EXHIBIT 1.1
15,000,000 SHARES OF COMMON STOCK
LASER MORTGAGE MANAGEMENT, INC.
UNDERWRITING AGREEMENT
__________,1997
BEAR, XXXXXXX & CO. INC.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
EVEREN SECURITIES, INC.
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
LASER Mortgage Management, Inc., a corporation organized and existing
under the laws of Maryland (the "Company"), whose assets are managed by LASER
Advisers Inc., a corporation organized and existing under the laws of Delaware
(the "Manager"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several underwriters named in Schedule I attached hereto
(the "Underwriters") an aggregate of 15,000,000 shares (the "Firm Shares") of
its common stock, par value $.001 per share (the "Common Stock"), and for the
sole purpose of covering over-allotments in connection with the sale of the Firm
Shares, at the option of the Underwriters, up to an additional 2,250,000 shares
(the "Additional Shares") of Common Stock on the terms set forth in
Section 2(c). The Firm Shares and any Additional Shares purchased by the
Underwriters are referred to herein as the "Shares." Bear, Xxxxxxx & Co. Inc.
("Bear Xxxxxxx"), Friedman, Billings, Xxxxxx & Co., Inc., EVEREN Securities,
Inc. and Xxxxxx, Xxxxxxxx & Company, Incorporated have agreed to act as
representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the purchase of the Shares. The Shares
are more fully described in the Registration Statement referred to below.
1. REPRESENTATIONS AND WARRANTIES.
1.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, and may have filed an amendment or
amendments thereto, on Form S-11 (No. 333-35673), for the registration of the
Shares under the Securities Act of 1933, as amended (the "Securities Act").
Such registration statement, including the prospectus, financial statements and
schedules, exhibits and all other documents filed as a part thereof, as amended
at the time of effectiveness of the registration statement, including any
information deemed to be a part thereof as of the time of effectiveness pursuant
to paragraph (b) of Rule 430A or Rule 434 of the Rules and Regulations of the
Commission under the Securities Act (the "Securities Act Regulations") and
including any registration statement filed pursuant to Rule 462(b) of the
Securities Act Regulations (a "Rule 462(b) Registration Statement") increasing
the size of the offering, is herein called the "Registration Statement" and the
prospectus, in the form first filed with the Commission pursuant to Rule 424(b)
of the Securities Act Regulations or filed as part of the Registration Statement
at the time of effectiveness if no Rule 424(b) or Rule 434 filing is required,
is herein called the "Prospectus." The term "Preliminary Prospectus" as used
herein means any preliminary prospectus relating to the Registration Statement
as described in Rule 430 of the Securities Act Regulations. In addition, all
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a Preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing, shall be deemed to include
any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis, and Retrieval System.
(b) At the time of the effectiveness of the Registration Statement or the
effectiveness of any post-effective amendment to the Registration Statement,
when the Prospectus is first filed with the Commission pursuant to Rule 424(b)
or Rule 434 of the Securities Act Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission and at the Closing Date
and the Additional Closing Date, if any (as hereinafter respectively defined),
the Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Securities Act and the Securities Act Regulations
and do not or will not contain an untrue statement of a material fact and do not
or will not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein (i) in the case of the
Registration Statement, not misleading and (ii) in the case of the Prospectus,
in light of the circumstances under which they were made, not misleading. When
any related Preliminary Prospectus was first filed with the Commission (whether
filed as part of the Registration Statement for the registration of the Shares
or any amendment thereto or pursuant to Rule 424(a) of the Securities Act
Regulations) and when any amendment thereof or supplement thereto was first
filed with the Commission, such Preliminary Prospectus and any amendments
thereof and supplements thereto complied in all material respects with the
applicable provisions of the Securities Act and the Securities Act
2
Regulations and did not contain an untrue statement of a material fact and did
not omit to state any material fact required to be stated therein or necessary
in order to make the statements therein in light of the circumstances under
which they were made not misleading. No representation and warranty is made in
this subsection (b), however, with respect to any information contained in or
omitted from the Registration Statement or the Prospectus or any related
Preliminary Prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through you as herein stated
expressly for use in connection with the preparation thereof. If Rule 434 is
used, the Company will comply with the requirements of Rule 434.
(c) Deloitte & Touche, LLP, whose reports are contained in the
Registration Statement, are independent public accountants with respect to the
Company as required by the Securities Act and the Securities Act Regulations.
(d) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as set forth in the
Registration Statement and the Prospectus, there has been no material adverse
change in the business, business prospects, properties, operations, financial
condition or results of operations (any such change being referred to herein as
a "Material Adverse Change") of the Company whether or not arising from
transactions in the ordinary course of business, and since the date of the
latest statement of financial condition included in the Registration Statement
and the Prospectus, the Company has not incurred or undertaken any liabilities
or obligations, direct or contingent, which are material to the Company except
for liabilities or obligations which are set forth in or contemplated by the
Registration Statement and the Prospectus.
(e) This Agreement and the Management Agreement (the "Management
Agreement") to be entered into on or prior to the Closing Date between the
Company and the Manager and the transactions contemplated herein and therein
have been duly and validly authorized by the Company, and this Agreement has
been and the Management Agreement has been or will be duly and validly executed
and delivered by the Company.
(f) The execution, delivery, and performance of this Agreement and the
Management Agreement and the consummation of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or result in a breach
of any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default) under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to any agreement, instrument,
franchise, license or permit to which the Company is a party or by which it or
any of its properties or assets may be bound or (ii) violate or conflict with
any provision of the articles of incorporation or bylaws of the Company or (iii)
violate or conflict with any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of its properties or assets, except,
with respect to clauses (i) and (iii) above, for those violations or conflicts
that would not have a material adverse effect on the business, business
prospects, properties,
3
operations, financial condition or results of operations (any such effect being
referred to herein as a "Material Adverse Effect") of the Company, or a material
adverse effect on the transactions contemplated by this Agreement. No consent,
approval, authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of its properties or assets is
required for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, including the issuance,
sale and delivery of the Shares to be issued, sold and delivered by the Company
hereunder, and such consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters.
