EXHIBIT 1.1
AMERICAN MORTGAGE ACCEPTANCE COMPANY
3,500,000 Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
TABLE OF CONTENTS
1. SALE AND PURCHASE .................................................... 2
2. PAYMENT AND DELIVERY ................................................. 3
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY ........................ 4
4. CERTAIN COVENANTS OF THE COMPANY ..................................... 13
5. PAYMENT OF EXPENSES .................................................. 16
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS .......................... 17
7. TERMINATION .......................................................... 23
8. INCREASE IN UNDERWRITERS' COMMITMENTS ................................ 24
9. INDEMNITY AND CONTRIBUTION BY THE COMPANY AND THE UNDERWRITERS ....... 25
10. SURVIVAL ............................................................. 28
11. NOTICES .............................................................. 28
12. GOVERNING LAW; CONSENT TO JURISDICTION ............................... 28
13. PARTIES IN INTEREST .................................................. 29
14. COUNTERPARTS ......................................................... 29
AMERICAN MORTGAGE ACCEPTANCE COMPANY
3,500,000 Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
____________, 2002
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
RBC XXXX XXXXXXXX INC.
as Representatives of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
American Mortgage Acceptance Company, a Massachusetts business trust (the
"Company"), confirms its agreement with Friedman, Billings, Xxxxxx & Co., Inc.,
RBC Xxxx Xxxxxxxx Inc. and each of the other Underwriters listed on Schedule I
hereto (collectively, the "Underwriters"), for whom Friedman, Billings, Xxxxxx &
Co., Inc. and RBC Xxxx Xxxxxxxx Inc. are acting as representatives (in such
capacity, the "Representatives"), with respect to (i) the sale by the Company
and the purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of common shares of beneficial interest of the Company, $0.10
par value per share (the "Common Shares"), set forth in Schedule I hereto and
(ii) the grant by the Company to the Underwriters, acting severally and not
jointly, of the option described in Section 1(b) hereof to purchase all or any
part of 525,000 Common Shares to cover over-allotments, if any. The 3,500,000
Common Shares to be purchased by the Underwriters (the "Initial Shares") and all
or any part of the 525,000 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 Underwriters propose to make a public
offering of the Shares as soon as the Underwriters deem 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-2 (No. 333-74288) and a
related preliminary prospectus for the registration of 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 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 which 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 Rule 462(b) Registration Statement. Each prospectus included
in the Registration Statement, or amendments thereof or supplements thereto,
before it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the Underwriters pursuant
to Rule 424(a) of the Securities Act Regulations is hereinafter called the
"Preliminary Prospectus." The term "Prospectus" means the final prospectus, as
first filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b)
of the Securities Act Regulations, and any amendments thereof or supplements
thereto. The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus.
Any reference herein to the Registration Statement, the Prospectus, any
Preliminary Prospectus or any amendment or supplement thereto shall be deemed to
refer to and include the documents incorporated by reference therein, and any
reference herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement, the Prospectus or any Preliminary Prospectus
shall be deemed to refer to and include the filing after the execution hereof of
any document with the Commission deemed to be incorporated by reference therein.
For purposes of this Agreement, all references to the Registration Statement,
the Prospectus, any Preliminary Prospectus or to any amendment or supplement
thereto shall be deemed to include any copy filed with the Commission pursuant
to its Electronic Data Gathering Analysis and Retrieval System ("XXXXX").
The Company also will issue and sell at the Closing Time (as hereinafter
defined) to Friedman, Billings, Xxxxxx & Co., Inc. ("FBR") for its own account
warrants (the "Warrants") to purchase at the Public Offering Price (as
hereinafter defined) up to 35,000 Common Shares (the "Warrant Shares"), which
issuance will be consummated in accordance with the terms and conditions of the
Warrant Agreement in the form filed as an exhibit to the Registration Statement
(the "Warrant Agreement").
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, the Company agrees to sell to
each Underwriter, severally and not jointly, and each Underwriter agrees,
severally and not jointly, to purchase from the Company at the purchase price
per share of $______, the number of Initial Shares set forth in Schedule I
opposite such Underwriter's name, plus any additional number of Initial Shares
which
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such Underwriter may become obligated to purchase pursuant to the provisions of
Section 8 hereof subject, in each case, to such adjustments among the
Underwriters as the Representatives in their sole discretion shall make to
eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company
hereby grants an option to each Underwriter, severally and not jointly, to
purchase from the Company all or any part of the Option Shares at the purchase
price per share set forth in paragraph (a) above plus, with respect to each
Underwriter purchasing Option Shares, any additional number of Option Shares
which each Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof. The option hereby granted will expire thirty
(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
written notice by the Representatives to the Company setting forth the number of
Option Shares as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such Option Shares. Any
such time and date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than three full business days (or
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
defined in Section 2(a) below). If the option is exercised as to all or any
portion of the Option Shares, each of the Underwriters, acting severally and not
jointly, will purchase that proportion of the total number of Option Shares then
being purchased which the number of Initial Shares set forth in Schedule I
opposite the name of such Underwriter bears to the total number of Initial
Shares, subject in each case to such adjustments as the Representatives in their
sole discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Terms of Public Offering. The Company is advised by you that the
Shares are to be offered to the public initially at $_______ per share (the
"Public Offering Price") and to certain dealers selected by you at a price that
represents a concession not in excess of $_______ per share under the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $_________ per share, to any Underwriter
or to certain other dealers. The Underwriters may from time to time increase or
decrease the Public Offering Price of the Shares after the initial public
offering to such extent as the Underwriters may determine.
