AMERICAN MORTGAGE ACCEPTANCE COMPANY UNDERWRITING AGREEMENT
EXHIBIT
1.1
EXECUTION
VERSION
7.25%
Cumulative Convertible Preferred Shares of Beneficial
Interest
July
24,
2007
STERNE,
AGEE & XXXXX, INC.
as
Representative of the several Underwriters
c/o
Sterne, Agee & Xxxxx, Inc.
000
Xxxx
00xx
Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Dear
Sirs:
American
Mortgage Acceptance Company, a Massachusetts business trust (the
“Company”) confirms its agreement with each of the Underwriters listed on
Schedule I hereto (collectively, the “Underwriters”), for whom
Sterne, Agee & Xxxxx, Inc. is acting as the representative (in such
capacity, the “Representative”), with respect to (i) the sale by the
Company of 680,000 shares (the “Initial Shares”) of 7.25% Cumulative
Convertible Preferred Shares of beneficial interest of the Company (the
“Preferred Shares”) and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of Preferred Shares set
forth opposite the names of the Underwriters in Schedule I hereto, and
(ii) the grant of the option to the Underwriters described in
Section 1(b) hereof to purchase all or any part of 60,000 additional
Preferred Shares to cover over-allotments (the “Option Shares”), if any,
as set forth in Schedule I hereto. The Initial Shares to be
purchased by the Underwriters and all or any part of the Option Shares subject
to the option described in Section l(b) hereof 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 Underwriting
Agreement (this “Agreement”) has been executed and
delivered.
The
Company has filed with the Securities and Exchange Commission (the
“Commission”) a shelf registration statement on Form S-3 (No. 333-
87440), including a related prospectus covering 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 registration statement, as amended at the time
it was declared effective by the Commission (and, if the Company files a
post-effective amendment to such registration statement which becomes effective
prior to the Closing Time (as defined below), such registration statement
as so
amended), the documents incorporated by reference thereto in accordance with
Item 12 of Form S-3 under the Securities Act or otherwise and the
information deemed to be a part of the registration statement pursuant to
Rule
430B of the Securities Act Regulations (“Rule 430B Information”), is
hereinafter called the“Registration Statement.” Any
registration statement filed pursuant to Rule 462(b) of the Securities Act
Regulations is
1
hereinafter
called the “Rule 462(b) Registration Statement,” and after such filing
the term “Registration Statement” shall include the 462(b) Registration
Statement. The term “Base Prospectus” means the prospectus
dated October 3, 2002 included in the Registration Statement, including
all
information incorporated by reference therein. The term
“Prospectus Supplement” means the prospectus supplement specifically
relating to the Shares in the form first filed with the Commission pursuant
to
Rule 424(b) under the Securities Act, including all information incorporated
by
reference therein. The term “Prospectus” means the Base
Prospectus together with the Prospectus Supplement. The term
“Preliminary Prospectus” means each prospectus used in connection with
the offering of the Shares that omitted Rule 430B Information.
All
references in this Agreement to financial statements and schedules and other
information which are “contained,” “included” or “stated” in the Registration
Statement, the Disclosure Package or the Prospectus (or other references
of like
import) shall be deemed to mean and include all such financial statements
and
schedules and other information which are incorporated by reference or otherwise
deemed by the Securities Act Regulations to be a part of or included in the
Registration Statement, the Disclosure Package, as hereinafter defined, or
the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, the Disclosure Package
or the Prospectus shall be deemed to mean and include the filing of any document
under the Securities Exchange Act of 1934 (the “Exchange Act”) and the
rules and regulations promulgated thereunder (the “Exchange Act
Regulations”), which are incorporated by reference or otherwise deemed by
the 1933 Act Regulations to be part of or included in the Registration
Statement, the Disclosure Package or the Prospectus, as the case may
be.
The
term
“Disclosure Package” means (i) the Base Prospectus and the
Preliminary Prospectus, as most recently amended or supplemented immediately
prior to the Initial Sale Time (as defined below), (ii) the Issuer Free
Writing Prospectuses (as defined below), if any, identified in Schedule
II hereto, (iii) any other Free Writing Prospectus (as defined below)
that the parties hereto shall hereafter expressly agree to treat as part
of the
Disclosure Package, and (iv) the information included on Schedule III
hereto.
The
term
“Issuer Free Writing Prospectus” means any “issuer free writing
prospectus”, as defined in Rule 433 of the Securities Act
Regulations. The term “Free Writing Prospectus” means any
“free writing prospectus,” as defined in Rule 405 of the Securities Act
Regulations.
The
Company and the Underwriters agree as follows:
1. Sale
and Purchase.
(a) Initial
Shares. Upon the basis of the representations and warranties and
other terms and conditions set forth herein, at the purchase price per share
of
$23.75 for the Preferred Shares, the Company agrees to sell to each Underwriter
the number of Initial Shares set forth in Schedule I opposite its name,
and each Underwriter agrees, severally and not jointly, to purchase from
the
Company the number of Initial Shares set forth in Schedule I opposite
such Underwriter’s name, plus any additional number of Initial Shares that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 9 hereof, subject in each case, to such adjustments among the
Underwriters as the Representative in its sole discretion
2
shall
make to eliminate any sales or purchases of fractional
shares. Notwithstanding the foregoing, with respect to up to 280,000
of the Preferred Shares that are sold to the Underwriters for the account
of
Centerline Holding Company or one of its subsidiaries, the purchase price
per
share set forth above shall be $25.00 rather than $23.75.
(b) Option
Shares. In addition, upon the basis of the representations and
warranties and other terms and conditions herein set forth, at the purchase
price per share set forth in paragraph (a), the Company hereby grants an
option
to purchase 60,000 Preferred Shares to the Underwriters, acting severally
and
not jointly, in the respective numbers of Preferred Shares set forth opposite
the names of the Underwriters in Schedule I hereto, plus any additional
number of Option Shares that such Underwriter may become obligated to purchase
pursuant to the provisions of Section 9 hereof. The option
hereby granted will expire 30 days after the date hereof and may be exercised
in
whole or in part from time to time only for the purpose of
covering over-allotments that may be made in connection with the offering
and
distribution of the Initial Shares upon notice by the Representative to the
Company setting forth the number of Option Shares as to which the several
Underwriters are then exercising the option, in whole or in part, and the
time
and date of payment and delivery for such Option Shares. Any such
time and date of delivery (an “Option Closing Time”) shall be determined
by the Representative, but shall not be later than five 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
hereinafter defined. If the option is exercised as to all or any
portion of the Option Shares, the Company shall sell that number of Option
Shares then being purchased and each of the Underwriters, acting severally
and
not jointly, shall purchase that proportion of the total number of Option
Shares
then being purchased which the number of Initial Shares set forth in Schedule
I opposite the name of such Underwriter bears to the total number of Initial
Shares, subject in each case to such adjustments among the Underwriters as
the
Representative in its sole discretion shall make to eliminate any sales or
purchases of fractional shares.
2. Payment
and Delivery.
(a) Initial
Shares. The Initial Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representative may request upon at least
forty-eight hours’ prior notice to the Company shall be delivered by or on
behalf of the Company to the Representative, including, at the option of
the
Representative, through the facilities of The Depository Trust Company
(“DTC”) for the account of such Underwriter, against payment by or on
behalf of such Underwriter of the purchase price therefor by wire transfer
of
Federal (same-day) funds to the account specified to the Representative by
the
Company upon at least forty-eight hours’ prior notice. The Company
will cause the certificates representing the Initial Shares to be made available
for checking and packaging not later than 1:00 p.m. New York City time on
the
business day prior to the Closing Time (as defined below) with respect thereto
at the office of the Representative, 000 Xxxx 00xx, Xxxxxx
00xx, Xxxxx,
Xxx Xxxx,
Xxx Xxxx 00000, or at the office of DTC or its designated custodian, as the
case
may be (the “Designated Office”). The time and date of such delivery
and payment shall be 10:30 a.m., New York City time, on the third (fourth,
if
the determination of the purchase price of the Initial Shares occurs after
4:30 p.m., New York City time) business day after the date hereof (unless
another time and date shall be agreed to by
3
the
Representative and the Company). The time and date at which such
delivery and payment are actually made is hereinafter called the “Closing
Time.”
(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 Representative may request upon at least
forty-eight hours’ prior notice to the Company shall be delivered by or on
behalf of the Company to the Representative, including, at the option of
the
Representative, 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 Representative by the Company upon at least forty-eight
hours’
prior 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 Option Closing Time with respect thereto at
the
Designated Office. The time and date of such delivery and payment
shall be 10:30 a.m., New York City time, on the date
specified by the Representative in the notice given by the Representative
to the
Company of the Underwriters’ election to purchase such Option Shares or on such
other time and date as the Company and the Representative may agree upon
in
writing.
(c) Payment
shall be made to the Company and by wire transfer of immediately available
funds
to a bank account designated by the Company against delivery to the
Representative for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Shares and the Option Shares, if any, which it has agreed to
purchase. Sterne, Agee & Xxxxx, Inc., individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Shares or the Option Shares,
if
any, to be purchased by any Underwriter whose funds have not been received
by
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations
hereunder.
3. Representations
and Warranties of the Company. The Company represents and
warrants to the Underwriters as of the date hereof, as of the Initial Sale
Time
(as defined below), as of the Closing Time and as of any Option Closing Time
(if
any), and agrees with each Underwriter, that:
(a) The
Company is not an “ineligible issuer,” as defined in Rule 405 of the Securities
Act Regulations.
(b) The
Company has an authorized and outstanding capitalization as set forth under
the
heading “Actual” in the section of each Preliminary Prospectus, the Prospectus
and the Disclosure Package entitled “Capitalization” and, the Company shall have
an authorized and outstanding capitalization as set forth under the heading
“As
Adjusted” in each Preliminary Prospectus, the Prospectus and the Disclosure
Package entitled “Capitalization”. The Company has no subsidiaries,
other than those listed on Schedule IV hereto (each a “Subsidiary”
and, collectively, the “Subsidiaries”).
