EXECUTION COPY
RAIT INVESTMENT TRUST
2,400,000 7.75% SERIES A CUMULATIVE PREFERRED SHARES OF BENEFICIAL INTEREST
UNDERWRITING AGREEMENT
March 15, 2004
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
as Representative of the several Underwriters
listed in Schedule I hereto
Dear Sirs:
RAIT Investment Trust, a Maryland real estate investment trust (the
"Company") and RAIT Partnership, L.P., a Delaware limited partnership (the
"Partnership"), confirm their agreement with each of the Underwriters listed in
Schedule I hereto (collectively, the "Underwriters"), for whom Friedman,
Billings, Xxxxxx & Co., Inc. is acting as a representative (in such capacity,
the "Representative"), with respect to (i) the sale by the Company and the
purchase by the Underwriters, of 2,400,000 7.75% Series A cumulative preferred
shares of beneficial interest of the Company, $.01 par value per share (the
"Series A Preferred Shares") and (ii) the grant by the Company to the
Underwriters, of the option described in Section 1(b) hereof to purchase all or
any part of 360,000 Series A Preferred Shares to cover over-allotments, if any.
The 2,400,000 Series A Preferred Shares to be purchased by the Underwriters (the
"Initial Shares") and all or any part of the 360,000 Series A Preferred Shares
subject to the option described in Section 1(b) hereof (the "Option Shares") are
hereinafter called, collectively, the "Shares." The Company acknowledges that,
at its request, the Underwriters have reserved up to 49,850 of the Initial
Shares for sale to certain persons listed in Schedule IV hereto at the purchase
price per share of $24.50.
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-3 (No. 333-103618), including
a base prospectus, dated July 10, 2003 (the "Base Prospectus"), relating to the
Shares, under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations thereunder (the "Securities Act Regulations"). The
Company has prepared and filed such amendments thereto, if any, and such amended
preliminary prospectuses, if any, as may have been required to the date hereof,
and will file such additional amendments thereto and such amended prospectuses
as may hereafter be required. The registration statement has been declared
effective under the Securities Act by the Commission. The registration statement
as
amended at the time it became effective (including all information deemed (by
incorporation by reference) to be a part of the registration statement at the
time it became effective pursuant to Rule 430A(b) of the Securities Act
Regulations) is hereinafter called the "Registration Statement," except that, if
the Company files a post-effective amendment to such registration statement that
becomes effective prior to the Closing Time (as defined below), "Registration
Statement" shall refer to such registration statement as so amended.
The Company proposes to file a final Prospectus Supplement pursuant to
Rule 424(b) under the Securities Act within two business days following the
execution of this Agreement (together with the Base Prospectus, the "Final
Prospectus"). The term "Prospectus" means the Final Prospectus and any
prospectus supplement specifically relating to the Shares, in the form first
filed with, or transmitted for filing to, the Commission pursuant to Rule 424(b)
under the Securities Act. For the purposes of this Agreement, the terms Base
Prospectus, Final Prospectus and Prospectus shall be deemed to include all
"Incorporated Documents." As used herein, the term "Incorporated Documents"
means the documents which are incorporated by reference or deemed to be
incorporated by reference in the Registration Statement, the Prospectus or any
amendment or supplement thereto filed prior to the date hereof or during the
period the Prospectus is required to be delivered in connection with the sale of
the Shares by the Underwriters or any dealer.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties,
representations, covenants and agreements and other terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter agrees, severally and not jointly, to purchase
from the Company at the purchase price per share of $24.2125, the number of
Initial Shares set forth in Schedule I opposite such Underwriter's name, plus
any additional number of Initial Shares which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 8 hereof, subject,
in each case, to such adjustments as the Representative in its sole discretion
shall make to eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the
warranties and representations and other terms and conditions herein set forth,
the Company hereby grants an option to the Underwriters, severally and not
jointly, to purchase from the Company all or any part of the Option Shares at
the purchase price per share set forth in paragraph (a) above plus any
additional number of Option Shares that such Underwriter may become obligated to
purchase pursuant to the provisions of Section 8 hereof. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments,
which may be made in connection with the offering and distribution of the
Initial Shares, upon notice during such 30-day period by the Underwriters to the
Company setting forth the number of Option Shares as to which the Underwriters
are then exercising the option and the time and date of payment and delivery for
such Option Shares. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Representative, but shall not be later than three
full business days (or earlier, without the consent of the Company, than two
full business days) after the exercise of said option, nor in any event
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prior to the Closing Time, as hereinafter defined. If the option is exercised as
to all or any portion of the Option Shares, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Shares then being purchased, which the number of Initial Shares set forth
in Schedule I opposite the name of such Underwriter bears to the total number of
Initial Shares, subject in each case to such adjustment among Underwriters as
the Representative in its sole discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Terms of Public Offering. Upon authorization of the
release of the Initial Shares by the Representative, the Underwriters propose to
offer the Shares for sale to the public upon the terms and conditions set forth
in the Prospectus. The Underwriters may from time to time increase or decrease
the public offering price of the Shares as set forth on the cover page of the
Prospectus after the initial public offering to such extent as the Underwriters
may determine.
2. Payment and Delivery:
(a) Initial Shares. The Initial Shares to be purchased by the
Underwriters hereunder, in definitive form, and in such authorized denominations
and registered in such names as the Underwriters 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 Underwriters, including, at the option of the
Underwriters, through the facilities of The Depository Trust Company ("DTC") for
the account of any 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 Underwriters by the Company
upon at least forty-eight hours' prior notice. The Company will, upon the
request of the Underwriters, cause certificates representing the Shares to be
made available for checking and packaging at least twenty-four hours prior to
the Closing Time (as defined below) with respect thereto at the office of the
Ledgewood Law Firm, P.C. located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 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 March 19, 2004 or on such
other time and date as the Company and the Representative may agree upon in
writing. The time at which such payment and delivery are actually made is
hereinafter sometimes called the "Closing Time" and the date of delivery of both
Initial Shares and Option Shares is hereinafter sometimes called the "Date of
Delivery."
(b) Option Shares. Any Option Shares to be purchased by the
Underwriters hereunder, in definitive form, and in such authorized denominations
and registered in such names as the Underwriters 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 Underwriters, including, at the option of the
Underwriters, through the facilities of DTC for the account of any 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 Underwriters 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 Date of Delivery 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
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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.
3. Representations and Warranties of the Company and the Partnership:
The Company and the Partnership, represent and warrant to the
Underwriters that:
(a) the Company and each Subsidiary of the Company set forth
on Schedule II hereto (each a "Subsidiary" and, collectively, the
"Subsidiaries") (other than the Partnership) has been duly formed or
incorporated, as the case may be, and is validly existing and in good standing
under the laws of its respective jurisdiction of formation or incorporation with
all requisite corporate power and authority to own, lease and operate its
respective properties and to conduct its respective business as now conducted
and, in the case of the Company, to authorize, execute and deliver this
Agreement and to consummate the transactions described in such agreement; other
than the Subsidiaries and as disclosed on Schedule III to the Agreement, the
Company does not own, directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any
partnership, joint venture or other association;
(b) the Company and the Subsidiaries other than the
Partnership are duly qualified or registered to transact business in each
jurisdiction in which they conduct their respective businesses as now conducted
and in which the failure, individually or in the aggregate, to be so qualified
or registered could reasonably be expected to have a material adverse effect on
the assets, operations, business or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole (a "Material Adverse Effect"), and
the Company and the Subsidiaries are in good standing in each jurisdiction in
which they maintain an office or in which the nature or conduct of their
respective businesses as now conducted requires such qualification, except where
the failure to be in good standing could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;
(c) the Partnership has been duly formed and is validly
existing as a limited partnership under the laws of the jurisdiction of its
organization, with all requisite partnership power and authority to own, lease
and operate its properties and to conduct its business as now conducted. The
Partnership has been duly qualified or registered to do business as a foreign
partnership in each jurisdiction in which it conducts its business as now
conducted, and in which the failure, individually or in the aggregate, to be so
qualified or registered could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect;
(d) the Company and the Subsidiaries are in compliance in all
respects with all applicable laws, rules, regulations, orders, decrees and
judgments, except where the failure to be in compliance could not reasonably be
expected to have a Material Adverse Effect;
(e) neither the Company nor any of the Subsidiaries is in
breach of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of, or default under), its
respective declaration of trust, charter, by-laws, certificate of limited
partnership or partnership agreement, 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 to which the Company or any of the Subsidiaries is
a party or by which any of them
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or their respective properties is bound, except for such breaches or defaults
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect, and the issuance, sale and delivery by the
Company of the Shares, the execution, delivery and performance of this Agreement
and consummation of the transactions contemplated hereby will not conflict with,
or result in any breach of, or constitute a default under (nor constitute any
event which with notice, lapse of time, or both would constitute a breach of, or
default under), (i) any provision of the declaration of trust, charter, by-laws,
certificate of limited partnership or partnership agreement, as the case may be,
of the Company or any of the Subsidiaries, (ii) 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 any of them or their respective properties may be bound or affected, or
(iii) any federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company or any of the Subsidiaries,
except in the case of clause (ii) for such breaches or defaults which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; or result in the creation or imposition of any material
lien, charge, claim or encumbrance upon any property or asset of the Company or
any of the Subsidiaries;
(f) the Company has full legal right, power and authority to
enter into and perform this Agreement and to consummate the transactions
contemplated herein; this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity, and except to
the extent that the indemnification and contribution provisions of Section 9
hereof may be limited by federal or state securities laws and public policy
