Advisors Act of 1940.
(s) If at any time during the 90 day period after the
Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company or the Manager shall occur as a result of
which in the reasonable opinion of the Representatives the market price of the
Common Stock has been or is likely materially and adversely to be affected
(regardless of whether such rumor, publication or event necessitates a
supplement or amendment to the Prospectus), the Company will, after written
notice from the Representatives advising the Company to the effect set forth
above, promptly prepare, consult with the Representatives concerning the
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content of, and disseminate a press release or other public statement,
reasonably satisfactory to the Representatives, responding to or commenting on
such rumor, publication or event.
(t) In the event that any portion of the Shares is issued without
certificates pursuant to section 2-210 of the Maryland General Corporation Law
(the "MGCL") and with the consent of the Representatives under Section 2 above,
at the time of issue of such Shares the Company shall send, or cause to be sent,
to the stockholder a written statement of the information required on
certificates by section 2-211 of the MGCL, and shall otherwise maintain full
compliance with sections 2-210 and 2-211 of the MGCL.
(u) The Company will engage and retain a "Big 6" Accounting Firm
as its qualified accountants and such tax experts at such accounting firm with
experience in advising REITs as are reasonably acceptable to the Representatives
for a period of not less than two years beginning on the First Closing Date to
assist the Company in developing appropriate accounting systems and testing
procedures and to conduct quarterly compliance reviews designed to determine
compliance with the REIT provisions of the Tax Code and the maintenance of
Company's exempt status under the Investment Company Act. The current accounting
firm employed by the Company is deemed to be acceptable to the Representative.
Any written reports of such compliance reviews shall be made available to the
Representatives.
(v) Prior to the First Closing Date, the Company and the Manager
shall adopt and implement (i) a compliance program, to ensure compliance with
the reporting requirements under the Exchange Act and the securities laws
generally and (ii) an xxxxxxx xxxxxxx compliance policy, to govern their
employees' and directors' trading in securities of the Company and all Company
affiliates in accordance with federal law and all applicable state blue sky
laws.
The Underwriters may, in their sole discretion, waive in writing
the performance by the Company of any one or more of the foregoing covenants or
extend the time for their performance.
5. Conditions of the Obligations of the Underwriters.
In addition to the execution and delivery of the Price
Determination Agreement, the obligations of each Underwriter hereunder are
subject to the following conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Representatives not later than 5:00 p.m., New
York City time, on the date of this Agreement or at such later date and time as
shall be consented to in writing by the Representatives and all filings required
by Rule 424 of the Rules and Regulations and Rule 430A shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv)
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after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Representatives and the Representatives did not reasonably
object thereto.
(c) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (i) there shall not have been,
and no development shall have occurred which could reasonably be expected to
result in, a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise) or results
of operations of the Company, whether or not arising from transactions in the
ordinary course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and (ii) the
Company and the Manager shall not have sustained any material loss or
interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, which
is not set forth in the Registration Statement and the Prospectus, if in the
judgment of the Representatives any such development makes it impracticable or
inadvisable to consummate the sale and delivery of the Shares by the
Underwriters at the initial public offering price.
(d) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or the Manager or
any of their respective officers or directors in their capacities as such,
before or by any federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding,
individually or in the aggregate, would reasonably be expected to have a
material and adverse affect on the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company.
(e) Each of the representations and warranties of the Company and
the Manager contained herein shall be true and correct in all material respects
at the First Closing Date and, with respect to the Option Shares, at the Option
Closing Date as if made at the First Closing Date and, with respect to the
Option Shares, at the Option Closing Date, and all covenants and agreements
herein contained to be performed on the part of the Company and all conditions
herein contained to be fulfilled or complied with by the Company at or prior to
the First Closing Date and, with respect to the Option Shares, at or prior to
the Option Closing Date shall have been duly performed, fulfilled or complied
with.
(f) On each of the First Closing Date and, if any part of the
Option is exercised, the Option Closing Date, the Underwriters shall have
received opinions, to the effect set forth in Exhibit C hereto dated the Closing
Date or the Option Closing Date, as the case may be, and satisfactory in form
and substance to counsel for the Underwriters, from (1) Xxxx Xxxx Xxxx &
Freidenrich, A Professional Corporation, counsel to the Company ("Xxxx Xxxx"),
(2) as to matters involving the application of Maryland law, Piper & Marbury
L.L.P. and (3) as to matters involving tax law, Jeffers, Wilson, Xxxxx & Xxxx,
LLP, each of which shall expressly state that O'Melveny & Xxxxx LLP, as counsel
for the Underwriters, may rely on such opinion. In rendering such opinions,
counsel for the Company may rely, to the extent they deem proper, as to matters
of fact, on certificates of responsible officers of the Company, which shall be
attached to such opinions, and public officials.