4
(c) All
of
the outstanding shares of beneficial interest of the Company and all of the
outstanding shares of capital stock or other than equity interests of each
of
the Subsidiaries have been duly and validly authorized and issued and are
fully
paid and non-assessable, and, except as disclosed in each Preliminary
Prospectus, the Prospectus and the Disclosure Package, all of the outstanding
shares of capital stock or other than equity interests of each of the
Subsidiaries are directly or indirectly owned of record and beneficially
by the
Company. Except as disclosed in each Preliminary Prospectus, the
Prospectus and the Disclosure Package, there are no outstanding
(i) securities or obligations of the Company or any of the Subsidiaries
convertible into or exchangeable for any beneficial interest of the Company
or
any capital stock or other than equity interests of any Subsidiary,
(ii) warrants, rights or options to subscribe for or purchase from the
Company or any such Subsidiary, any such beneficial interest, capital stock
or
other equity interests or any such convertible or exchangeable securities
or
obligations, or (iii) obligations of the Company or any such Subsidiary to
issue any shares of beneficial interest, capital stock or other equity interests
or any such convertible or exchangeable securities or obligation, or any
such
warrants, rights or options.
(d) Each
of
the Company and the Subsidiaries has been duly organized and is validly existing
as a business trust, limited liability company or exempt company in good
standing under the laws of its respective jurisdiction of formation, with
all
requisite power and authority to own its respective properties, to conduct
its
respective business as described in each of the Registration Statement, each
Preliminary Prospectus, the Prospectus and the Disclosure Package and, in
the
case of the Company, to execute and deliver this Agreement and to consummate
the
transactions contemplated hereby.
(e) Each
of
the Company and the Subsidiaries are duly qualified or licensed by each
jurisdiction in which they conduct their respective businesses and in which
the
failure to be so qualified or licensed could reasonably be expected to have
a
material adverse effect on the assets, business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole (a “Material Adverse
Effect” or “Material Adverse Change”), and the Company and the
Subsidiaries are duly qualified, and in good standing, in each jurisdiction
in
which they own or lease real property or maintain an office and in which
such
qualification is necessary, except where the failure to be so qualified and
in
good standing would not reasonably be expected to have a Material Adverse
Effect. Other than the Subsidiaries, the Company does not own,
directly or indirectly, any capital stock or other equity interests of any
other
corporation or any equity interest in any partnership, joint venture or other
association.
(f) Each
of
the Company and the Subsidiaries are in compliance with all governmental
rules
and regulations necessary to conduct their respective businesses as now operated
except when failure thereof would not result in a Material Adverse Effect
and
have not received any notice of changes in existing governmental rules or
regulations that, if modified adversely to the Company and the Subsidiaries,
would have a Material Adverse Effect.
(g) 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, bylaws, articles of formation, operating agreement or other
organizational documents including, but not
5
limited
to, the resolutions adopted by the Company’s Board of Trustees establishing the
terms and designation of the Shares (collectively, “Organizational
Documents”), as the case may be, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or other agreement
or instrument (including, without limitation, that certain Third Amended
and
Restated Advisory Services Agreement dated as of March 19, 2007) to which
the
Company or any of the Subsidiaries is a party or by which any of them or
their
respective properties is bound, except for such breaches or defaults that
would
not have a Material Adverse Effect; the execution, delivery and performance
of
this Agreement, and consummation of the transactions contemplated hereby
will
not: (i) conflict with, or result in any breach of, or constitute a default
under (nor constitute any event which with notice, lapse of time, or both
would
constitute a breach of, or default under), (A) any provision of the
Organizational Documents, as the case may be, of the Company or any of the
Subsidiaries, or (B) any provision of any license, indenture, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument
to
which the Company or any of the Subsidiaries is a party or by which it or
its
properties may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable
to
the Company or any of the Subsidiaries or (ii) result in the creation or
imposition of any lien, charge, claim or encumbrance upon any property or
assets
of the Company or any of the Subsidiaries, except in the case of clause (i)(B)
and this clause (ii) for such breaches, defaults, liens, charges, claims or
encumbrances which would not have a Material Adverse Effect.
(h) This
Agreement has been duly authorized, executed and delivered by the Company
and
constitutes a legal, valid and binding agreement of the Company enforceable
in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general equitable principles, and except to
the extent that the indemnification and contribution provisions of
Section 10 hereof may be limited by federal or state securities laws and
public policy considerations in respect thereof.
(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 Company’s consummation of
the transactions contemplated by this Agreement, and its sale and delivery
of
the Shares as contemplated herein, other than (i) such as have been
obtained, or will have been obtained at the Closing Time or the relevant
Option
Closing Time, as the case may be, under the Securities Act and the Exchange
Act,
(ii) such approvals as have been applied for, or will have been applied for
at the Closing Time or the relevant Option Closing Time, as the case may
be, in
connection with the Company’s application to list the Shares on the American
Stock Exchange (“AMEX”), (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 and (iv) such approvals as may be
required by the rules of the National Association of Securities Dealers,
Inc.
(“NASD”).
(j) Each
of
the Company and the Subsidiaries possesses all certificates, authorizations
or
permits required to be issued by appropriate governmental agencies or bodies
and
has not received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit that, if
determined or modified adversely to the Company, would, individually or in
the
aggregate, have a Material Adverse Effect.
6
(k) The
Company meets the requirements for use of Form S-3 under the Securities
Act. Each of the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendment thereto has become effective under
the Securities Act and no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement or any
post-effective amendment thereto 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. The Company has prepared and filed such amendments to such
Registration Statement and the Prospectus as may have been required to the
date
hereof, and covenants and agrees that it will file such additional amendments
thereto and as may hereafter be required. The Company has not
distributed any offering material in connection with the offering or sale
of the
Securities other than the Registration Statement, each Preliminary Prospectus,
the Disclosure Package or the Prospectus.
(l) Each
Preliminary Prospectus when filed and the Registration Statement as of its
effective date and as of the date hereof complied, and the Prospectus and
any
further amendments or supplements to the Registration Statement, the Preliminary
Prospectus or the Prospectus will, when they become effective or are filed
with
the Commission, as the case may be, comply with the requirements of the
Securities Act and the Securities Act Regulations. The Registration
Statement, as of its effective date, as of the date hereof, as of the Initial
Sale Time, as of the Closing Time or Option Closing Time, did not, does not
and
will not contain an untrue statement of a material fact or omit to state
a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the Company makes no warranty
or
representation with respect to any statement contained in the Registration
Statement 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 Representative to the Company expressly for use in the Registration
Statement (that information being limited to that described in the last sentence
of the first paragraph of Section 9(c) hereof (the “Underwriter
Information”)). The Preliminary Prospectus did not and does not,
as of its filing date and as of the date hereof, and the Prospectus or any
amendment or supplement thereto did not, does not and will not, as of the
applicable filing date, the date hereof, the Initial Sale
Time, the Closing Time and on each Option Closing Time (if any), 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; provided, however,
that the Company makes no warranty or representation with respect to the
Underwriter Information.
(m) Each
document incorporated by reference in the Registration Statement and the
Disclosure Package, when they became effective, or at the time they were
or
hereafter are filed with the Commission, as applicable, conformed and will
conform in all material respects to the requirements of the Securities Act
or
the Securities Act Regulations and the Exchange Act and
the Exchange Act Regulations and none of such documents contained, contain
or
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated by reference
in
any Preliminary Prospectus, the Prospectus and the Disclosure Package or
any
further amendment or supplement thereto, when such documents become
7
effective
or are filed with the Commission, as applicable, will conform in all material
respects to the requirements of the Exchange Act and the Exchange Act
Regulations, as applicable, and will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(n) As
of
8:30 a.m. (New York time) on July 25, 2007 (the “Initial Sale Time”), the
Disclosure Package will not contain any untrue statement of a material fact
or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; as of its issue date or date of first use and at all subsequent
times through the Initial Sale Time, any Issuer Free Writing Prospectus (when
considered together with the Disclosure Package) did not, and at the time
of
each sale of Shares and at the Closing Time and each Option Closing Time,
any
such Issuer Free Writing Prospectus (when considered together with the
Disclosure Package) will not, contain any untrue statement of a material
fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in the Disclosure
Package
in reliance upon and in conformity with the Underwriter
Information;
(o) Any
Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times
through the completion of the public offer and sale of the Shares did not,
does
not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement, including
any document incorporated by reference therein that has not been superseded
or
modified; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in any Issuer Free Writing Prospectus in reliance
upon and in
conformity with the Underwriter Information;
(p) The
Company is eligible to use Free Writing Prospectuses in connection with this
offering pursuant to Rules 164 and 433 under the Securities Act Regulations;
any
Free Writing Prospectus that the Company is required to file pursuant to
Rule
433(d) under the Securities Act Regulations has been, or will be, filed with
the
Commission in accordance with the requirements of the Securities Act and
the
Securities Act Regulations; and each Free Writing Prospectus that the Company
has filed, or is required to file, pursuant to Rule 433(d) under the Securities
Act Regulations or that was prepared by or on behalf of or used by the Company
complies or will comply in all material respects with the requirements of
the
Securities Act and the Securities Act Regulations;
(q) Except
for any Issuer Free Writing Prospectuses identified in Schedule II
hereto, and each “road show” (as defined in Rule 433 under the Securities Act
Regulations) relating to the public offering of shares contemplated herein
that
is a “written communication” (as defined in Rule 405 under the Securities Act
Regulations), the Company has not prepared, used or referred to, and will
not,
without the prior consent of the Representative, prepare, use or refer to,
any
Free Writing Prospectus;
8
(r) Each
Preliminary Prospectus, the Prospectus and any Issuer Free Writing Prospectuses
(to the extent any such Issuer Free Writing Prospectus was required to be
filed
with the Commission) delivered to the Underwriters for use in connection
with
this offering have been and will be identical to the versions of such documents
transmitted to the Commission for filing via the Electronic Data Gathering
Analysis and Retrieval System (“XXXXX”), except to the extent permitted
by Regulation S-T.
(s) All
legal
or governmental proceedings, contracts or documents of a character required
to
be filed, or incorporated by reference, as exhibits to the Registration
Statement or to be summarized or described in, or that were summarized or
described in, any Preliminary Prospectus or the Prospectus have been so filed,
incorporated, summarized or described as required, and such descriptions
present
fairly in all material respects the information required to be
shown.
(t) There
are
no actions, suits, proceedings, or, to the knowledge of the Company, inquiries
or investigations, pending or, to the knowledge of the Company, 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 are subject, at law or in equity, before or by any federal, state,
local
or foreign governmental or regulatory commission, board, body, authority,
arbitral panel or agency which would be reasonably likely to result in a
judgment, decree, award or order having a Material Adverse Effect.
