Exhibit 1.1
ANTHRACITE CAPITAL, INC.
4,000,000 Shares of Common Stock
UNDERWRITING AGREEMENT
May 7, 2001
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
as Underwriter
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Anthracite Capital, Inc., a Maryland corporation that has elected to
be taxed as a real estate investment trust (the "Company"), confirms its
agreement with Friedman, Billings, Xxxxxx & Co., Inc. (the "Underwriter"),
with respect to (i) the sale by the Company and the purchase by the
Underwriter, of the numbers of shares of common stock of the Company, $.001
par value per share (the "Common Shares "), set forth in Schedule I hereto
and (ii) the grant by the Company to the Underwriter, of the option described
in Section 1(b) hereof to purchase all or any part of 600,000 additional
Common Shares to cover over-allotments, if any. The 4,000,000 Common Shares
to be purchased by the Underwriter (the "Initial Shares") and all or any part
of the 600,000 Common Shares subject to the option described in Section 1(b)
hereof (the "Option Shares") are hereinafter called, collectively, the
"Shares."
The Company understands that the Underwriter proposes to make a
public offering of the Shares as soon as the Underwriter deems advisable
after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission"), a registration statement on Form S-3 (No. 333-75473),
including a base prospectus, dated September 29, 1999 (the "Base
Prospectus"), relating to the Shares, under the Securities Act of 1933, as
amended (the "Securities Act"), and the rules and regulations thereunder (the
"Securities Act Regulations"). The Company has prepared and filed such
amendments thereto, if any, and such amended preliminary prospectuses, if
any, as may have been required to the date hereof, and will file such
additional amendments thereto and such amended prospectuses as may hereafter
be required. The registration statement has been declared effective under the
Securities Act by the Commission. The registration statement as amended at
the time it became effective (including all information deemed (by
incorporation by reference) to be a part of the registration statement at the
time it became effective pursuant to Rule 430A(b) of the Securities Act
Regulations) is hereinafter called the "Registration Statement," except that,
if the Company files a post-effective amendment to such registration
statement that becomes effective prior to the Closing Time (as defined
below), "Registration Statement" shall refer to such registration statement
as so amended. Any registration statement filed pursuant to Rule 462(b) of
the Securities Act Regulations is hereinafter called the "Rule 462(b)
Registration Statement," and after such filing the term "Registration
Statement" shall include the 462(b) Registration Statement. The Company
proposes to file with the Commission pursuant to Rule 424 under the
Securities Act, a supplement, dated May 7, 2001, to the prospectus dated
February 13, 2001 (the "Amended Base Prospectus"), relating to the Shares and
the method of distribution thereof. The term "Base Prospectus" means the
prospectus included in the Registration Statement and the Amended Base
Prospectus; the term "Prospectus Supplement" means any prospectus supplement
specifically relating to the Shares, in the form first filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 under the
Securities Act; the term "Prospectus" means the Base Prospectus and the
Amended Base Prospectus, including, in each case, the Prospectus Supplement.
The Company and the Underwriter agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the
purchase price per share of $ 9.4575, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company
4,000,000 Initial Shares.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the
purchase price per share set forth in paragraph (a), the Company hereby
grants an option to the Underwriter to purchase from the Company all or any
part of the Option Shares. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Shares upon
notice by the Underwriter to the Company setting forth the number of Option
Shares as to which the Underwriter is then exercising the option and the time
and date of payment and delivery for such Option Shares. Any such time and
date of delivery (a "Date of Delivery") shall be determined by the
Underwriter, but shall not be later than five full business days (nor
earlier, without the consent of the Company, than two full business days)
after the exercise of said option, nor in any event prior to the Closing
Time, as hereinafter defined.
2. Payment and Delivery:
(a) Initial Shares. The Shares to be purchased by the Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Underwriter may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Underwriter, including, at the option of the
Underwriter, through the facilities of The Depository Trust Company ("DTC")
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Underwriter by the Company
upon at least forty-eight hours' prior notice. The Company will cause the
certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Closing Time (as defined
below) with respect thereto at the office of the Underwriter, 0000 00xx Xx.
Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 or at the office of DTC or its designated
custodian, as the case may be (the "Designated Office"). The time and date of
such delivery and payment shall be 9:30 a.m., New York City time, on May 11,
2001 or on such other time and date as the Company and the Underwriter may
agree upon in writing. The time at which such payment and delivery are
actually made is hereinafter sometimes called the "Closing Time" and the date
of delivery of both Initial Shares and Option Shares is hereinafter sometimes
called the "Date of Delivery."
(b) Option Shares. Any Option Shares to be purchased by the
Underwriter hereunder, in definitive form, and in such authorized
denominations and registered in such names as the Underwriter may request
upon at least forty-eight hours' prior notice to the Company shall be
delivered by or on behalf of the Company to the Underwriter, including, at
the option of the Underwriter, through the facilities of DTC for the account
of such Underwriter, against payment by or on behalf of such Underwriter of
the purchase price therefor by wire transfer of Federal (same-day) funds to
the account specified to the Underwriter by the Company. The Company will
cause the certificates representing the Shares to be made available for
checking and packaging at least twenty-four hours prior to the Date of
Delivery with respect thereto at the Designated Office. The time and date of
such delivery and payment shall be 9:30 a.m., New York City time, on the date
specified by the Underwriter in the notice given by the Underwriter to the
Company of the Underwriters' election to purchase such Option Shares or on
such other time and date as the Company and the Underwriter may agree upon in
writing.