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(g) On each of the First Closing Date and, if any part of the
Option is exercised, the Option Closing Date, the Underwriters shall have
received an opinion of O'Melveny & Xxxxx LLP, counsel to the Underwriters, dated
the First Closing Date or the Option Closing Date, as the case may be, with
respect to the Registration Statement, the Prospectus and this Agreement, which
opinion shall be satisfactory in all respects to the Representatives.
(h) The Underwriters shall have received on the date before this
Agreement is executed and also on the First Closing Date and, if any part of the
Option is exercised, the Option Closing Date a letter from the Accountants, the
first one to be dated the day before the date of this Agreement, the second one
to be dated the First Closing Date and the third one (if applicable) to be dated
the Option Closing Date, to the effect that:
(1) They are independent accountants with respect to the
Company within the meaning of the Securities Act and the
applicable rules and regulations thereunder;
(2) In their opinion, the financial statements examined by
them and contained in the Registration Statement or incorporated
by reference therein and the Prospectus comply in form in all
material respects with the applicable accounting requirements of
the Securities Act and the related published rules and
regulations;
(3) On the basis of a reading of the latest available
interim unaudited financial statement of the Company, carrying
out certain specified procedures (which do not constitute an
examination made in accordance with generally accepted auditing
standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this
paragraph (3), a reading of the minute books of the stockholders,
the board of directors and any committees thereof of the Company,
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters, nothing came
to their attention that caused them to believe that as of a date
not more than five days prior to the date of such letter, there
were any changes in the capital stock or long-term debt of the
Company or any decreases in net current assets or stockholders'
equity of the Company in each case compared with amounts shown on
the balance sheet included in the Registration Statement and the
Prospectus; and
(4) They have carried out certain specified procedures,
not constituting an audit, with respect to any pro forma
financial information, amounts, percentages and other financial
information that are derived from the general accounting records
of the Company and are included in the Registration Statement and
the Prospectus as marked (to the reasonable satisfaction of the
Representatives) on the copy of the Prospectus attached to such
letter, and have compared such amounts, percentages and financial
information with such records of the Company and with information
derived from such records and have found them to be in agreement,
excluding any questions of legal interpretation.
(i) At the First Closing Date and, if any part of the Option is
exercised, the Option Closing Date, there shall be furnished to the
Representatives an accurate certificate, dated as
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of such Closing Date, signed by each of the Chief Executive Officer and the
Chief Financial Officer of the Company, in form and substance satisfactory to
the Representatives, to the effect that:
(1) Each signer of such certificate has carefully examined
the Registration Statement and the Prospectus; in his opinion and
to the best of his knowledge, such documents and any amendments
or supplements thereto contain all statements required to be
stated therein regarding the Company; and neither the
Registration Statement nor the Prospectus nor any amendment or
supplement thereto includes any untrue statement of a material
fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading;
(2) Each of the representations and warranties of the
Company contained in this Agreement are true and correct in all
material respects as of the date of this Agreement and as of the
First Closing Date or the Option Closing Date, as the case may
be;
(3) The Commission has not issued any order preventing or
suspending the use of the Prospectus or any preliminary
prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and no proceedings
for that purpose have been instituted or, to the best of the
information and belief of the respective signers, are pending or
threatened or contemplated under the Securities Act;
(4) No order suspending the effectiveness of the
Registration Statement or the qualification or registration of
the Shares under the securities or Blue Sky laws of any
jurisdiction is in effect and no proceeding for that purpose are
pending or, to the best of the information and belief of the
respective signers, threatened or contemplated by the Commission
or the authorities of any such jurisdiction;
(5) Any request for additional information on the part of
the staff of the Commission or the authorities of any
jurisdiction has been complied with to the satisfaction of the
staff of the Commission or such authorities;
(6) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, transaction
or event has occurred which should have been set forth in an
amendment to the Registration Statement or in a supplement to or
amendment of any prospectus which has not been disclosed in such
a supplement or amendment;
(7) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, there
has not been any material adverse change or a development
involving a material adverse change in the condition (financial
or otherwise), business, properties, results of operations,
management or prospects of the Company; and no legal or
governmental action, suit or proceeding is pending or, to the
knowledge of the Company, threatened against the Company or the
Manager
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which is material to the Company, whether or not arising from
transactions in the ordinary course of business, or which,
individually or in the aggregate, may adversely affect the
transactions contemplated by this Agreement; since such dates
and except as so disclosed, neither the Company nor the Manager
has entered into any verbal or written agreement or other
transaction which is not in the ordinary course of business or
which could result in a material reduction in the future
earnings of the Company, or, except as incurred in the ordinary
course of business, incurred any material liability or
obligation, direct, contingent or indirect, made any change in
its capital stock, made any material change in its short-term
debt or funded debt or repurchased or otherwise acquired any of
its capital stock; and the Company has not declared or paid any
dividend, or made any other distribution, upon its outstanding
capital stock payable to stockholders of record on a date prior
to the Closing Date or the Option Closing Date; and
(8) Each of the covenants required herein to be performed
by the Company or the Manager on or prior to the date of such
certificate has been duly, timely and fully performed and each
condition herein required to be complied with by the Company or
the Manager on or prior to the delivery of such certificate has
been duly, timely and fully complied with.