(u) The
consolidated financial statements, including the notes thereto, included
in (or
incorporated by reference into) each of the Registration Statement, a
Preliminary Prospectus, the Prospectus and the Disclosure Package present
fairly
the financial position of the Company and the Subsidiaries
(the “Covered Entities”) as of the dates indicated and the results of
operations, changes in financial position, stockholders’ equity and cash flows
of the Covered Entities for the periods specified; the supporting schedules
included or incorporated by reference in the Registration Statement, if any,
fairly present the information required to be stated therein. Such
financial statements and supporting schedules have been prepared in conformity
with generally accepted accounting principles as applied in the United States
(“GAAP”) and on a consistent basis during the periods involved and in
accordance with all applicable laws, rules and regulations, including, but
not
limited to Regulation S-X promulgated by the Commission. The
financial data set forth or incorporated by reference in the Registration
Statement, the Disclosure Package, each Preliminary Prospectus and the
Prospectus fairly present that information shown therein and has been complied
on a basis consistent with the financial statements included or incorporated
by
reference in the Registration Statement, the Disclosure Package, a Preliminary
Prospectus and the Prospectus. No other financial statements or
supporting schedules are required to be included in the Registration
Statement. Any pro forma financial statements of the Company, and the
related notes thereto, included in (or incorporated by reference into) each
of
the Registration Statement, a Preliminary Prospectus, the Prospectus and
the
Disclosure Package present fairly in all material respects the information
shown
therein, comply as to form in all material respects with the Commission’s rules
and guidelines with respect to pro forma financial statements and the
adjustments used therein are appropriate to give effect to the transactions
contemplated thereby. All disclosures contained in the Registration
Statement, the Disclosure Package, a Preliminary Prospectus or the Prospectus,
regarding “non-GAAP financial measures” (as such term is defined by the rules
and regulations of the Commission) comply with Regulation
9
G
of the
Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the
extent
applicable.
(v) Deloitte
& Touche LLP, whose reports on the audited financial statements of the
Covered Entities are filed with the Commission as part of each of the
Registration Statement, a Preliminary Prospectus, the Prospectus and the
Disclosure Package or are incorporated by reference therein to the Company’s
knowledge, is and was during the periods covered by its reports, independent
public accountants as required by the Securities Act and the Securities Act
Regulations and are registered with the Public Company Accounting Oversight
Board.
(w) Subsequent
to the respective dates as of which information is given in each of the
Registration Statement, a Preliminary Prospectus, the Prospectus and the
Disclosure Package, and except as may be otherwise stated in such documents,
there has not been (i) any material adverse change in the assets, business,
operations, earnings, prospects, properties or condition (financial or
otherwise) 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, contemplated
or
entered into by the Company or any of the Subsidiaries, which is outside
the
ordinary course of the Company’s or Subsidiaries’ business, (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 and which is outside the ordinary course of
the
Company’s or Subsidiaries’ business or (iv) any dividend or distribution of
any kind declared, paid or made by the Company on any shares of beneficial
interest.
(x) No
relationship, direct or indirect, exists between or among the Company or
any of
its Subsidiaries on the one hand, and the directors, officers, trustees,
managers, shareholders, partners, customers or suppliers of the Company or
any
of the Subsidiaries or the Company’s external manager and its affiliates (the
“Manager”) on the other hand, which would be required by the Securities Act or
by the Securities Regulations to be described in the Registration Statement,
the
Disclosure Package and the Prospectus and which is not so
described. Except as disclosed in each Preliminary Prospectus, the
Prospectus and the Disclosure Package, the Company has not entered into any
transactions that would be required to be disclosed in accordance with Item
404
of Regulation S-K on terms that were inconsistent with terms that would
reasonably be likely to have been obtained from independent third
parties.
(y) The
Shares, and the common shares of beneficial interest, conform in all material
respects to the description thereof contained in the Registration Statement,
each Preliminary Prospectus, the Prospectus and the Disclosure
Package.
(z) Other
than as disclosed in each Preliminary Prospectus, the Disclosure Package
and the
Prospectus or incorporated by reference therein, there are no persons with
registration or other similar rights to have any equity securities, including
securities which are convertible into or exchangeable for equity securities,
registered pursuant to the Registration Statement or otherwise registered
by the
Company under the Securities Act.
10
(aa) The
Shares have been duly authorized and, when issued and duly delivered against
payment therefor as contemplated by this Agreement, will be validly issued,
fully paid and nonassessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim, and the issuance and sale of the Shares
by the
Company is not subject to preemptive or other similar rights arising by
operation of law, under the Organizational Documents, as the case may be,
of the
Company or any of the Subsidiaries, under any agreement to which the Company
or
any of the Subsidiaries is a party.
(bb) The
Company has made adequate reserves of common shares of beneficial interest
to
provide for the conversion of the Shares and will maintain such reserves
for so
long as the Share remain outstanding.
(cc) The
Company intends to apply to list the Shares on the AMEX; the Company has
taken
and will take all necessary actions to ensure that, upon and at all times
after
the AMEX shall have approved the Shares for listing, the Company will be
in
compliance with all applicable corporate governance requirements set forth
in
the AMEX’s listing standards that are then in effect and is taking such steps as
are necessary to ensure that it will be in compliance with other applicable
corporate governance requirements set forth in the AMEX’s listing standards not
currently in effect upon the effectiveness of such requirements.
(dd) The
Company has not taken, and will not take, directly or indirectly, any action
that is designed to or which has constituted or that might reasonably be
expected to cause or result in stabilization or manipulation of the price
of any
security of the Company to facilitate the sale or resale of the
Shares.
(ee) 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
Regulations, or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning
of Article I of the By-laws of the NASD) any member firm of the
NASD. No relationship, direct or indirect, exists between or among
the Company, on the one hand, and the directors, officers or stockholders
of the
Company or the Manager, on the other hand, which is required by the rules
of the
NASD to be described in the Registration Statement and the Prospectus, which
is
not so described.
(ff) Any
certificate signed by any officer of the Company or any Subsidiary delivered
to
the Representative 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.
(gg) The
form
of certificate used to evidence the Preferred Shares complies in all material
respects with all applicable statutory requirements, with any applicable
requirements of the Organizational Documents of the Company and the requirements
of the AMEX.
(hh) Each
of
the Company and the Subsidiaries have good title to all personal property
owned
by it, free and clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are disclosed in each
Preliminary Prospectus, the Prospectus and the Disclosure Package or such
as do
not materially and
11
adversely
affect the value of such property and do not materially interfere with the
use
made of such property by the Company and the Subsidiaries, taken as a
whole. Any real property and buildings held under lease by the
Company or any Subsidiary are held under valid, existing and enforceable
leases,
with such exceptions as are disclosed in each Preliminary Prospectus, the
Prospectus and the Disclosure Package 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 any Subsidiary, taken as a
whole.
(ii) After
due
inquiry, other than the under-performing and impaired mortgage loans disclosed
in each Preliminary Prospectus, the Prospectus and the Disclosure Package
or as
would not have a Material Adverse Effect, to the Company’s knowledge, the
Company (i) has no materially impaired mortgage loans, notes receivable,
debt
securities or other material assets, (ii) has not failed to collect or accrue
income from its assets in accordance with GAAP and (iii) has no mortgage
loans,
notes receivable, debt securities or other material assets that have been
placed
on non-accrual status. With respect to the Impaired Assets set forth
in the Company’s financial statements contained in each Preliminary Prospectus,
the Prospectus and the Disclosure Package, the Company has adequate reserves
as
determined in accordance with GAAP.
(jj) The
Company and each of the Subsidiaries owns, possesses or can acquire on
reasonable terms adequate licenses or other rights to use all patents,
trademarks, service marks, trade names, copyrights, software and design
licenses, trade secrets, manufacturing processes, other intangible property
rights and know-how (collectively “Intangibles”) necessary to entitle the
Company and each Subsidiary to conduct its business as described in each
Preliminary Prospectus, the Prospectus and the Disclosure Package, and neither
the Company nor any Subsidiary has received written notice of infringement
of or
conflict with asserted rights of others with respect to any Intangibles which
could result in a Material Adverse Effect.
(kk) The
Company and the Subsidiaries maintain, directly or through its manager, a
system
of internal accounting controls sufficient to provide reasonable assurance
that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken
with respect to any differences.
(ll) The
Company and the Subsidiaries have filed on a timely basis all necessary federal,
state, local and foreign income and franchise tax returns required to be
filed
through the date hereof and have paid or will pay on a timely basis all taxes
shown as due thereon. No tax deficiency has been asserted against any
such entity, nor does any such entity know of any tax deficiency which is
likely
to be asserted against it, which if determined adversely to it could result
in a
Material Adverse Effect. All tax liabilities are adequately provided
for on the respective books of the Company.
(mm) Each
of
the Company and the Subsidiaries maintain respective insurance (issued by
insurers of recognized financial responsibility) of the types and in the
amounts
generally deemed adequate for its business and consistent with insurance
coverage maintained by
12
similar
companies in similar businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company and the
Subsidiaries against theft, damage, destruction, acts of vandalism and all
other
risks customarily insured against, all of which insurance is in full force
and
effect.
(nn) Neither
the Company nor any of the Subsidiaries has, to its knowledge, violated,
or
received written notice of any violation with respect to, any applicable
environmental, safety or similar law applicable to the business or properties
of
the Company or any of the Subsidiaries, nor any federal or state law relating
to
discrimination in the hiring, promotion or pay of employees, nor any applicable
federal or state wages and hours law, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations promulgated
thereunder, the violation of any of which would be reasonably likely to result
in a Material Adverse Effect.
(oo) Neither
the Company nor any of the Subsidiaries, nor to the Company’s knowledge any
executive officer or director purporting to act on behalf of the Company
or any
of the Subsidiaries, has at any time, (i) made any unlawful contributions
to any candidate for political office, or failed to disclose fully any such
contributions, or (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.
(pp) Except
as
otherwise disclosed in each Preliminary Prospectus, the Prospectus and the
Disclosure Package, there are no material outstanding loans or advances or
material guarantees of indebtedness by the Company or any of the Subsidiaries
to
or for the benefit of any of the officers or directors of the Company or
any of
the Subsidiaries or any of the members of the families of any of
them.
(qq) All
securities issued by the Company or any of the Subsidiaries have been issued
and
sold in material compliance with (i) all applicable federal and state
securities laws, (ii) the laws of the applicable jurisdiction of
incorporation of the issuing entity and, (iii) to the extent applicable to
the issuing entity, the requirements of the AMEX.
(rr) In
connection with this offering, the Company has not offered and will not offer
its Preferred Shares or any other securities convertible into or exchangeable
or
exercisable for Preferred Shares in a manner in violation of the Securities
Act.
(ss) The
Company has not incurred any liability for any finder’s fees or similar payments
in connection with the transactions herein contemplated, other than pursuant
to
this Agreement.