(d) Warrants. Upon the basis of the warranties and representations and
other terms and conditions herein set forth, the Company also agrees to issue to
FBR, in further consideration of FBR's efforts in connection with the sale and
purchase of the Initial Shares and the Option Shares, the Warrants to purchase
up to 35,000 Common Shares at an exercise price equal to the Public Offering
Price.
2. Payment and Delivery:
(a) Initial Shares and Warrants. The Initial Shares to be purchased by
each Underwriter hereunder, in definitive form, and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior written notice to the Company shall be
delivered by or on behalf of the Company to the Representatives,
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including, at the option of the Representatives, through the facilities of The
Depository Trust Company ("DTC") for the account of each Underwriter, together
with the delivery of the Warrants, represented by one or more certificates as
FBR may specify, to FBR, against payment by or on behalf of each Underwriter of
the purchase price of the Initial Shares by wire transfer of federal (same-day)
funds to the account specified to the Representatives by the Company upon at
least forty-eight hours' prior written 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 with respect
thereto. The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on ________________, 2002 or on such other time and date as the
Company and the Representatives 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 either of the Initial Shares or the
Option Shares is hereinafter sometimes called the "Date of Delivery."
(b) Option Shares. Any Option Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior written notice to the Company shall be delivered by or
on behalf of the Company to the Representatives, including, at the option of the
Representatives, through the facilities of DTC for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of federal (same-day) funds to the account
specified to the Representatives by the Company upon at least forty-eight hours'
prior written notice. The Company will cause the certificates representing the
Option Shares to be made available for checking and packaging at least
twenty-four hours prior to the Date of Delivery with respect thereto. The time
and date of such delivery and payment shall be 9:30 a.m., New York City time, on
the date specified by the Representatives in the notice given by the
Representatives to the Company of the Underwriters' election to purchase such
Option Shares or on such other time and date as the Company and the
Representatives may agree upon in writing.
3. Representations and Warranties of the Company: The Company represents
and warrants to the Underwriters that:
(a) the Company has been duly formed and is validly existing in good
standing as a business trust under the laws of The Commonwealth of Massachusetts
with all requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as now conducted and to authorize,
execute and deliver this Agreement and the Warrant Agreement and to consummate
the transactions described herein and therein;
(b) each of the subsidiaries of the Company, which are set forth on
Schedule II hereto (each a "Subsidiary" and, collectively, the "Subsidiaries"),
has been duly formed or incorporated, as the case may be, and is validly
existing and in good standing under the laws of its respective jurisdiction of
formation or incorporation with all requisite corporate or other power and
authority to own, lease and operate its respective properties and to conduct its
respective business as now conducted;
(c) 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
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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 the nature or conduct of their
respective businesses as now conducted requires such qualification, except where
the failure to be in good standing 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;
(d) the Company and the Subsidiaries are in compliance in all material
respects with all applicable laws, rules, regulations, orders, decrees and
judgments;
(e) 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 declaration
of trust, charter or by-laws, as the case may be, or in the performance or
observance of any obligation, agreement, covenant or condition contained in any
license, advisory agreement, management agreement (including, without
limitation, that certain Amended and Restated Advisory Services Agreement, dated
March 29, 1993, as amended and restated on November 12, 1999, as amended (the
"Advisory Services Agreement") between the Company and Related AMI Associates,
Inc. (the "Advisor")), 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 which 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, and the issuance, sale and delivery by the
Company of the Shares, the execution, delivery and performance of this Agreement
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 declaration of trust, operating
agreement, charter or by-laws, as the case may be, of the Company or any of the
Subsidiaries, (ii) any provision of any license, advisory agreement, management
agreement (including, without limitation, the Advisory Services Agreement),
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 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 Company or any of the Subsidiaries,
except in the case of clauses (ii) or (iii) for such breaches or defaults which
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;
(f) the Company has full legal right, power and authority to enter into
and perform this Agreement and the Warrant Agreement and to consummate the
transactions contemplated herein and therein; each of this Agreement and the
Warrant Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company enforceable
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, and by general principles of equity, and except to the extent
that the indemnification and contribution
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provisions of Section 9 hereof may be limited by federal or state securities
laws and public policy considerations in respect thereof;
(g) the issuance and sale of the Shares to the Underwriters 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 described in the Prospectus, no
holder of the Shares is or will be subject to personal liability by reason of
being such a holder; except as contemplated herein, no person or entity holds a
right to participate in the registration under the Securities Act of the Shares
pursuant to the Registration Statement; no person or entity has a right to
require the Company to register any capital stock of the Company owned by such
person or entity under the Securities Act; except the Advisor pursuant to the
Advisory Services Agreement, no person or entity has a right of participation or
first refusal with respect to the sale of the Shares by the Company; 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 declaration of trust of the Company and the requirements of the American
Stock Exchange;
(h) the issuance of the Warrants has been duly authorized by the Company;
when issued and delivered pursuant to the terms of the Warrant Agreement, the
Warrants will constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, or by general principles of equity; the Warrant
Shares have been duly reserved for issuance by the Company upon exercise of the
Warrants in accordance with the terms of the Warrant Agreement; and the Warrants