3. Representations and Warranties of the Company: The Company represents
and warrants to the Underwriter that:
(a) each of the Company, each Subsidiary of the Company set forth on
Schedule I hereto (each a "Subsidiary" and, collectively, the "Subsidiaries")
and BlackRock Financial Management, Inc. (the "Manager") has been duly
incorporated and is validly existing as a corporation and in good standing
under the laws of its respective jurisdiction of incorporation with all
requisite corporate power and authority to own, lease and operate its
respective properties and to conduct its respective business as now conducted
and as proposed to be conducted as described in the Registration Statement
and Prospectus and, in the case of the Company, to authorize, execute and
deliver this Agreement and to consummate the transactions contemplated
hereby;
(b) the Company and the Subsidiaries are duly qualified or
registered to transact business in each jurisdiction in which they conduct
their respective businesses as now conducted and as proposed to be conducted
as described in the Registration Statement and the Prospectus and in which
the failure, individually or in the aggregate, to be so qualified or
registered could reasonably be expected to have a material adverse effect on
the assets, operations or condition (financial or otherwise) of the Company
and the Subsidiaries taken as a whole; and the Company and the Subsidiaries
are in good standing in each jurisdiction in which they own or lease real
property or maintain an office or in which the nature or conduct of their
respective businesses as now conducted or proposed to be conducted as
described in the Registration Statement and the Prospectus requires such
qualification, except where the failure to be in good standing could be
reasonably expected to not have a material adverse effect on the assets,
operations, business or condition (financial or otherwise) of the Company and
the Subsidiaries taken as a whole;
(c) the Company and the Subsidiaries are in compliance in all
material respects with all applicable laws, rules, regulations, orders,
decrees and judgments;
(d) neither the Company nor any of the Subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under), its respective
charter or by-laws, or in the performance or observance of any obligation,
agreement, covenant or condition contained in any license, indenture,
mortgage, deed of trust, loan or credit agreement or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or their respective properties is bound, except for such
breaches or defaults that could be reasonably expected to have a material
adverse effect on the assets, operations, business or condition (financial or
otherwise) of the Company and the Subsidiaries taken as a whole, and the
issuance, sale and delivery by the Company of the Shares, the execution,
delivery and performance of this Agreement by the Company, and consummation
of the transactions contemplated hereby will not conflict with, or result in
any breach of, or constitute a default under (nor constitute any event which
with notice, lapse of time, or both would constitute a breach of, or default
under), (i) any provision of the articles of incorporation or charter or
by-laws of the Company, any of the Subsidiaries or the Manager, (ii) any
provision of any license, indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the Company, any of the
Subsidiaries or the Manager is a party or by which any of them or their
respective properties may be bound or affected, or (iii) any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Manager, the Company or any of the Subsidiaries, except in
the case of clause (ii) for such breaches or defaults which, could be
reasonably expected not to have a material adverse effect, with respect to
the Company or the Subsidiary on the assets, operations, business or
condition (financial or otherwise) of the Company and the Subsidiaries taken
as a whole or result in the creation or imposition of any material lien,
charge, claim or encumbrance upon any property or asset of the Company or the
Subsidiaries or, with respect to the Manager, would not have a material
adverse effect on the ability of the Manager to perform its obligations under
the Management Agreement;
(e) the Company has full legal right, power and authority to enter
into and perform this Agreement and to consummate the transactions
contemplated herein; this Agreement has been duly authorized, executed and
delivered by the Company and each is a legal, valid and binding agreement of
the Company enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and by general principles of equity,
and except to the extent that the indemnification and contribution provisions
of Section 9 hereof may be limited by federal or state securities laws and
public policy considerations in respect thereof;
(f) the Manager has full legal right, power and authority to perform
the Management Agreement between the Manager and the Company dated March 27,
1998, as amended on January 1, 1999 and May 5, 2000 (the "Management
Agreement") and to consummate the transactions contemplated therein; the
Management Agreement has been duly authorized, executed and delivered by the
Manager and constitutes a valid and binding agreement of the Manager,
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity;
(g) the issuance and sale of the Shares to the Underwriter hereunder
have been duly authorized by the Company; when issued and delivered against
payment therefor as provided in this Agreement, the Shares will be validly
issued, fully paid and non-assessable and the issuance of the Shares will not
be subject to any preemptive or similar rights; except as contemplated
herein, no person or entity holds a right to require or participate in the
registration under the Securities Act of the Shares pursuant to the
Registration Statement; no person or entity has a right of participation or
first refusal with respect to the sale of the Shares by the Company; except
as set forth in the Prospectus, there are no contracts, agreements or
understandings between the Company and any person or entity granting such
person or entity the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement; the form of certificates
evidencing the Shares complies with all applicable legal requirements and, in
all material respects, with all applicable requirements of the charter and
bylaws of the Company and the requirements of the New York Stock Exchange;
(h) no approval, authorization, consent or order of or filing with
any federal, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with (i) the execution,
delivery and performance by the Company of this Agreement, the consummation
of the transaction contemplated hereby, (ii) the performance by the Manager
of the Management Agreement or the consummation of the transactions
contemplated thereby, or (iii) the sale and delivery of the Shares, other
than (x) such as have been obtained, or will have been obtained at the
Closing Time or the relevant Date of Delivery, as the case may be, under the
Securities Act or the Securities Exchange Act of 1934 as amended (the
"Exchange Act"), (y) such approvals as have been obtained in connection with
the approval of the listing of the Shares on the New York Stock Exchange and
(z) any necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriter;
(i) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state or local law, regulation or rule,
and has obtained all necessary authorizations, consents and approvals from
other persons required in order to conduct their respective businesses as
described in the Registration Statement and Prospectus, except to the extent
that any failure to have any such licenses, authorizations, consents or
approvals, to make any such filings or to obtain any such authorizations,
consents or approvals could reasonably be expected to not have, individually
or in the aggregate, a material adverse effect on the assets, operations,
business or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole; neither the Company nor any of the
Subsidiaries is in violation of, in default under, or has received any notice
regarding a possible violation, default or revocation of any such license,
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, the effect of which could reasonably be
expected to be material and adverse to the assets, operations, business or
condition (financial or otherwise) of the Company and the Subsidiaries taken
as a whole; and no such license, authorization, consent or approval contains
a materially burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectus;