(tt) The
Company is organized in conformity with the requirements for qualification
as a
real estate investment trust (“REIT”) under the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(collectively, the “Code”), and the Company’s current and proposed method
of operations will enable it to meet the requirements for qualification and
taxation as a REIT under the Code for its taxable year ending December 31,
2006
and thereafter. No transaction or other event has occurred which
could cause the Company to not be able to qualify as a REIT for its taxable
year
ending
13
(uu) The Company has retained Deloitte & Touche LLP as its independent registered public accounting firm and Deloitte & Touche LLP (i) periodically tests procedures and conduct annual compliance reviews designed to determine compliance with the REIT provisions of the Code and (ii) assists the Company in monitoring what it believes are appropriate accounting systems and procedures designed to determine compliance with the REIT provisions of the Code.
(vv) Neither
the Company nor any of the Subsidiaries is, and, after giving effect to the
offering and sale of the Shares, will not be an “investment company”, or an
entity “controlled” by an “investment company”, as such term is defined in the
Investment Company Act of 1940, as amended (the “Investment Company
Act”).
(ww) There
has
been no failure on the part of the Company or any of the Company’s directors or
officers, in their capacities as such, to comply with any effective applicable provision of the Xxxxxxxx-Xxxxx
Act of 2002 and the
rules and regulations promulgated in connection therewith, including
Section 302 and 906 relating to certifications.
(xx) The
Company has established, maintained and evaluated, directly or through its
Manager, “disclosure controls and procedures” (as such term is defined in Rule
13a-15 and 15d-15 under the Exchange Act). Such disclosure controls
and procedures are designed to ensure that material information relating
to the
Company, including its Subsidiaries, is made known to the Company’s Chief
Executive Officer and its Chief Financial Officer by others within those
entities, and such disclosure controls and procedures are believed to be
effective to perform the functions for which they were
established. The Company’s auditors have been advised of:
(i) any significant deficiencies and material weaknesses known to
management in the design or operation of internal controls over financial
reporting that are reasonably likely to adversely affect the Company’s ability
to record, process, summarize, and report financial data; and (ii) any
fraud, whether or not material, known to management that involves management
or
other employees who have a role in the Company’s internal controls over
financial reporting. Since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no changes in internal
controls over financial reporting that have materially affected or are
reasonably likely to materially affect internal controls over financial
reporting, including any corrective actions with regard to significant
deficiencies and material weaknesses.
(yy) All
stock
option awards granted by the Company have been appropriately authorized by
the
board of trustees of the Company or a duly authorized committee thereof,
including approval of the exercise or purchase price or the methodology for
determining the exercise or purchase price and the substantive terms of the
stock options awards; all stock options granted to employees in the United
States reflect the fair market value of the Company’s capital stock as
determined under Section 409A of the Code, and the rules and regulations
promulgated thereunder, or any successor statute, rules and regulations thereto,
on the date the option was granted (within the meaning of United States Treasury
Regulation §1.421-1(c)); no stock options awards granted by the Company have
been retroactively granted, or the exercise or
14
purchase
price of any stock option award determined
retroactively; there is no action, suit, proceeding, formal inquiry or formal
investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against the Company in connection with any stock option awards
granted by the Company; there is no action, suit, proceeding, formal inquiry
or
formal investigation before or brought by any court or governmental agency
or
body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company in connection with any stock
option
awards granted by the Company.
(zz) The
information regarding the Manager in the Prospectus, each Preliminary Prospectus
and the Disclosure Package is true and correct in all material
respects.
(aaa) The
Manager has been duly organized and is validly existing as a corporation
in good
standing under the laws of the State of Delaware and has all requisite power
and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement, the Disclosure Package, each
Preliminary Prospectus and the Prospectus; and the Manager is duly qualified
as
a foreign corporation to transact business and is in good standing in each
other
jurisdiction in which such qualification is required, whether by reason of
the
ownership or leasing of property or the conduct of business, except where
the
failure so to qualify or to be in good standing as would not have a material
adverse effect on the assets, business, operations, earnings, properties,
prospects or condition (financial or otherwise) of the Manager, or its ability
to perform its obligations under the Manager Agreements and Instruments (the
“Manager Material Adverse Effect”).
(bbb) Except
as
would not constitute a Manager Material Adverse Effect, the Manager is not
in
violation of its Organizational Documents or in default in the performance
or
observance of any obligation, agreement, covenant or condition contained
in any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Manager is a party or
by
which it may be bound, or to which any of the property or assets of the Manager
is subject (collectively, the “Manager Agreements and Instruments”), or
in violation of any law, statute, rule, regulation, judgment, order or decree
except for such violations or except for such defaults that would not result
in
a material adverse effect on the assets, business, operations, earnings,
properties, prospects or condition, (financial or otherwise) of the Manager,
or
its ability to perform its obligations under the Advisory
Agreement. Except as would not constitute a Manager Material Adverse
Effect, the consummation of the transactions contemplated herein and in the
Disclosure Package, each Preliminary Prospectus and the Prospectus do not
and
will not, whether with or without the giving of notice or passage of time
or
both, conflict with or constitute a breach of, or default under, or result
in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Manager nor will such action result in any violation of
the
provisions of the Organizational Documents of the Manager or any applicable
law,
statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Manager or any of its subsidiaries or any of their respective assets,
properties or operations.
(ccc) There
is
no action, suit, proceeding, inquiry or investigation before or brought by
any
court or governmental agency or body, domestic or foreign, now pending, or,
to
15
the
knowledge of the Manager, threatened, against or
affecting the Manager that would reasonably likely result in a Manager Material
Adverse Effect.
(ddd) (A)
No
filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, (B) no authorization, approval, vote or other consent
of
any stockholder or creditor of the Manager, (C) no waiver or consent under
any Management Agreement and
Instrument and (D) no authorization, approval, vote or
other consent of any other person or entity, is necessary or required for
the
performance by the Manager of the transactions contemplated hereby, on the
terms
contemplated by the Disclosure Package and the Prospectus, except (1) such
as
have been already obtained and (2) such, the failure of which to have obtained,
would not reasonably be expected to have a Manager Material Adverse
Effect.
(eee) The
Manager has the financial resources available to it necessary for the
performance of its services and obligations as contemplated in the Registration
Statement, the Disclosure Package, each Preliminary Prospectus and the
Prospectus and the Management Agreements and Instruments.
(fff) The
Manager possesses such governmental licenses issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct
its
business as described in the Registration Statement, the Disclosure Package,
each Preliminary Prospectus and the Prospectus; the Manager is in compliance
with the terms and conditions of all such governmental licenses, except where
the failure so to comply would not, individually or in the aggregate, reasonably
likely result in a Manager Material Adverse Effect; all of the governmental
licenses are valid and in full force and effect, except when the invalidity
of
such governmental licenses or the failure of such governmental licenses to
be in
full force and effect would not reasonably likely result in a Manager Material
Adverse Effect; and the Manager has not received any notice of proceedings
relating to the revocation or modification of any such governmental licenses
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably likely result in a Manager
Material Adverse Effect.
(ggg) Except
(i) as disclosed in the Registration Statement, the Disclosure Package, each
Preliminary Prospectus and the Prospectus and (ii) with respect to Xxxxx
Xxxxxx,
the Manager has not been notified that any executive, key employee or
significant group of employees of the Manager plans to terminate employment
with
the Manager. Neither the Manager nor any executive or key employee of
the Manager is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by the
present or proposed business activities of the Company or the Manager as
described in the Registration Statement, the Disclosure Package, each
Preliminary Prospectus and the Prospectus, except where such termination
or
violation would not constitute a Manager Material Adverse Effect.
(hhh) The
Manager operates a system of internal controls sufficient to provide reasonable
assurance that (A) transactions effectuated by it on behalf of the Company
are
executed in accordance with its management’s general or specific authorization;
and (B) access to the Company’s assets is permitted only in accordance with its
management’s general or specific authorization.
16
(iii) The
Manager is not prohibited by the Investment Advisers Act of 1940, as amended
(the “Advisers Act”), or the rules and regulations thereunder, from
performing its obligations under the Management Agreements and Instruments
as
described in the Disclosure Package and the Prospectus.
4. Certain
Covenants. The Company hereby agrees with each Underwriter
that:
(a) The
Company will 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 Representative 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 use its
commercially reasonable efforts to cause such post-effective amendment to
become
effective as soon as possible and will advise the Representative promptly
and,
if requested by the Representative, will confirm such advice in writing,
when
such post-effective amendment has become effective.
(c) The
Company will prepare the Prospectus in a form reasonably approved by the
Representative and file such Prospectus with the Commission pursuant to Rule
424(b) under the Securities Act not later than 10:00 a.m. (New York City
time)
on the second business day following the execution and delivery of this
Agreement, and to furnish promptly (and with respect to the initial delivery
of
such Prospectus, not later than 10:00 a.m. (New York City time) on the second
business day following the execution and delivery of this Agreement) 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) as the Underwriters may reasonably request for the purposes
contemplated by the Securities Act Regulations, which Prospectus and any
amendments or supplements thereto
furnished to the Underwriters
will be identical to the version transmitted to the Commission for filing
via
XXXXX, except to the extent permitted by Regulation S-T.
(d) The
Company will advise the Representative promptly and (if requested by the
Representative) confirm such advice in writing when any post-effective amendment
to the Registration Statement becomes effective under the Securities Act
Regulations.
(e) The
Company will furnish a copy of each proposed Free Writing Prospectus to the
Representative and counsel for the Underwriters and obtain the consent of
the
Representative (which consent may not be unreasonably withheld) prior to
referring to, using or filing with the Commission any Free Writing Prospectus
pursuant to Rule 433(d) under the Securities Act, other than the Issuer Free
Writing Prospectuses, if any, identified in Schedule II
hereto.
17
(f) The
Company will comply with the requirements of Rules 164 and 433 of the Securities
Act Regulations applicable to any Issuer Free Writing Prospectus, including
timely filing with the Commission, legending and record keeping, as
applicable.
(g) The
Company shall advise the Representative promptly of (i) the receipt of any
comments from, or any request by, the Commission for amendments or supplements
to the Registration Statement, any Preliminary Prospectus, the Prospectus
or any
Issuer Free Writing Prospectus, or for additional information with respect
thereto, or (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus, the Prospectus
or any Issuer Free Writing Prospectus, or of the suspension of the qualification
of the Shares for offering or sale in any jurisdiction, or of the initiation
or
threatening, in writing or otherwise, 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
Representative promptly of any proposal to amend or supplement the Registration
Statement, the Preliminary Prospectus, the Prospectus or any Issuer Free
Writing
Prospectus and to file no such amendment or supplement to which the
Representative shall reasonably object in writing after notice
thereof.