(j) On or prior to the First Closing Date, the Representatives
shall have received the executed lock-up agreements referred to in Section 4(n)
hereof.
(k) The Shares shall not subject to any stop order or other
proceeding on the First Closing Date and the Option Closing Date.
(l) Prior to the each Closing Date, the Shares to be purchased by
the Underwriters shall have been duly authorized for listing by the New York
Stock Exchange upon official notice of issuance.
(m) The Company or the Manager, as applicable, shall have
furnished to the Representatives such certificates, in addition to those
specifically mentioned herein, as the Representatives, or counsel to the
Underwriters, may have reasonably requested as to the accuracy and completeness
at the First Closing Date and the Option Closing Date of any statement in the
Registration Statement or the Prospectus or any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, as
to the accuracy at the First Closing Date and the Option Closing Date of the
representations and warranties of the Company and the Manager herein, as to the
performance by the Company and the Manager of their respective obligations
hereunder, as to the fulfillment of the conditions concurrent and precedent to
the obligations hereunder of the Underwriters, or as to any factual matters
reasonably necessary for counsel to the Underwriters to render the opinion
referred to in Section 5(g).
All such opinions, certificates, letters and documents shall be
in compliance with the provisions hereof only if they are reasonably
satisfactory to the Underwriters and to O'Melveny & Xxxxx LLP, counsel to the
Underwriters. The Company and the Manager shall furnish the Underwriters with
such manually signed or conformed copies of such opinions, certificates, letters
and documents as reasonably requested by the Underwriters. Any certificate
signed by any officer of the Company or of the Manager and delivered to the
Underwriters or their counsel shall be deemed to
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be a representation and warranty by the Company or the Manager, as the case may
be, to the Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations under this
Agreement to be satisfied prior to or at the Closing Date is not so satisfied,
this Agreement will terminate at the election of and upon notification by the
Underwriters without liability on the part of any Underwriter or the Company
except for the expenses to be paid or reimbursed by the Company pursuant to
Sections 4(j) and 4(k) hereof and except to the extent provided in Section 6
hereof.
6. Indemnification and Contribution.
(a) Each of the Company and the Manager, jointly and severally,
will indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person, if any, who controls
each Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any and all amounts paid in settlement of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim asserted),
as and when incurred, to which any Underwriter, or any such person, may become
subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses or damages arise out of or are based on (i) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or in
any documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus, or in any application or other document executed
by or on behalf of the Company or based on written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the
Shares under the securities laws thereof or filed with the Commission, (ii) the
omission or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it not misleading or
(iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Shares or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, liability, expense or damage arising out of or based upon
matters covered by clause (i) or (ii) above (provided that neither the Company
nor the Manager shall be liable under this clause (iii) to the extent it is
finally judicially determined by a court of competent jurisdiction that such
loss, claim, liability, expense or damage resulted directly from any such acts
or failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct); provided that neither the Company
nor the Manager shall be liable to the extent that (A) such loss, claim,
liability, expense or damage arises from the sale of the Shares in the public
offering to any person by an Underwriter and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representatives on behalf of any Underwriter expressly for
inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus or (B) results solely from an untrue statement of a material fact
contained in, or the omission of a material fact from, such preliminary
prospectus, which untrue statement or omission was completely corrected in the
Prospectus (as then amended or supplemented). This indemnity agreement will be
in addition to any liability that the Company and the Manager might otherwise
have.