will conform in all material respects to the description thereof in the
Registration Statement and the Prospectus;
(i) 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 the execution, delivery and
performance of this Agreement, the consummation of the transactions contemplated
hereby or the sale and delivery of the Shares, issuance of the Warrants or the
Warrant Shares by the Company as contemplated hereby or in the Warrant Agreement
other than (i) such as have been obtained, or will have been obtained at or
before 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"), (ii) such approvals as have been obtained in connection with
the approval of the listing of the Shares on the American Stock Exchange and
(iii) any necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the Underwriters;
(j) each of the Company and the Subsidiaries has, or has obtained, all
necessary licenses, authorizations, consents and approvals and has made all
necessary filings required under any federal, state or local law, regulation or
rule, required in order to conduct their respective businesses as described in
the Prospectus, except to the extent that any failure to have
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any such licenses, authorizations, consents or approvals, to make any such
filings or to obtain any such authorizations, consents or approvals could not
reasonably be expected to 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 written 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 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 no such license,
authorization, consent or approval contains a materially burdensome restriction
that is not adequately disclosed in the Registration Statement and the
Prospectus;
(k) 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 any request on
the part of the Commission for additional information has been complied with;
(l) the Company and the transactions contemplated by this Agreement meet
the requirements and conditions for using a registration statement on Form S-2
under the Securities Act, set forth in the General Instructions to Form S-2; the
Preliminary Prospectus and the Registration Statement comply 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 not
misleading; and the Preliminary Prospectus does not, and the Prospectus or any
amendment or supplement thereto will not, as of the applicable filing date 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 Underwriters and
furnished in writing by or on behalf of the Underwriters through the
Representatives 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);
(m) the Preliminary Prospectus was, and the Prospectus delivered to the
Underwriters for use in connection with this offering will be, identical in all
material respects to the versions of the Preliminary Prospectus and Prospectus
created to be transmitted to the Commission for filing via XXXXX, except to the
extent permitted by Regulation S-T;
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(n) each document incorporated by reference or deemed to be incorporated
by reference in the Registration Statement and in the Prospectus, when each
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 rules
and 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 Registration Statement and 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;
(o) all legal or governmental proceedings, contracts or documents which
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;
(p) 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, arbitration 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;
(q) the financial statements, including the notes thereto, included in the
Registration Statement and the Prospectus or incorporated by reference therein
present fairly the financial position of the Company and the Subsidiaries as of
the dates indicated and the results of operations and changes in financial
position and cash flows of the Company and the Subsidiaries for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as indicated in the notes thereto); the financial
statement schedules included in the Registration Statement and the Prospectus or
incorporated by reference therein fairly present the information shown therein;
no other financial statements or schedules are required by Form S-2 or otherwise
to be included in the Registration Statement or Prospectus or incorporated by
reference therein;
(r) 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 preceding the filing of the Registration
Statement and if during such period the Company has
8
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);
(s) 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,
are and were during the periods covered by their reports independent public
accountants within the meaning of the Securities Act and the Securities Act
Regulations;
(t) KPMG 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, are and were during the
periods covered by their reports independent public accountants within the
meaning of the Securities Act and the Securities Act Regulations;
(u) 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) except in
accordance with the Company's ordinary practice as disclosed in the Registration
Statement and the Prospectus, any dividend or distribution of any kind declared,
paid or made with respect to the capital stock of the Company;
(v) the authorized, issued and outstanding shares of beneficial interest
is as set forth in the column entitled "Actual" under the "Capitalization"
section contained in the Prospectus as of the date stated in such section
(except for subsequent issuances thereof, if any, contemplated under this
Agreement, the Warrant Agreement or the Advisory Services Agreement);
immediately after the Closing Time, _____________________ Common Shares will be
issued and outstanding (subject to the Underwriters' option described in Section
1(b) hereof) and no shares of any other class of capital stock will be issued
and outstanding. All of the issued and outstanding shares of beneficial interest
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 beneficial interest of the
Company have been issued in violation of any preemptive or similar rights
granted by the Company; except as disclosed in the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any shares of beneficial interest
(whether common or preferred) of the Company or any security convertible into or
exchangeable for shares of beneficial interest of the Company;
9
(w) when the Warrant Shares have been issued and duly delivered against
payment therefor as contemplated by the Warrant Agreement, the Warrant Shares
will be validly issued, fully paid and non-assessable, and, except for any
action that may have been taken by the holder thereof, free and clear of any
pledge, lien, encumbrance, security interest or other claim; the issuance and
sale of the Warrants and the Warrant Shares by the Company is not subject to
preemptive or other similar rights granted by the Company; except as described
in the Prospectus, no holder of Warrant Shares is or will be subject to personal
liability by reason of being such a holder;
(x) the Shares being sold pursuant to this Agreement, as of the Date of
Delivery, and any Warrant Shares, when issued and delivered in accordance with
the terms of the Warrant Agreement, will conform in all material respects to the
statements relating thereto contained in the Prospectus and will be in
substantially the form filed or incorporated by reference, as the case may be,