(j) each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the Securities Act and no
stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the Securities Act
and no proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are threatened by the Commission, and the
Company has complied with any request on the part of the Commission for
additional information;
(k) the Company and the transactions contemplated by this Agreement
meet the requirements and conditions for using a registration statement on
Form S-3 under the Securities Act, set forth in the General Instructions to
Form S-3; the Registration Statement complies, and the Prospectus and any
further amendments or supplements thereto will comply, when they have become
effective or are filed with the Commission, as the case may be, in all
material respects with the requirements of the Securities Act and the
Securities Act Regulations and, in each case, present, or will present,
fairly the information required to be shown; the Registration Statement did
not, and any amendment thereto will not, in each case as of the applicable
effective date, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and the Prospectus or any amendment or supplement
thereto will not, as of the applicable filing date and at the Closing Time
and on each Date of Delivery (if any), contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no warranty or representation with respect to any
statement contained in the Registration Statement or the Prospectus in
reliance upon and in conformity with the information concerning the
Underwriter and furnished in writing by the Underwriter to the Company
expressly for use in the Registration Statement or the Prospectus (that
information being limited to that described in the last sentence of the first
paragraph of Section 9(b) hereof);
(l) each document incorporated by reference in the Prospectus, when
it became effective or was filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the Securities Act Regulations and
the regulations promulgated under the Exchange Act (the "Exchange Act
Regulations"), and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the Securities Act Regulations and the Exchange Act
Regulations and will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(m) the Prospectus in paper format delivered to the Underwriter for
use in connection with this offering will be identical in all material
respects to the version of the Prospectus created to be transmitted to the
Commission for filing via the Electronic Data Gathering Analysis and
Retrieval System ("XXXXX"), except to the extent permitted by Regulation S-T;
(n) all legal or governmental proceedings, contracts or documents
that are material and of a character required to be filed as exhibits to the
Registration Statement or to be summarized or described in the Prospectus
have been so filed, summarized or described as required;
(o) there are no actions, suits, proceedings, inquiries or
investigations pending or, to the Company's knowledge, threatened against the
Company or any of the Subsidiaries or any of their respective officers and
directors or to which the properties, assets or rights of any such entity is
subject, at law or in equity, before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority,
arbitral panel or agency which could reasonably be expected to result in a
judgment, decree, award or order having a material adverse effect on the
assets, operations, business or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole, or which could adversely
affect the consummation of the transactions contemplated by this Agreement in
any material respect;
(p) the financial statements, including the notes thereto, included
in the Registration Statement and the Prospectus present fairly the financial
position of the entity or entities presented therein as of the dates
indicated and the results of operations and changes in financial position and
cash flows of the entity or entities presented therein for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States and
on a consistent basis during the periods involved and in accordance with
Regulation S-X promulgated by the Commission; the financial statement
schedules included or incorporated by reference in the Registration Statement
and the Prospectus fairly present the information required to be shown
therein; no other financial statements or schedules are required by Form S-3
or otherwise to be included in the Registration Statement or Prospectus; the
unaudited pro forma financial information (including the related notes)
included in the Prospectus complies as to form in all material respects to
the applicable accounting requirements of the Securities Act and the
Securities Act Regulations, and management of the Company believes that the
assumptions underlying the pro forma adjustments are reasonable; such pro
forma adjustments have been properly applied to the historical amounts in the
compilation of the information and such information fairly presents with
respect to the Company and the Subsidiaries, the financial position, results
of operations and other information purported to be shown therein at the
respective dates and for the respective periods specified; no other pro forma
financial information is required to be included in the Registration
Statement;
(q) the Company has filed in a timely manner all reports required to
be filed pursuant to sections 13, 14, 15(d) of the Exchange Act during the
preceding twelve calendar months and if during such period the Company has
relied on Rule 12b-25(b) under the Exchange Act ("Rule 12b-25(b)") with
respect to a report or a portion of a report, that report or portion of a
report has actually been filed within the time period prescribed by Rule
12b-25(b);
(r) Deloitte & Touche, LLP, whose reports on the audited financial
statements of the Company and the Subsidiaries are included as part of the
Registration Statement and Prospectus or are incorporated by reference
therein and any other accounting firm that has certified financial statements
and delivered its reports with respect thereto, are and were during the
periods covered by their reports independent public accountants as required
by the Securities Act and the Securities Act Regulations;
(s) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as may be
otherwise stated in the Registration Statement or Prospectus, there has not
been (i) any material adverse change in the assets, operations, business or
condition (financial or otherwise), present or prospective, of the Company
and the Subsidiaries taken as a whole, whether or not arising in the ordinary
course of business, (ii) any transaction, which is material to the Company
and the Subsidiaries taken as a whole, planned or entered into by the Company
or any of the Subsidiaries, (iii) any obligation, contingent or otherwise,
directly or indirectly incurred by the Company or any of the Subsidiaries,
which is material to the Company and the Subsidiaries taken as a whole or
(iv) any dividend or distribution of any kind declared, paid or made with
respect to any class of capital stock of the Company;
(t) the authorized shares of Common Shares of the Company conform in
all material respects to the description thereof contained in the Prospectus;
the Company has an authorized, issued and outstanding capitalization as set
forth in the Prospectus under the caption "Capitalization"; immediately after
the Closing Time, 34,014,046 Common Shares will be issued and outstanding
(subject to the Underwriter's option described in Section 1(b) hereof) and no
shares of any other class of Common Shares or preferred stock will be issued
and outstanding. All of the issued and outstanding shares of Common Shares of
the Company have been duly authorized and are validly issued, fully paid and
non-assessable, and have been offered, sold and issued by the Company in
compliance with all applicable laws (including, without limitation, federal
and state securities laws) none of the issued shares of Common Shares of the
Company have been issued in violation of any preemptive or similar rights
granted by the Company;
(u) all of the issued and outstanding shares of capital stock of
each Subsidiary have been duly authorized and are validly issued, fully paid
and non-assessable, and 95% are owned of record and beneficially by the
Company, and have been offered, sold and issued by the Subsidiaries in
compliance with all applicable laws (including, but not limited to, federal
and state securities laws); none of the issued shares of capital stock of the
Subsidiaries have been issued in violation of any preemptive or similar
rights;