(h) Unless
available on XXXXX, the Company will furnish to the Underwriters at the request
of the Representative, for a period of two years from the date of this Agreement
(i) as soon as reasonably practicable, copies of all annual, quarterly and
current reports or other communications supplied to holders of Preferred
Shares,
(ii) as soon as reasonably practicable after the filing thereof, copies of
all reports filed by the Company with the Commission, the NASD or any securities
exchange and (iii) such other information as the Representative may
reasonably request regarding the Company and the Subsidiaries; provided,
however, any information that is deemed by the Company to be confidential
will
be subject to the execution and delivery of non-disclosure agreements in
favor
of the Company in its reasonable discretion.
(i) The
Company will advise the Representative promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to
the
Shares is required to be delivered (whether physically or in compliance with
Rule 172 under the Securities Act Regulations or similar
rule) under the Securities Act Regulations which, in the judgment of the
Company
or in the reasonable opinion of the Representative or counsel for the
Underwriters, (i) would require the making of any change in the Prospectus
or the Disclosure Package then being used so that the Prospectus or the
Disclosure Package would not include an untrue statement of a material fact
or
omit to state a material fact required to be stated therein or necessary
to make
the statements therein, in the light of the circumstances under which they
were
made, not misleading, (ii) as a result of which any Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in
the
Registration Statement relating to the Shares or (iii) if it is necessary
at any time to amend or supplement the Prospectus or the Disclosure Package
to
comply with the Securities Act and the Securities Act Regulations and, during
such time, to prepare and furnish, at the Company’s expense, to the Underwriters
promptly such amendments or supplements to such Prospectus or the Disclosure
Package so that the Prospectus or the Disclosure Package as so amended or
supplemented will not, in the light of the circumstances when it is so delivered
(whether physically or in compliance with Rule 172
18
under
the Securities Act Regulations or similar
rule), be misleading or, in the case of any Issuer Free Writing Prospectus,
conflict with the information contained in the Registration Statement, or
so
that the Prospectus or the Disclosure Package will comply with the law and
to
furnish to the Underwriters a copy of such proposed amendment or supplement
before filing any such amendment or supplement with the
Commission.
(j) Unless
available on XXXXX, the Company will furnish promptly to the Representative,
upon request, a signed copy of the Registration Statement, as initially filed
with the Commission, and all amendments or supplements thereto (including
all
exhibits filed therewith or incorporated by reference therein) and such number
of conformed copies of the foregoing as the Representative may reasonably
request.
(k) The
Company will furnish to the Representative, not less than two business days
before filing with the Commission subsequent to the effective date of the
Prospectus and during the period referred to in paragraph (i) above, a copy
of any document proposed to be filed with the Commission pursuant to
Section 13, 14, or 15(d) of the Exchange Act.
(l) The
Company will apply the net proceeds of the sale of the Shares in accordance
with
its statements under the caption “Use of Proceeds” in each Preliminary
Prospectus and the Prospectus.
(m) The
Company will 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 12 months beginning after the effective date of the
Registration Statement.
(n) The
Company will use its best efforts to effect and maintain the quotation of
the
Shares on the AMEX and to file with such exchange all documents and notices
required by such exchange of companies that have securities that are traded
thereon.
(o) The
Company will engage and maintain, at its expense, a
registrar and transfer agent for the Shares.
(p) The
Company will use its best efforts to meet the requirements for qualification
as
a real estate investment trust under Sections 856 through 860 of the Code,
so
long as the Board of Trustees elects that the Company qualify as a
REIT. The Board of Trustees has no present intention to change the
Company’s election to qualify as a REIT.
(q) The
Company will conduct its affairs in such a manner so as to reasonably ensure
that the Company will not be an “investment company” or an entity “controlled”
by an investment company within the meaning of the Investment Company
Act.
(r) The
Company will refrain, during a period of 90 days from the date of this
Agreement, without the prior written consent of the Representative, from
(i) offering, pledging, selling, contracting to sell, selling any option or
contract to purchase, purchasing any option or
19
contract
to sell, granting any option for the sale
of, or otherwise disposing of or transferring, directly or indirectly, any
Preferred Shares or any securities convertible into or exercisable or
exchangeable for Preferred 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
Preferred Shares, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Preferred Shares or
such other securities, in cash or otherwise. The foregoing sentence
shall not apply to the Shares to be sold hereunder.
(s) The
Company will not itself, and will use its best efforts to cause its officers,
directors, manager and affiliates not to, (i) take, directly or indirectly
prior to termination of the underwriting syndicate contemplated by this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result in, or which might
in the
future reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company, to facilitate the
sale
or resale of any of the Shares, (ii) sell, bid for, purchase or pay anyone
any compensation for soliciting purchases of the Shares or (iii) pay or
agree to pay to any person any compensation for soliciting any order to purchase
any other securities of the Company.
(t) If,
at
any time during the 60-day period after the date of this Agreement, any rumor,
publication or event relating to or affecting the Company shall occur as
a
result of which in the reasonable opinion of the Representative the market
price
of the Preferred Shares, or common beneficial interest into which the Preferred
Shares are Convertible, 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
Representative advising the Company to the effect set forth above, to forthwith
consult with the Representative concerning the advisability and substance
of a
press release or other public statement, responding to or commenting on such
rumor, publication or event and, subject to any reasonable objection by the
Company, to prepare and disseminate (in further consultation with the
Representative) a press release or other public statement, responding to
or
commenting on such rumor, publication or event.
(u) The
Company will actively take reasonable steps to ensure that it will be in
material compliance with the applicable provisions of the Xxxxxxxx-Xxxxx
Act and
rules and regulations promulgated thereunder upon the effectiveness of such
provisions.
(a) The
Company agrees to pay all costs and expenses incident to the performance
of its
obligations under this Agreement, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, including expenses,
fees and taxes in connection with (i) the preparation and filing of the
Registration Statement, each Preliminary Prospectus, the Prospectus, any
Issuer
Free Writing Prospectus and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and
to
dealers (including costs of mailing and shipment), (ii) the preparation,
issuance and delivery of the certificates for the Shares to the Underwriters,
including any stock or other transfer taxes or duties payable upon the sale
of
the Shares to the Underwriters,
20
(iii) filing
fees in connection with the
qualification of the Shares for offering and sale under state laws that the
Company and the Representative have mutually agreed are appropriate and the
determination of their eligibility for investment under state law as aforesaid
(including the legal fees and filing fees and other disbursements of counsel
for
the Underwriters), (iv) filing fees in connection with the review of the
public offering of the Shares by the NASD, (v) the fees and expenses of any
transfer agent or registrar for the Shares and miscellaneous expenses referred
to in the Registration Statement, (vii) the fees and expenses incurred in
connection with the inclusion of the Shares for quotation on the AMEX,
(vii) making road show presentations with respect to the offering of the
Shares, including travel expense related thereto; provided that the Company
has
approved such expenses, (viii) the reasonable and documented legal fees and
other disbursements of counsel for the Underwriters, subject to the Cap (defined
below), and (ix) the performance of the Company’s other obligations
hereunder. Upon the request of the Representative, the Company will
provide funds in advance for filing fees.
Notwithstanding
the foregoing, the Company will not be required to pay any legal fees or
other
disbursements of counsel for the Underwriters that exceed an aggregate amount
of
$100,000 (the “Cap”). Furthermore, notwithstanding the
foregoing, in the event the Representative terminates this Agreement for
any
reason other than the willful default by the Company of the material terms
of
this Agreement, the Company will not be required to pay any legal fees and
other
disbursements of counsel for the Underwriters.
(b) The
Company agrees to reimburse the Representative for its reasonable out-of-pocket
expenses in connection with the performance of its activities under this
Agreement, including, but not limited to, costs such as printing, facsimile,
courier service, direct computer expenses, accommodations and travel, but
excluding the fees and expenses of the Underwriters’ outside legal counsel and
any other advisors, accountants, appraisers, etc. (other than the fees and
expenses of counsel which shall be reimbursed by the Company pursuant to
the
provisions of subsection (a) above).
6. Conditions
of the Underwriters’ Obligations. The obligations of the
Underwriters hereunder to purchase Shares at the Closing Time or on each
Option
Closing Time, as applicable, 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 Option Closing
Time, as applicable, (except for such representations that are qualified
therein
as to materiality or speak only as of a specified date, which shall be true
and
correct in all respects at such times), (ii) the accuracy of the certificates
of
any officer of the Company delivered pursuant to the provisions hereof, (iii)
the performance by the Company of its respective obligations hereunder in
all
material respects and (iv) to the satisfaction of the following further
conditions at the Closing Time or on each Option Closing Time, as
applicable:
(a) The
Representative shall have received the opinions, dated as of Closing Time,
from
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP (which may rely on the opinion of
Xxxxxx & Xxxxxxxxxx LLP to the extent any opinion thereunder pertains to
Massachusetts law), counsel for the Company and the Manager, in the form
and
substance reasonably satisfactory to counsel for the Underwriters, to the
effect
set forth in Exhibit A-1,Exhibit A-2 and Exhibit A-3
hereto. The Representative shall have further
received the favorable opinion, dated as of Closing Time, from Xxxxxx &
Xxxxxxxxxx LLP, counsel for the Company, in the form and substance reasonably
21
satisfactory to counsel for the Underwriters, to the
effect
set forth in Exhibit A-4 hereto. The Representative shall have
further received the reliance letter and favorable opinion, dated as of
Closing
Time, from Xxxxxx and Calder, counsel for the Company, in the form and
substance
reasonably satisfactory to counsel for the Underwriters, to the effect
set forth
in Exhibit A-5 and Exhibit A-6 hereto. Such counsel may
also state that, insofar as such opinion involves factual matters, they
have
relied, to the extent they deem proper, upon certificates of officers of
the
Company and certificates of public officials.
(b) The
Representative shall have received signed copies of opinions addressed to
the
Company from Xxxxxx & Xxxxxxxxxx LLP substantially in the form of Exhibit
5.1 to the Registration Statement.