(g) Except as otherwise disclosed in the Prospectus, all of the
outstanding shares of Common Stock are duly and validly authorized and issued,
fully paid and nonassessable and were not issued and are not now in violation of
or subject to any preemptive rights. The Shares, when issued, delivered and
sold in accordance with this Agreement, will be duly and validly issued and
outstanding, fully paid and nonassessable, and will not have been issued in
violation of or be subject to any preemptive rights. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Prospectus under
the caption "Capitalization." The Common Stock, including the Shares, conforms
to the description thereof contained in the Registration Statement and the
Prospectus.
(h) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Maryland. The
Company has been duly qualified and is in good standing as a foreign corporation
in each jurisdiction in which the character or location of its properties
(owned, leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in good
standing which will not in the aggregate have a Material Adverse Effect on the
Company or a material adverse effect on the transactions contemplated by this
Agreement. The Company has all requisite power and authority, and all necessary
consents, approvals, authorizations, orders, registrations, qualifications,
licenses and permits of and from all public, regulatory or governmental agencies
and bodies, to own, lease and operate its properties and conduct its business as
now being conducted and as described in the Registration Statement and the
Prospectus, except for the absence of which in the aggregate would not have a
Material Adverse Effect on the Company or a material adverse effect on the
transactions contemplated by this Agreement, and no such consent, approval,
authorization, order, registration, qualification, license or permit contains a
materially burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus.
(i) The Company has no subsidiaries.
(j) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which the Company is a party or to which any property
of the Company is subject or which is pending or, to the knowledge of the
Company, contemplated against the Company which might result in any Material
Adverse Change of the Company,
4
which might materially and adversely affect the transactions contemplated by
this Agreement or which is required to be disclosed in the Registration
Statement or the Prospectus and is not so disclosed. The description of
litigation matters in the Prospectus under the caption "Business--Legal
Proceedings" is complete and accurate in all material respects.
(k) The Company has not taken and will not take, directly or indirectly,
any action designed to cause or result in, or which constitutes or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares.
(l) The statement of financial condition, including the notes thereto,
included in the Registration Statement and the Prospectus present fairly the
financial position of the Company on the dates indicated and the results of
operations for the periods specified; said statement of financial condition have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and no other statement of financial condition,
financial statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus under
the caption "Capitalization" fairly present the information set forth therein on
a basis consistent with that of the audited financial statements contained in
the Registration Statement.
(m) Except as otherwise disclosed in the Prospectus, no holder of
securities of the Company has any rights to the registration of securities of
the Company or securities of any other person that are convertible, exchangeable
or exercisable for securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the Shares
contemplated hereby.
(n) The Company has good and marketable title to all the properties and
assets reflected as owned in the financial statements referred to in
subsection (l) above or elsewhere in the Prospectus, in each case free and clear
of any security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except such as are described in the Prospectus and such as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by the
Company. The real property, improvements, equipment and personal property held
under lease by the Company are held under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not materially interfere
with the use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company.
(o) The Company has filed all necessary federal, state and foreign income
and franchise tax returns and have paid all taxes required to be paid by any of
them and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them, except insofar as the failure to file such returns
would not have a Material Adverse Effect on the Company or a material adverse
effect on the transactions contemplated by this Agreement. The Company has made
adequate charges, accruals and reserves in their respective financial statements
in respect of all federal, state and foreign income and franchise taxes for all
periods
5
as to which the tax liability of the Company has not been finally determined,
except to the extent of any inadequacy that would not have a Material Adverse
Effect on the Company or a material adverse effect on the transactions
contemplated by this Agreement.
(p) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(q) Except as otherwise disclosed in the Prospectus, there are no business
relationships or related-party transactions of the type described in Item 404 of
Regulation S-K of the Commission involving the Company, except for such
transactions that would be considered immaterial under such Item 404. The
descriptions in the Prospectus under the caption "Certain Relationships and
Related Party Transactions and Conflicts of Interest" are complete and accurate
in all material respects.
(r) The Company has elected to be taxed as a "real estate investment
trust" (a "REIT") under Sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the "Code"), effective beginning in its taxable year 1997.
The Company has not taken any action that would prevent it from qualifying as a
REIT under the Code, and from and after the Closing Date, the Company shall
conduct its operations in a manner so as to enable it to elect to be qualified,
and thereafter maintain its qualification, as a REIT under the Code.
(s) Prior to the date of the Preliminary Prospectus, the Shares were duly
authorized (subject to issuance thereof) for listing on the New York Stock
Exchange (the "NYSE").
(t) The Company is not, and after giving effect to the issue and sale of
the Shares by the Company will not be, an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(u) Neither the Company nor its officers, directors, employees and agents
have distributed or will distribute prior to the Closing Date any offering
material in connection with the offering and sale of the Shares other than the
Preliminary Prospectus, the Prospectus, the Registration Statement or other
materials permitted by the Securities Act.
(v) The conditions for use of Form S-11, as set forth in the General
Instructions thereto, have been satisfied.
6
(w) The Company is not and will not be a "broker" within the meaning of
Section 3(a)(4) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or a "dealer" within the meaning of Section 3(a)(5) of the
Exchange Act or required to be registered pursuant to Section 15(a) of the
Exchange Act.
(x) Neither the Company nor any affiliate has incurred any liability for a
fee, commission or other compensation on account of the employment of a broker
or finder in connection with the transactions contemplated by this Agreement,
other than as disclosed in the Prospectus.
Any certificate signed by an officer of the Company and delivered to the
Representatives or their counsel shall be deemed to be a representation and
warranty by the Company as to the matters covered thereby.