as an exhibit to the Registration Statement;
(y) each of the Company, the Subsidiaries, and each of their respective
officers, trustees, directors and controlling persons has not, directly or
indirectly, (i) taken, and will not take 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; or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Shares or (B) paid or agreed to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company;
(z) neither the Company nor any of its affiliates (i) is required to
register as a "broker" or "dealer" in accordance with the provisions of the
Exchange Act or the Exchange Act Regulations, or (ii) directly, or indirectly
through one or more intermediaries, controls or has any other association with
(within the meaning of Article 1 of the By-Laws of the National Association of
Securities Dealers, Inc. (the "NASD")) any member firm of the NASD;
(aa) the Company has not relied upon the Representatives or legal counsel
for the Representatives for any legal, tax or accounting advice in connection
with the offering and sale of the Shares, the Warrants or the Warrant Shares;
(bb) any certificate signed by any officer of the Company or any
Subsidiary delivered to the Representatives or to counsel for the Underwriters
pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby;
(cc) 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 the financial statements thereto 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, liens, security interests, pledges,
10
charges, encumbrances, mortgages and defects, 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) to the knowledge of the Company, there is no breach of, or default
under (nor has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), the Advisory Services Agreement
by the Advisor;
(ee) to the knowledge of the Company, there are no statutes or regulations
applicable to the Company due to its existence as a Massachusetts business trust
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;
(ff) no relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors, trustees,
officers, shareholders, customers or suppliers of the Company or any of the
Subsidiaries on the other hand, which is required by the Securities Act to be
described in the Registration Statement and the Prospectus which is not so
described;
(gg) the Company and each Subsidiary owns or possesses adequate licenses
or other rights to use all patents, trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how, if any (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 knows
of no such infringement of or conflict with) asserted rights of others with
respect to any Intangibles which could materially and adversely affect the
assets, operations, business or condition (financial or otherwise) of the
Company or the Subsidiaries taken as a whole;
(hh) each of the Company and the Subsidiaries has filed on a timely basis
all necessary federal, state, local and foreign income and franchise tax
returns, if any such returns were 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 the Company or any of the Subsidiaries, nor does the Company or
any of the Subsidiaries know of any tax deficiency which is likely to be
asserted against any such entity which, if determined adversely to any such
entity, would materially adversely affect the assets, operations, business or
condition (financial or otherwise) of any such entity, respectively; all tax
liabilities, if any, are adequately provided for on the respective books of such
entities;
(ii) each of the Company and the Subsidiaries maintains insurance (issued
by insurers of recognized financial responsibility) of the types and in the
amounts generally deemed
11
adequate, if any, for their respective businesses and consistent with insurance
coverage maintained by similar companies in similar businesses;
(jj) none of the Company nor any of its Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or any provisions
of the Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a material adverse effect on the assets, operations, business or
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole;
(kk) there are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, any
related constraints on operation activities and any potential liabilities to
third parties) which would, singly or in the aggregate, have a material adverse
effect on the assets, operations, business or condition (financial or otherwise)
of the Company and its Subsidiaries taken as a whole;
(ll) neither the Company nor any of the Subsidiaries nor, to the knowledge
of the Company, any officer, director or trustee 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;
(mm) 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, trustees or directors of the Company or any
of the Subsidiaries or any of the members of the families of any of them;
(nn) neither the Company nor any of the Subsidiaries nor, to the Company's
knowledge, any employee or 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;
(oo) the Company is organized and operates in conformity with the
requirements for qualification as a real estate investment trust (a "REIT")
under the Internal Revenue Code of
12
1986, as amended (the "Code"), and the Company's proposed method of operation
will enable it to meet the requirements for qualification and taxation as a REIT
under the Code;
(pp) the Shares have been approved for listing, upon official notice of
issuance, on the American Stock Exchange;
(qq) 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 Prospectus or other offering material in
connection with the offer and sale of the Shares, except as contemplated herein;
(rr) 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
(ss) the Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated except
as may otherwise exist with respect to the Underwriters pursuant to this
Agreement, FBR pursuant to the Warrant Agreement and the Advisor pursuant to the
Advisory Services Agreement.
4. Certain Covenants of the Company: The Company hereby covenants with
each Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as the Representatives may designate and to
maintain such qualifications in effect as long as required for the distribution
of the Shares; provided that the Company shall not be required 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 Representatives promptly and, if requested by
the Representatives, 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 Underwriters and
file such Prospectus with the Commission pursuant to Rule 424(b) within the time
period prescribed by the Securities Act and the Securities Act Regulations, and
to furnish promptly to the Underwriters as many 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) as the Underwriters may reasonably request for the purposes
contemplated by the Securities Act Regulations, which Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical in all material
13
respects 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 Representatives promptly and (if requested by the
Representatives) to confirm such advice in writing when any post-effective
amendment thereto becomes effective under the Securities Act Regulations;
(e) to advise the Representatives 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 any
Preliminary Prospectus or 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 Representatives promptly of any
proposal to amend or supplement the Registration Statement or Prospectus and to
file no such amendment or supplement to which the Representatives shall