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(b) Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only insofar as losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representatives on behalf of such Underwriter expressly for
use in the Registration Statement, the Preliminary Prospectus or the Prospectus.
This indemnity will be in addition to any liability that each Underwriter might
otherwise have; provided, however, that in no case shall any Underwriter be
liable or responsible for any amount in excess of the underwriting discounts and
commissions and advisory fees received by such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section 6 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent
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will not be unreasonably withheld). No indemnifying party shall, without the
prior written consent of each indemnified party, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 6 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action or
proceeding. Notwithstanding any other provision of this Section 6(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement, except to
the extent the fees are reasonably and in good faith being contested by the
Indemnifying Party and written notice of such contest has been provided to the
Indemnified Party prior to expiration of such 30-day period.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Manager or the
Underwriters, the Company, the Manager and the Underwriters will contribute to
the total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Company or
the Manager from persons other than the Underwriters, such as persons who
control the Company or the Manager within the meaning of the Securities Act,
officers of the Company who signed the Registration Statement and directors of
the Company, who also may be liable for contribution) to which the Company, the
Manager and any one or more of the Underwriters may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company and the Manager, on the one hand, and the Underwriters, on the
other. The relative benefits received by the Company and the Manager, on the one
hand, and the Underwriters, on the other, shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses net of any advisory fee) received by the Company bear to the total
underwriting discounts, commissions and advisory fees received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus (or with respect to the advisory fee, as described in the section
entitled "Underwriting" in the Prospectus). If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault of the Company and the Manager, on the one hand, and the
Underwriters, on the other, with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Manager, on the one hand, or the Representatives on behalf of
Underwriters, on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section 6(d) were to be
determined by pro rata allocation
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(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 6(d) shall be deemed to
include, for purpose of this Section 6(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions received by it and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 6(d) are
several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section 6(d), any person who controls a party to
this Agreement within the meaning of the Securities Act will have the same
rights to contribution as that party, and each officer of the Company who signed
the Registration Statement will have the same rights to contribution as the
Company, subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). Except for a settlement entered
into pursuant to the last sentence of Section 6(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company and the Manager
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of any Underwriter,
(ii) acceptance of the Shares and payment therefor or (iii) any termination of
this Agreement.
7. Termination.
Without limiting the right to terminate this Agreement pursuant
to any other provision hereof, the obligations of the Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Shares, on or prior to the Option Closing Date), by
notice to the Company from the Representatives, without liability on the part of
any Underwriter to the Company if, prior to delivery and payment for the Shares
(or the Option Shares, as the case may be), in the sole judgment of the
Representatives, (i) there has been, since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company, (ii) trading in any of the
equity securities of the Company shall have been suspended by the Commission,
the NASD, by an exchange or stock market that lists or includes such securities,
(iii) trading in securities generally on the New York Stock Exchange or the
Nasdaq Stock Market shall have been suspended or limited or minimum or maximum
prices shall have been generally established on such exchange or the over the
counter market, or additional material governmental restrictions, not in force
on the date of this Agreement, shall have been imposed upon trading in
securities generally by such exchange or by order of the Commission or the NASD
or any court or other governmental authority, (iv) a general banking
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moratorium shall have been declared by either federal or New York State
authorities or (v) any material adverse change in the financial or securities
markets in the United States or in political, financial or economic conditions
in the United States or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or other
calamity or crisis shall have occurred, the effect of any of which is such as to
make it, in the sole judgment of the Representatives, impracticable or
inadvisable to market the Shares on the terms and in the manner contemplated by
the Prospectus.
8. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of Firm Shares,
the other Underwriters shall be obligated, severally, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 8 by more than one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company for the purchase or sale of any Shares
under this Agreement. In any such case either the Representatives or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken pursuant to this Section 8 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Miscellaneous.