1.2 REPRESENTATIONS AND WARRANTIES OF THE MANAGER. The Manager represents
and warrants to, and agrees with, the Underwriters that:
(a) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as set forth in the
Registration Statement and the Prospectus, there has been no Material Adverse
Change of the Manager whether or not arising from transactions in the ordinary
course of business.
(b) This Agreement and the Management Agreement to be entered into on or
prior to the Closing Date between the Company and the Manager and the
transactions contemplated herein and therein have been duly and validly
authorized by the Manager and this Agreement has been, and the Management
Agreement has been or will be duly and validly executed and delivered by the
Manager.
(c) The execution, delivery, and performance of this Agreement and the
Management Agreement and the consummation of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or result in a breach
of any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default) under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Manager pursuant to any agreement, instrument,
franchise, license or permit to which the Manager is a party or by which it or
any of its properties or assets may be bound or (ii) violate or conflict with
any provision of the certificate of incorporation or bylaws of the Manager or
(iii) violate or conflict with any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or body
having jurisdiction over the Manager or any of its properties or assets, except,
with respect to clauses (i) and (iii) above, for those violations or conflicts
that would not have a Material Adverse Effect on the Manager, or a material
adverse effect on the transactions contemplated by this Agreement. No consent,
approval, authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental or regulatory agency or
body having jurisdiction over the Manager or any of its
7
properties or assets is required for the execution, delivery and performance of
this Agreement by the Manager.
(d) The Manager has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The
Manager has been duly qualified and is in good standing as a foreign
corporation, in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to be so qualified
or in good standing which will not in the aggregate have a Material Adverse
Effect on the Manager or a material adverse effect on the transactions
contemplated by this Agreement. The Manager has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies, to own, lease and operate its
properties and conduct its business as now being conducted and as described in
the Registration Statement and the Prospectus, except for the absence of which
in the aggregate would not have a Material Adverse Effect on the Manager or a
material adverse effect on the transactions contemplated by this Agreement, and
no such consent, approval, authorization, order, registration, qualification,
license or permit contains a materially burdensome restriction not adequately
disclosed in the Registration Statement and the Prospectus.
(e) The Manager has no subsidiaries.
(f) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which the Manager is a party or to which any property
of the Manager is subject or which is pending or, to the knowledge of the
Manager, contemplated against the Manager which might result in any Material
Adverse Change of the Manager, which might materially and adversely affect the
transactions contemplated by this Agreement or which is required to be disclosed
in the Registration Statement or the Prospectus and is not so disclosed.
(g) The Manager has not taken and will not take, directly or indirectly,
any action designed to cause or result in, or which constitutes or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares.
(h) The Manager has filed all necessary federal, state and foreign income
and franchise tax returns and have paid all taxes required to be paid by any of
them and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them, except insofar as the failure to file such returns
would not have a Material Adverse Effect on the Manager or a material adverse
effect on the transactions contemplated by this Agreement. The Manager has made
adequate charges, accruals and reserves in its financial statements in respect
of all federal, state and foreign income and franchise taxes for all periods as
to which the tax liability of the Manager has not been finally determined,
except to the extent of any inadequacy that would not have a Material Adverse
Effect on the Manager or a material adverse effect on the transactions
contemplated by this Agreement.
8
(i) The Manager is insured by recognized financially sound and reputable
institutions with policies in such amounts and with such deductibles and
covering such risks that the Manager believes are adequate to insure against
potential losses, with such policies including, without limitation, policies
covering errors and omissions and fidelity bonds. The Manager has no reason to
believe that it will not be able (i) to renew their existing insurance coverage
as and when such policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct its business
as now conducted and at a cost that would not result in a Material Adverse
Change of the Manager. The Manager has not been denied any insurance coverage
for which it has sought or applied.
(j) The Manager maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(k) Except as otherwise disclosed in the Prospectus, there are no business
relationships or related-party transactions of the type described in Item 404 of
Regulation S-K of the Commission involving the Company and the Manager, except
for such transactions that would be considered immaterial under such Item 404.
The descriptions in the Prospectus under the caption "Certain Relationships and
Related Party Transactions and Conflicts of Interest" are complete and accurate
in all material respects.
(l) The Manager is not and will not be an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act.
(m) The Manager is not and will not be a "broker" within the meaning of
Section 3(a)(4) of the Exchange Act or a "dealer" within the meaning of
Section 3(a)(5) of the Exchange Act or required to be registered pursuant to
Section 15(a) of the Exchange Act.
Any certificate signed by an officer of the Manager and delivered to the
Representatives or their counsel shall be deemed to be a representation and
warranty by the Manager as to the matters covered thereby.
2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price per share of $_________, the number of Firm Shares set forth opposite the
respective names of the Underwriters in
9
Schedule I hereto plus any additional number of Shares which such Underwriter
may become obligated to purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of certificates for,
the Shares shall be made at the office of Bear Xxxxxxx, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, or at such other place as shall be agreed upon by you and the
Company, at 10:00 a.m. on the third or fourth business day (as permitted under
Rule 15c6-1 of the rules and regulations of the Commission under the Exchange
Act (the "Exchange Act Regulations")) (unless postponed in accordance with the
provisions of Section 9 hereof) following the date of the effectiveness of the
Registration Statement (or, if the Company has elected to rely upon Rule 430A of
the Securities Act Regulations, the third or fourth business day (as permitted
under Rule 15c6-1 of the Exchange Act Regulations) after the determination of
the public offering price of the Shares), or such other time not later than ten
business days after such date as shall be agreed upon by you and the Company
(such time and date of payment and delivery being herein called the "Closing
Date"). Payment shall be made to the Company by wire transfer in same-day
funds, against delivery to you for the respective accounts of the Underwriters
of certificates for the Shares to be purchased by them. Certificates for the
Shares shall be registered in such name or names and in such authorized
denominations as you may request in writing at least 48 hours prior to the
Closing Date. The Company will permit you to examine and package such
certificates for delivery at least 24 hours prior to the Closing Date.