reasonably object in writing;
(f) to file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may, in the
reasonable judgment of the Company or the Representatives, be required by the
Securities Act or requested by the Commission;
(g) to furnish promptly to the Underwriters such other publicly available
information as the Underwriters may reasonably request regarding the Company and
its Subsidiaries for a period of five years from the date of this Agreement
including (i) copies of all annual, quarterly and current reports or other
communications supplied to holders of Common Shares and (ii) copies of all
reports filed by the Company with the Commission, the NASD or any securities
exchange;
(h) to advise the Underwriters promptly during any period of time in which
a Prospectus relating to the Shares is required to be delivered under the
Securities Act Regulations 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, and, during such time, to prepare and furnish, at the Company's
expense, to the Underwriters promptly such amendments or supplements to the
Prospectus as may be necessary to reflect any such change;
(i) to furnish promptly to the Representatives such number of conformed
copies of the Registration Statement, as initially filed with the Commission,
and of all amendments or supplements thereto (including all exhibits filed
therewith) as the Underwriters may reasonably request;
14
(j) to furnish to the Underwriters, not less than two (2) business days
before filing with the Commission, subsequent to the effective date of the
Prospectus and during any period of time in which a prospectus relating to the
Shares is required to be delivered under the Securities Act Regulations, a copy
of any document proposed to be filed with the Commission pursuant to Section 13,
14, or 15(d) of the Exchange Act;
(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 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
twelve 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 American Stock Exchange (or any other national securities exchange
or quotation system) and to file with the American Stock Exchange all documents
and notices required by the American Stock Exchange of companies that have
securities that are listed on the American Stock Exchange;
(n) except in the ordinary course of business in connection with (x) the
granting of options pursuant to the Company's Incentive Share Option Plan (not
to exceed 100,000 options) and (y) the payment in stock to directors of the
Company of a portion of their annual or other directors fees, to refrain during
a period of 120 days from the date of the Prospectus, without the prior written
consent of the Representatives, from (i) offering, 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 option outstanding on the
date hereof or upon the exercise of any option granted in the ordinary course of
business as provided herein, (C) the issuance of common shares of beneficial
interest to the Advisor in connection with this offering pursuant to the
Advisory Services Agreement or (D) the issuance of Warrant Shares to the holder
of the Warrant upon the exercise of such Warrant;
(o) the Company will maintain a transfer agent and, if necessary under the
jurisdiction of formation of the Company, a registrar (which may be the same
entity as the transfer agent) for its Common Shares;
15
(p) subject to its declaration of trust, the Company will use its best
efforts to continue to meet the requirements to qualify as a real estate
investment trust under the Code;
(q) the Company will comply with all of the provisions of any undertakings
in the Registration Statement;
(r) 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 "controlled" by an investment company within
the meaning of the 1940 Act;
(s) if at any time during the 30-day period after the execution of this
Agreement, any rumor, publication or event relating to or affecting the Company
shall occur as a result of which in the Representatives' 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
Representatives advising the Company to the effect set forth above, to forthwith
prepare, consult with the Representatives concerning the substance of, and
disseminate a press release or other public statement, in compliance with the
Securities Act, the Securities Act Regulations and other applicable laws and
reasonably satisfactory to the Representatives, responding to or commenting on
such rumor, publication or event;
(t) to cause to be maintained a system of 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; and
(u) to execute and deliver to FBR the Warrant Agreement and to comply with
the terms of the Warrant Agreement.
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 and the Warrant
Agreement, whether or not the transactions contemplated hereunder are
consummated or this Agreement and the Warrant Agreement are terminated,
including (i) the fees, disbursements and expenses of the Company's counsel, the
Company's accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees and expenses in connection
with the preparation, printing, filing and distribution of the Registration
Statement (including financial statements and exhibits), any preliminary
prospectus, the Prospectus and all amendments and supplements to any of the
foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement and any other agreements
16
or documents in connection with the offering, purchase, sale or delivery of the
Shares, (iv) all expenses in connection with the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any Preliminary and
Supplemental Blue Sky Memoranda in connection therewith (excluding the fees and
disbursements of counsel for the Underwriters in connection with such
registration or qualification and memoranda relating thereto which are addressed
in Section 5(b)), if any, (v) all costs and expenses incident to the listing of
the Shares on American Stock Exchange and any other national securities
exchanges and foreign stock exchanges, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer agent,
registrar and depositary, and (viii) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section 5(a).
(b) Upon the completion of the transactions contemplated hereunder or in
the event this Agreement is terminated by either (i) the Representatives as a
result of a default by the Company hereunder or under the Warrant Agreement or
(ii) the Company (unless such termination by the Company is as a result of a
default by the Underwriters hereunder or under the Warrant Agreement in which
case the Company shall not be responsible for the fees and disbursements
referenced in this Section 5(b)), the Company agrees to reimburse the
Representatives upon request for the reasonable fees and disbursements of the
Representatives' legal counsel and Blue Sky counsel (which shall undertake all
Blue Sky matters) up to an aggregate amount of $125,000.
6. Conditions of the Underwriters' Obligations: The obligations of the
Underwriters 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 you. If the Company is required to file a Rule
462(b) Registration Statement after the effectiveness of this Agreement, such
Rule 462(b) Registration Statement shall have become effective by 5:30 p.m., New
York City time, on the date hereof, and no stop order suspending the
effectiveness of the Rule 462(b) Registration Statement shall have been
17
issued and no proceedings for that purpose shall have been commenced or shall be
pending before or contemplated by the Commission.