(c) On
the
date of this Agreement and at the Closing Time and each Option Closing Time,
the
Representative shall have received from Deloitte & Touche LLP letters dated,
respectively, as of the date of this Agreement, the Closing Time and each
Option
Closing Time, as the case may be, addressed to the Representative, in form
and
substance satisfactory to the Representative, relating to the financial
statements, including any pro forma financial statements, of the Company
and the
Subsidiaries included or incorporated by reference in the Registration
Statement, any Preliminary Prospectus, the Prospectus and the Disclosure
Package, and such other matters customarily covered by comfort letters issued
in
connection with registered public offerings; provided, that the letters
delivered at the Closing Time and each Option Closing Time (if applicable)
shall
use a “cut-off” date no more than three business days prior to such Closing Time
or such Option Closing Time, as the case may be.
(d) The
Representative shall have received at the Closing Time and on each Option
Closing Time the favorable opinion of Hunton & Xxxxxxxx LLP, dated the
Closing Time or such Option Closing Time, addressed to the Representative
and in
form and substance satisfactory to the Representative. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
the
State of Massachusetts, upon the opinions of Xxxxxx & Xxxxxxxxxx LLP,
counsel to the Company. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they
deem
proper, upon certificates of officers of the Company and certificates of
public
officials.
(e) No
amendment or supplement to the Registration Statement, any Preliminary
Prospectus, the Prospectus or any document in the Disclosure Package shall
have
been filed to which the Representative shall have objected in
writing.
(f) Prior
to
the Closing Time and each Option Closing Time (i) no stop order suspending
the effectiveness of the Registration Statement or any order preventing or
suspending the use of any Preliminary Prospectus, the Prospectus or any document
in the Disclosure Package shall have been issued, and no proceedings for
such
purpose shall have been initiated or threatened, by the Commission, and no
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for
any of
such purposes, shall have occurred and, in any such instance, not been waived
by
the Commission; and (ii) neither any Preliminary Prospectus, the Prospectus
nor the Disclosure Package shall contain an untrue statement of material
fact or
omit to state a material fact required to be stated
22
therein
or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(g) All
filings with the Commission required by Rule 424 under the Securities Act
to
have been filed by the Closing Time shall have been made within the applicable
time period prescribed for such filing by such rule.
(h) At
Closing Time, there shall not have been, since the date hereof or since the
respective dates as of which information is given in the Disclosure Package,
any
Preliminary Prospectus, or the Prospectus, any Material Adverse
Change.
(i) The
Company shall have applied to have the Shares approved for inclusion in the
AMEX.
(j) The
NASD
shall not have raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements between the date
of
this Agreement and the Closing Time or the Option Closing Time, as
applicable.
(k) The
Company will, at the Closing Time and on each Option Closing Time, deliver
to
the Underwriters a certificate of its Chief Executive Officer and Chief
Financial Officer, to the effect that (i) there has been no Material Adverse
Change since the date of this Agreement, (ii) the representations and
warranties in Section 3 hereof are true and correct in all material respects
(except for such representation that are qualified therein as to materiality,
which shall be true and correct in all respects at such times) with the same
force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing
Time
and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to their knowledge, contemplated by the
Commission.
(l) 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, any Preliminary Prospectus, the Prospectus and the
Disclosure Package, and the performance by the Company of its covenants
contained herein and therein, as of the Closing Time or any Option Closing
Time
as the Representative may reasonably request.
(m) The
Company shall have performed its obligations under this Agreement as are
to be
performed by the terms hereof at or before the Closing Time or the relevant
Option Closing Time.
7. Termination. The
obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representative, at any time
prior
to the Closing Time or any Option Closing Time, (i) if any of the
conditions specified in Section 7 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, or (ii) if there has been since
the respective dates as of which information is given in the Registration
Statement, Preliminary Prospectus, the Prospectus or the Disclosure Package,
in
the reasonable opinion of the Representative any Material Adverse Change
or
(iii) if there has occurred an outbreak or escalation of hostilities or
other national or international calamity or crisis or change in
23
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
opinion of the Representative, impracticable to market 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 AMEX, or if
trading generally on the New York Stock Exchange (“NYSE”), AMEX or on the
Nasdaq Stock Market has been suspended (including automatic halt in trading
pursuant to market-decline triggers other than those in which solely program
trading is temporarily halted), or limitations on prices for trading (other
than
limitations on hours or numbers of days of trading) have been fixed, or maximum
ranges for prices for securities have been required, by the NYSE, AMEX or
the
NASD or the Nasdaq Stock Market or by order of the Commission or any other
governmental authority, or (v) 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 Representative materially adversely affects or will materially adversely
affect the business or operations of the Company, which in the case of a
prospective effect cannot reasonably be expected to be remedied by the Company
prior to the occurrence of such effect or (vi) 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 Representative has
a
material adverse effect on the securities markets in the United
States.
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 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
6 and
10 hereof) and the Underwriters shall be under no obligation or liability
to the
Company under this Agreement (except to the extent provided in Section 10
hereof) or to one another hereunder.
8. Increase
in Underwriters’ Commitments. If any Underwriter shall default at
the Closing Time or on any Option Closing Time in its obligation to take
up and
pay for the Shares to be purchased by it under this Agreement on such date,
the
Representative 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 satisfactory to the Company, 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 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
Representative may terminate this Agreement by notice to the Company, without
liability to any non-defaulting Underwriter except as set forth in
Section 10 (provided that if such default occurs with respect to the
Initial
24
Shares after the Closing Time, this Agreement will
not
terminate as to the Initial Shares or any Option Shares purchased prior
to such
termination).
Without
relieving any defaulting
Underwriter from its obligations hereunder, and without waiving the Company’s
right to seek damages from any such defaulting Underwriter, 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
Representative with the approval of the Company or selected by the Company
with
the approval of the Representative).
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 Option Closing Time for a period
not exceeding seven 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 9 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 the Securities
Act,
and the respective directors, officers, employees and agents of each
Underwriter, 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 (i) any breach of any
representation, warranty or covenant of the Company contained herein,
(ii) any failure on the part of the Company to comply with any applicable
law, rule or regulation relating to the offering of securities being made
pursuant to the Prospectus, (iii) 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), any Issuer Free Writing Prospectus that the Company has filed or
was
required to file with the Commission, or the Prospectus (the term Prospectus
for
the purpose of this Section 10 being deemed to include the Base Prospectus,
any Preliminary Prospectus, the Prospectus and the Prospectus as amended
or
supplemented by the Company), (iv) any omission or alleged omission to
state a material fact required to be stated in such Registration Statement
or
necessary to make the statements made therein not misleading or (v) any
omission or alleged omission from any Issuer Free Writing Prospectus or
Prospectus necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except in the case
of
(ii), (iii), (iv) and (v) above only 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 the Underwriter
Information.
25
(b) If
any
action is brought against an Underwriter or controlling person in respect
of
which indemnity may be sought against the Company pursuant to subsection
(a) above, 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 of its choosing
and payment of expenses, provided, however, that any failure or delay to
so
notify the Company will not relieve the Company of any obligation hereunder,
except to the extent, and only to the extent, that its ability to defend
is
actually impaired or otherwise prejudiced by such failure or delay, and after
notice from the Company to such indemnified party of its election so to assume
the defense thereof and the continued good faith assumption of such defense,
the
Company will not be liable to such indemnified party under this Section for
any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. 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 after notice of such action
by
such indemnified party or such indemnified party or parties shall have
reasonably concluded (based on the advice of counsel) that there exists an
actual and material conflict of interest between the interests of the Company
and such indemnified party in connection with such action (in which case
the
Company shall not have the right to direct the defense of such action on
behalf
of the indemnified party or parties), in any of which events such fees and
expenses shall be borne by the Company and paid as incurred (it being
understood, however, that the Company shall not be liable for the expenses
of
more than one separate firm of attorneys for the Underwriters or controlling
persons in any one action or series of related actions in the same jurisdiction
(other than local counsel in any such jurisdiction) representing the indemnified
parties who are parties to such action). Anything in this paragraph
to the contrary notwithstanding, the Company shall not be liable for any
settlement of any such claim or action effected without its prior written
consent, not to be unreasonably withheld.
(c) Each
Underwriter agrees, severally and not jointly, to indemnify, defend and hold
harmless the Company, the Manager, the Company’s and the Manager’s trustees,
directors and officers, and any person who controls the Company or the Manager
within the meaning of the Securities Act, from and against any loss, expense,
liability, damage or claim (including the reasonable cost of investigation)
which, jointly or severally, the Company, the Manager or any such person
may
incur under the Securities Act, the Exchange Act or otherwise, but only insofar
as such loss, expense, liability, damage or claim arises out of or is based
upon
any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing by such
Underwriter through the Representative 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), any Issuer Free Writing
Prospectus 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 in such Registration Statement, any Issuer Free Writing
Prospectus or the Prospectus or necessary to make such information (with
respect
to any Issuer Free Writing Prospectus or the Prospectus, in the light of
the
circumstances under which made) not misleading. The statements set
forth in the (i) first, second, fifth, sixth, eighth and ninth
26
(e) If
the
indemnification provided for in this Section 10 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a),
(b),
(c) and (d) of this Section 10 in respect of any losses,
expenses, liabilities, damages or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party
as a
result of such losses, expenses, liabilities, damages or claims (i) in such
proportion as is appropriate to reflect the relative benefits received by
the
Company and the Underwriters from the offering of the Shares or (ii) if
(but only if) the allocation provided by clause (i) above is not permitted
by applicable
27
law,
in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and of the Underwriters in connection with
the
statements or omissions 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 and the
Underwriters 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 total underwriting
discounts and commissions received by the Underwriters. The relative
fault of the Company and of the Underwriters shall be determined
by reference to, among other things,
whether the untrue statement or alleged untrue statement of a material fact
or
omission or alleged omission relates to information supplied by the Company
or
by the Underwriters and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to in the first sentence
of
this subsection (e) 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 which is the subject of this subsection
(e).
(f) Notwithstanding
the provisions of this Section 10, no Underwriter shall be required to
contribute any amount in excess of 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 10 are several in
proportion to their respective underwriting commitments and not
joint.
10. Survival. The
indemnity and contribution agreements contained in Section 10 and the
covenants, warranties and representations of the Company contained in Sections
3, 4 and 5 of this Agreement shall remain in full force and effect regardless
of
any investigation made by or on behalf of any Underwriter, or any person
who
controls any Underwriter within the meaning of the Securities Act, or by
or on
behalf of the Company or the Manager, their respective trustees, directors
and
officers, or any person who controls the Company or the Manager within the
meaning of the Securities 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 or the Manager’s officers, trustees and directors, in
connection with the sale and delivery of the Shares, or in connection with
the
Registration Statement, any Preliminary Prospectus, the Disclosure Package
or
the Prospectus.