(c) In addition, the Company hereby grants to the Underwriters the option
to purchase up to 2,250,000 Additional Shares at the same purchase price per
share to be paid by the Underwriters to the Company for the Firm Shares as set
forth in this Section 2, for the sole purpose of covering over-allotments in the
sale of Firm Shares by the Underwriters. This option may be exercised at any
time, in whole or in part, on or before the thirtieth day following the date of
the Prospectus, by written notice by you to the Company. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is being
exercised and the date and time, as reasonably determined by you, when the
Additional Shares are to be delivered (such date and time being herein sometimes
referred to as the "Additional Closing Date"); PROVIDED, HOWEVER, that the
Additional Closing Date shall not be earlier than the Closing Date or earlier
than the second full business day after the date on which the option shall have
been exercised nor later than the eighth full business day after the date on
which the option shall have been exercised (unless such time and date are
postponed in accordance with the provisions of Section 9 hereof). Certificates
for the Additional Shares shall be registered in such name or names and in such
authorized denominations as you may request in writing at least 48 hours prior
to the Additional Closing Date. The Company will permit you to examine and
package such certificates for delivery at least 24 hours prior to the Additional
Closing Date.
(d) The number of Additional Shares to be sold to each Underwriter shall
be the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 9 hereof) bears to the total
10
number of Firm Shares being purchased from the Company, subject, however, to
such adjustments to eliminate any fractional shares as you in your sole
discretion shall make.
(e) Payment for the Additional Shares shall be made by wire transfer in
same-day funds at the office Bear Xxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
or such other location as may be mutually acceptable, upon delivery of the
certificates for the Additional Shares to you for the respective accounts of the
Underwriters.
3. OFFERING. Upon your authorization of the release of the Firm Shares,
the Underwriters propose to offer the Shares for sale to the public upon the
terms set forth in the Prospectus.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
Underwriters that:
(a) The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when any post-effective amendment to
the Registration Statement becomes effective, (ii) of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information, (iii) of the mailing or the
delivery to the Commission for filing of the Prospectus or any amendment of or
supplement to the Registration Statement or the Prospectus or any document to be
filed pursuant to the Exchange Act during any period when the Prospectus is
required to be delivered under the Securities Act, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of the initiation, or the
threatening, of any proceedings therefor, (v) of the receipt of any comments or
inquiries from the Commission relating to the Registration Statement or the
Prospectus, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any post-effective amendment to the
Registration Statement or use any amendment of or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs from
the prospectus filed with the Commission pursuant to Rule 424(b) of the
Securities Act Regulations, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the Securities Act Regulations) to which
the Representatives or counsel for the Underwriters shall reasonably object, and
will furnish the Representatives with copies of any such amendment or supplement
a reasonable amount of time prior to such proposed filing or use, as the case
may be.
(b) If any event shall occur as a result of which the Prospectus would, in
the judgment of the Underwriters or the Company include an untrue statement of a
material fact or omit to state any 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, if it
11
shall be necessary at any time to amend or supplement the Prospectus or
Registration Statement to comply with the Securities Act or the Securities Act
Regulations, the Company will notify you promptly and prepare and file with the
Commission an appropriate amendment or supplement (in form and substance
satisfactory to you) which will correct such statement or omission or which will
effect such compliance.
(c) The Company has delivered to each of you one signed copy of the
Registration Statement as originally filed, including exhibits and all
amendments thereto, and the Company will promptly deliver to each of the
Underwriters, from time to time during the period that the Prospectus is
required to be delivered under the Securities Act or the Exchange Act, such
number of copies of the Prospectus and the Registration Statement, and all
amendments of and supplements to such documents, if any, as you may reasonably
request.
(d) The Company will endeavor in good faith, in cooperation with you, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; PROVIDED, HOWEVER, that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process.
(e) The Company will make generally available (within the meaning of
Section 11(a) of the Securities Act) to its security holders and to you as soon
as practicable, but not later than 45 days after the end of its fiscal quarter
in which the first anniversary date of the effective date of the Registration
Statement occurs (or if such fiscal quarter is the Company's fourth fiscal
quarter, not later than 90 days after the end of such quarter), an earnings
statement (in form complying with the provisions of Rule 158 of the Securities
Act Regulations) covering a period of at least twelve consecutive months
beginning after the effective date of the Registration Statement (as defined in
Rule 158(c) of the Securities Act Regulations).
(f) During the period of 180 days from the date of the Prospectus, the
Company will not, directly or indirectly without your prior written consent,
issue, sell, offer or agree to sell, grant any option to purchase, or otherwise
dispose (or announce any offer, sale, grant of an option to purchase or other
disposition) of, any shares of Common Stock (or any securities convertible into,
exchangeable or exercisable for shares of Common Stock), other than the
Company's sale of Shares hereunder, the Company's issuance of Common Stock upon
the exercise of presently outstanding stock options and the grant of options
under the Company's 1997 Stock Incentive Plan.
(g) The Company will obtain the undertaking of each of its officers and
directors, the Manager and its officers and directors, the purchasers in the
private placement described in the Prospectus under the caption "Private
Placement," and such other persons as have been heretofore designated by you and
listed on Schedule II attached hereto that, during the period of 180 days (or
such shorter period as expressly agreed to by Bear Xxxxxxx) from the date of the
Prospectus, each of them will not, directly or indirectly, without your prior
written
12
consent, issue, sell, offer or agree to sell, grant any option to purchase, or
otherwise dispose (or announce any offer, sale, grant of an option to purchase
or other disposition) of, any shares of Common Stock (or any securities
convertible into, exercisable for or exchangeable for shares of Common Stock).
(h) During a period of three years from the date of the Prospectus, the
Company will furnish to you copies of (i) all reports to its stockholders; and
(ii) all reports, financial statements and proxy or information statements filed
by the Company with the Commission or any national securities exchange or
quotation system.