(v) except as disclosed in the Prospectus, there are no outstanding
(i) securities or obligations of the Company or any of its Subsidiaries
convertible into or exchangeable for any capital stock of the Company or any
such Subsidiary, (ii) warrants, rights or options to subscribe for or
purchase from the Company or any such Subsidiary any such capital stock or
any such convertible or exchangeable securities or obligations, or (iii)
obligations of the Company or any such Subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or obligation,
or any such warrants, rights or options;
(w) each of the Company, the Subsidiaries, and each of their
respective officers, directors and controlling persons has not taken, and
will not take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(x) the Company (i) is not required to register as a "broker" or
"dealer" in accordance with the provisions of the Exchange Act or the rules
and regulations thereunder, and (ii) directly, or indirectly through one or
more intermediaries, does not control any member firm of the National
Association of Securities Dealers, Inc. (the "NASD");
(y) the Company has not relied upon the Underwriter or legal counsel
for the Underwriter for any legal, tax or accounting advice in connection
with the offering and sale of the Shares;
(z) any certificate signed by any officer of the Company or any
Subsidiary delivered to the Underwriter or to counsel for the Underwriter
pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to the Underwriter as to the
matters covered thereby;
(aa) there are no statutes or regulations applicable to the Company
or any of the Subsidiaries or certificates, permits or other authorizations
from governmental regulatory officials or bodies required to be obtained or
maintained by the Company or any of the Subsidiaries of a character required
to be disclosed in the Registration Statement or the Prospectus which have
not been so disclosed and properly described therein; all agreements between
the Company or any of the Subsidiaries and third parties expressly referenced
in the Prospectus are legal, valid and binding obligations of the Company or
one or more of the Subsidiaries, enforceable in accordance with their
respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity;
(bb) no relationship, direct or indirect, exists between or among
the Company or any of the Subsidiaries, on the one hand, and the directors,
officers, shareholders, customers or suppliers of the Company, the Subsidiary
or the Manager, on the other hand, which is required by the Securities Act to
be described in the Registration Statement and the Prospectus that is not so
described;
(cc) with such exceptions as could not reasonably be expected to
have a material adverse effect on the assets, operations, business or
condition (financial or otherwise) of the Company and the Subsidiaries, taken
as a whole, the Company and the Subsidiaries have good and marketable title
in fee simple to all real property, if any, and good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except such
as are disclosed in the Prospectus or such as do not materially and adversely
affect the value of such property and do not interfere with the use made or
proposed to be made of such property by the Company and the Subsidiaries; and
any real property and buildings held under lease by the Company or any
Subsidiary are held under valid, existing and enforceable leases, with such
exceptions as are disclosed in the Prospectus or are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or such Subsidiary;
(dd) the Company and each Subsidiary owns or possesses adequate
license or other rights to use all patents, trademarks, service marks, trade
names, copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how (collectively
"Intangibles") necessary to entitle the Company and each Subsidiary to
conduct its business as described in the Prospectus, and neither the Company,
nor any Subsidiary, has received notice of infringement of or conflict with
(and the Company does not know of any such infringement of or conflict with)
asserted rights of others with respect to any Intangibles which could
materially and adversely affect the business, prospects, properties, assets,
results of operations or condition (financial or otherwise) of the Company or
any Subsidiary;
(ee) the Company and each of its Subsidiaries 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 authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences;
(ff) each of the Company and the Subsidiaries have filed on a timely
basis all material federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof and have paid all taxes
shown as due thereon; and no tax deficiency has been asserted against any
such entity, nor does any such entity know of any tax deficiency which is
likely to be asserted against any such entity which if, determined adversely
to any such entity, could materially adversely affect the business,
prospects, properties, assets, results of operations or condition (financial
or otherwise) of any such entity, respectively; all tax liabilities are
adequately provided for on the respective books of such entities;
(gg) neither the Company nor any of the Subsidiaries nor, to the
best of the Company's knowledge, any officer or director purporting to act on
behalf of the Company or any of the Subsidiaries has at any time; (i) made
any contributions to any candidate for political office, or failed to
disclose fully any such contributions, in violation of law, (ii) made any
payment to any state, federal or foreign governmental officer or official, or
other person charged with similar public or quasi-public duties, other than
payments required or allowed by applicable law, (iii) made any payment
outside the ordinary course of business to any investment officer or loan
broker or person charged with similar duties of any entity to which the
Company or any of the Subsidiaries sells or from which the Company or any of
the Subsidiaries buys loans or servicing arrangements for the purpose of
influencing such agent, officer, broker or person to buy loans or servicing
arrangements from or sell loans to the Company or any of the Subsidiaries, or
(iv) engaged in any transactions, 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 and the Subsidiaries;
(hh) except as otherwise disclosed in the Prospectus, there are no
material outstanding loans or advances or material guarantees of indebtedness
by the Company or any of the Subsidiaries to or for the benefit of any of the
officers or directors of the Company or any of the Subsidiaries or any of the
members of the families of any of them;
(ii) neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any agent of the Company or any of the Subsidiaries, has
made any payment of funds of the Company or of any Subsidiary 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;
(jj) neither the Company nor any of the Subsidiaries have any
employees;
(kk) (i) the Company is organized in conformity with the
requirements for qualification as a real estate investment trust ("REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), (ii) the
Company qualified as a REIT for all taxable years prior to 2001, and (iii)
the Company's method of operation will enable it to meet the requirements for
taxation as a REIT under the Code for 2001 and all subsequent taxable years,
and the Company intends to qualify as a REIT for all such years;
(ll) the Shares have been approved for listing, upon official notice
of issuance, on the New York Stock Exchange;
(mm) in connection with this offering, the Company has not offered
and will not offer its Common Shares or any other securities convertible into
or exchangeable or exercisable for Common Shares in a manner in violation of
the Securities Act or the Securities Act Regulations; the Company has not
distributed and will not distribute any offering material in connection with
the offer and sale of the Shares, other than the Prospectus, Registration
Statement and other materials permitted by the Act;
(nn) the Company has complied and will comply with all the
provisions of Florida Statutes, Section 517.075 (Chapter 92-198, Laws of
Florida); neither the Company nor any of the Subsidiaries or their respective
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba;
(oo) neither the Company nor any of the Subsidiaries is, or solely
as a result of transactions contemplated hereby and the application of the
proceeds from the sale of the Shares, will become, an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"); and
(pp) the Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions herein
contemplated.