(i) Notice given pursuant to any of the provisions of this
Agreement shall be in writing and unless otherwise specified, shall be mailed or
delivered (a) if to the Company, at the office of the Company, 000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 000, Xxx Xxx, Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxxx, with a
copy to Xxxx Xxxx Xxxx & Freidenrich, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx
Xxxxx, Xxxxxxxxxx 00000-0000, Attention: Cameron Xxx Xxxxx, Esq., (b) if to the
Manager, at the office of the Manager, 000 Xxxxxx Xxxx Xxxxxx, Xxxxx 000, Xxx
Xxx, Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxxx, with a copy to Xxxx Xxxx Xxxx
& Freidenrich, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx
00000-0000, Attention: Cameron Xxx Xxxxx, Esq., or (c) if to the Underwriters,
at the offices of PaineWebber Incorporated, 1285 Avenue of the Xxxxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxx, Xx., with a copy to
O'Melveny & Xxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000-0000, Attention: Xxxxx X. Xxxxx, Esq. Any such notice shall be effective
only upon receipt. Any notice under Section 6 or 8 may be made by telex or
telephone, but if so made shall be subsequently confirmed in writing and (ii)
In addition to the payment to the Underwriters described in the Price
Determination Agreement, the Company shall pay to PaineWebber Incorporated, in
its individual capacity and not as Representative of the several Underwriters,
a financial advisory fee equal to .5% of the gross proceeds of the offering of
the Shares, including any proceeds received by the Company as a result of the
Underwriters exercise of the Underwriters overallotment option.
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(b) This Agreement has been and is made solely for the benefit of
the Underwriters, the Company, the Manager and of the controlling persons,
directors and officers referred to in Section 6 hereof, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser, as such purchaser, of Shares
from any of the several Underwriters.
(c) All representations, warranties and agreements of the Company
contained herein or in certificates or other instruments delivered pursuant
hereto, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any of its controlling
persons and shall survive delivery of and payment for the Shares hereunder.
(d) The invalidity or unenforceability of any Section, paragraph
or provision of this Agreement shall not affect the validity or enforceability
of any other Section, paragraph or provision hereof. If any Section, paragraph
or provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
(e) Any action required or permitted to be taken by the
Representatives under this Agreement may be taken by them jointly or by
PaineWebber Incorporated.
(f) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES OF SUCH STATE.
(g) The Company, the Manager and each of the Underwriters hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
(h) This Agreement may not be amended or otherwise modified or
any provision hereof waived except by an instrument in writing signed by the
Representatives and the Company.
(i) This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
(j) In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section headings in
this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement.
(k) The Company agrees to pay an advisory fee to PaineWebber
Incorporated equal to .5% of the aggregate offering price to the public.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon it
will become a binding agreement between the Company, the Manager and the
Underwriters, all in accordance with its terms.
Very truly yours,
AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
By:
-------------------------------
Xxxx X. Xxxxxxx
Chief Executive Officer
HOME ASSET MANAGEMENT CORP.
By:
-------------------------------
Xxxx X. Xxxxxxx
Chief Executive Officer
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED
XXXXXXXXXXX & CO., INC.
EVEREN SECURITIES,INC.
SUTRO & CO. INCORPORATED
Acting on behalf of themselves and as the
Representatives of the other several
Underwriters listed in Schedule 1 hereof.
By: PAINEWEBBER INCORPORATED
By:
-------------------------------
Name:
------------------------------
Its:
-------------------------------
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SCHEDULE I
UNDERWRITERS
Number of
Firm Shares
Underwriter to be Purchased
----------- ---------------
PaineWebber Incorporated
Xxxxxxxxxxx & Co., Inc.
EVEREN Securities, Inc.
Sutro & Co. Incorporated
Total 6,500,000
==========
Schedule I
28
SCHEDULE II
PRINCIPAL AGREEMENTS
The agreements attached as Exhibits 10.1 through 10.14 of the Registration
Statement
Schedule II
29
EXHIBIT A
AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
PRICE DETERMINATION AGREEMENT
[pricing date], 1997
PAINEWEBBER INCORPORATED
XXXXXXXXXXX & CO., INC.
EVEREN SECURITIES, INC.
SUTRO & CO. INCORPORATED
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated October
__, 1997 (the "Underwriting Agreement"), between American Residential Investment
Trust, Inc. a Maryland corporation (the "Company"), Home Asset Management Corp.,
a Delaware corporation (the "Manager") and the several underwriters listed in
Schedule I thereto (hereinafter the "Underwriters") for whom you are acting as
the representatives. The Underwriting Agreement provides for the purchase by the
Underwriters from the Company, subject to the terms and conditions set forth
therein, of an aggregate of 6,500,000 shares (the "Firm Shares") of the
Company's common stock, par value $0.01 per share. This Agreement is the Price
Determination Agreement referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the
undersigned agrees with the Representatives as follows:
1. The initial public offering price per share for the Firm
Shares shall be $________.