(i) The Company will apply the proceeds from the sale of the Shares as set
forth under the caption "Use of Proceeds" in the Prospectus.
(j) If the Company elects to rely upon Rule 462(b) of the Securities Act
Regulations, the Company shall file the Rule 462(b) Registration Statement with
the Commission in compliance with Rule 462(b) of the Securities Act Regulations
by 10:00 p.m., Washington, D.C. time, on the date of this Agreement, and the
Company shall at the time of filing, either pay to the Commission the filing fee
for the Rule 462(b) Registration Statement or give irrevocable instructions for
the payment of such fee pursuant to Rule 111(b) of the Securities Act
Regulations.
(k) The Company, during the period when the Prospectus is required to be
delivered under the Securities Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act and the
Exchange Act Regulations.
(l) The Company will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or result in,
or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares.
(m) The Company will continue to meet the requirements to qualify as a
REIT and will not revoke its election to be a REIT unless and until the Board
determines that such revocation is advantageous to the Company.
(n) The Company will use its best efforts to effect the quotation of the
Common Shares on the NYSE.
5. PAYMENT OF EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits thereto), any Preliminary Prospectus, the Prospectus and any amendments
or supplements thereto (including, without limitation, fees and expenses of the
Company's accountants and counsel), the underwriting documents (including this
Agreement,
13
the Agreement Among Underwriters and the Selling Agreement) and all other
documents related to the public offering of the Shares (including those supplied
to the Underwriters in quantities as hereinabove stated), (ii) the issuance,
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the qualification of the Shares under
state or foreign securities or Blue Sky laws, including the costs of printing
and mailing a preliminary and final "Blue Sky Memorandum" and the fees of
counsel in connection therewith and such counsel's disbursements in relation
thereto, (iv) listing the Shares on the NYSE, (v) filing fees of the Commission
and the National Association of Securities Dealers, Inc. (the "NASD"), (vi) the
cost of printing certificates representing the Shares and (vii) the cost and
charges of any transfer agent.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company and the Manager herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6 "Closing Date"
shall refer to the Closing Date for the Firm Shares and any Additional Closing
Date, if different, for the Additional Shares), to the absence from any
certificates, opinions, written statements or letters furnished to you or to
Cadwalader, Xxxxxxxxxx & Xxxx ("Underwriters' Counsel") pursuant to this
Section 6 of any misstatement or omission, to the performance by the Company and
the Manager of their respective obligations hereunder, and to the following
additional conditions:
(a) On the Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Securities Act or
proceedings therefor initiated or threatened by the Commission. The Prospectus
shall have been filed or transmitted for filing with the Commission pursuant to
Rule 424(b) of the Securities Act Regulations within the prescribed time period,
and prior to the Closing Date the Company shall have provided evidence
satisfactory to the Underwriters of such timely filing or transmittal.
(b) On the Closing Date you shall have received the opinion of Stroock &
Stroock & Xxxxx LLP, counsel for the Company and the Manager, dated the Closing
Date addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Maryland.
(ii) The Company is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the character or location
of its properties (owned, leased or licensed) or the nature or conduct of
its business makes such qualification necessary, except for those failures
to be so qualified or in good standing which will not in the aggregate have
a Material Adverse Effect on the Company or a material adverse effect on
the transactions contemplated by this Agreement.
14
(iii) The Company has all requisite corporate power and authority to
own, lease and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and the
Prospectus.
(iv) The Manager has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(v) The Manager is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the character or location
of its properties (owned, leased or licensed) or the nature or conduct of
its business makes such qualification necessary, except for those failures
to be so qualified or in good standing which will not in the aggregate have
a Material Adverse Effect on the Manager or a material adverse effect on
the transactions contemplated by this Agreement.
(vi) The Manager has all requisite power and authority to own,
lease and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and the
Prospectus.
(vii) Neither the Company nor the Manager has any subsidiaries.
(viii) The Company has an authorized capital stock as set forth in
the Registration Statement and the Prospectus. All of the outstanding
shares of Common Stock are duly and validly authorized and issued, are
fully paid and nonassessable. The Shares to be delivered on the Closing
Date have been duly and validly authorized and, when delivered by the
Company in accordance with this Agreement, will be duly and validly issued,
fully paid and nonassessable and will not have been issued in violation of
or subject to any preemptive rights, except as otherwise disclosed in the
Prospectus. The Common Stock, including the Shares, conforms to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(ix) The Shares to be sold under this Agreement to the Underwriters
are duly authorized for listing on the NYSE and such authorization has been
in effect since a date prior to the date of the Preliminary Prospectus.
(x) This Agreement and the Management Agreement and the
transactions contemplated herein and therein have been duly and validly
authorized by the Company and the Manager and this Agreement and the
Management Agreement have been duly and validly executed and delivered by
the Company and the Manager.
(xi) To the best knowledge of such counsel and except as described
in the Prospectus, there is no litigation or governmental proceeding to
which the Company or the Manager is a party or to which any property of the
Company or the Manager is subject or which is threatened against the
Company or the Manager which might result in any Material Adverse Change,
or any development involving a Material Adverse Change, of the Company or
the Manager, which might materially and adversely affect the transactions
contemplated by this Agreement or which is required
15
to be disclosed in the Registration Statement and the Prospectus and is not
so disclosed. The descriptions of litigation matters in the Prospectus
under the caption "Business--Legal Proceedings" are complete and accurate
in all material respects.