4. Certain Covenants of the Company: The Company hereby covenants with
the Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities
or blue sky laws of such states as the Underwriter may designate and to
maintain such qualifications in effect as long as requested by the
Underwriter for the distribution of the Shares, provided that the Company
shall not be required to maintain such qualification for more than 90 days
from the date hereof (except that, upon the written request of the
Underwriter and at the expense of the Underwriter, the Company shall maintain
such qualification for an additional period, not to exceed 180 days), or to
qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except service of process with respect to
the offering and sale of the Shares);
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the
Company will endeavor to cause such post-effective amendment to become
effective as soon as possible and will advise the Underwriter promptly and,
if requested by the Underwriter, will confirm such advice in writing, when
such post-effective amendment has become effective;
(c) to prepare the Prospectus in a form approved by the Underwriter
and file such Prospectus (or a terms sheet as permitted by Rule 434) with the
Commission pursuant to Rule 424(b) within the time period prescribed by law,
and to furnish promptly to the Underwriter copies of the Prospectus (or of
the Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the
Registration Statement) in such quantities and at such locations as the
Underwriter may reasonably request for the purposes contemplated by the
Securities Act Regulations, which Prospectus and any amendments or
supplements thereto furnished to the Underwriter will be materially identical
to the version created to be transmitted to the Commission for filing via
XXXXX, except to the extent permitted by Regulation S-T;
(d) to advise the Underwriter promptly and (if requested by the
Underwriter) to confirm such advice in writing, when any post-effective
amendment to the Registration Statement becomes effective under the
Securities Act Regulations;
(e) to advise the Underwriter promptly, confirming such advice in
writing, of (i) the receipt of any comments from, or any request by, the
Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or suspending the use
of the Prospectus, or of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes and, if the Commission or any
other government agency or authority should issue any such order, to make
every reasonable effort to obtain the lifting or removal of such order as
soon as possible; to advise the Underwriter promptly of any proposal to amend
or supplement the Registration Statement or Prospectus and to file no such
amendment or supplement to which the Underwriter shall reasonably object in
writing;
(f) before amending or supplementing the Registration Statement or
the Prospectus, or, during any period of time in which a Prospectus relating
to the Shares is required to be delivered under the Securities Act
Regulations, to furnish to the Underwriter a copy of each such proposed
amendment or supplement before filing any such amendment or supplement with
the Commission;
(g) to furnish to the Underwriter, for a period of five years from
the date of this Agreement (i) as soon as available, copies of all annual,
quarterly and current reports or other communications supplied to holders of
Common Shares, (ii) as soon as practicable after the filing thereof, copies
of all reports publicly filed by the Company with the Commission, the NASD,
New York Stock Exchange or any securities exchange and (iii) such other
publicly available information as the Underwriter may reasonably request
regarding the Company and its Subsidiaries;
(h) to advise the Underwriter promptly during any period of time in
which a Prospectus relating to the Shares is required to be delivered under
the Securities Act Regulations (i) of any material change in the Company's
assets, operations, business or condition (financial or otherwise) or (ii) of
the happening of any event which would require the making of any change in
the Prospectus then being used so that the Prospectus would not include any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
(iii) if it is necessary at any time to amend or supplement the Prospectus to
comply with any law, and, during such time, promptly to prepare and furnish,
at the Company's expense, to the Underwriter copies of the proposed
amendments or supplements to the Prospectus before filing any such amendment
or supplement with the Commission, and thereafter promptly to furnish at the
Company's own expense to the Underwriter and to dealers, copies in such
quantities and at such locations as the Underwriter may from time to time
reasonably request of an appropriate amendment to the Registration Statement
or supplement to the Prospectus so that the Prospectus as so amended or
supplemented will (i) reflect such change, or (ii) not, in the light of the
circumstances when it is so delivered, be misleading, or (iii) comply with
the law provided that the requirements of this paragraph shall not extend
beyond 90 days after the date of this Agreement (or, upon the written request
of the Underwriter and at the expense of the Underwriter, for an additional
180 days);
(i) to furnish promptly to the Underwriter a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith or
incorporated therein) and such number of conformed copies of the foregoing as
the Underwriter may reasonably request;
(j) to furnish to the Underwriter, not less than two business days
before filing with the Commission subsequent to the effective date of the
Prospectus and during the period referred to in paragraph (h) above, a copy
of any document proposed to be filed with the Commission pursuant to Section
13, 14, or 15(d) of the Exchange Act and during such period to file all such
documents in a manner and within the time periods required by the Exchange
Act and the Exchange Act Regulations;
(k) to apply the net proceeds of the sale of the Shares
substantially in accordance with its statements under the caption "Use of
Proceeds" in the Prospectus;
(l) to make generally available to its security holders and to
deliver to the Underwriter as soon as practicable, but in any event not later
than the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, an earnings
statement complying with the provisions of Section 11(a) of the Securities
Act (in form, at the option of the Company, complying with the provisions of
Rule 158 of the Securities Act Regulations) covering a period of 12 months
beginning on the effective date of the Registration Statement;
(m) to use its best efforts to effect and maintain the listing of
the Shares on the New York Stock Exchange and to file with the New York Stock
Exchange all documents and notices required by the New York Stock Exchange of
companies that have securities that are listed on the New York Stock
Exchange;
(n) to refrain during a period of 90 days from the date of the
Prospectus, without the prior written consent of the Underwriter, from (i)
offering, pledging, selling, contracting to sell, selling any option or
contract to purchase, purchasing any option or contract to sell, granting any
option for the sale of, or otherwise disposing of or transferring, directly
or indirectly, any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares, or filing any registration
statement under the Securities Act with respect to any of the foregoing or
(ii) entering into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or such other securities, in cash or otherwise; the
foregoing sentence shall not apply to (A) the Shares to be sold hereunder,
(B) any Common Shares issued by the Company upon the exercise of an options
outstanding on the date hereof or upon the exercise of options pursuant to
the management option plan that became effective on March 23, 1998, or
pursuant to a dividend reinvestment plan;
(o) the Company shall not, and shall use its best efforts to cause
its officers, directors and affiliates not to, (i) take, directly or
indirectly prior to termination of the underwriting syndicate contemplated by
this Agreement, any action designed to stabilize or manipulate the price of
any security of the Company, or which could be reasonably likely to cause or
result in, or which could be reasonably likely to in the future to cause or
result in, the stabilization or manipulation of the price of any security of
the Company, to facilitate the sale or resale of any of the Shares, (ii)
sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of the Shares other than pursuant to this Agreement or (iii) pay or
agree to pay to any person any compensation for soliciting any order to
purchase any other securities of the Company;
(p) the Company will maintain, at the Company's expense, a transfer agent
and, if necessary under the jurisdiction of incorporation of the
Company, a registrar (which may be the same entity as the transfer
agent) for its Common Shares;
(q) the Company will use its best efforts to continue to qualify as
a REIT under the Code;
(r) the Company will comply with all of the provisions of any
undertakings in the Registration Statement;
(s) the Company and the Subsidiaries will conduct their affairs in
such a manner so as to ensure that neither the Company nor any Subsidiary
will be an "investment company" or an entity subject to regulation as an
investment company within the meaning of the 1940 Act;
(t) if at any time during the 25-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in the Underwriter's
reasonable opinion the market price of the Common Shares has been or is
likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus) and after written notice from the Underwriter advising the
Company to the effect set forth above, to forthwith prepare, consult with the
Underwriter concerning the substance of, and disseminate a press release or
other public statement, reasonably satisfactory to the Underwriter,
responding to or commenting on such rumor, publication or event; and
(u) to 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 authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
5. Payment of Expenses
(a) The Company agrees to pay all costs and expenses incident to the
performance of the Company's obligations under this Agreement, whether or not
the transactions contemplated hereunder are consummated or this Agreement is
terminated, including, but not limited to, all fees and expenses of and
filing with the Commission, the New York Stock Exchange and the NASD; all
Blue Sky fees and expenses (in the United States and Canada), including
filing fees and reasonable legal fees and disbursements of the Underwriter's
Blue Sky counsel (for United States and Canadian Blue Sky), fees and
disbursements of counsel and accountants for the Company, all reasonable due
diligence expenses of the Underwriter and its counsel and printing costs,
including costs of printing the prospectus, and any amendments thereto; all
underwriting documents, Blue Sky Memoranda, and a reasonable quantity of
prospectuses requested by the Underwriter, and the Company's road show costs
and expenses.