2. The purchase price per share for the Firm Shares to be paid by
the Underwriters shall be $_______, representing an amount equal to the initial
public offering price set forth above, less $________ (approximately _____%) per
share.
3. The Company and the Manager represent and warrant to the
Underwriters that the representations and warranties of the Company and the
Manager set forth in Section 3 of the Underwriting Agreement are accurate as
though expressly made at and as of the date hereof.
4. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPALS OF SUCH STATE.
30
If the foregoing is in accordance with your understanding of the
agreement between the Underwriters, the Company and the Manager please sign and
return to the Company a counterpart hereof, whereupon this instrument along with
all counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters, the Company and the Manager in accordance with
its terms and the terms of the Underwriting Agreement.
Very truly yours,
AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
By:
-------------------------------
Xxxx X. Xxxxxxx
Chief Executive Officer
HOME ASSET MANAGEMENT CORP.
By:
-------------------------------
Xxxx X. Xxxxxxx
Chief Executive Officer
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED
XXXXXXXXXXX & CO., INC.
EVEREN SECURITIES,INC.
SUTRO & CO. INCORPORATED
Acting on behalf of themselves and as the Representatives of the other
several Underwriters listed in Schedule 1 to the Underwriting Agreement.
By: PAINEWEBBER INCORPORATED
By:
-------------------------------
Name:
------------------------------
Its:
-------------------------------
A-2
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EXHIBIT B
[pricing date], 1997
LOCK-UP AGREEMENT
PAINEWEBBER INCORPORATED
XXXXXXXXXXX & CO., INC.
EVEREN SECURITIES, INC.
SUTRO & CO. INCORPORATED
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In consideration of the proposed public offering (the "Offering")
of up to 7,475,000 shares (including 975,000 option shares to cover
over-allotments) of Common Stock, par value $.01 per share, (the "Common Stock")
of American Residential Investment Trust, Inc., a Maryland corporation, as
contemplated by a registration statement with respect to such shares filed with
the Securities and Exchange Commission on Form S-11 (Registration No.
333-33679), the undersigned hereby agrees that the undersigned will not, for a
period of 180 days after the commencement of the public offering of such shares,
without the prior written consent of PaineWebber Incorporated, offer to sell,
sell, contract to sell, grant any option to sell, or otherwise dispose of, or
require the Company to file with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933 to register, any shares
of Common Stock or securities convertible into or exchangeable for Common Stock
or warrants or other rights to acquire shares of Common Stock of which the
undersigned is now, or may in the future become, the beneficial owner (within
the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934) (other
than pursuant to employee stock option plans, or in connection with other
employee incentive compensation arrangements or any dividend reinvestment or
employee stock purchase plans).
Very truly yours,
By:
--------------------------------
Name:
------------------------------
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EXHIBIT C
Form of Opinion of
Counsel to the Company and the Manager
1. The Company and the Manager are corporations duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation, are duly licensed or qualified to do business
and in good standing as foreign corporations in all jurisdictions where the
nature and conduct of the Company's or the Manager's business makes such
qualification and licensing necessary, and have full corporate power and
authority to conduct all the activities conducted by them, to own or lease all
the assets owned or leased by them and to conduct their business as described in
the Registration Statement and the Prospectus.
2. All of the outstanding shares of Common Stock are, and the
Shares to be purchased by the Underwriters, upon issuance and delivery against
payment therefor in the manner described in the Underwriting Agreement, will be,
duly authorized, validly issued, fully paid and nonassessable.
3. No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to subscribe for
or purchase any securities of the Company, including the Shares, arising under
or by operation of (i) the statutes, judicial and administrative decisions and
the rules and regulations of the governmental agencies of the State of Maryland
(ii) the Company's certificate of incorporation or by-laws (iii) any instrument,
document, contract or other agreement referred to in the Registration Statement
or any instrument, document, contract or agreement filed as an exhibit to, or
incorporated as an exhibit by reference in, the Registration Statement or (iv)
to the best of our knowledge, any other source. Except as described in the
Registration Statement or the Prospectus, to the best of our knowledge, there is
no commitment or arrangement to issue, and there are no outstanding options,
warrants or other rights calling for the issuance of, any share of capital stock
of the Company to any person or any security or other instrument that by its
terms is convertible into, exercisable for or exchangeable for capital stock of
the Company.