considerations in respect thereof;
(g) the Partnership has full legal right, power and authority
to enter into and perform this Agreement and to consummate the transactions
contemplated herein; this Agreement has been duly authorized, executed and
delivered by the Partnership and constitutes a valid and binding agreement of
the Partnership enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and by general principles of equity, and
except to the extent the indemnification and contribution provisions set forth
in Section 9 hereof may be limited by federal or state securities laws and the
public policy considerations in respect thereof underlying such laws;
(h) the Limited Partnership Agreement of the Partnership,
including all amendments thereto (the "Partnership Agreement"), has been duly
and validly authorized, executed and delivered by or on behalf of the partners
of the Partnership and constitutes a valid and binding agreement of the parties
thereto, enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity;
(i) the issuance and sale of the Shares to the Underwriters
hereunder have been duly authorized by the Company; when issued and delivered
against payment therefor as provided in this Agreement, the Shares will be
validly issued, fully paid and non-assessable and the issuance of the Shares
will not be subject to any preemptive or similar rights; except as contemplated
herein, no person or entity holds a right to require or participate in the
registration
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under the Securities Act of the Shares pursuant to the Registration Statement;
no person or entity has a right of participation or first refusal with respect
to the sale of the Shares by the Company; except as set forth in the Prospectus,
there are no contracts, agreements or understandings between the Company and any
person or entity granting such person or entity the right to require the Company
to file a registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement; the form of
certificates evidencing the Shares complies with all applicable legal
requirements and, in all material respects, with all applicable requirements of
the declaration of trust and bylaws of the Company and the requirements of the
New York Stock Exchange;
(j) Intentionally omitted;
(k) no approval, authorization, consent or order of or filing
with any federal, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the execution, delivery
and performance of this Agreement, the consummation of the transactions
contemplated hereby or the sale and delivery of the Shares as contemplated
hereby other than (i) such as have been obtained, or will have been obtained at
the Closing Time or the relevant Date of Delivery, as the case may be, under the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (ii) such approvals as have been obtained in connection with the approval
of the listing of the Shares on the New York Stock Exchange, (iii) any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters, and (iv) any approval
of the National Association of Securities Dealers, Inc. (the "NASD") required
with respect to the fairness and reasonableness of the underwriting terms and
arrangements set forth herein;
(l) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state or local law, regulation or rule, and
has obtained all necessary authorizations, consents and approvals from other
persons required in order to conduct their respective businesses as described in
the Registration Statement and Prospectus, except to the extent that any failure
to have any such licenses, authorizations, consents or approvals, to make any
such filings or to obtain any such authorizations, consents or approvals could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect; neither the Company nor any of the Subsidiaries is in violation
of, in default under, or has received any notice regarding a possible violation,
default or revocation of any such license, authorization, consent or approval or
any federal, state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to the Company or any of the Subsidiaries, the
effect of which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and no such license, authorization,
consent or approval contains a materially burdensome restriction that is not
adequately disclosed in the Registration Statement and the Prospectus;
(m) the Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are threatened by the Commission, and any request on
the part of the Commission for additional information has been complied with;
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(n) the Company and the transactions contemplated by this
Agreement meet the requirements and conditions for using a registration
statement on Form S-3 under the Securities Act, set forth in the General
Instructions to Form S-3; the Registration Statement complies and the Final
Prospectus and any further amendments or supplements thereto will comply, when
they have become effective or are filed with the Commission, as the case may be,
in all material respects with the requirements of the Securities Act and the
Securities Act Regulations and, in each case, present, or will present, fairly
the information required to be shown; the Registration Statement did not, and
any amendment thereto will not, in each case as of the applicable effective
date, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and the Final Prospectus or any amendment or supplement thereto will
not, as of the applicable filing date and at the Closing Time and on each Date
of Delivery (if any), contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in the Registration
Statement or the Prospectus in reliance upon and in conformity with the
information concerning the Underwriters and furnished in writing by or on behalf
of the Underwriters to the Company expressly for use in the Registration
Statement or the Prospectus (that information being limited to that described in
the last sentence of the first paragraph of Section 9(b) hereof);
(o) the Final Prospectus delivered to the Underwriters for use
in connection with this offering will be identical to the version of the Final
Prospectus created to be transmitted to the Commission for filing via the
Electronic Data Gathering Analysis and Retrieval System ("XXXXX"), except to the
extent permitted by Regulation S-T and Rule 424(b) of the Securities Act
Regulations;
(p) each Incorporated Document when it became effective or was
filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and the Securities Act Regulations and the regulations promulgated
under the Exchange Act (the "Exchange Act Regulations"), and none of such
documents contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated by reference in
the Registration Statement and the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
Securities Act Regulations and the Exchange Act Regulations and will not include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(q) all legal or governmental proceedings, contracts or
documents which are material and of a character required to be filed as exhibits
to the Registration Statement or to be summarized or described in the Prospectus
have been so filed, summarized or described as required;
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(r) there are no actions, suits, proceedings, inquiries or
investigations pending or, to the Company's knowledge, threatened against the
Company or any of the Subsidiaries or any of their respective officers and
directors or to which the properties, assets or rights of any such entity is
subject, at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority, arbitration panel
or agency which could reasonably be expected to result in a judgment, decree,
award or order having, individually or in the aggregate, a Material Adverse
Effect, or which could adversely affect the consummation of the transactions
contemplated by this Agreement in any material respect;
(s) the financial statements, including the notes thereto,
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company and the
Subsidiaries as of the dates indicated and the results of operations and changes
in financial position and cash flows of the Company and the Subsidiaries for the
periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except as indicated in the notes thereto); the
financial statement schedules included or incorporated by reference in the
Registration Statement and the Prospectus fairly present the information shown
therein; no other financial statements or schedules are required by Form S-3 or
otherwise to be included in the Registration Statement or Prospectus.
(t) the Company has filed in a timely manner all reports
required to be filed pursuant to sections 13, 14 and 15(d) of the Exchange Act
during the preceding twelve calendar months and, if during such period the
Company has relied on Rule 12b-25(b) under the Exchange Act ("Rule 12b-25(b)")
with respect to a report or a portion of a report, that report or portion of a
report has actually been filed within the time period prescribed by Rule
12b-25(b);
(u) Xxxxx Xxxxxxxx LLP, whose reports on the audited financial
statements of the Company and the Subsidiaries are included as part of the
Registration Statement and Prospectus or are incorporated by reference therein
are and were during the periods covered by their reports independent public
accountants within the meaning of the Securities Act, the Securities Act
Regulations, and the requirements of the New York Stock Exchange;
(v) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, and except as may be
otherwise stated in the Registration Statement or Prospectus, there has not been
(i) any material adverse change in the assets, operations, business prospects or
condition (financial or otherwise), present or prospective, of the Company and
the Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, (ii) any transaction, which is material to the Company and the
Subsidiaries taken as a whole, planned or entered into by the Company or any of
the Subsidiaries, (iii) any liability or obligation, contingent or otherwise,
directly or indirectly incurred by the Company or any of the Subsidiaries, which
is material to the Company and the Subsidiaries taken as a whole or (iv) except
in accordance with the Company's ordinary practice as disclosed in the
Registration Statement and the Prospectus, any dividend or distribution of any
kind declared, paid or made with respect to the capital stock of the Company or
with respect to the partnership interests of the Partnership;
(w) the authorized shares of beneficial interest of the
Company conform in all material respects to the description thereof contained in
the Prospectus; the Company has an
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authorized, issued and outstanding capitalization as set forth in the Prospectus
under the caption "Capitalization" as of the date stated in such section;
immediately after the Closing Time, __________ Series A Preferred Shares will be
issued and outstanding (subject to the Underwriters' option described in Section
1(b) hereof) and no shares of beneficial interest of any other class of
beneficial interest will be issued and outstanding. All of the issued and
outstanding shares of beneficial interest of the Company have been duly
authorized and are validly issued, fully paid and non-assessable, and have been
offered, sold and issued by the Company in compliance with all applicable laws
(including, without limitation, federal and state securities laws); none of the
issued shares of beneficial interest of the Company have been issued in
violation of any preemptive or similar rights granted by the Company; except as
disclosed in the Prospectus or in connection with the Company's employee stock
option plan, dividend reinvestment and share purchase plan and supplemental
executive retirement plan for the Company's chief executive officer (the
"SERP"), there is no outstanding option, warrant or other right calling for the
issuance of, and no commitment, plan or arrangement to issue, any shares of
beneficial interest of the Company or any security convertible into or
exchangeable for shares of beneficial interest of the Company;
(x) all of the issued and outstanding shares of capital stock
of RAIT General, Inc., a Maryland corporation ("RAIT General"), and RAIT
Limited, Inc., a Maryland corporation ("RAIT Limited"), have been duly
authorized and are validly issued, fully paid and non-assessable, and are owned
of record and beneficially by the Company, free and clear of any security
interests, claims, liens, proxies, equities or other encumbrances and have been
offered, sold and issued by RAIT General and RAIT Limited in compliance with all
applicable laws (including, but not limited to, federal and state securities
laws); none of the issued shares of capital stock of RAIT General and RAIT
Limited have been issued in violation of any preemptive or similar rights;
except as disclosed in the Prospectus, there is no outstanding option, warrant
or other right calling for the issuance of, and no commitment, plan or
arrangement to issue, any shares of capital stock of RAIT General or RAIT