11. No
Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (i) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the offering price of the Securities
and any related discounts and commissions, is an arm’s-length commercial
transaction between the Company and the several Underwriters, (ii) in connection
with the offering contemplated hereby and the process leading to such
transaction each Underwriter is and has been acting solely as a principal
and is
not the agent or fiduciary of the Company or the Manager, or their respective
shareholders, creditors, employees or any other party, (iii) no Underwriter
has
assumed or will assume an advisory or fiduciary responsibility in favor of
the
Company or the Manager with respect to the offering contemplated
28
12. Integration. This
Agreement supersedes all prior agreements and understandings (whether written
or
oral) between the Company and the Underwriters, or any of them, with respect
to
the subject matter hereof.
13. 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 000 Xxxx 00xx Xxxxxx,
00xx Xxxxx,
Xxx Xxxx,
Xxx Xxxx 00000, Attention: Syndicate Department, with a copy to Hunton &
Xxxxxxxx LLP, Riverfront Plaza, East Tower, 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000-0000, Attention: Xxxxxx X. XxXxx; if to the Company, shall be
sufficient in all respects if delivered to American Mortgage Acceptance Company,
000 Xxxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx,
Xxx Xxxx, 00000, Attention: Xxxxxxx X. Xxxxx, with a copy to Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxx Xxxxxxxxxxx.
14. Governing
Law; Headings. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES. The section headings in this Agreement
have been inserted as a matter of convenience of reference and are not a
part of
this Agreement.
15. TIME. TIME
SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET
FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
16. Parties
at Interest. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Company, the Manager and
the
controlling persons, directors and officers referred to in
Sections 10 and 11 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.
17. Counterparts
and Facsimile Signatures. This Agreement may be signed by the
parties in counterparts which together shall constitute one and the same
agreement among the parties. A facsimile signature shall constitute
an original signature for all purposes.
29
18. Successors. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the officers, trustees and directors
and
controlling persons referred to in Sections 10 and 11.
19. Amendments. This
Agreement may not be modified or amended, except by an instrument in writing
executed and delivered on behalf of each of the parties hereto.
[Signatures
on following page]
30
Very
truly yours,
By:
/s/ Xxxxxx X.
Xxxx
Name:
Xxxxxx Xxxx
Title:
Chief Financial Officer
Accepted
and agreed to as of the date first above written:
STERNE,
AGEE & XXXXX, INC.
By:
/s/ Xxxx
Xxxx
Name:
Xxxx Xxxx
Title:
Managing Director
For
itself and as Representative of the
other
Underwriters
named on Schedule I
hereto.
31
|
Underwriter
|
Number of Initial
Shares to be Purchased |
Maximum Option Shares
to
be Purchased
|
|
Sterne, Agee & Xxxxx, Inc.
|
510,000
|
45,000
|
|
Boenning & Scattergood
|
170,000
|
15,000
|
|
|
||
|
Total
|
680,000
|
60,000
|
Issuer
Free Writing Prospectus
1. Issuer
Free Writing Prospectus, filed with the SEC on July 10, 2007; and
2. Issuer
Free Writing Prospectus, filed with the SEC on July 24, 2007.
Schedule
III
Information
Conveyed at the Initial Sale Time
The
cumulative cash dividend on the Series A Cumulative Convertible Preferred
Shares
being offered is 7.25%.
The
Company will sell 680,000 7.25% Series A Cumulative Convertible Preferred
Shares. This share amount has changed from the figures disclosed in
the preliminary prospectus.
The
underwriting discount is $1.25 per share.
The
Company will receive net proceeds, after deducting the underwriting discount
and
estimated offering expenses, of $16.0 million upon settlement of this offering,
or $17.4 million if the over-allotment option is exercised in full.
The
conversion rate of the Preferred Shares will initially be 2.2701 common shares
per Preferred Share and is equivalent to an initial conversion price of $11.0125
per common share, which represents a 25% premium over $8.81 per share, the
average closing price of the Company’s common shares for the five trading days
prior to July 25, 2007.
As
of
July 24, 2007, the amount outstanding under the Company’s credit line with
Centerline Capital Group was $45.7 million and the interest rate was
8.32%.
Under
the
heading "Capitalization", as adjusted for the July 2007 offering, (i) the
total
cash and cash equivalents is $30.5 million, (ii) the additional paid-in capital
is $128.0 million and (iii) total stockholders’ equity is $102.7
million.
The
last
reported sale price of the Company’s common shares was $8.46 per share on July
24, 2007.
The
trade
date is July 24, 2007.
The
closing date is July 27, 2007.
Schedule
IV
Subsidiaries
AMAC
Capital Financing I, a Delaware statutory trust
AMAC
CDO
Funding I, a Cayman Islands exempt company
AMAC
CDO
Equity, LLC, a Delaware limited company
AMAC
CDO
I Advancing, LLC, a Delaware limited liability company
AMAC
CRE
Funding II, Ltd., a Cayman Islands exempt company
Exhibit
A-1
(i)
The Manager is validly existing as a corporation in good standing under the
laws
of the State of Delaware.
(ii) The
Manager has the corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Disclosure Package
and the Prospectus.
(iii) Based
solely on a review of the Foreign Good Standing Certificates, the Company
is in
good standing as a foreign business trust in the jurisdictions set forth
opposite its name in Schedule I attached hereto.
(iv) Based
solely on a review of the Foreign Good Standing Certificates, we confirm
that
the Manager is in good standing as a foreign corporation in the State of
New
York.
(v) Each
Subsidiary formed under the laws of Delaware is validly existing as a limited
liability company or trust in good standing under the laws of the State of
Delaware and has the limited liability company or trust power and authority
to
own, lease and operate its properties and to conduct its business as described
in the Disclosure Package and the Prospectus and is duly qualified as a foreign
limited liability company or trust to transact business and is in good standing
in the jurisdictions set forth opposite its name in Schedule II attached
hereto.
(vi) The
Registration Statement, based on the SEC Confirmation, has been declared
effective under the 1933 Act; any required filing of each prospectus relating
to
the Preferred Shares (including the Prospectus) pursuant to Rule 424(b) has
been
made in the manner and within the time period required by Rule 424(b) (without
reference to Rule 424(b)(8)); any required filing of each Issuer Free Writing
Prospectus pursuant to Rule 433 has been made in the manner and within the
time
period required by Rule 433(d); and, to our knowledge, based on the SEC
Confirmation, no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose
have been instituted or are pending or threatened by the
Commission.
(vii) The
Registration Statement, including without limitation the Rule 430B Information,
the Disclosure Package and the Prospectus, excluding the documents incorporated
by reference therein, and each amendment or supplement to the Registration
Statement, the Disclosure Package and the Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (including without limitation each deemed effective date with respect
to
the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations),
(other than the financial statements, notes and supporting schedules included
therein or omitted therefrom, as to which we express no opinion), appear
on
their face to comply as to form in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations.
(viii) The
documents incorporated by reference in the Disclosure Package and the Prospectus
(other than the financial statements, notes and supporting schedules and
other
information of a financial, statistical or accounting nature included or
incorporated by reference therein, included therein or omitted therefrom,
as to
which we express no opinion), when they became effective or were filed with
the
Commission, as the case may be, appear on their face to comply as to form
in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder.
(ix) Based
solely upon a certificate of the Company’s stock transfer agent, we confirm that
as of July 24, 2007 there were 8,402,049 common shares of beneficial interests
and no preferred shares of beneficial interests issued and
outstanding.
(x)
The form of certificate used to evidence the Preferred Shares complies in
all
material respects with the requirements of the American Stock
Exchange.
(xi) The
issuance of the Preferred Shares is not subject to preemptive or similar
rights
arising under any agreement filed as an exhibit and incorporated by reference
into the Registration Statement.
(xii) To
our knowledge, there is not pending or overtly threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any Subsidiary
is
a party, or to which the property of the Company or any Subsidiary is subject,
before or brought by any federal or New York court or governmental agency
or
body which is required to be described in the Prospectus and Disclosure Package
but is not so described.
(xiii) The
execution and delivery of the Purchase Agreement and the consummation of
the
transactions contemplated in the Purchase Agreement and in the Registration
Statement (including the issuance and sale of the Preferred
Shares and the use of the proceeds from the sale of the Preferred
Shares as described in the Disclosure Package and the Prospectus under the
caption “Use Of Proceeds”) do not and will not, whether with or without the
giving of notice or lapse of time or both, result in any violation of the
provisions of the Organizational Documents of any Subsidiary.
(xiv) The
information in the Disclosure Package and the Prospectus under “The
Offering—Ranking”, “The Offering—Dividends”, “The Offering—Liquidation
Preference”, “The Offering—Voting Rights”, “The
Offering—Maturity”, “The Offering—Redemption”, “The
Offering—Conversion Rights”, “The Offering—Company Conversion
Option”, “The Offering—Payments of Dividends Upon
Conversion”, “The Offering—Conversion Rate
Adjustments”, “The Offering—Conversion After a Public Change of
Control”, “The Offering—Purchase of Preferred Shares Upon a Fundamental Change”,
“Our Company—Limitations on Indebtedness”, “Description of Preferred Shares”
(except as to “—Restrictions on Ownership”) “Description of Our Shares,” and in
the Registration Statement under Item 15, insofar as it purports to summarize
certain provisions of the Company’s Organizational Documents, provides an
accurate description of such provisions in all material
respects.
(xv) The
information in the Issuer Free Writing Prospectus dated July 24, 2007 under
“The
Offering—Restrictions on Ownership and Transfer” and “Description of Preferred
Shares—Restrictions on Ownership”, insofar as it purports to summarize certain
provisions of the Company’s Organizational Documents, provides an accurate
description of such provisions in all material respects.
(xvi) The
Preferred Shares conform in all material respects to the description thereof
contained in each of the Prospectus and Disclosure Package under the caption
“Description of Preferred Shares.” The authorized common shares of
beneficial interests of the Company conform in all material respects to the
description thereof in the Base Prospectus under the caption “Description of Our
Shares”.
(xvii) All
descriptions in the Registration Statement, the Disclosure Package and the
Prospectus of contracts and other documents and instruments to which the
Company
or its subsidiaries are a party are accurate in all material respects; to
our
knowledge, there are no contracts, documents or instruments, including, but
not
limited to, franchises, indentures, mortgages, loan or credit agreements,
notes
and leases required to be described or referred to in the
Registration Statement, the Disclosure Package or the Prospectus or to be
filed
as exhibits to the Registration Statement or to the documents incorporated
by
reference in the Registration Statement other than those described or referred
to therein or filed or incorporated by reference as exhibits
thereto.