(xii) The execution, delivery, and performance of this Agreement and
the Management Agreement and the consummation of the transactions
contemplated hereby and thereby do not and will not (A) conflict with or
result in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both, would
constitute a default) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
the Manager pursuant to any agreement, instrument, franchise, license or
permit known to such counsel to which the Company or the Manager is a party
or by which any of such entities or their respective properties or assets
may be bound that is material to the Company or the Manager (collectively,
the "Material Contracts") or (B) violate or conflict with any provision of
the articles of incorporation or bylaws of the Company or the certificate
of incorporation or bylaws of the Manager or (C) to the best knowledge of
such counsel, violate or conflict with any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or the
Manager or any of their respective properties or assets, except, with
respect to clauses (A) and (C) above, for those violations or conflicts
that would not have a Material Adverse Effect on the Company or the Manager
or a material adverse effect on the transactions contemplated by this
Agreement. To the best knowledge of such counsel, no consent, approval,
authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or the Manager or any
of their respective properties or assets is required for the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, except for (x) such as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters (as to which such counsel
need express no opinion) and (y) such as have been made or obtained under
the Securities Act or the rules of the NYSE.
(xiii) At the time the Registration Statement became effective and on
the date hereof, the Registration Statement and the Prospectus as amended
or supplemented (other than the financial statements and schedules and
other financial data included therein, as to which no opinion need be
expressed) compiled and comply as to form in all material respects with the
requirements of the Securities Act and the Securities Act Regulations.
(xiv) The Registration Statement, including any Rule 462(b)
Registration Statement, is effective under the Securities Act, and to the
best knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereof or
the Rule 462(b) Registration Statement has been issued and no proceedings
therefor have been initiated or threatened
16
by the Commission. Any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) under the Securities Act
Regulations has been made in the manner and within the time period required
by such Rule.
(xv) To the best knowledge of such counsel and except as described
in the Prospectus, no holder of securities of the Company has any rights to
the registration of securities of the Company or securities of any other
person that are convertible, exchangeable or exercisable for securities of
the Company because of the filing of the Registration Statement or
otherwise in connection with the sale of the Shares contemplated hereby.
(xvi) To the best knowledge of such counsel and except as described
in the Prospectus, there are no business relationships or related-party
transactions of the type described in Item 404 of Regulation S-K of the
Commission involving the Company or the Manager, except for such
transactions that would be considered immaterial under such Item. To the
best knowledge of such counsel, the descriptions in the Prospectus under
the caption "Certain Relationships and Related Party Transactions and
Conflicts of Interest" are complete and accurate in all material respects.
(xvii) The Company has been organized in conformity with the
requirements for qualification as a REIT under Sections 856 through 860 of
the Code, and, to the best knowledge of such counsel, the Company has not
taken any action that would prevent it from qualifying as a REIT under the
Code, and the Company conducts its operations in a manner so as to enable
it to elect to be qualified, and thereafter maintain its qualification, as
a REIT under the Code.
(xviii) The Company is not, and after giving effect to the issue and
sale of the Shares by the Company will not be, an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act, or a "broker" within the meaning of Section 3(a)(4)
of the Exchange Act or a "dealer" within the meaning of Section 3(a)(5) of
the Exchange Act or required to be registered pursuant to Section 15(a) of
the Exchange Act.
(xix) The statements in the Prospectus under the captions "Risk
Factors--Legal, Tax and Other Risks," "Certain Federal Income Tax
Considerations," "ERISA Considerations," "Certain Legal Aspects of Mortgage
Loans and Real Property Investments," "Certain Provisions of Maryland Law
and the Company's Charter and Bylaws" and "Description of Capital Stock"
and in Item 34 of the Registration Statement, insofar as such statements
constitute matters of law, summaries of legal matters, the Company's
charter or bylaw provisions, legal documents or legal proceedings, or legal
conclusions, have been reviewed by such counsel and, as of the date of the
Prospectus and as of the date hereof, fairly present and summarize, in all
material respects, the matters referred to therein.
17
In addition, such opinion shall also contain a statement that such counsel
has participated in conferences with officers and representatives of the Company
and the Manager, representatives of the independent public accountants for the
Company and the Underwriters at which the contents of the Registration Statement
and the Prospectus and related matters were discussed and, although they are not
passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectus, and they have not made any independent check or
verification thereof, on the basis of the foregoing, no facts have come to the
attention of such counsel which would lead such counsel to believe that either
the Registration Statement at the time it became effective (except for financial
statements and schedules and other financial statistical data included therein,
as to which such counsel need express no opinion) or any subsequent amendment
thereof made prior to the Closing Date as of the date of such amendment
contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (except for financial statements
and schedules and other financial or statistical data included therein, as to
which counsel need express no opinion) as of its date (or any subsequent
amendment thereof or subsequent supplement thereto made prior to the Closing
Date as of the date of such amendment or supplement) and as of the Closing Date
contained or contains an untrue statement of a material fact or omitted or omits
to state any 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.
In rendering such opinion, such counsel may rely as to matters involving
the application of laws other than the laws of the United States, New York and
any other jurisdictions in which they are admitted to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to Underwriters'
Counsel, familiar with the applicable laws; PROVIDED, that such opinion shall
expressly state that the Underwriters may rely on such opinion as if it were
addressed to them. In rendering such opinion, such counsel may rely as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and the Manager and certificates or other written
statements of officers of departments of various jurisdictions having custody of
documents respecting the existence or good standing of the Company and the
Manager; PROVIDED that copies of any such statements or certificates shall be
delivered to Underwriters' Counsel and such opinion shall state that such
counsel and the Underwriters are justified in so relying upon any such
certificate. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel is in form satisfactory to such counsel and,
in their opinion, you and they are justified in relying thereon.