Limited or any security convertible into or exchangeable for capital stock of
RAIT General or RAIT Limited;
(y) immediately after the Closing Time, all of the issued and
outstanding units of partnership interest in the Partnership ("Common Units")
will be validly issued, fully paid and non-assessable; none of the Units has
been or will be issued or is owned or held in violation of any preemptive right;
the Units have been or will be offered, sold and issued by the Partnership in
compliance with all applicable laws (including, without limitation, federal and
state securities laws);
(z) each of the Company, the Subsidiaries, and each of their
respective officers, directors and controlling persons has not taken, and will
not take, directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(aa) except for certain relationships between Xxxxx Xxxxx and
other affiliates and Xxxxx Bros. & Co., Inc. described in a COBRA Desk filing
made with the NASD on December 3, 2001, as subsequently amended and
supplemented, in connection with a prior shelf offering from the Registration
Statement, which filing, as subsequently amended and supplemented, the Company
reviewed and approved, neither the Company nor any of its
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affiliates (i) is required to register as a "broker" or "dealer" in accordance
with the provisions of the Exchange Act or the Exchange Act Regulations, or (ii)
directly, or indirectly through one or more intermediaries, controls or has any
other association with (within the meaning of Article 1 of the By-laws of the
NASD) any member firm of the NASD;
(bb) the Company has not relied upon the Underwriters or legal
counsel for the Underwriters for any legal, tax or accounting advice in
connection with the offering and sale of the Shares;
(cc) any certificate signed by any officer of the Company or
any Subsidiary delivered to the Underwriters 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 the Underwriters as to the matters
covered thereby;
(dd) the Company and the Subsidiaries have good and marketable
title in fee simple to all real property and good title to all personal property
owned by them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects, except such as are
disclosed in the Prospectus or the financial statements thereto or such as do
not materially and adversely affect the value of such property and do not
interfere with the use made or proposed to be made of such property by the
Company and the Subsidiaries; and any real property and buildings held under
lease by the Company or any Subsidiary are held under valid, existing and
enforceable leases, with such exceptions, liens, security interests, pledges,
charges, encumbrances, mortgages and defects, as are disclosed in the Prospectus
or are not material and do not interfere with the use made or proposed to be
made of such property and buildings by the Company or such Subsidiary; the
Company or a Subsidiary has obtained an owner's title insurance policy, from a
title insurance company licensed to issue such policy, on any real property
owned by the Company or any Subsidiary, that insures the Company's or the
Subsidiary's fee or leasehold interest in such real property (other than the
leasehold interest of the Company with respect to its principal executive
offices), with coverage in an amount at least equal to the fair market value of
such fee or leasehold interest in the real property, or a lender's title
insurance policy insuring the lien of its mortgage securing the real property
with coverage equal to the maximum aggregate principal amount of any
indebtedness held by the Company or a Subsidiary and secured by the real
property;
(ee) neither the purchase nor the origination, as the case may
be, of the loans owned by the Company, nor the execution and delivery of, or
performance by the borrowers thereunder of any mortgage, deed of trust, deed,
indenture, note, loan or credit agreement or any other agreement or instrument
in connection therewith, at the time of such purchase, origination, execution or
delivery, resulted in a breach of or default under any mortgage, deed of trust,
indenture, note, loan or credit agreement or any other agreement or instrument
relating to any mortgage or other loan that may have priority over any such loan
with respect to the assets of the borrower thereunder and that is in existence
at the time the Company or any of the Subsidiaries purchases or originates any
such loan;
(ff) to the knowledge of the Company and the Partnership,
there are no statutes or regulations applicable to the Company or any of the
Subsidiaries or certificates, permits or other authorizations from governmental
regulatory officials or bodies required to be obtained or maintained by the
Company or any of the Subsidiaries of a character required to be
10
disclosed in the Registration Statement or the Prospectus which have not been so
disclosed and properly described therein; except as disclosed in the Prospectus,
all agreements between the Company or any of the Subsidiaries and third parties
expressly referenced in the Prospectus are legal, valid and binding obligations
of the Company or one or more of the Subsidiaries, enforceable in accordance
with their respective terms, except to the extent enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity;
(gg) no relationship, direct or indirect, exists between or
among the Company or any of the Subsidiaries, on the one hand, and any director,
trustee, officer, shareholder, customer or supplier of the Company or any of the
Subsidiaries, or any affiliate or family member thereof, on the other hand,
which is required by the Securities Act to be described in the Registration
Statement and the Prospectus which is not so described;
(hh) the Company and each Subsidiary owns or possesses
adequate license or other rights to use all patents, trademarks, service marks,
trade names, copyrights, software and design licenses, trade secrets,
manufacturing processes, other intangible property rights and know-how, if any
(collectively "Intangibles"), necessary to entitle the Company and each
Subsidiary to conduct its business as described in the Prospectus, and neither
the Company, nor any Subsidiary, has received notice of infringement of or
conflict with (and knows of no such infringement of or conflict with) asserted
rights of others with respect to any Intangibles which, individually or in the
aggregate, could have a Material Adverse Effect;
(ii) each of the Company and the Subsidiaries has filed on a
timely basis all necessary federal, state, local and foreign income and
franchise tax returns, if any such returns were required to be filed, through
the date hereof and have paid all taxes shown as due thereon; and no tax
deficiency has been asserted against the Company or any of the Subsidiaries, nor
does the Company or any of the Subsidiaries know of any tax deficiency which is
likely to be asserted against any such entity which, if determined adversely to
any such entity, could materially adversely affect the assets, operations,
business or condition (financial or otherwise) of any such entity, respectively;
all tax liabilities, if any, are adequately provided for on the respective books
of such entities;
(jj) each of the Company and the Subsidiaries maintains
insurance (issued by insurers of recognized financial responsibility) of the
types and in the amounts generally deemed adequate, if any, for their respective
businesses and consistent with insurance coverage maintained by 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;
(kk) except as otherwise disclosed in the Prospectus, neither
the Company, any of the Subsidiaries nor, to the best of their knowledge, any
former owner of any real property owned by the Company or any of the
Subsidiaries has authorized or conducted or has knowledge of the generation,
transportation, storage, presence, use, treatment, disposal, release, or other
handling of any hazardous substance, hazardous waste, hazardous material,
hazardous constituent, toxic substance, pollutant, contaminant, asbestos, radon,
polychlorinated biphenyls ("PCBs"), petroleum product or waste (including crude
oil or any fraction thereof), natural gas,
11
liquefied gas, synthetic gas or other material defined, regulated, controlled or
potentially subject to any remediation requirement under any environmental law
(collectively, "Hazardous Materials"), on, in, under or affecting any real
property currently leased or owned or by any means controlled by the Company or
any of the Subsidiaries, including any real property underlying any loan held by
the Company or the Subsidiaries (collectively, the "Real Property"), except in
material compliance with applicable laws; to the knowledge of the Company and
the Partnership, the Real Property, and the Company's, the Subsidiaries' and the
former owners of the Real Property's operations with respect to the Real
Property, are and were in compliance with all federal, state and local laws,
ordinances, rules, regulations and other governmental requirements relating to
pollution, control of chemicals, management of waste, discharges of materials
into the environment, health, safety, natural resources, and the environment
(collectively, "Environmental Laws"), and the Company and the Subsidiaries are
in compliance with, all licenses, permits, registrations and government
authorizations necessary to operate under all applicable Environmental Laws;
except as otherwise disclosed in the Prospectus, neither the Company nor the
Subsidiaries or, to the knowledge of the Company and the Partnership, any former
owner of any of the Real Property has received any written or oral notice from
any governmental entity or any other person and there is no pending or
threatened claim, litigation or any administrative agency proceeding that:
alleges a violation of any Environmental Laws by the Company or any of the
Subsidiaries; or that the Company or any of the Subsidiaries is a liable party
or a potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., or
any state superfund law; has resulted in or could result in the attachment of an
environmental lien on any of the Real Property; or alleges that the Company or
any of the Subsidiaries is liable for any contamination of the environment,
contamination of the Real Property, damage to natural resources, property
damage, or personal injury based on their activities or the activities of their
predecessors or third parties (whether at the Real Property or elsewhere)
involving Hazardous Materials, whether arising under the Environmental Laws,
common law principles, or other legal standards; in the ordinary course of its
business as necessary and appropriate, the Company conducts a periodic review of
the effect of Environmental Laws on the business, operations and properties of
the Company and the Subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures) required for clean-up, closure of properties
or compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties;
(ll) there are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
could, individually or in the aggregate, reasonably be deemed to have a Material
Adverse Effect;
(mm) none of the entities which prepared appraisals of the
Real Property, nor the entities which prepared Phase I environmental assessment
reports with respect to the Real Property, was employed for such purpose on a
contingent basis or has any substantial interest in the Company or any of the
Subsidiaries, and none of their directors, officers or employees is connected
with the Company or any of the Subsidiaries as a promoter, selling agent, voting
trustee, officer, director or employee;
12
(nn) neither the Company nor any of the Subsidiaries nor, to
the best of the Company's knowledge, any officer, director or trustee purporting
to act on behalf of the Company or any of the Subsidiaries has at any time; (i)
made any contributions to any candidate for political office, or failed to
disclose fully any such contributions, in violation of law, (ii) made any
payment to any state, federal or foreign governmental officer or official, or
other person charged with similar public or quasi-public duties, other than
payments required or allowed by applicable law, (iii) made any payment outside
the ordinary course of business to any investment officer or loan broker or
person charged with similar duties of any entity to which the Company or any of
the Subsidiaries sells or from which the Company or any of the Subsidiaries buys
loans or servicing arrangements for the purpose of influencing such agent,
officer, broker or person to buy loans or servicing arrangements from or sell
loans to the Company or any of the Subsidiaries, or (iv) engaged in any
transactions, maintained any bank account or used any corporate funds except for
transactions, bank accounts and funds which have been and are reflected in the
normally maintained books and records of the Company and the Subsidiaries;
(oo) except as otherwise disclosed in the Prospectus, there
are no material outstanding loans or advances or material guarantees of
indebtedness by the Company or any of the Subsidiaries to or for the benefit of
any of the officers or directors of the Company or any of the Subsidiaries or