(b) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP,
counsel for the Company, addressed to the Underwriters and dated the Closing
Time and each Date of Delivery and in form reasonably satisfactory to Winston &
Xxxxxx, counsel for the Underwriters, to the effect that:
(i) each of the Subsidiaries is validly existing and in good standing
under the laws of its respective jurisdiction of formation or incorporation
with the requisite power and authority to own its respective assets and to
conduct its respective business as described in the Registration Statement
and Prospectus;
(ii) the Company and the Subsidiaries are duly qualified in or
registered by and are in good standing in each jurisdiction set forth
opposite its name in Schedule II hereto; to such counsel's knowledge, other
than as disclosed in the Prospectus, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any other
corporation or any ownership interest in any limited liability company,
partnership, joint venture or other association; except as described in the
Registration Statement and the Prospectus, the issuance and sale of the
Shares, the Warrants, and the Warrant Shares by the Company is not subject
to preemptive or other similar rights arising under the Company's Second
Amended and Restated Declaration of Trust or any document listed as an
exhibit under Item 16 of Part II of the Registration Statement;
(iii) the execution, delivery and performance of this Agreement and
the Warrant Agreement by the Company and the consummation by the Company of
the transactions contemplated herein or therein, as the case may be, do not
and will not 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), or in the case of clause (iii)
below, constitute a violation or conflict with, (i) any provisions of the
declaration of trust, charter or by-laws, as the case may be, of the
Company or any Subsidiary, (ii) any provision of any document listed as an
exhibit under Item 16 of Part II of the Registration Statement under Item
16, or (iii) to such counsel's knowledge, any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body
or agency having jurisdiction over the Company or any Subsidiary (other
than State and foreign securities or blue sky laws and the rules and
regulations of the NASD, as to which counsel need express no opinion, or
the federal securities laws, as to which counsel need express only that
nothing has come to its attention to lead it to believe that such a
violation has or will occur), except in the case of clause (iii) for such
violations or conflicts, which individually or in the aggregate could not
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; or, to such counsel's knowledge,
result in the creation or imposition of any lien, encumbrance, charge or
claim upon any property or assets of the Company or the Subsidiaries;
18
(iv) the Warrant Agreement 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;
(v) no approval, authorization, consent or order of or filing with
any federal or state governmental or regulatory commission, board, body,
authority or agency is required in connection with the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby by the Company, or the sale and delivery of the Shares
by the Company as contemplated hereby other than such as have been obtained
or made under the Securities Act or the Exchange Act and such approvals as
have been obtained in connection with the listing of the Shares on the
American Stock Exchange and except that such counsel need express no
opinion as to any necessary qualification under the state securities or
blue sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters or any approval of the underwriting terms and
arrangements by the NASD;
(vi) to such counsel's knowledge, except as otherwise described in
the Prospectus or provided for in the Warrant Agreement, there are no
contracts, agreements or understandings between the Company and any person
granting such person with registration or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise
require the Company to file a registration statement under the Securities
Act with respect to any securities of the Company;
(vii) the form of certificate used to evidence the Shares complies in
material respects with all the requirements of the American Stock Exchange;
(viii) the Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and, to
such counsel's knowledge, no proceedings with respect thereto have been
commenced or threatened;
(ix) the Registration Statement (including any Rule 462(b)
Registration Statement) and the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement (including any Rule 462(b) Registration Statement)
and Prospectus, excluding the documents incorporated by reference therein,
as of their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or omitted therefrom,
as to which such counsel does not express an opinion) complied as to form
in all material respects with the requirements of the Securities Act and
the Securities Act Regulations;
(x) the documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules therein or omitted
therefrom, as to which such counsel does not express an opinion), when they
were filed with the Commission complied as to form in all material respects
with the requirements of the Exchange Act and the Exchange Act Regulations;
19
(xi) the information in the Prospectus under "Management-Advisory
Agreement," "Management-Advisory Compensation," "Management-Other Advisory
Agreement Terms," and "Certain Federal Income Tax Considerations," and in
the Registration Statement under Item 15, to the extent that it constitutes
matters of law, summaries of legal matters or the Company's declaration of
trust or legal proceedings, or legal conclusions, has been reviewed by them
and is correct in all material respects and such counsel's opinion set
forth under "Certain Federal Income Tax Considerations" is confirmed;
(xii) the Shares have been approved for listing on the American Stock
Exchange, subject to official notice of issuance;
(xiii) to such counsel's knowledge, there are no actions, suits or
proceedings, inquiries, or investigations pending or threatened against the
Company or any of the Subsidiaries or to which the properties, assets or
rights of any such entity are subject, at law or in equity, before or by
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority, arbitration panel or agency except as described in
the Prospectus;
(xiv) to such counsel's knowledge, any franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be filed as an exhibit to the Registration Statement have been
so filed (or incorporated by reference);
(xv) the Company is organized in conformity with the requirements for
qualification as a real estate investment trust pursuant to Sections 856
through 860 of the Code, and the Company's proposed method of operation
will enable it to meet the requirements for qualification and taxation as a
real estate investment trust under the Code; and
(xvi) neither the Company nor any of the Subsidiaries is, or solely
as a result of the transactions contemplated hereby and the application of
the proceeds from the sale of the Shares as described in the Registration
Statement and the Prospectus under the caption "Use of Proceeds," will
become an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, independent
public accountants of the Company and Underwriters 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 (except as and to the extent stated in subparagraph (xi)
above), nothing has caused them to believe that the Registration Statement or
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
20
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 Underwriters at the Closing Time and
on each Date of Delivery an opinion of Xxxxxxx Procter LLP, special
Massachusetts counsel for the Company, addressed to the Underwriters and dated
the Closing Time and each Date of Delivery and in form reasonably satisfactory
to Winston & Xxxxxx, counsel for the Underwriters, to the effect that, as a
matter of Massachusetts law:
(i) the Company has been duly formed and is validly existing in good
standing as a business trust under the laws of The Commonwealth of
Massachusetts with the requisite power and authority (a) to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and Prospectus, (b) to execute and deliver this
Agreement and the Warrant Agreement and (c) to consummate the transactions
described herein and therein;
(ii) the authorized shares of beneficial interest of the Company is
as set forth in the column entitled "Actual" under the "Capitalization"
section contained in the Prospectus as of the date stated in such section;
(iii) each of this Agreement and the Warrant Agreement has been duly
authorized, executed and delivered by the Company;
(iv) the Shares, the Warrants and the Warrant Shares have been duly
authorized and, when the Shares and the Warrant Shares have been issued and
duly delivered against payment therefor as contemplated by this Agreement
or the Warrant Agreement, as the case may be, the Shares and the Warrant
Shares will be validly issued, fully paid and non-assessable;
(v) except as described in the Registration Statement and the
Prospectus, the issuance and sale of the Shares, the Warrants, and the
Warrant Shares by the Company is not subject to preemptive or other similar
rights to the extent arising by operation of applicable law or under the
declaration of trust of the Company;
(vi) the form of certificate used to evidence the Shares complies in
all material respects with all applicable statutory requirements and with
any applicable requirements of the declaration of trust of the Company;
(vii) except to the extent set forth in the opinion, the information
in the Prospectus under "Description of Securities" and, to the extent that
it constitutes matters of law, summaries of legal matters or the Company's
declaration of trust or legal proceedings, or legal conclusions, has been
reviewed by them and is correct in all material respects;
(d) The Representatives 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 Representatives
as representatives of the Underwriters and in form and substance satisfactory to
the Representatives.