(b) If this Agreement shall be terminated by the Underwriter, or any
of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Company shall be unable to perform its obligations
under this Agreement, the Company will reimburse the Underwriter for all
out-of-pocket expenses (such as printing, facsimile, courier service,
accommodations, travel and the reasonable fees and disbursements of
Underwriter's counsel) reasonably incurred by the Underwriter in connection
with this Agreement or the transactions contemplated herein.
6. Conditions of the Underwriter's Obligations: The obligations of the
Underwriter hereunder are subject to (i) the accuracy of the representations and
warranties on the part of the Company in all material respects on the date
hereof and at the Closing Time and on each Date of Delivery, (ii) the
performance by the Company of its obligations hereunder in all material
respects, and (iii) the following further conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become effective not later than 5:30
p.m., New York City time, on the date hereof, or at such later date and time
as shall be consented to in writing by the Underwriter.
(b) The Company shall furnish to the Underwriter at the Closing Time
and on each Date of Delivery an opinion of Skadden, Arps, Slate, Xxxxxxx &
Xxxx, LLP, counsel for the Company, addressed to the Underwriter and dated
the Closing Time and each Date of Delivery and in form and substance
satisfactory to the Underwriter. In rendering their opinion, Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP may rely as to matters of Maryland law upon the
opinion of Miles & Stockbridge, P.C., ("Miles & Stockbridge"). In addition,
Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP shall state that they have
participated in conferences with officers and other Underwriter of the
Company, independent public accountants of the Company and Underwriter at
which the contents of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus, nothing has caused
them to believe that the Registration Statement, the Prospectus, as of their
respective effective or issue dates and as of the date of such counsel's
opinion, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that, in each
case, such counsel need express no view with respect to the financial
statements and other financial and statistical data included in the
Registration Statement or Prospectus).
(c) The Company shall furnish to the Underwriter at the Closing Time
and on each Date of Delivery an opinion of Miles & Stockbridge, special
counsel for the Company, addressed to the Underwriter and dated the Closing
Time and each Date of Delivery and in form and substance satisfactory to the
Underwriter, covering matters of Maryland law.
(d) The Underwriter shall have received from Deloitte & Touche LLP,
letters dated, respectively, as of the date of this Agreement, the Closing
Time and each Date of Delivery, as the case may be, addressed to the
Underwriter and in form and substance satisfactory to the Underwriter.
(e) The Underwriter shall have received at the Closing Time and on
each Date of Delivery the favorable opinion of Hunton & Xxxxxxxx, dated the
Closing Time or such Date of Delivery, addressed to the Underwriter and in
form and substance satisfactory to the Underwriter.
(f) No amendment or supplement to the Registration Statement or
Prospectus shall have been filed to which the Underwriter shall have objected
in writing.
(g) Prior to the Closing Time and each Date of Delivery (i) no stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto, and no order directed at any document
incorporated by reference therein and no order preventing or suspending the
use of any Prospectus has been issued by the Commission, and no suspension of
the qualification of the Shares for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceedings for any of such purposes,
has occurred; and (ii) the Registration Statement and the Prospectus shall
not contain an untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(h) Between the time of execution of this Agreement and the Closing
Time or the relevant Date of Delivery (i) no material and unfavorable change
in the assets, results of operations, business, or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole shall occur
or become known (whether or not arising in the ordinary course of business)
or that makes it, in the judgment of the Underwriter, impracticable to market
the Shares on the terms and in the manner contemplated in the Prospectus, or
(ii) no transaction which is material and unfavorable to the Company shall
have been entered into by the Company or any of the Subsidiaries.
(i) At the Closing Time, the NASD shall not have raised any
objections with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(j) At the Closing Time, the Shares shall have been approved for
listing on the New York Stock Exchange.
(k) The Underwriter shall have received letters (each, a "Lock-up
Agreement") from each person listed on Schedule II hereto, in form and
substance satisfactory to the Underwriter, confirming that for a period of 90
days after the Closing Time, such persons will not directly or indirectly (i)
offer, pledge to secure any obligation due on or within 90 days after the
Closing Time, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option for the
sale of, or otherwise dispose of or transfer, directly or indirectly, any
Common Shares (other than by participating as selling stockholders in a
registered offering of Common Shares offered by the Company with the consent
of the Underwriter) or any securities convertible into or exercisable or
exchangeable for Common Shares or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Shares,
whether any such swap or transaction described in clause (i) or (ii) above is
to be settled by delivery of Common Shares or such other securities, in cash
or otherwise, without the prior written consent of Friedman, Billings, Xxxxxx
& Co., Inc., which consent may be withheld in its sole discretion.