any of the members of the families of any of them;
(pp) neither the Company nor any of the Subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or any of the
Subsidiaries, has made any payment of funds of the Company or of any Subsidiary
or received or retained any funds in violation of any law, rule or regulation or
of a character required to be disclosed in the Prospectus;
(qq) the Company is organized and operates in conformity with
the requirements for qualification as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"), and the Company's
current and proposed method of operation will enable it to meet the requirements
for taxation as a real estate investment trust under the Code;
(rr) An application for listing the Shares on the New York
Stock Exchange has been made;
(ss) in connection with this offering, the Company has not
offered and will not offer its Common Shares or any other securities convertible
into or exchangeable or exercisable for Common Shares in a manner in violation
of the Securities Act or the Securities Act Regulations; the Company has not
distributed and will not distribute any Prospectus or other offering material in
connection with the offer and sale of the Shares, except as contemplated herein;
(tt) the Company has complied and will comply with all the
provisions of Florida Statutes, Section 517.075 (Chapter 92-198, Laws of
Florida); neither the Company nor any of the Subsidiaries or their respective
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba;
13
(uu) neither the Company nor any of the Subsidiaries is, or
solely as a result of transactions contemplated hereby and the application of
the proceeds from the sale of the Shares, will become an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act");
(vv) the Company has not incurred any liability for any
finder's fees or similar payments in connection with the transactions herein
contemplated;
(ww) neither the Company, any of its Subsidiaries, nor any
real property owned, directly or indirectly, by the Company (each a "Property")
has sustained, since December 31, 2003, any material loss or interference with
its business from fire, explosion, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or arbitrators'
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus;
(xx) no person has an option or right of first refusal to
purchase all or part of any Property or any interest therein. Each of the
Properties complies with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes, laws and regulations and laws
relating to access to the Properties), except if and to the extent disclosed in
the Prospectus and except for such failures to comply that would not
individually or in the aggregate have a Material Adverse Effect;
(yy) each of the Company and the Subsidiaries owns, possesses
or has obtained all material permits, licenses, franchises, certificates,
consents, orders, approvals and other authorizations of governmental or
regulatory authorities as are necessary to own or lease, as the case may be, and
to operate its respective Property and to carry on its business as presently
conducted, and neither the Company nor the Partnership has received any notice
of proceedings relating to revocation or modification of any such licenses,
permits, certificates, consents, orders, approvals or authorizations;
(zz) to the best of the Company's and the Partnership's
knowledge, no general labor problem exists or is imminent with the employees of
the Company or any of its Subsidiaries; and
(aaa) the Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
4. Certain Covenants of the Company and the Partnership
The Company and the Partnership hereby covenant with the
Underwriters:
14
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as the 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 endeavor 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) to prepare the Final Prospectus in a form approved by the
Representative and file such Prospectus with the Commission pursuant to Rule
424(b) within the time period prescribed by law, 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 twenty-four hours following
the execution and delivery of this Agreement) to the Underwriters as many copies
of the Final Prospectus (or of the Final Prospectus as amended or supplemented
if the Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may reasonably
request for the purposes contemplated by the Securities Act Regulations, which
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the version created to be transmitted to the
Commission for filing via XXXXX, except to the extent permitted by Regulation
S-T or Rule 424(b) under the Securities Act Regulations;
(d) to advise the Representative promptly and (if requested by
the Representative) to confirm such advice in writing, when any post-effective
amendment to the Registration Statement becomes effective under the Securities
Act Regulations;
(e) to advise the Representative immediately, confirming such
advice in writing, of (i) the receipt of any comments from, or any request by,
the Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes and, if
the Commission or any other government agency or authority should issue any such
order, to make every reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise the Representative promptly of any proposal
to amend or supplement the Registration Statement or Prospectus and to file no
such amendment or supplement to which the Representative shall reasonably object
in writing;
(f) to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the
15
Company or the Representative, be required by the Securities Act or requested by
the Commission;
(g) prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Securities Act Regulations, to furnish a copy
thereof to the Representative and counsel for the Underwriters and obtain the
consent of the Representative to the filing;
(h) to furnish to the Underwriters for a period of five years
from the date of this Agreement, except to the extent such documents are readily
available to the Underwriters in electronic form in the Commission's XXXXX
archives, (i) as soon as available, copies of all annual, quarterly and current
reports or other communications supplied to holders of Common Shares, (ii) as
soon as practicable after the filing thereof, copies of all reports filed by the
Company with the Commission, the NASD or any securities exchange and (iii) such
other publicly available information as the Underwriters may reasonably request
regarding the Company and its Subsidiaries;
(i) to advise the Underwriters promptly during any period of
time in which a Prospectus relating to the Shares is required to be delivered
under the Securities Act Regulations (i) of any material change in the Company's
assets, operations, business or condition (financial or otherwise) or (ii) of
the happening of any event which would require the making of any change in the
Prospectus then being used so that the Prospectus would not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and, during such time,
to prepare and furnish, at the Company's expense, to the Underwriters promptly
such amendments or supplements to the Prospectus as may be necessary to reflect
any such change;
(j) to furnish promptly to the Representative a signed copy of
the Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith) and
such number of conformed copies of the foregoing as the Representative may
reasonably request;
(k) to 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 any period of time in which a prospectus
relating to the Shares is required to be delivered under the Securities Act
Regulations, a copy of any document proposed to be filed with the Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act;
(l) to apply the net proceeds of the sale of the Shares
substantially in accordance with its statements under the caption "Use of
Proceeds" in the Prospectus;
(m) to make generally available to its security holders as
soon as practicable, but in any event not later than the end of the fiscal
quarter first occurring after the first anniversary of the effective date of the
Registration Statement, an earnings statement complying with the provisions of
Section 11(a) of the Securities Act (in form, at the option of the Company,
complying with the provisions of Rule 158 of the Securities Act Regulations)
covering a period of 12 months beginning on the effective date of the
Registration Statement;
16
(n) to cause and use its best efforts to obtain and thereafter
maintain the listing of the Shares on the New York Stock Exchange and to file
with the New York Stock Exchange all documents and notices required by the New
York Stock Exchange of companies that have securities that are listed on the New
York Stock Exchange;
(o) to refrain during a period of 30 days from the date of the
Prospectus, 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 contract to sell, granting any option for
the sale of, or otherwise disposing of or transferring, directly or indirectly,
any Common Shares or any securities convertible into or exercisable or
exchangeable for Common Shares, or filing any registration statement under the
Securities Act with respect to any of the foregoing or (ii) entering into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Shares, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Shares or such other
securities, in cash or otherwise; the foregoing sentence shall not apply to (A)
the Shares to be sold hereunder, (B) any Common Shares issued by the Company
upon the exercise of an option outstanding on the date hereof or upon the
exercise of any option granted in the ordinary course of business and in
accordance with the terms of any management option plan existing on the date
hereof or (C) pursuant to the Company's employee stock option plan, dividend
reinvestment plan or any other incentive compensation or retirement plan of the
Company;
(p) the Company will maintain a transfer agent and, if
necessary under the jurisdiction of formation of the Company, a registrar (which
may be the same entity as the transfer agent) for its Common Shares;
(q) the Company will use its best efforts (i) to meet the
requirements to qualify as a real estate investment trust under the Code and
(ii) to cause the Partnership to be treated as a partnership for federal income
tax purposes;
(r) the Company will comply with all of the provisions of any
undertakings in the Registration Statement;
(s) the Company and the Subsidiaries will conduct their
affairs in such a manner so as to ensure that neither the Company nor any
Subsidiary will be an "investment company" or an entity "controlled" by an
investment company within the meaning of the 1940 Act;
(t) if at any time during the 30-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 Representative's reasonable
opinion the market price of the Common Shares has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus) and after written
notice from the Representative advising the Company to the effect set forth
above, to forthwith prepare, consult with the Representative concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to the Representative, responding to or commenting on
such rumor, publication or event;
17
(u) to maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; and
(v) the Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Common Shares.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident
to the performance of the Company's obligations under this Agreement whether or
not the transactions contemplated hereunder are consummated or this Agreement
terminated, including, but not limited to, all fees and expenses of and filing
with the Commission and the NASD; all Blue Sky fees and expenses, including
filing fees and disbursements of the Underwriters' Blue Sky counsel (but
excluding the fees of such counsel), fees and disbursements of counsel and
accountants for the Company, and printing costs, including costs of printing the
prospectus, and any amendments thereto; all underwriting documents, Blue Sky
Memoranda, a reasonable quantity of prospectuses requested by the Underwriters,
and the Company's road show costs and expenses. In addition, the Company agrees
to pay all costs and expenses incurred by the Representative in connection with
the offer and sale of the Shares, including but not limited to travel expenses
and legal fees, up to a maximum of $5,000.
(b) If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters for all out-of-pocket
expenses (including the fees and disbursements of its counsel) reasonably
incurred by the Underwriters in connection with this Agreement or the
transactions contemplated herein.
6. Conditions of the Underwriters' Obligations:
The obligations of the Underwriters hereunder are subject to
(i) the accuracy of the representations and warranties on the part of the
Company in all material respects on the date hereof and at the Closing Time and
on each Date of Delivery, (ii) the performance by the Company of its obligations
hereunder in all material respects, and (iii) the following further conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become
18
effective not later than 5:30 p.m., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you.