4. To the best of our knowledge, there are no persons with
registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering
contemplated by the Underwriting Agreement, except for such rights as have been
duly waived. No person or entity has the right to require the registration under
the Securities Act of shares of Common Stock or other securities of the Company
by reason of the filing or effectiveness of the Registration Statement.
C-1
33
5. No consent, approval, authorization or order of, or any filing
or declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of the Underwriting Agreement by the Company and the Manager or in
connection with the taking by the Company and the Manager of any action
contemplated thereby except such as have been obtained and are in full force and
effect under the Securities Act and the Rules and Regulations and otherwise, and
except such as may be required under state or Canadian securities or "Blue Sky"
laws or under the by-laws and rules of the NASD in connection with the purchase
and distribution by the Underwriters of the Shares to be sold by the Company.
6. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Registration Statement and the Prospectus under
the caption "Capitalization." The description of the Common Stock contained in
the Prospectus is complete and accurate in all material respects.
7. All of the shares of capital stock issued prior to the Shares
were issued and sold in one or more valid private placements exempt from the
registration requirements of the Securities Act and will not be integrated with
the public sale of the Shares and were otherwise issued in accordance with all
state and federal securities laws.
8. The Registration Statement and the Prospectus, including any
documents incorporated by reference into the Prospectus at the time they were
filed and on the Closing Date comply (or complied) in all material respects as
to form with the requirements of the Securities Act, the Exchange Act, the
Exchange Act Rules and Regulations and the Rules and Regulations, including,
without limitation, Item 503 of Regulation S-K (except that we express no
opinion as to financial statements schedules and other financial data contained
in the Registration Statement or the Prospectus or incorporated by reference
therein).
9. To the best of our knowledge, any instrument, document, lease,
license, contract or other agreement (collectively, "Documents") required to be
described or referred to in the Registration Statement or the Prospectus has
been properly described or referred to therein and any Document required to be
filed as an exhibit to the Registration Statement has been filed as an exhibit
thereto or has been incorporated as an exhibit it by reference in the
Registration Statement; and no default exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any Document filed or required to be filed as an exhibit to the
Registration Statement.
10. To the best of our knowledge, neither the Company nor the
Manager is in violation of, or in default with respect to, any law, rule,
regulation, order, judgment or decree, except as
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may be described in the Prospectus or such as in the aggregate do not now have
and will not in the future have a material adverse effect upon the operations,
business or assets of the Company or the Manager.
11. The statements (i) in the Prospectus under the captions "Risk
Factors," "Description of Capital Stock," "Management's Discussion and Analysis
of Financial Condition and Results of Operations," "Business," "Certain
Transactions," "Shares Eligible for Future Sale," "Certain Provisions of
Maryland Law and the Company's Charter and Bylaws," "Federal Income Tax
Consequences," "ERISA Considerations" and "Underwriting" and (ii) in Item 33
(Recent Sales of Unregistered Securities) and Item 34 (Indemnification of
Directors and Officers) of the Registration Statement, insofar as such
statements constitute matters of law, summaries of legal matters, the Company's
charter or bylaw provisions, documents or legal proceedings, or legal
conclusions, has been reviewed by such counsel, and accurately and fairly
present and summarize, in all material respects, the matters referred to
therein.
12. The description of the Company's stock option, stock bonus
and other stock plans or arrangements, and the options or other rights granted
and exercised thereunder, set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.
13. To the best of our knowledge, the Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than the subsidiaries, if any, listed in Exhibit 21 to the Registration
Statement.
14. The Company has full corporate power and authority to enter
into the Underwriting Agreement and the Underwriting Agreement has been duly
authorized, executed and delivered by the Company, is a valid and binding
agreement of the Company and, except for the indemnification and contribution
provisions thereof, as to which we express no opinion, is enforceable against
the Company in accordance with the terms thereof.