(l) The Company will, at the Closing Time and on each Date of
Delivery, deliver to the Underwriter a certificate of two principal executive
officers, to the effect that, to each of such officer's knowledge, the
representations and warranties of the Company set forth in this Agreement are
true and correct and the conditions set forth in this Section 6 have been
met, in each case, as of such date.
(m) The Company shall have furnished to the Underwriter such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus, the
representations, warranties and statement of the Company contained herein,
and the performance by the Company of its covenants contained herein, and the
fulfillment of any conditions contained herein, as of the Closing Time or any
Date of Delivery as the Underwriter may reasonably request.
(n) The Manager shall have furnished the Underwriter such documents
and certificates as of the Closing Time or any Date of Delivery as the
Underwriter may reasonably request, including the letter agreement attached
as Schedule III hereto (the "Manager's Representation Letter") and the
accuracy of the representations and warranties in the Manager's
Representation Letter as of the date hereof, the Closing Time and on each
Date so Delivery;
(o) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the Closing Date shall have been made
within the applicable time period prescribed for such filing by such Rule.
(p) The Company shall perform such of its obligations under this
Agreement as are to be performed by the terms hereof and thereof at or before
the Closing Time or the relevant Date of Delivery.
The obligations of the Underwriter to purchase Option Shares
hereunder are subject to the delivery to the Underwriter on the Date if
Delivery of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Option Shares and other matters related to the issuance of the Option Shares.
7. Termination: The obligations of the Underwriter hereunder shall
be subject to termination in the absolute discretion of the Underwriter, at
any time prior to the Closing Time or any Date of Delivery, (i) if any of the
conditions specified in Section 6 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, or (ii) if there has been since
the respective dates as of which information is given in the Registration
Statement, any material adverse change, or any development involving a
prospective material adverse change, in or affecting the assets, operations,
business or condition (financial or otherwise) of the Company, whether or not
arising in the ordinary course of business, or (iii) if there has occurred
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic, political or other conditions the
effect of which on the financial markets of the United States is such as to
make it, in the judgment of the Underwriter, impracticable to market or
deliver the Shares or enforce contracts for the sale of the Shares, or (iv)
if trading in any securities of the Company has been suspended by the
Commission or by the New York Stock Exchange or if trading generally on the
New York Stock Exchange or in the Nasdaq over-the-counter market has been
suspended (including automatic halt in trading pursuant to market-decline
triggers other than those in which solely program trading is temporarily
halted), or limitations on prices for trading (other than limitations on
hours or numbers of days of trading) have been fixed, or maximum ranges for
prices for securities have been required, by such exchange or the NASD or by
order of the Commission or any other governmental authority, or (v) if there
has been any downgrading in the rating of any of the Company's debt
securities or preferred stock by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Securities Act), or (vi) any federal or state statute, regulation, rule or
order of any court or other governmental authority has been enacted,
published, decreed or otherwise promulgated which in the reasonable opinion
of the Underwriter has a material adverse affect or will have a material
adverse affect on the assets, operations, business or condition (financial or
otherwise) of the Company, (vii) any action has been taken by any federal,
state or local government or agency in respect of its monetary or fiscal
affairs which in the reasonable opinion of the Underwriter has a material
adverse effect on the securities markets in the United States, and (viii) in
the case of any of the events specified in clauses (i) through (vii), such
event, singly or together with any other such events, makes it, in the
judgment of the Underwriter, impracticable to market or deliver the Shares on
the terms and in the manner contemplated in the Prospectus.
If the Underwriter elects to terminate this Agreement as provided in
this Section 7, the Company and the Underwriter shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriter of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriter for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriter shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. [Reserved].
9. Indemnity and Contribution by the Company and the Underwriter:
(a) The Company agrees to indemnify, defend and hold harmless the
Underwriter and any person who controls the Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, the
Underwriter or controlling person may incur under the Securities Act, the
Exchange Act or otherwise, insofar as such loss, expense, liability, damage
or claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or in the Registration Statement as amended by any post-effective amendment
thereof by the Company) or in a Prospectus (the term Prospectus for the
purpose of this Section 9 being deemed to include the Prospectus and the
Prospectus as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact required
to be stated in either such Registration Statement or Prospectus or necessary
to make the statements made therein, in the light of the circumstances under
which they were made, not misleading, except insofar as any such loss,
expense, liability, damage or claim arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in and in conformity with information furnished in
writing by the Underwriter through the Underwriter to the Company expressly
for use in such Registration Statement or such Prospectus, provided, however,
that the indemnity agreement contained in this subsection (a) with respect to
the Prospectus shall not inure to the benefit of an Underwriter (or to the
benefit of any person controlling the Underwriter) with respect to any person
asserting any such loss, expense, liability, damage or claim which is the
subject thereof if the Prospectus or any supplement thereto prepared with the
consent of the Underwriter and furnished to the Underwriter prior to the
Closing Time corrected any such alleged untrue statement or omission and if
the Underwriter failed to send or give a copy of the Prospectus or supplement
thereto to such person at or prior to the written confirmation of the sale of
Shares to such person, unless such failure resulted from noncompliance by the
Company with Section 4(a) of this Agreement.
If any action is brought against an Underwriter or controlling
person in respect of which indemnity may be sought against the Company
pursuant to the preceding paragraph, the Underwriter shall promptly notify
the Company in writing of the institution of such action and the Company
shall assume the defense of such action, including the employment of counsel
and payment of expenses, provided, however, that any failure or delay to so
notify the Company will not relieve the Company of any obligation hereunder,
except to the extent that its ability to defend is actually impaired by such
failure or delay. The Underwriter or controlling person shall have the right
to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of the Underwriter or such
controlling person unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action or the Company shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Company and which counsel to the
Underwriter believes may present a conflict for counsel representing the
Company and the Underwriter (in which case the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party
or parties), in any of which events such fees and expenses shall be borne by
the Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate firm
of attorneys for the Underwriter or controlling persons in any one action or
series of related actions in the same jurisdiction (other than local counsel
in such jurisdiction) representing the indemnified parties who are parties to
such action). Anything in this paragraph to the contrary notwithstanding, the
Company shall not be liable for any settlement of any such claim or action
effected without its written consent.