21
(e) The Underwriters shall have received at the Closing Time and on each
Date of Delivery the favorable opinion of Winston & Xxxxxx, dated the Closing
Time or such Date of Delivery, addressed to the Representatives and in form and
substance satisfactory to the Representatives.
(f) No amendment or supplement to the Registration Statement or Prospectus
shall have been filed to which the Underwriters 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 order
preventing or suspending the use of any Preliminary Prospectus or 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 a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h) 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 (ii) no
transaction which is material and unfavorable to the Company shall have been
entered into by the Company or any of the Subsidiaries, in each case, which
makes it, in the reasonable judgment of the Representatives, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
(i) At the Closing Time, the Shares shall have been approved for listing
on the American Stock Exchange, subject to official notice of issuance.
(j) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(k) The Representatives shall have received letters (each, a "Lock-up
Agreement") from each entity and person listed on Schedule III hereto, in form
and substance satisfactory to the Representatives, confirming that for a period
of 120 days after the Closing Time, such entities and persons will not directly
or indirectly (i) offer, pledge to secure any obligation due on or within 120
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 (other than a disposition or
transfer pursuant to which the acquiror or transferee is subject to the
restrictions on disposition and transfer set forth in this Section 6(k) to the
same extent as such stockholder delivering a letter hereunder), directly or
indirectly, any Common Shares owned or hereafter acquired by such persons (other
than by participating as selling stockholders in a registered offering of Common
Shares offered by the Company with the consent of the Representatives) 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
22
to be settled by delivery of Common Shares or such other securities, in cash or
otherwise, without the prior written consent of the Representatives, which
consent may be withheld at the sole discretion of the Representatives.
(l) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters 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 and the conditions set
forth in paragraphs (g), (h) and (i) have been met and are true and correct as
of such date.
(m) The Company shall have furnished to the Underwriters 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 statements 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 Underwriters may reasonably request. (n) All filings with the Commission
required by Rule 424 under the Securities Act shall have been made within the
applicable time period prescribed for such filing by such Rule.
(o) The Company shall perform such of its obligations under this Agreement
and the Warrant Agreement as are to be performed by the terms hereof and thereof
at or before the Closing Time or the relevant Date of Delivery.
(p) At the Closing Time, the Warrant Agreement shall have been entered
into and delivered by all required parties.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the delivery to the Representatives on the Date of
Delivery of such documents as the Representatives 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 several Underwriters hereunder
shall be subject to termination in the absolute discretion of the
Representatives, at any time after the date hereof and 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 Prospectus, any 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 reasonable judgment of the Representatives,
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 NASD or if trading generally on the New
York Stock Exchange, the American Stock Exchange or in the Nasdaq
over-the-counter market has been
23
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 Representatives 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, or (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
Representatives has a material adverse effect on the securities markets in the
United States, or (viii) the declaration of a banking moratorium by either
federal or New York State authorities, or (ix) in the case of any of the events
specified in clauses (i) through (viii), such event, singly or together with any
other such events, makes it, in the judgment of the Representatives,
impracticable to market or deliver the Shares on the terms and in the manner
contemplated in the Prospectus.
If the Representatives elect to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters 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
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder. Notwithstanding any termination of this Agreement, the Company shall
be liable for all expenses which it has agreed to pay pursuant to Section 5
hereof. The Company also agrees to reimburse the several Underwriters, their
directors and officers and any persons controlling any of the Underwriters for
any and all fees and expenses (including, without limitation, the fees
disbursements of counsel) incurred by them in connection with enforcing their
rights hereunder (including, without limitation, pursuant to Section 9 hereof).