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16. The execution and delivery by the Company and the Manager of,
and the performance by the Company and the Manager of their respective
agreements in, the Underwriting Agreement do not and will not (a) violate the
certificate of incorporation or by-laws of the Company or the Manager; (b)
breach or result in a default under, cause the time for performance of any
obligation to be accelerated under, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the assets of the Company or the
Manager pursuant to the terms of: (i) any indenture, mortgage, deed of trust,
loan agreement, bond, debenture, note agreement, capital lease or other evidence
of indebtedness of which we have knowledge, (ii) any voting trust arrangement or
any contract or other agreement to which the Company or the Manager is a party
that restricts the ability of the Company to issue securities and of which we
have knowledge, (iii) any of the Principal Agreements, (iv) any Document filed
as an exhibit to, or incorporated as an exhibit by reference in, the
Registration Statement or (v) any other material contract of the Company or the
Manager of which we have knowledge, (c) breach or otherwise violate any existing
obligation of the Company or the Manager under any court or administrative
order, judgment or decree of which we have knowledge or (d) violate applicable
provisions of any statute or regulation in the State of Maryland, the State of
California or of the United States.
18. The form of certificate used to evidence the Common Stock is
in due and Proper form and complies with all requirements of the charter and
bylaws of the Company and all applicable statutory requirements, including those
of the Maryland General Corporation Law. In connection with any sale of
securities to the Underwriters without certificates pursuant to the Underwriting
Agreement, the Company has fully complied with sections 2-210 and 2-211 of the
Maryland General Corporation Law.
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19. Delivery of certificates for the Shares and/or transfer of
the Shares through the "FAST" system of the Depository Trust Company for the
accounts of the Underwriters will transfer valid and marketable title thereto to
each Underwriter that has purchased such Shares in good faith and without any
notice of any adverse claim with respect thereto.
20. Each of the Company and the Manager are not now, and, after
receipt of payment for the Shares, use of the proceeds of the offering as
described in the Prospectus and consummation of all related transactions, will
not be an "investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended, or a "broker" within the
meaning of Section 3(a)(4) of the Exchange Act or a "dealer" within the meaning
of Section 3(a)(5) of the Exchange Act or required to be registered pursuant to
Section 15(a) of the Exchange Act.
21. The proposed methods of operations of the Company and the
Manager, as described in the Prospectus, will not cause or require either of
them to register as an investment advisor under the Investment Advisors Act of
1940.
22. The Shares have been duly authorized for listing by the New
York Stock Exchange upon official notice of issuance.
23. The Company is organized in conformity with the requirements
for qualification as a real estate investment trust ("REIT") under Sections 856
through 860 of the Tax Code; and the Company's organization and contemplated
method of operation are such as to enable it to meet the requirements for
qualification and taxation as, and to elect to be taxed as, a REIT under the Tax
Code beginning with its taxable year ending December 31, 1997. Such election,
once made, will continue in effect until revoked or terminated. To the best of
our knowledge, there is no event or condition which would cause or is likely to
cause the Company to fail to qualify as a REIT at any time after the First
Closing Date.
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We hereby confirm to you that the Registration Statement has
become effective under the Securities Act, that the Prospectus has been filed as
required by Section 3(a) of the Underwriting Agreement, and that no order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or is threatened, pending or
contemplated.
We hereby further confirm to you that there are no actions,
suits, proceedings or investigations pending or, to our knowledge, overtly
threatened in writing against the Company or any of their respective officers or
directors in their capacities as such, before or by any court, governmental
agency or arbitrator which (i) seek to challenge the legality or enforceability
of the Underwriting Agreement, (ii) seek to challenge the legality or
enforceability of any of the Documents filed, or required to be filed, or
incorporated by reference as exhibits to the Registration Statement, (iii) seek
damages or other remedies with respect to any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement, (iv) except as
set forth in or contemplated by the Registration Statement and the Prospectus,
seek money damages or seek to impose criminal penalties upon the Company or any
of their respective officers or directors in their capacities as such and of
which we have knowledge or (v) seek to enjoin any of the business activities of
the Company or the transactions described in the Prospectus and of which we have
knowledge.
In addition, we have participated in conferences with officers
and other representatives of the Company and the Manager, representatives of the
independent public or certified public accountants for the Company and with
representatives of the Underwriters at which the contents of the Registration
Statement and the Prospectus, and any supplements or amendments thereto, and
related matters were discussed and prepared, although we are not passing upon
and do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the Prospectus
(other than as specified above), and any supplements or amendments thereto, on
the basis of the foregoing, nothing has come to our attention which would lead
us to believe that either the Registration Statement or any amendments thereto,
at the time the Registration Statement or such amendments became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, as of its date or at the First Closing
Date [or the Option Closing Date] contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except that we express no belief as to the financial
statements or schedules or other financial or statistical data derived
therefrom, included in the Registration Statement or the Prospectus or any
amendments or supplements thereto).
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