(b) The Company shall furnish to the Underwriters at the
Closing Time and on each Date of Delivery an opinion of Ledgewood Law Firm,
P.C., counsel for the Company, addressed to the Underwriters and dated the
Closing Time and each Date of Delivery and in form satisfactory to Hunton &
Xxxxxxxx LLP, counsel for the Underwriters, stating that:
(i) the authorized shares of beneficial interest of
the Company conform as to legal matters to the description thereof contained in
the Prospectus and meet the requirements of Form S-3 under the Securities Act;
the Company has an authorized capitalization as set forth in the Prospectus
Supplement under the caption "Capitalization" as of the date stated in such
section; the outstanding shares of beneficial interest or capital stock, as the
case may be, of the Company and the Subsidiaries (other than the Partnership)
have been duly and validly authorized and issued and are fully paid and
non-assessable; all of the authorized and validly issued shares of capital stock
of or interests in the Subsidiaries, as the case may be, are directly or
indirectly owned of record and, to such counsel's knowledge, beneficially by the
Company, except as set forth on Schedule II to the Agreement; except as
disclosed in the Prospectus or pursuant to the Company's stock option plan,
dividend reinvestment and share purchase plan or the SERP, there are no
authorized and validly issued (A) securities or obligations of the Company or
any of the Subsidiaries convertible into or exchangeable for any shares of
beneficial interest of the Company or any capital stock or interests in any such
Subsidiary or (B) warrants, rights or options to subscribe for or purchase from
the Company or any such Subsidiary any such shares of beneficial interest,
capital stock, interests or any such convertible or exchangeable securities or
obligations; except as set forth in the Prospectus, as contemplated by this
Agreement, or pursuant to the Company's stock option plan, dividend reinvestment
and share purchase plan or the SERP, there are no outstanding obligations of the
Company or any such Subsidiary to issue any shares of beneficial interest,
capital stock or interests, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options;
(ii) each of the Company and the Subsidiaries (other
than the Partnership) has been duly formed or incorporated, as the case may be,
and is validly existing and in good standing under the laws of its respective
jurisdiction of formation or incorporation with the requisite power and
authority to own its respective properties and to conduct its respective
business as described in the Registration Statement and Prospectus and, in the
case of the Company, to execute and deliver this Agreement and to consummate the
transactions described in such agreement;
(iii) the Company and the Subsidiaries (other than
the Partnership) are duly qualified in or registered by and are in good standing
in each jurisdiction specifically referred to in the Registration Statement and
Prospectus as jurisdictions in which property securing loans proposed to be made
or acquired by the Company is located and in which the failure, individually or
in the aggregate, to be so qualified could reasonably be expected to have a
Material Adverse Effect. Except as disclosed in the Prospectus, no Subsidiary is
prohibited or restricted by its charter, bylaws, operating agreement,
certificate of limited partnership or partnership agreement, as the case may be,
or, to the knowledge of such counsel, otherwise, directly or indirectly, from
paying dividends to the Company, or from making any other
19
distribution with respect to such Subsidiary's capital stock or interests or
from paying the Company or any other Subsidiary, any loans or advances to such
Subsidiary from the Company or such other Subsidiary, or from transferring any
such Subsidiary's property or assets to the Company or to any other Subsidiary;
to such counsel's knowledge, other than as disclosed on Schedule II and Schedule
III to the Agreement, the Company does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or any
ownership interest in any partnership, joint venture or other association;
(iv) the Partnership has been duly formed and is
validly existing as a limited partnership under the laws of the jurisdiction of
its organization, with all requisite partnership power and authority to own,
lease and operate its properties and to conduct its business as now conducted as
described in the Registration Statement and the Prospectus. The Partnership has
been duly qualified or registered to do business as a foreign partnership in
those jurisdictions specifically referred to in the Registration Statement and
Prospectus as jurisdictions in which property securing loans proposed to be made
or acquired by the Partnership is located and in which the failure, individually
or in the aggregate, to be so qualified or registered would have a Material
Adverse Effect;
(v) to such counsel's knowledge, the Company and the
Subsidiaries are in compliance in all respects with all applicable laws, rules,
regulations and orders, except where the failure to be in compliance could not
reasonably be expected to have a Material Adverse Effect;
(vi) to such counsel's knowledge, except as disclosed
in the Registration Statement and the Prospectus, neither the Company nor any
Subsidiary is in material breach of, or in material default under (nor has any
event occurred which with notice, lapse of time, or both would constitute a
material breach of, or material default under) its respective declaration of
trust, charter, by-laws, certificate of limited partnership or partnership
agreement, as the case may be, or in the performance or observation of any
obligation, agreement, covenant, or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or any other
agreement or instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or their respective properties may be bound or
affected, except such breaches or defaults which, individually or in the
aggregate, would not have a Material Adverse Effect;
(vii) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated under this Agreement, do not and will not conflict with, or result
in any breach of, or constitute a default under (nor constitute any event which
with notice, lapse of time, or both would constitute a breach of or default
under), (i) any provisions of the declaration of trust, charter, by-laws,
certificate of limited partnership or partnership agreement, as the case may be,
of the Company or any Subsidiary, (ii) to such counsel's knowledge, any
provision of any license, indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their respective properties may
be bound or affected, or (iii) to such counsel's knowledge, any law or
regulation or any decree, judgment or order applicable to the Company or any
Subsidiary (other than State and foreign securities or blue sky laws and the
rules and regulations of the NASD, as to which counsel need express no opinion,
or the federal securities laws, as to which counsel need express only that
20
nothing has come to its attention to lead it to believe that such a violation
has or will occur), except in the case of clauses (ii) and (iii) for such
conflicts, breaches or defaults, laws, regulations, decrees, judgments or
orders, which individually or in the aggregate, could not be reasonably expected
to have a Material Adverse Effect; or, result in the creation or imposition of
any lien, encumbrance, or to such counsel's knowledge, charge or claim upon any
property or assets of the Company or the Subsidiaries;
(viii) the Company has full legal right, power and
authority to enter into and perform this Agreement and to consummate the
transactions contemplated herein; this Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid and binding
agreement of the Company enforceable in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and by general principles of equity, and
except that enforceability of the indemnification and contribution provisions
set forth in Section 9 hereof may be limited by the federal or state securities
laws of the United States or public policy underlying such laws;
(ix) the Partnership has full partnership right,
power and authority to enter into and perform this Agreement and to consummate
the transactions contemplated herein. This Agreement has been duly authorized,
executed and delivered by the Partnership and constitutes a valid and binding
agreement of the Partnership enforceable in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally, and by general principles of equity,
and except that enforceability of the indemnification and contribution
provisions set forth in Section 9 hereof may be limited by federal or state
securities laws of the United States or public policy underlying such laws;
(x) Intentionally omitted;
(xi) no approval, authorization, consent or order of
or filing with any federal or state governmental or regulatory commission,
board, body, authority or agency is required in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby by the Company and the Partnership, or the sale
and delivery of the Shares by the Company as contemplated hereby other than such
as have been obtained or made under the Securities Act or the Exchange Act and
such approvals as have been applied for in connection with the listing of the
Shares on the New York Stock Exchange and except that such counsel need express
no opinion as to any necessary qualification under the state and foreign
securities or blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters or any approval of the underwriting terms and
arrangements by the NASD;
(xii) to such counsel's knowledge, each of the
Company and the Subsidiaries has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings required under any
federal, state or local law, regulation or rule, and has obtained all necessary
authorizations, consents and approvals from other persons, required to conduct
their respective businesses, as described in the Registration Statement and the
Prospectus, except to the extent that any failure to have any such
authorizations, consents or approvals would not, individually or in the
aggregate, have a Material Adverse Effect; to such counsel's knowledge, neither
the Company nor any of the Subsidiaries is in violation of, in
21
default under, or has received any notice regarding a possible violation,
default or revocation of any such license, authorization, consent or approval or
any federal, state, local or foreign law, regulation or decree, order or
judgment applicable to the Company or any of the Subsidiaries, the effect of
which could be a Material Adverse Effect; and no such license, authorization,
consent or approval contains a materially burdensome restriction that is not
adequately disclosed in the Registration Statement and the Prospectus;
(xiii) the Shares have been duly authorized and, when
the Shares have been issued and duly delivered against payment therefor as
contemplated by this Agreement, the Shares will be validly issued, fully paid
and nonassessable, and, except for any action that may have been taken by the
holder thereof, free and clear of any pledge, lien, encumbrance, security
interest, or other claim;
(xiv) immediately after the Closing Time, all of the
Common Units will be validly issued, fully paid and non-assessable. None of the
Common Units has been or will be issued or is owned or held in violation of any
preemptive right. The outstanding Common Units have been offered, sold and
issued by the Partnership in compliance with all federal and state securities
laws;
(xv) the issuance and sale of the Shares by the
Company and the Units by the Partnership are not subject to preemptive or other
similar rights arising by operation of law, under the declaration of trust or
by-laws of the Company or the certificate of limited partnership or Partnership
Agreement of the Partnership, under any agreement known to such counsel to which
the Company or any of the Subsidiaries is a party or, to such counsel's
knowledge, otherwise;
(xvi) provided that all parties are in compliance
with any standstill, subordination, intercreditor or similar agreement entered
into with the holder of applicable Senior Indebtedness (as defined below), to
the best of such counsel's knowledge and solely in reliance upon representations
made by the Company and the Company's borrowers, and opinions given by counsel
to such borrowers, neither the purchase nor the origination, as the case may be,
of the loans to the Company's borrowers held directly or indirectly by the
Company and disclosed in the Registration Statement and Prospectus (the "Company
Loans"), nor the execution and delivery of, or performance by such borrowers of
any mortgage, deed of trust, deed, indenture, note, loan or credit agreement or
any other agreement or instrument in connection therewith, has resulted in or,
with notice and an opportunity to cure, would result in a breach of or default
under any mortgage, deed of trust, indenture, note, loan or credit agreement or
any other agreement or instrument relating to any mortgage or other loan
("Senior Indebtedness") that may have priority over any Company Loan with
respect to the assets of the borrower thereunder and that was in existence at
the time the Company or any of the Subsidiaries purchased or originated any such
loan;
(xvii) to such counsel's knowledge, there are no
persons with registration or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act;
(xviii) the form of certificate used to evidence the
Shares complies in all material respects with all applicable statutory
requirements, with any applicable requirements of
22
the declaration of trust and bylaws of the Company and the requirements of the
New York Stock Exchange;
(xix) the Registration Statement has become effective
under the Securities Act and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has been issued
and, to such counsel's knowledge, no proceedings with respect thereto have been
commenced or threatened;
(xx) as of the effective date of the Registration
Statement, the Registration Statement and the Prospectus (except as to the
financial statements and other financial and statistical data contained therein,
as to which such counsel need express no opinion) complied as to form in all
material respects with the requirements of the Securities Act and the Securities
Act Regulations;
(xxi) the statements under the captions
"Capitalization," "Risk Factors," "Market Price of and Distributions on our
Common Shares," "Certain Provisions of Maryland Law and of our Declaration of
Trust and Bylaws," "Description of Shares of Beneficial Interest," "Federal
Income Tax Consequences of Our Status as a REIT," and "Supplemental Federal
Income Tax Consequences of Our Status as a REIT," in the Registration Statement
and the Prospectus, or incorporated therein by reference, insofar as such
statements constitute a summary of the legal matters referred to therein,
constitute accurate summaries thereof in all material respects;
(xxii) the Company has applied to list the Shares on
the New York Stock Exchange;
(xxiii) to such counsel's knowledge, there are no
actions, suits or proceedings, inquiries, or investigations pending or
threatened against the Company or any of the Subsidiaries or 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, arbitration panel or agency that are required to be described in the
Prospectus but are not so described;
(xxiv) to such counsel's knowledge, there are no
contracts or documents of a character that are required to be filed as exhibits
to the Registration Statement or to be described or summarized in the Prospectus
which have not been so filed, summarized or described; to such counsel's
knowledge, all agreements between the Company or any of the Subsidiaries,
respectively, and third parties expressly referenced in the Prospectus are
legal, valid and binding obligations of the Company or the Subsidiaries, as the
case may be, enforceable in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and by general principles of equity;
(xxv) the Company qualified to be taxed as a REIT
pursuant to sections 856 through 860 of the Code for its taxable years ended
December 31, 1998 through December 31, 2003, and the Company's organization and
current and proposed method of operation will enable it to continue to qualify
as a REIT for its taxable year ending December 31, 2004, and in the future;
23
(xxvi) neither the Company nor any of the
Subsidiaries is, or solely as a result of the transactions contemplated hereby
and the application of the proceeds from the sale of the Shares as described in
the Registration Statement and the Prospectus under the caption "Use of
Proceeds," will become an "investment company" or a company "controlled" by an
"investment company" within the meaning of the 1940 Act;
(xxvii) to such counsel's knowledge, each of the
Company and the Subsidiaries has filed on a timely basis all necessary federal,
state, local and foreign income and franchise tax returns through the date
hereof, if any such returns are required to be filed, and have paid all taxes
shown as due thereon; and no tax deficiency has been asserted against any such
entity, nor, to such counsel's knowledge, does any such entity know of any tax
deficiency which is likely to be asserted against any such entity which, if
determined adversely to any such entity, could have a Material Adverse Effect;
and
(xxviii) each document filed pursuant to the Exchange
Act (other than the financial statements and supporting schedules included
therein, as to which no opinion needs to be rendered) that is incorporated or
deemed to be incorporated by reference in the Prospectus complied when so filed
as to form in all material respects with the Exchange Act.