(c) All proceedings taken in connection with the sale of the Firm Shares
and the Additional Shares as herein contemplated shall be satisfactory in form
and substance to you and to Underwriters' Counsel, and the Underwriters shall
have received from said Underwriters' Counsel a favorable opinion, dated as of
the Closing Date with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related matters as you
may reasonably require, and the Company shall have furnished to
18
Underwriters' Counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(d) At the Closing Date you shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Company on behalf of the
Company and a certificate of the Chief Executive Officer and Chief Financial
Officer of the Manager on behalf of the Manager, each dated the Closing Date, to
the effect that (i) the condition set forth in subsection (a) of this Section 6
has been satisfied, (ii) as of the date hereof and as of the Closing Date the
representations and warranties of the Company and the Manager, respectively, set
forth in Section 1 hereof are accurate, (iii) as of the Closing Date the
obligations of the Company and the Manager, respectively, to be performed
hereunder on or prior thereto have been duly performed and (iv) subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, the Company and the Manager, respectively, have
not sustained any material loss or interference with their respective businesses
or properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any Material Adverse Change, or
any development involving a Material Adverse Change, of the Company and the
Manager, respectively, except in each case as described in or contemplated by
the Prospectus.
(e) At the time this Agreement is executed and at the Closing Date, you
shall have received (i) a letter from Deloitte & Touche, LLP, independent public
accountants for the Company, dated as of the date of this Agreement and as of
the Closing Date, respectively, addressed to the Underwriters and in form and
substance satisfactory to you, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to financial statements and certain information of the Company and its
subsidiaries contained in the Registration Statement and the Prospectus and
(ii) letters from Deloitte & Touche, LLP, Xxxxxx Xxxxxxxx LLP and Anchin, Block
and Anchin, LLP, each dated as of the date of this Agreement and the Closing
Date, respectively, addressed to the Underwriters and in form and substance
satisfactory to you, containing statements and information of the type
ordinarily included in "agreed upon procedures letters" to underwriters with
respect to the information contained in "Appendix A--Past Performance Results"
to the Prospectus.
(f) Prior to the Closing Date the Company and the Manager shall have
furnished to you such further information, certificates and documents as you may
reasonably request.
(g) You shall have received from each person who is a director or officer
of the Company, the Manager and its officers and directors, the purchasers in
the private placement described in the Prospectus under the caption "Private
Placement," and such other persons as have been heretofore designated by you and
listed on Schedule II hereto an agreement to the effect that such person will
not, directly or indirectly, without Bear Xxxxxxx'x prior written consent,
issue, sell, offer or agree to sell, grant any option to purchase, or otherwise
dispose (or announce any offer, sale, grant of an option to purchase or other
19
disposition) of, any shares of Common Stock (or any securities convertible into,
exchangeable or exercisable for shares of Common Stock) for a period of 180 days
(or such shorter period as expressly agreed to by Bear Xxxxxxx) after the date
of the Prospectus.
(h) At the Closing Date, the Shares shall have been approved for listing
on the NYSE.
If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to you or to Underwriters'
Counsel pursuant to this Section 6 shall not be in all material respects
reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, all obligations of the Underwriters hereunder may be canceled by you
at, or at any time prior to, the Closing Date and the obligations of the
Underwriters to purchase the Additional Shares may be canceled by you at, or at
any time prior to, the Additional Closing Date. Notice of such cancellation
shall be given to the Company in writing, or by telephone, telecopy, telex or
telegraph, confirmed in writing.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act against
any and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including, without limitation, attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or any
related Preliminary Prospectus or the Prospectus, or in any supplement thereto
or amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that
the Company will not be liable in any such case (i) to the extent, but only to
the extent, that any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any
Underwriter through you expressly for use therein and (ii) with respect to any
Preliminary Prospectus to the extent that any such loss, claim, damage or
liability results from the fact that an Underwriter sold Shares to a person as
to whom there was not sent or given, at or prior to written confirmation of such
sale, a copy of the Prospectus as then amended or supplemented in any case where
such delivery is required by the Securities Act if the Company has previously
furnished copies thereof to such Underwriter and the loss, claim, damage or
liability of the Underwriters results from an untrue statement or omission of a
material fact contained in the Preliminary Prospectus which was
20
corrected in the Prospectus as then amended. This indemnity agreement will be
in addition to any liability which the Company may otherwise have including
under this Agreement.
(b) The Manager agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act against
any and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including, without limitation, attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or any
related Preliminary Prospectus or the Prospectus, or in any supplement thereto
or amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein under the caption
"The Manager" in the Prospectus and in "Appendix A--Past Performance Results" to
the Prospectus; PROVIDED, HOWEVER, that the Manager will not be liable in any
such case with respect to any Preliminary Prospectus to the extent that any such
loss, claim, damage or liability results from the fact that an Underwriter sold
Shares to a person as to whom there was not sent or given, at or prior to
written confirmation of such sale, a copy of the Prospectus as then amended or
supplemented in any case where such delivery is required by the Securities Act
if the Company has previously furnished copies thereof to such Underwriter and
the loss, claim, damage or liability of the Underwriters results from an untrue
statement or omission of a material fact contained in the Preliminary Prospectus
which was corrected in the Prospectus as then amended. This indemnity agreement
will be in addition to any liability which the Manager may otherwise have
including under this Agreement.
(c) Each Underwriter severally, and not jointly, agrees to indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement and
each other person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, against
any losses, liabilities, claims, damages and expenses whatsoever as incurred
(including, without limitation, attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending, against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or any
related Preliminary Prospectus
21
or the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
you expressly for use therein; PROVIDED, HOWEVER, that in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which any
Underwriter may otherwise have including under this Agreement. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page, the stabilization language on page 2 and the statements set forth in the
first and seventh paragraphs under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of any
Underwriter expressly for use in the Registration Statement, as originally filed
or in any amendment thereof, any related Preliminary Prospectus or the
Prospectus or in any amendment thereof or supplement thereto, as the case may
be.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7, except to the extent that it
has been prejudiced in any material respect by such failure, or from any
liability that it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded (based on an
opinion of counsel) that there may be defenses available to it or them which are
different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties 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
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent; PROVIDED, HOWEVER,
that such consent was not unreasonably withheld.