(xviii) No
filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any federal or New York court or governmental
authority or agency, (other than (a) under the 1933 Act and the 1933 Act
Regulations, which have been obtained, (b) as may be required under the
securities or blue sky laws of the various states or (c) as required by the
NASD
or AMEX, as to which we express no opinion) is required in connection with
the
execution and delivery of the Purchase Agreement or for the offering, issuance,
sale or delivery of the Preferred Shares.
(xix) The
execution, delivery and performance of the Purchase Agreement and the
consummation of the transactions contemplated in the Purchase Agreement and
in
the Registration Statement (including the issuance and sale of the Preferred
Shares and the use of the proceeds from the sale of the Preferred
Shares as described in the Disclosure Package and the Prospectus under the
caption “Use Of Proceeds”) and compliance by the Company with its obligations
under the Purchase Agreement do not and will not, whether with or without
the
giving of notice or lapse of time or both, conflict with or constitute a
breach
of, or default under or result in the creation or imposition of any lien,
charge
or encumbrance upon any property or assets of the Company or any Subsidiary
pursuant to any agreement filed as an exhibit and incorporated by reference
into
the Registration Statement or any Credit Facility, to which the Company or
any
Subsidiary is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any Subsidiary is subject
(except for such conflicts, breaches, defaults or liens, charges or encumbrances
that would not have a Material Adverse Effect), nor will such action result
in
any violation of any applicable federal or New York law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government
instrumentality or court, having jurisdiction over the Company
or any Subsidiary or any of their respective properties, assets or
operations.
(xx) The
Company is not, and upon the issuance and sale of the Preferred Shares as
herein
contemplated and the application of the net proceeds therefrom as described
in
the Disclosure Package and the Prospectus will not be an “investment company” as
defined under the 1940 Act.
Schedule
I
New
York
South
Dakota
Texas
Virginia
Schedule
II
AMAC
Credit Facility, LLC - NY
AMAC
CDO
I Equity, LLC – NY
AMAC
CDO
I Advancing, LLC – NY
Exhibit
A-2
Nothing
has come to our attention that
would lead us to believe that (i) the Registration Statement (except for
financial statements, notes and schedules and other financial and accounting
data included or incorporated by reference therein or omitted therefrom,
as to
which we make no statement), at the time such Registration Statement became
effective, contained an untrue statement of a material fact or omitted to
state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; or that the Registration Statement, including
the Rule 430B Information (except for financial statements, notes and schedules
and other financial and accounting data included or incorporated by reference
therein or omitted therefrom, as to which we make no statement), at each
deemed
effective date with respect to the Underwriters pursuant to Rule 430B(f)(2)
of
the 1933 Act Regulations, contained an untrue statement of a material fact
or
omitted to state a material fact required to be stated therein or necessary
to
make the statements therein not misleading; (ii) as of the Applicable
Time, the Disclosure Package (except for financial statements and schedules
and
other financial and accounting data included or incorporated by reference
therein or omitted therefrom, as to which we make no statement) contained
an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (iii) that the
Prospectus (except for financial statements and schedules and other financial
data included or incorporated by reference therein or omitted therefrom,
as to
which we need make no statement), at the time the Prospectus was issued or
at
the Closing Time, included or includes an untrue statement of a material
fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Exhibit
A-3
(i)
commencing with AMAC’s taxable year ended December 31, 1991, AMAC has been and
is organized in conformity with the requirements for qualification and taxation
as a real estate investment trust (“REIT”) under the Code, (ii) AMAC’s planned
method of operation will enable it to meet the requirements for qualification
and taxation as a REIT under the Code for the current year and future years,
and
(iii) insofar as statements in the Prospectus, Prospectus Summary under
the captions “Federal Income Tax Considerations” constitute a summary of U.S.
federal tax laws, such statements, in all material respects, are accurate
and
fairly summarize the U.S. federal tax laws referred to
therein. AMAC’s qualification and taxation as a REIT depends upon its
ability to meet, through actual annual operating results, certain requirements,
including requirements relating to its income, assets and distribution levels
and diversity of stock ownership, and various other qualification tests imposed
under the Code, the results of which will not be reviewed by
us. Accordingly, no assurance can be given that the actual results of
AMAC’s operation for any one taxable year will satisfy such
requirements.
Exhibit
A-4
(i) The
Company has filed the necessary certificates required to be filed under Chapter
182 of the General Laws of the Commonwealth of Massachusetts and is duly
authorized to exercise in the Commonwealth of Massachusetts all of the powers
recited in the Declaration of Trust and to transact business in the Commonwealth
of Massachusetts.
(ii) The
Company has the trust power and authority to own, lease and operate its
properties and to conduct its business as described in the Disclosure Package
and the Prospectus and to enter into and perform its obligations under the
Purchase Agreement.
(iii) The
execution, delivery and performance of the Purchase Agreement have been duly
authorized by all necessary trust action on the part of the
Company. The Purchase Agreement has been duly executed and delivered
by the Company.
(iv) The
form of certificate used to evidence the Preferred Shares complies in all
material respects with all applicable statutory requirements, with any
applicable requirements of the Organizational Documents and with the resolutions
establishing the terms and designation of the Shares (the “Resolutions”) of the
Company.
(v) The
Preferred Shares have been duly authorized, and when the Preferred Shares
have
been issued and duly delivered against payment therefor as contemplated by
the
Purchase Agreement, the Preferred Shares will be validly issued, fully paid
and
nonassessable.
(vi) The
issuance of the Preferred Shares is not subject to preemptive or similar
rights
arising under the Organizational Documents or the Resolutions.
(vii) The
information under the following sections: “The Offering—Ranking”, “The
Offering—Dividends”, “The Offering—Liquidation Preference”, “The Offering—Voting
Rights”, “The Offering—Maturity”, “The
Offering—Redemption”, “The Offering—Conversion Rights”, “The Offering—Company
Conversion Option”, “The Offering—Payments of Dividends Upon Conversion”, “The
Offering—Conversion Rate Adjustments”, “The Offering—Conversion After a Public
Change of Control”, “The Offering—Purchase of Preferred Shares Upon a
Fundamental Change”, “Our Company—Limitations on Indebtedness”, “Description of
Preferred Shares” (except as to “—Restrictions on Ownership”), “Description of
Our Shares”, and the first paragraph of the section of the Risk Factors entitled
“Our declaration of trust contains limits on ownership and transfer of our
common shares and the Preferred Shares, which could have adverse consequences
to
you” in the Prospectus, “The Offering—Restrictions on Ownership and Transfer”
and “Description of Preferred Shares—Restrictions on Ownership” under the Issuer
Free Writing Prospectus dated July 24, 2007, and Item 15 in the Registration
Statement, to the extent that it constitutes (a) matters of Massachusetts
law, or (b) summaries of (i) legal matters pertaining to Massachusetts law,
(ii)
the Organizational Documents, or (iii) legal conclusions concerning
Massachusetts law, has been reviewed by us and is correct in all material
respects.
(viii)
The execution and delivery of the Purchase Agreement and the consummation
of the
transactions contemplated in the Purchase Agreement and in the Registration
Statement (including the issuance and sale of the Preferred
Shares and the use of the proceeds from the sale of the Preferred
Shares as described in the Disclosure Package and the Prospectus under the
caption “Use Of Proceeds”) do not and will not, whether with or without the
giving of notice or lapse of time or both, result in any violation of the
provisions of the Organizational Documents of the Company.
(ix)
To our knowledge, the Company is
not in default under any of its Organizational Documents.
Exhibit
A-5
AMAC
CDO Funding I (the "Company")
We
refer
to our legal opinion addressed in respect of the Company dated 16 November
2006
(the "Opinion"), a copy of which is attached to this
letter.
We
confirm that notwithstanding the final paragraph of the Opinion, on the basis
of
the assumptions and subject to the qualifications set out in the Opinion,
you
may rely on the Opinion as though it were addressed to you.
Please
note that we have not reviewed or updated the Opinion and that the Opinion
only
confirms such matters as at 16 November 2006.
This
letter may only be relied upon by the addressee and may not be relied upon
by
any other person or for any other purpose.
Exhibit
A-6
We
act as
Cayman Islands legal counsel to AMAC CRE Funding II Ltd. (the
"Company").
We
have
examined:
|
(a)
|
the
Certificate of Incorporation and Memorandum and Articles of Association
of
the Company as certified by the Registrar of Companies in the Cayman
Islands;
|
|
(b)
|
the
minutes of the meetings of the Board of Directors of the Company
held on
18 December 2006 and 14 March 2007;
|
|
(c)
|
a
Certificate of Good Standing issued by the Registrar of Companies
in the
Cayman Islands (the "Certificate of Good
Standing");
|
|
(d)
|
a
certificate from a Director of the Company, a copy of which is
attached
(the "Director's Certificate");
and
|
|
(e)
|
the
documents listed in the Schedule hereto (collectively, the
"Warehouse
Documents").
|
We
have
not been instructed to undertake and have not undertaken any further enquiry
or
due diligence in relation to the matter the subject of this
Opinion. The following Opinion is given only as to and based on
circumstances and matters of fact existing on the effective date hereof and
of
which we are aware consequent upon the instructions we have received in relation
to the matter the subject of this Opinion and as to the law of the Cayman
Islands as the same is in force at the effective date
hereof. In giving this Opinion, we have relied upon the
completeness and accuracy of the Certificate of Good Standing and the Director's
Certificate.
We
are of
the opinion that:
|
1.
|
the
Company has been duly incorporated as an exempted company with
limited
liability and is validly existing and in good standing under the
laws of
Cayman Islands; and
|
|
2.
|
the
Company has full power and authority under its Memorandum and Articles
of
Association and under Cayman Islands law to enter into, execute
and
perform its obligations under the Warehouse
Documents.
|
This
opinion is addressed to you. You may use this opinion for your sole
benefit only. This opinion may not be relied upon by any other
person(s) without our prior written consent.
SCHEDULE
|
1.
|
An
amended and restated asset acquisition agreement dated as of 13
March 2007
among the Company, CharterMac AMI Associates, Inc.
("CharterMac"), American Mortgage Acceptance Company
("AMAC") and Citigroup Financial Products Inc.
("CFPI").
|
|
2.
|
An
amended and restated master participation agreement dated as of
13 March
2007 among the Company, CFPI and
AMAC,.
|
|
3.
|
A
portfolio administration agreement dated as of 19 December 2006
among
LaSalle Bank National Association, AMAC and
CFPI
|