In addition, such counsel shall state that they have
participated in conferences with officers and other representative of the
Company, independent public accountants of the Company and the Underwriters at
which the contents of the Registration Statement and Prospectus were discussed
and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus (except as and to the
extent stated in subparagraphs (xx) and (xxi) above), nothing has come to their
attention that would cause them to believe that the Registration Statement or
the Final Prospectus, as of their respective effective or issue dates and as of
the date of such counsel's opinion, contained or contains any untrue statement
of a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that, in each case, such counsel need express no view with respect to the
financial statements and other financial and statistical data included in the
Registration Statement or Prospectus).
Such counsel may rely upon the opinion delivered pursuant to
Section 6(c).
(c) The Company shall furnish to the Underwriters at the
Closing Time and on each Date of Delivery an opinion of Xxxxx Xxxxxxx, LLP,
special counsel for the Company, addressed to the Underwriters and dated the
Closing Time and each Date of Delivery and in form satisfactory to Hunton &
Xxxxxxxx, counsel for the Underwriters, stating that, as a matter of Maryland
law:
(i) the statements under the captions "Certain
Provisions of Maryland Law and of the Declaration of Trust and Bylaws," and
"Description of Shares of Beneficial Interest," in the Registration Statement
and the Prospectus, insofar as such statements constitute matters of Maryland
corporate law or Maryland real estate investment trust law, have been reviewed
by such counsel and are a fair summary of such matters;
24
(ii) the Company has an authorized capitalization as
set forth in the Prospectus under the caption "Capitalization;" the outstanding
shares of beneficial interest or capital stock, as the case may be, of the
Company, RAIT General and RAIT Limited have been duly and validly authorized and
issued and are fully paid and non-assessable; to such counsel's knowledge, all
of the outstanding shares of capital stock of RAIT General and RAIT Limited are
directly or indirectly owned of record by the Company;
(iii) the Company, RAIT General and RAIT Limited each
has been duly formed or incorporated, as the case may be, and is validly
existing and in good standing under the laws of the state of Maryland with the
requisite trust or corporate power and authority, as the case may be, to own its
respective properties and to conduct its respective business as described in its
respective declaration of trust or charter, as the case may be, and, in the case
of the Company, to execute, deliver and perform this Agreement and to consummate
the transactions described herein; The Company has the trust power to own shares
of RAIT General and RAIT Limited and to serve as a member of limited liability
companies; RAIT General has the corporate power to serve as general partner of
RAIT Partnership, L.P., a Delaware limited partnership (the "Operating
Partnership"); and RAIT Limited has the corporate power to serve as limited
partner of the Operating Partnership;
(iv) except as disclosed in the Prospectus, and
assuming compliance with Sections 2-311 and 2-419 of the Maryland General
Corporation Law (the "MGCL") and approval by the directors and stockholders of
RAIT General or RAIT Limited, as applicable, as required by the charter or
bylaws of RAIT General or RAIT Limited, respectively, or the MGCL, neither RAIT
General nor RAIT Limited, respectively, is prohibited or restricted by the MGCL
or its charter or bylaws from paying dividends to the Company or from making any
other distribution with respect to such Subsidiary's capital stock or from
repaying the Company, or any other Subsidiary, any loans or advances to such
Subsidiary, or from transferring any such Subsidiary's property or assets to the
Company or to any other Subsidiary in exchange for fair consideration; and
(v) this Agreement has been duly authorized, and
assuming it has been executed and delivered by an officer of the Company, has
been duly executed and delivered by the Company.
(d) The Underwriters shall have received from Xxxxx Xxxxxxxx
LLP, independent public accountants for the Company, letters dated,
respectively, as of the date of this Agreement, the Closing Time and each Date
of Delivery, as the case may be, addressed to the Underwriters in form and
substance satisfactory to the Underwriters, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the audited and unaudited financial statements and
certain financial information and data contained in the Registration Statement
and the Prospectus, including the Incorporated Documents.
(e) The Underwriters shall have received at the Closing Time
and on each Date of Delivery the favorable opinion of Hunton & Xxxxxxxx LLP,
dated the Closing Time or such Date of Delivery, addressed to the Underwriters
and in form and substance satisfactory to the Underwriters.
25
(f) No amendment or supplement to the Registration Statement
or Prospectus shall have been filed to which the Underwriters shall have
objected in writing.
(g) Prior to the Closing Time and each Date of Delivery (i) no
stop order suspending the effectiveness of the Registration Statement or any
order preventing or suspending the use of the Prospectus has been issued by the
Commission, and no suspension of the qualification of the Shares for offering or
sale in any jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes, has occurred; and (ii) the Registration Statement and
the Prospectus shall not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) Between the time of execution of this Agreement and the
Closing Time or the relevant Date of Delivery (i) no material and unfavorable
change in the assets, results of operations, business, or condition (financial
or otherwise) of the Company and its Subsidiaries taken as a whole shall occur
or become known (whether or not arising in the ordinary course of business) or
that makes it, in the judgment of the Representative, impracticable to market
the Shares on the terms and in the manner contemplated in the Prospectus, or
(ii) no transaction which is material and unfavorable to the Company shall have
been entered into by the Company or any of the Subsidiaries.
(i) Intentionally omitted.
(j) At the Closing Time, the Company shall have applied to
list the Shares on the New York Stock Exchange.
(k) The NASD shall not have raised any objection with respect
to the fairness and reasonableness of the underwriting terms and arrangements.
(l) Intentionally omitted.
(m) The Company will, at the Closing Time and on each Date of
Delivery, deliver to the Underwriters a certificate of two principal executive
officers or, in the case of the Partnership two principal executive officers of
RAIT General, to the effect that, to each of such officer's knowledge, the
representations and warranties of the Company set forth in this Agreement and
the conditions set forth in paragraphs (g), (h), (i) and (j) have been met and
are true and correct as of such date.
(n) The Company shall have furnished to the Underwriters such
other documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus, the representations,
warranties and statements of the Company contained herein, and the performance
by the Company of its covenants contained herein, and the fulfillment of any
conditions contained herein, as of the Closing Time or any Date of Delivery as
the Underwriters may reasonably request.
(o) All filings with the Commission required by Rule 424 under
the Securities Act shall have been made within the applicable time period
prescribed for such filing by such Rule.
26
(p) The Company shall perform such of its obligations under
this Agreement are to be performed by the terms hereof and thereof at or before
the Closing Time or the relevant Date of Delivery.
The obligation of the Underwriters to purchase Option Shares
hereunder is subject to the delivery to the Underwriters on the Date of Delivery
of such documents as the Underwriters may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the Option
Shares and other matters related to the issuance of the Option Shares.