22
8. CONTRIBUTION. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, the Manager and the
Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company or the Manager
any contribution received by the Company or the Manager from persons, other than
the Underwriters, who may also be liable for contribution, including persons who
control the Company or the Manager within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, officers of the Company who
signed the Registration Statement and directors of the Company) as incurred to
which the Company, the Manager and one or more of the Underwriters may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company and the Manager on the one hand and the Underwriters on
the other hand from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Manager on the one hand and the Underwriters on the other hand in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Manager on the one hand
and the Underwriters on the other hand shall be deemed to be in the same
proportion as (x) the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and (y) the underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Manager on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Manager on the one hand or the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Manager on the one hand and the Underwriters on
the other hand agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by PRO RATA allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 8, (i) in no
case shall any Underwriter be liable or responsible for any amount in excess of
the underwriting discount applicable to the Shares purchased by such Underwriter
hereunder, and (ii) 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. Notwithstanding the provisions of this Section 8 and the
preceding sentence, no Underwriter
23
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall
have the same rights to contribution as such Underwriter, and each person, if
any, who controls the Company or the Manager within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company or the
Manager, as the case may be, subject in each case to clauses (i) and (ii) of
this Section 8. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties, notify each party or parties from whom contribution may be sought,
but the omission to so notify such party or parties shall not relieve the party
or parties from whom contribution may be sought from any obligation it or they
may have under this Section 8 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
PROVIDED, HOWEVER, that such consent was not unreasonably withheld.
9. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase shall be
purchased by the non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their respective
names on Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the Firm
Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any non-
defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within five calendar days
after such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement, or in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares, shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Section 5, 7(a) and 8 hereof) or the Underwriters, but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their
24
liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to which the
default relates are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, you or the Company
shall have the right to postpone the Closing Date or Additional Closing Date, as
the case may be, for a period, not exceeding five business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 9 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares or Additional Shares.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations and
warranties, covenants and agreements of the Underwriters, the Company and the
Manager contained in this Agreement, including the agreements contained in
Section 5 hereof, the indemnity agreements contained in Section 7 hereof, and
the contribution agreements contained in Section 8 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof or by or on
behalf of the Company, any of its officers and directors, the Manager or any
controlling person of the Company or the Manager, and shall survive delivery of
and payment for the Shares to and by the Underwriters. The representations
contained in Section 1 hereof and the agreements contained in Sections 5, 7, 9
and 11(d) hereof shall survive the termination of this Agreement, including
termination pursuant to Section 9 or 11 hereof.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective upon the execution of this
Agreement.
(b) You shall have the right to terminate this Agreement at any time prior
to the Closing Date or terminate the obligations of the Underwriters to purchase
the Additional Shares at any time prior to the Additional Closing Date, as the
case may be, if (i) any domestic or international event or act or occurrence has
materially disrupted, or in your opinion will in the immediate future materially
disrupt, the market for the Company's securities or securities in general; or
(ii) if trading on the NYSE, the American Stock Exchange (the "AMEX") or the
Nasdaq National Market ("Nasdaq") shall have been suspended, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required, on the NYSE, the AMEX or Nasdaq by such
exchanges or by order of the Commission or any other governmental authority
having jurisdiction; or (iii) if a banking moratorium has been declared by a
state or federal authority or if any new restriction materially adversely
affecting the distribution of the Firm Shares or the Additional Shares, as the
case may be, shall have become effective; or (iv) there shall have occurred any
Material
25
Adverse Change with respect to the Company or the Manager; or (v) (A) if the
United States becomes engaged in hostilities or there is an escalation of
hostilities involving the United States or there is a declaration of a national
emergency or war by the United States or (B) if there shall have been such
change in political, financial or economic conditions, if the effect of any such
event in clause (A) or (B) in your judgment makes it impracticable or
inadvisable to proceed with the offering, sale and delivery of the Firm Shares
or the Additional Shares, as the case may be, on the terms contemplated by the
Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be by
telephone, telecopy, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to Section 9(b) hereof), or if the
sale of the Shares provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth herein is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof, the Company
will, subject to demand by you, reimburse the Underwriters for up to $75,000 of
out-of-pocket expenses (including the fees and expenses of their counsel)
incurred by the Underwriters in connection herewith.
12. NOTICES. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, telecopied, telexed or telegraphed and
confirmed in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxx; if sent to the
Company or the Manager, shall be mailed, delivered, telecopied, telexed or
telegraphed and confirmed in writing to the Company or the Manager, 00 Xxxx X.
Xxxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxx Xxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx.
13. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters, the Company, the Manager and the
controlling persons, directors, officers, employees and agents referred to in
Sections 7 and 8 hereof, and their respective successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. The "term successors and assigns" shall not include
a purchaser, in its capacity as such, of Shares from any of the Underwriters.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
[Signatures Commence on the Following Page]
26
If the foregoing correctly sets forth the understanding among you, the Company
and the Manager, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
LASER MORTGAGE MANAGEMENT, INC.
By: _____________________________
Name:
Title:
LASER ADVISERS INC.
By:_______________________________
Name:
Title:
Accepted as of the date first above written:
BEAR, XXXXXXX & CO. INC.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
EVEREN SECURITIES, INC.
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
On behalf of themselves and the other Underwriters named in Schedule I hereto.
BEAR, XXXXXXX & CO. INC.
By: _________________________
Name:
Title:
SCHEDULE I
NAME OF UNDERWRITER NUMBER OF FIRM
SHARES TO BE PURCHASED
Bear, Xxxxxxx & Co. Inc.. . . . . . . . . . . . . . .
Friedman, Billings, Xxxxxx & Co., Inc.. . . . . . . .
EVEREN Securities, Inc. . . . . . . . . . . . . . . .
Xxxxxx, Xxxxxxxx & Company, Incorporated. . . . . . .
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000
----------
----------
I-1
SCHEDULE II
[List persons subject to lock-up]
II-1