8. Increase in Underwriters' Commitments: If any Underwriter shall
default at the Closing Time or on a Date of Delivery in its obligation to take
up and pay for the Shares to be purchased by it under this Agreement on such
date, the Representatives shall have the right, within 36 hours after such
default, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Shares which such Underwriter shall have agreed but failed to take up and
pay for (the "Defaulted Shares"). Absent the completion of such arrangements
within such 36 hour period, (i) if the total number of Defaulted Shares does not
exceed 10% of the total number of
24
Shares to be purchased on such date, each non-defaulting Underwriter shall take
up and pay for (in addition to the number of Shares which it is otherwise
obligated to purchase on such date pursuant to this Agreement) the portion of
the total number of Shares agreed to be purchased by the defaulting Underwriter
on such date in the proportion that its underwriting obligations hereunder bears
to the underwriting obligations of all non-defaulting Underwriters; and (ii) if
the total number of Defaulted Shares exceeds 10% of such total, the
Representatives may terminate this Agreement by notice to the Company, without
liability to any non-defaulting Underwriter.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by the Representatives with the approval of
the Company or selected by the Company with the approval of the
Representatives).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with the like effect as if such
substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company and the Underwriters:
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Underwriter or
controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim arises out
of or is based upon 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 any Preliminary Prospectus, 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 Underwriters
through the Representatives 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 Preliminary
Prospectus or the Prospectus shall not inure to the benefit of an Underwriter
(or to the benefit of any person controlling such Underwriter) with respect to
any person asserting any such loss, expense, liability, damage or claim which is
the subject thereof if the Prospectus or
25
any supplement thereto prepared with the consent of the Representatives and
furnished to the Underwriters prior to the Closing Time corrected any such
alleged untrue statement or omission and if such 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 any person who controls
any Underwriter in respect of which indemnity may be sought against the Company
pursuant to the preceding paragraph, such Underwriter shall promptly notify the
Company in writing of the institution of such action and the Company shall
assume the defense of such action, including the employment of counsel and
payment of out-of-pocket expenses, provided, however, that any failure or delay
to so notify the Company will not relieve the Company of any obligation
hereunder, except to the extent that its ability to defend is actually impaired
by such failure or delay. Such Underwriter or controlling person shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action or the Company shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Company 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 Underwriters or controlling persons in any one action or series of
related actions in the same 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 the its written consent.
(b) Each Underwriter agrees, severally and not jointly, 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, 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 such Underwriter through
the Representatives 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 under the caption "Underwriting" regarding (i) concessions to dealers
in connection with the sale of Shares and (ii)
26
stabilizing and the beneficial ownership of Shares by the Underwriters, and
entities associated with the Underwriters, in the Preliminary Prospectus and the
Prospectus (to the extent such statements relate to the Underwriters) constitute
the only information furnished by or on behalf of any Underwriter through the
Representatives 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
Representatives in writing of the institution of such action and the
Representatives, on behalf of the Underwriters, shall assume the defense of such
action, including the employment of counsel and payment of expenses. The Company
or such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Company
or such person unless the employment of such counsel shall have been authorized
in writing by the Representatives in connection with the defense of such action
or the Representatives shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Underwriters (in which case the
Representatives shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the expenses
of more than one separate firm of attorneys in any one action or series of
related actions in the same jurisdiction representing the indemnified parties
who are parties to such action). Anything in this paragraph to the contrary
notwithstanding, no Underwriter shall be liable for any settlement of any such
claim or action effected without the written consent of the Representatives.
(c) If the indemnification provided for in this Section 9 is unavailable
to 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 Underwriters 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
Underwriters 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 Underwriters 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 Underwriters. The relative fault of the Company on the one hand and of the
Underwriters 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 Underwriters and the parties' relative
27
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, on the one hand, and the Underwriters, on the other,
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
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, no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
(e) Each of the Underwriters agrees to look solely to the assets,
properties and rights of the Company for satisfaction of all claims against the
Company brought pursuant to this Section 9, and in no event shall any
shareholder of the Company have any personal liability for the obligations of
the Company under this Agreement.
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
any Underwriter, or any person who controls any Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or
on behalf of the Company, the Subsidiaries, their trustees or directors and
officers or any person who controls the Company, 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 each Underwriter agree promptly to notify the others
of the commencement of any litigation or proceeding against it and, in the case
of the Company, against any of the Company's officers and directors, in
connection with the sale and delivery of the Shares, or in connection with the
Registration Statement or Prospectus.
11. Notices: Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered to Friedman,
Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered to the Company at the offices of the Company at 000
Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Financial
Officer.
12. Governing Law; Consent to Jurisdiction; Headings: THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
28
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
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 Underwriters, the Company and the controlling
persons, directors and officers referred to in Sections 9 and 10 hereof, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
[signature pages follow]
29
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this Agreement shall constitute a binding agreement among the
Company and the Underwriters.
Very truly yours,
AMERICAN MORTGAGE ACCEPTANCE COMPANY
------------------------------------------
By: Xxxxxx X. Xxxxxx
Its: President and Chief Executive Officer
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
BY: FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
-------------------------------------
By:
---------------------------------
Its: Managing Director
For themselves and as Representatives
of the other Underwriters named on
Schedule I hereto.
Schedule I
Number of Initial
Underwriter Shares to be Purchased
----------- ----------------------
Friedman, Billings, Xxxxxx & Co., Inc. ..................
RBC Xxxx Xxxxxxxx Inc. ..................................
Total 3,500,000
Schedule II
The Company and its Subsidiaries
Jurisdiction of Incorporation Jurisdiction Qualified to
Name or Formation Transact Business
----- ----------------------------- ---------------------------
American Mortgage Acceptance Company Massachusetts Arizona, Connecticut and New York
AMAC/FM Corporation Delaware N/A
AMC REPO SELLER, LLC Delaware N/A
Schedule III
Persons and Entities Subject to Lock-Up Agreements
Name Shares
---- ------
Related AMI Associates, Inc. 48,308
Xxxxxx X. Xxxxxx 18,500
Xxxxx X. Xxxxx 0
Xxxxxx X. Xxxxx 0
Xxxx X. Xxxxxx 12,000
Xxxxx X. Xxxxxx 0
Xxxxxxx X. Xxxxx 1,500
Xxxxxx X. Xxxxxx 0
Xxxx X. Xxxxxxxxx 0
Xxxxxx X. Xxxxx 0
Xxxx X. Xxxxxxxxx 0