7. Termination:
The obligations of the Underwriters hereunder shall be subject
to termination in the absolute discretion of the Representative, at any time
prior to the Closing Time or any Date of Delivery, (i) if any of the conditions
specified in Section 6 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, or (ii) if there has been since the respective
dates as of which information is given in the Registration Statement, any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the assets, operations, business or condition
(financial or otherwise) of the Company, whether or not arising in the ordinary
course of business, or (iii) if there has occurred outbreak or escalation of
hostilities or other national or international calamity or crisis or change in
economic, political or other conditions the effect of which on the financial
markets of the United States is such as to make it, in the judgment of the
Representative, impracticable to market or deliver the Shares or enforce
contracts for the sale of the Shares, or (iv) if trading in any securities of
the Company has been suspended by the Commission or by the New York Stock
Exchange or if trading generally on the New York Stock Exchange, the American
Stock Exchange or in the Nasdaq over-the-counter market has been suspended
(including automatic halt in trading pursuant to market-decline triggers other
than those in which solely program trading is temporarily halted), or
limitations on prices for trading (other than limitations on hours or numbers of
days of trading) have been fixed, or maximum ranges for prices for securities
have been required, by such exchange or the NASD or by order of the Commission
or any other governmental authority, or (v) if there has been any downgrading in
the rating of any of the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities Act), or (vi) any federal or state statute,
regulation, rule or order of any court or other governmental authority has been
enacted, published, decreed or otherwise promulgated which in the reasonable
opinion of the Representative has a Material Adverse Effect, or (vii) any action
has been taken by any federal, state or local government or agency in respect of
its monetary or fiscal affairs which in the reasonable opinion of the
Representative has a material adverse effect on the securities markets in the
United States, or (viii) in the case of any of the events specified in clauses
(i) through (vii), such event, singly or together with any other such events,
makes it, in the judgment of the Representative, impracticable to market or
deliver the Shares on the terms and in the manner contemplated in the
Prospectus.
If the Representative elects to terminate this Agreement as
provided in this Section 7, the Company shall be notified promptly by telephone,
promptly confirmed by facsimile.
27
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply in all material respects with any of the terms
of this Agreement, the Company shall not be under any obligation or liability
under this Agreement (except to the extent provided in Sections 5 and 9 hereof)
and the Underwriters shall be under no obligation or liability to the Company
under this Agreement (except to the extent provided in Section 9 hereof).
8. Underwriter Default.
If any Underwriter shall default at the Closing Time or on a
Date of Delivery in its obligation to take up and pay for the Shares to be
purchased by it under this Agreement, on such date the 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, 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, at its election, either terminate this Agreement by notice to the Company,
without liability to any non-defaulting Underwriter or, as described in this
paragraph above, make arrangements with the other non-defaulting underwriters,
or any other underwriters selected by the Representative, to take up and pay for
all, but not less than all, of the Shares to be purchased under this Agreement,
including the Defaulted Shares.
If a new Underwriter or Underwriters are substituted for a
defaulting Underwriter in accordance with the foregoing provision, the Company
or the non-defaulting Underwriters shall have the right to postpone the Closing
Time or the relevant Date of Delivery for a period not exceeding five business
days in order that any necessary changes in the Registration Statement and
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 8 with the like
effect as if such substituted Underwriter had originally been named in this
Agreement.
9. Indemnity and Contribution by the Company, the Partnership and the
Underwriters:
(a) The Company and the Partnership, jointly and severally,
agree to indemnify, defend and hold harmless each Underwriter and any person who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) which, jointly
or severally, any Underwriter or controlling person may incur under the
Securities Act, the Exchange Act or otherwise, insofar as such loss,
28
expense, liability, damage or claim arises out of or is based upon (i) any
breach of any representation, warranty or covenant of the Company or the
Partnership contained herein or (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in the Prospectus, or in any materials or information provided to
investors by, or with the approval of, the Company in connection with the
marketing of the offering of the Shares ("Marketing Materials"), including any
roadshow or investor presentations made to investors by the Company (whether in
person or electronically), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as any such loss, expense, liability, damage or claim
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission of a material fact contained in and in
conformity with information furnished in writing by the Representative to the
Company or the Partnership expressly for use in such Registration Statement or
such Prospectus, provided, however, that the indemnity agreement contained in
this subsection (a) with respect to the Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling any
Underwriter) with respect to any person asserting any such loss, expense,
liability, damage or claim which is the subject thereof if the Prospectus or any
supplement thereto prepared with the consent of the Underwriters and furnished
to the Underwriters prior to the Closing Time corrected any such alleged untrue
statement or omission and if any Underwriter failed to send or give a copy of
the Prospectus or supplement thereto to such person at or prior to the written
confirmation of the sale of Shares to such person, unless such failure resulted
from noncompliance by the Company or the Partnership with Section 4(a) of this
Agreement.
If any claim or action is brought against, or any loss,
expense, liability or damage (including the reasonable cost of investigation) is
incurred by, the Underwriters or any controlling person in respect of which
indemnity may be sought against the Company or the Partnership pursuant to the
preceding paragraph, the Underwriters shall promptly notify the Company and the
Partnership in writing of the institution of such claim or action or of the
incurrence of such loss, expense, liability or damage and the Company and the
Partnership shall assume the defense of such claim or action or the response to
such loss, expense, liability or damage, including the employment of counsel and
payment of fees and expenses associated therewith, provided, however, that any
failure or delay to so notify the Company or the Partnership will not relieve
the Company or the Partnership of any obligation hereunder, except to the extent
that its ability to defend such claim or action or mitigate such loss, expense,
liability or damage is actually impaired by such failure or delay. The
Underwriters or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of the Underwriters or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company
and the Partnership or the Company and the Partnership shall not have employed
counsel to have charge of the defense of or response to such claim, action,
loss, expense, liability or damage, within a reasonable time or such indemnified
party or parties shall have reasonably concluded (based on the advice of
counsel) that there may be defenses available to it or them which are different
from or additional to those available to the Company or the Partnership and
which counsel to the Underwriters believes may present a conflict for counsel
representing the Company or the
29
Partnership and the Underwriters (in which case the Company and the Partnership
shall not have the right to direct the defense of such claim or 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 the Partnership and paid as incurred
(it being understood, however, that the Company and the Partnership shall not be
liable for the expenses of more than one separate firm of attorneys for the
Underwriters or controlling persons in any one action or series of related
actions in the same jurisdiction representing the indemnified parties who are
parties to such action). Anything in this paragraph to the contrary
notwithstanding, neither the Company nor the Partnership shall be liable for any
settlement of any such claim or action effected without the its written consent.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify, defend and hold harmless the Partnership, the Company, the
Subsidiaries, their trustees and directors, the officers that signed the
Registration Statement and any person who controls the Partnership, the Company
or any Subsidiary within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) which, jointly
or severally, the Company, the Partnership or any such person may incur under
the Securities Act, the Exchange Act or otherwise, insofar as such loss,
expense, liability, damage or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by the Underwriters to the
Company or the Partnership expressly for use in the Registration Statement (or
in the Registration Statement as amended by any post-effective amendment thereof
by the Company) or in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated either in the Registration Statement or
Prospectus or necessary to make such information, in the light of the
circumstances under which made, not misleading. The statements set forth under
the caption "Underwriting" regarding stabilizing and the beneficial ownership of
Shares by Friedman, Billings, Xxxxxx & Co., Inc. ("FBR"), and entities
associated with FBR in the Prospectus constitute the only information furnished
by or on behalf of the Underwriters to the Company for purposes of Section 3(n)
and this Section 9.
If any claim or action is brought against the Company, the
Partnership or any such person in respect of which indemnity may be sought
against the Underwriters pursuant to the foregoing paragraph, the Company, the
Partnership or such person shall promptly notify the Underwriters in writing of
the institution of such action and the Underwriters shall assume the defense of
such action, including the employment of counsel and payment of expenses. The
Company, the Partnership or such person shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of the Company, the Partnership or such person unless the employment
of such counsel shall have been authorized in writing by the Representative in
connection with the defense of such action or the Underwriters shall not have
employed counsel to have charge of the defense of such action within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available
to it or them which are different from or additional to those available to the
Underwriters (in which case the Underwriters shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the Underwriters
and paid as incurred (it being understood, however, that the Underwriters shall
not be liable for the expenses of more than one separate firm of attorneys in
any one action or series of related actions in the same
30
jurisdiction representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, the
Underwriters shall not be liable for any settlement of any such claim or action
effected without the written consent of the Representative.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, expenses, liabilities, damages or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, expenses,
liabilities, damages or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Partnership on the
one hand and the Underwriters on the other hand from the offering of the Shares
or (ii) if (but only if) the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Partnership on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, expenses, liabilities, damages or claims, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Partnership on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of underwriting discounts and commissions but before deducting expenses)
received by the Company and the Partnership bear to the underwriting discounts
and commissions received by the Underwriters. The relative fault of the Company
and the Partnership on the one hand and of the Underwriters on the other shall
be determined by reference to, among other things, whether the untrue statement
or alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company or the Partnership or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
(d) The Company and the Partnership, on the one hand, and the
Underwriters, on the other, agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in subsection (c)(i) and, if applicable
(ii), above. Notwithstanding the provisions of this Section 9, the Underwriters
shall not be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by the
Underwriters. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
10. Survival:
The indemnity and contribution agreements contained in Section
9 and the covenants, warranties and representations of the Company, the
Partnership and the Subsidiaries contained in Sections 3, 4 and 5 of this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the Underwriters, or any person who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the
31
Exchange Act, or by or on behalf of the Company, the Partnership, the
Subsidiaries, their trustees or directors and officers or any person who
controls the Company, any Subsidiary or the Partnership within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the sale and delivery of the
Shares. The Company, the Partnership and each Underwriter agree promptly to
notify the others of the commencement of any litigation or proceeding against it
and, in the case of the Company, against any of the Company's officers and
directors, in connection with the sale and delivery of the Shares, or in
connection with the Registration Statement or Prospectus.