(b) The Underwriter agrees, to indemnify, defend and hold harmless
the Company, the Subsidiaries, their trustees and directors, the officers
that signed the Registration Statement and any person who controls the
Company or any Subsidiary within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any loss, expense,
liability, damage or claim (including the reasonable cost of investigation)
which, jointly or severally, the Company or any such person may incur under
the Securities Act, the Exchange Act or otherwise, but only insofar as such
loss, expense, liability, damage or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by the Underwriter to
the Company expressly for use in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by
the Company) or in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated either in the Registration Statement or
Prospectus or necessary to make such information, in the light of the
circumstances under which made, not misleading. The statements set forth in
the second paragraph, including the table, the fourth, the eighth and the
eleventh paragraphs under the caption "Underwriting" (to the extent such
statements relate to the Underwriter) constitute the only information
furnished by or on behalf of the Underwriter to the Company for purposes of
Section 3(l) and this Section 9.
If any action is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Company or such person shall promptly notify the
Underwriter in writing of the institution of such action and the Underwriter,
on behalf of the Underwriter, shall assume the defense of such action,
including the employment of counsel and payment of expenses. The Company or
such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the
Company or such person unless the employment of such counsel shall have been
authorized in writing by the Underwriter in connection with the defense of
such action or the Underwriter shall not have employed counsel to have charge
of the defense of such action within a reasonable time or such indemnified
party or parties shall have reasonably concluded (based on the advice of
counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Underwriter (in which
case the Underwriter shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the Underwriter and paid as incurred
(it being understood, however, that the Underwriter shall not be liable for
the expenses of more than one separate firm of attorneys in any one action or
series of related actions in the same jurisdiction (other than local counsel
or such jurisdiction) representing the indemnified parties who are parties to
such action). Anything in this paragraph to the contrary notwithstanding, the
Underwriter shall not be liable for any settlement of any such claim or
action effected without the written consent of the Underwriter.
(c) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsections (a) and (b) of this Section 9 in respect of any losses, expenses,
liabilities, damages or claims referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, expenses, liabilities, damages or claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other hand from the
offering of the Shares or (ii) if (but only if) the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of
the Underwriter on the other in connection with the statements or omissions
which resulted in such losses, expenses, liabilities, damages or claims, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriter on the other
shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company bear to the underwriting discounts and
commissions received by the Underwriter. The relative fault of the Company on
the one hand and of the Underwriter on the other shall be determined by
reference to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission relates
to information supplied by the Company or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The amount paid or payable by a party
as a result of the losses, claims, damages and liabilities referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any
claim or action.
(d) The Company and the Underwriter agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriter were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in subsection (c)(i) and,
if applicable (ii), above. Notwithstanding the provisions of this Section 9,
the Underwriter shall not be required to contribute any amount in excess of
the total price at which the securities underwritten by the Underwriter
exceeds the amount of damages that it has been required to pay be reason of
such untrue or alleged untrue statement, or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
10. Survival: The indemnity and contribution agreements contained in
Section 9 and the covenants, warranties and representations of the Company
and the Subsidiaries contained in Sections 3, 4 and 5 of this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Underwriter, or any person who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, or by or on behalf of the Company, the Subsidiaries, their directors and
officers or any person who controls the Company or any Subsidiary within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and shall survive any termination of this Agreement or the sale and
delivery of the Shares. The Company and the Underwriter agree promptly to
notify the others of the commencement of any litigation or proceeding against
it and, in the case of the Company, against any of the Company's officers and
directors, in connection with the sale and delivery of the Shares, or in
connection with the Registration Statement or Prospectus.
11. Notices: Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if
to the Underwriter, shall be sufficient in all respects if delivered to
Friedman, Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Syndicate Department; if to the Company, shall be
sufficient in all respects if delivered to the Company at the offices of the
Company at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx Xxxxxxxxx.
12. Governing Law; Consent to Jurisdiction; Headings: THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES; provided that
Sections 5-1401 and 5-1402 of the New York General Obligations Law shall
apply to this Agreement. The parties hereto agree to be subject to, and
hereby irrevocably submit to, the nonexclusive jurisdiction of any United
States federal or New York state court sitting in New York, New York, in
respect of any suit, action or proceeding arising out of or relating to this
Agreement or the transactions contemplated herein, and irrevocably agree that
all claims in respect of any such suit, action or proceeding may be heard and
determined in any such court. Each of the parties hereto irrevocably waives,
to the fullest extent permitted by applicable law, any objection to the
laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding has been
brought in an inconvenient forum. The section headings in this Agreement have
been inserted as a matter of convenience of reference and are not a part of
this Agreement.
13. Parties in Interest: The Agreement herein set forth has been and is made
solely for the benefit of the Underwriter, the Company and the controlling
persons, directors and officers referred to in Sections 9 and 10 hereof, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from the Underwriter) shall acquire or have any right under or by
virtue of this Agreement.
14. Counterparts and Facsimile Signatures: This Agreement may be
signed by the parties in counterparts which together shall constitute one and
the same agreement among the parties. A facsimile signature shall constitute
an original signature for all purposes.
If the foregoing correctly sets forth the understanding among the
Company and the Underwriter, please so indicate in the space provided below
for the purpose, whereupon this Agreement shall constitute a binding
agreement among the Company and the Underwriter.
Very truly yours,
ANTHRACITE CAPITAL, INC.
/s/ Xxxxxxx X. Xxxx
-----------------------------------
Title: Chief Operating Officer and
Chief Financial Officer
Accepted and agreed to as of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: Friedman, Billings, Xxxxxx & Co., Inc.
/s/ Xxxxx X. Xxxxxxxxx
---------------------
Xxxxx X. Xxxxxxxxx
Managing Director
Schedule I
Subsidiaries of the Company
Anthracite Funding, LLC
Anthracite Funding ML, LLC
Schedule II
Persons From Whom the Underwriter Has Received Lock-Up Agreements
Officers of the Company Titles
Xxxx Xxxxxx President and Chief Executive Officer
Xxxxxxx Xxxx Chief Operating Officer, Chief Financial Officer, and
Treasurer
Xxxxx Xxxxxx Vice President and Chief Investment Officer
Xxxx Xxxxxx Vice President
Xxx Xxxxxx Vice President
Xxxx Xxxxx Vice President
Xxxxxx Xxxxxxxxx Vice President and Secretary
Directors of the Company
------------------------
Xxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxx
Xxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx, III
Schedule III
Manager's Representation Letter