11. Notices:
Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered to Friedman,
Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered to the Company at the offices of the Company at 0000
Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000; and, if to the
Partnership, shall be sufficient in all respects if delivered to the Partnership
at the offices of the Partnership at 0000 Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
12. Governing Law; Consent to Jurisdiction; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES. The parties hereto agree to be subject to, and hereby
irrevocably submit to, the nonexclusive jurisdiction of any United States
federal or Virginia state court sitting in Alexandria, Virginia, in respect of
any suit, action or proceeding arising out of or relating to this Agreement or
the transactions contemplated herein, and irrevocably agree that all claims in
respect of any such suit, action or proceeding may be heard and determined in
any such court. Each of the parties hereto irrevocably waives, to the fullest
extent permitted by applicable law, any objection to the laying of the venue of
any such suit, action or proceeding brought in any such court and any claim that
any such suit, action or proceeding has been brought in an inconvenient forum.
The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Parties in Interest:
The Agreement herein set forth has been and is made solely for
the benefit of the Underwriters, the Company, the Partnership and the
controlling persons, directors and officers referred to in Sections 9 and 10
hereof, and their respective successors, assigns, executors and administrators.
No other person, partnership, association or corporation (including a purchaser,
as such purchaser, from the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts:
This Agreement may be signed by the parties in counterparts,
which together shall constitute one and the same agreement among the parties.
32
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this Agreement shall constitute a binding agreement among
the Company, the Partnership and the Underwriters.
Very truly yours,
RAIT INVESTMENT TRUST
By: /s/ Xxxxx XxXxxxxxx
----------------------------
Name: Xxxxx XxXxxxxxx
Title: EVP & CFO
RAIT PARTNERSHIP, L.P.
By: RAIT General, Inc.
Its:General Partner
By: /s/ Xxxxx XxXxxxxxx
----------------------------
Name: Xxxxx XxXxxxxxx
Title: EVP & CFO
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Managing Director
Acting for itself and on behalf of the several
Underwriters listed in Schedule I hereto
33
SCHEDULE I
Underwriter Number of Initial Shares
----------- ------------------------
Friedman, Billings, Xxxxxx & Co., Inc................................. 1,680,000
Xxxxxx, Xxxxxxxx & Company, Incorporated.............................. 720,000
---------
Total................................................................. 2,400,000
SCHEDULE II
-----------------------------------------------------------------------------------------------------------------------
STATE AND PERCENTAGE
COMPANY DATE OF INTEREST
NAME FORMATION OWNER(S) OWNED
-----------------------------------------------------------------------------------------------------------------------
RAIT General, Inc. Maryland - 8/14/97 RAIT Investment Trust 100%
RAIT Limited, Inc. Maryland - 8/14/97 RAIT Investment Trust 100%
RAIT Partnership, L.P. Delaware - 8/15/97 RAIT General, Inc. 1% general partner
RAIT Limited, Inc. 99% limited partner
0000 Xxxxxxxxx Xxxxxxxxx, LLC Maryland - 1/15/98 RAIT Executive Boulevard, LLC 1% (managing) member
RAIT Partnership, L.P. 83.6% member
SAS Executive Boulevard 15.4% member
OSEB Associates, L.P. Pennsylvania - 7/12/98 OSEB GP, Inc. 89% general partner
Brandywine Construction & 11% limited partner
Management, Inc.
OSEB GP, Inc. Delaware - 7/11/98 RAIT Partnership, L.P. 100%
RAIT Abbotts GP, Inc. Delaware - 2/7/00 RAIT Partnership, L.P. 100%
RAIT Abbotts Limited Partnership Delaware - 2/7/00 RAIT Abbotts GP, Inc. 1% general partner
RAIT Partnership, L.P. 99% limited partner
RAIT Antigua Bay Manager, Inc. Delaware - 7/2/02 RAIT Partnership, L.P. 100%
RAIT Bayside Manager, Inc. Delaware - 9/30/02 RAIT Partnership, L.P. 100%
RAIT C Street Manager, Inc. Delaware - 9/19/01 RAIT Partnership, LP. 100%
RAIT C Street Manager II, Inc. Delaware - 9/19/01 RAIT Partnership, LP. 100%
RAIT Capital Corp. Delaware - 8/2/00 RAIT Partnership, L.P. 100%
RAIT Carter Oak, LLC Delaware - 5/28/03 RAIT Partnership, L.P. 100%
RAIT Eastfield, LLC Delaware - 5/29/03 RAIT Partnership, L.P. 100%
RAIT Emerald Pointe, Inc. Delaware - 10/6/03 RAIT Partnership, L.P. 100%
RAIT Executive Boulevard, LLC Delaware - 10/10/02 RAIT Partnership, L.P. 100%
RAIT Executive Mews Manager I, Inc. Delaware - 3/29/01 RAIT Partnership, L.P. 100%
RAIT Executive Mews Manager II, Inc. Delaware - 3/29/01 RAIT Partnership, L.P. 100%
RAIT Executive Mews Manager III, Inc. Delaware - 3/29/01 RAIT Partnership, L.P. 100%
RAIT Fieldstone, LLC Delaware - 12/27/02 RAIT Partnership, L.P. 100%
RAIT Firehouse, LLC Delaware - 9/25/02 RAIT Partnership, L.P. 100%
RAIT Highland Club, Inc. Delaware - 1/9/02 RAIT Partnership, L.P. 100%
RAIT Highland Club, LLC Delaware - 1/9/02 RAIT Highland Club, Inc. 100%
RAIT Kenwood, LLC Delaware - 8/22/03 RAIT Partnership, L.P. 100%
RAIT Lincoln Court, LLC Delaware - 9/25/02 RAIT Partnership, L.P. 100%
RAIT Milk Street, LLC Delaware - 5/22/03 RAIT Partnership, L.P. 100%
RAIT Montego Bay Manager, Inc. Delaware - 7/10/02 RAIT Partnership, L.P. 100%
RAIT Rohrerstown, L.P. Pennsylvania - 3/17/98 RAIT General, Inc. 1% general partner
RAIT Partnership, L.P. 99% limited partner
RAIT Xxxxx Key Manager, Inc. Delaware - 7/10/02 RAIT Partnership, L.P. 100%
RAIT St. Ives Manager, Inc. Delaware - 6/1/01 RAIT Partnership, L.P. 100%
REM-Cherry Hill, LLC New Jersey - 3/29/01 RAIT Partnership, L.P. 100%
REM-Willow Grove, Inc. Pennsylvania - 3/29/01 RAIT Partnership, L.P. 100%
REM-Willow Grove, L.P. Pennsylvania - 3/29/01 REM-Willow Grove, Inc. 1% general partner
RAIT Partnership, L.P. 99% limited partner
Stobba Associates, L.P. Pennsylvania - 4/12/93 RAIT Abbotts GP, Inc. 1% General Partner
RAIT Abbotts Limited 49% Limited Partner
Partnership
-----------------------------------------------------------------------------------------------------------------------
SCHEDULE III
--------------------------------------------------------------------------------------------------------------------------
STATE AND
COMPANY DATE OF PERCENTAGE
NAME FORMATION OWNER(S) INTEREST OWNED
--------------------------------------------------------------------------------------------------------------------------
122 C Street, LLC Delaware - 9/19/01 RAIT C Street Manager, Inc. Non-member manager
000 X Xxxxxx Member, LLC Delaware - 9/19/01 RAIT C Street Manager II, Inc. Non-member manager
Antigua Bay Southwest, LLC Delaware - 7/2/02 RAIT Antigua Bay Manager, Inc. 1% managing member
Bayside Apartments, LLC Delaware - 9/30/02 RAIT Bayside Manager, Inc. 1% managing member
E Pointe Properties I, Ltd. Texas - RAIT Partnership, L.P. Class B Limited Partner
Eastfield Associates, LLC Delaware - 4/6/99 RAIT Eastfield, LLC Class B member
Fieldstone Apartments, LLC Maryland - 4/13/98 RAIT Fieldstone, LLC 5% Class C member
Xxxxx Holdings Kenwood, LTD Ohio - 8/4/98 RAIT Kenwood, LLC .1% Class B Member
Montego Bay Southwest, LLC Delaware - 7/2/02 RAIT Montego Bay Manager, Inc. 1% managing member
RAIT Enterprises, LLC Delaware - 6/24/02 RAIT Investment Trust 16.67%
RAIT SLH, L.P. Pennsylvania - 9/27/99 RAIT Partnership, L.P. 11% limited partner
RAIT Ventures, LLC Delaware - 4/1/02 RAIT Investment Trust 30%
RAK Old South Associates Limited Massachusetts - RAIT Milk Street, LLC Class B Limited Partner
Partnership 11/19/98
Xxxxxxxxxx Plaza Manager, Inc. Delaware - 7/23/03 HVC Xxxxxxxxxx Plaza, LLC 95%
RAIT Partnership, L.P. 5%
Sable Key Southwest, LLC Delaware RAIT Sable Key Manager, Inc. Non-member manager
St. Xxxx XX, LLC Delaware - 5/30/01 HVC-St. Ives, LLC 50%
(Xxxxxxxx entity)
RAIT St. Ives Manager, Inc. 50%
St. Ives Owner, L.P. Pennsylvania - 5/30/01 St. Xxxx XX, LLC 2% general partner
St. Ives Limited Partner, L.P. 98% limited partner
(Xxxxxxxx entity)
--------------------------------------------------------------------------------------------------------------------------
SCHEDULE IV
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxxx
Xxx Xxxxxxxxxxx
Xxxxxx Xxxxxxxx
Xxxx Xxxxxxx
Xxxxxxx Xxxxx or Assignee
Xxx Xxxxxxxxxx
Xxxxx & Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxx
Xxx Xxxxxxxx
Xxxxxxxxxx Associates, LP
Xxx Xxxxx
Xxxxxx Xxxxxxxx
Menase Ender
Xxxxxxx Xxxxx
Xxxxxxx Abt
Xxxxxx Xxxxxxxxx
Xxxxxx X. & Xxxxxxx X. Xxxxxxxxxx
Xxxxx Xxxxxxxxx
Xxxx Xxx
Xxxxxx Xxxxxxxx
