Exhibit 1
RAIT INVESTMENT TRUST
550,000 COMMON SHARES OF BENEFICIAL INTEREST
PURCHASE AGREEMENT
October 31, 2002
U.S. Bancorp Xxxxx Xxxxxxx Inc.
000 Xxxxxxxx Xxxx
Mail Station J101 2005
Xxxxxxxxxxx, XX 00000-0000
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 U.S. Bancorp Xxxxx Xxxxxxx Inc.
(the "Underwriter"), with respect to the sale by the Company and the purchase by
the Underwriter, of 550,000 common shares of beneficial interest of the Company,
$.01 par value per share (the "Common Shares"). The 550,000 Common Shares to be
purchased by the Underwriter are hereinafter called the "Shares."
The Company understands that the Underwriter proposes to make a public
offering of the Shares as soon as the Underwriter deems advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-3 (No. 333-69422), including a
base prospectus, dated November 2, 2001 (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 Underwriter or any dealer.
The Company and the Underwriter agree as follows:
1. Sale and Purchase of Shares: Upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company
agrees to sell to the Underwriter and the Underwriter agrees to purchase the
Shares from the Company at the purchase price per share of $19.77. The Company
is advised by you that the Shares are to be offered to the public initially at
$20.70 per share (the "Public Offering Price") and to certain dealers selected
by you at a price that represents a concession not in excess of $.47 per share
under the Public Offering Price, and that the Underwriter may allow, and such
dealers may reallow, a concession, not in excess of $.10 per share, to certain
other dealers. The Underwriter may from time to time increase or decrease the
Public Offering Price of the Shares after the initial public offering to such
extent as the Underwriter may determine.
2. Payment and Delivery of Shares: The Shares to be purchased by the
Underwriter hereunder, in definitive form, and in such authorized denominations
and registered in such names as the Underwriter may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Underwriter, including, at the option of the
Underwriter, through the facilities of The Depository Trust Company ("DTC") for
the account of the Underwriter, against payment by or on behalf of the
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Underwriter by the Company upon
at least forty-eight hours' prior notice. The Company will, upon the request of
the Underwriter, 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 November 6, 2002 or on such other time and date as the
Company and the Underwriter may agree upon in writing. The time at which such
payment and delivery are actually made is hereinafter sometimes called the
"Closing Time."
3. Representations and Warranties of the Company and the Partnership:
The Company and the Partnership represent and warrant to the Underwriter that:
(a) the Company and each Subsidiary of the Company set forth on
Schedule I 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
2
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;
(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 material
respects with all applicable laws, rules, regulations, orders, decrees and
judgments;
(e) neither the Company nor any of the Subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under), its respective
declaration of trust, charter, 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 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;
3
(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 Underwriter hereunder
have been duly authorized by the Company; when issued and delivered against
payment therefor as provided in this Agreement, the Shares will be validly
issued, fully paid and non-assessable and the issuance of the Shares will not be
subject to any preemptive or similar rights; except as contemplated herein, no
person or entity holds a right to require or participate in the registration
under the Securities Act of the Shares pursuant to the Registration Statement;
no person or entity has a right of participation or first refusal with respect
to the sale of the Shares by the Company; except as set forth in the Prospectus,
there are no contracts, agreements or understandings between the Company and any
person or entity granting such person or entity the right to require the Company
to file a registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement; the form of
certificates evidencing the Shares complies with all applicable legal
requirements and, in all material respects, with all applicable requirements of
the 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
4
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
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 Underwriter and (iv)
any approval of the National Association of Securities Dealers, Inc. 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;
(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, 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
5
Prospectus in reliance upon and in conformity with the information concerning
the Underwriter and furnished in writing by or on behalf of the Underwriter to
the Company expressly for use in the Registration Statement or the Prospectus
(that information being limited to that described in the last sentence of the
first paragraph of Section 9(b) hereof);
(o) the Final Prospectus delivered to the Underwriter 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;
(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
6
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, 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 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, 18,734,454 Common
Shares will be issued and outstanding 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 or dividend reinvestment plan, 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
7
("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 encumbrences, 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 Common Units
has been or will be issued or is owned or held in violation of any preemptive
right; the Common 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 the a COBRA Desk filing made
with the National Association of Securities Dealers, Inc. (the "NASD") on
December 3, 2001, as subsequently amended and supplemented, in connection with a
prior shelf offering from the Registration Statement in which the Underwriter
participated as a co-managing underwriter, which filing, as subsequently amended
and supplemented, the Company reviewed and approved, neither the Company nor any
of its affiliates (i) is required to register as a "broker" or "dealer" in
accordance with the provisions of the Exchange Act or the Exchange Act
Regulations, or (ii) directly, or indirectly through one or more intermediaries,
controls or has any other association with (within the meaning of Article 1 of
the By-laws of the NASD) any member firm of the NASD;
(bb) the Company has not relied upon the Underwriter or legal counsel
for the Underwriter for any legal, tax or accounting advice in connection with
the offering and sale of the Shares;
(cc) any certificate signed by any officer of the Company or any
Subsidiary delivered to the Underwriter or to counsel for the Underwriter
pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to the Underwriter as to the matters
covered thereby;
(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,
8
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 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,
9
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, 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
10
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;
(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
11
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) the Shares have been approved for listing, upon official notice of
issuance, on the New York Stock Exchange;
(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;
(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 June 29, 1998, 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
12
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; and
(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.
(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 Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as the Underwriter may designate and to maintain
such qualifications in effect as long as 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 Underwriter promptly and, if requested by the
Underwriter, will confirm such advice in writing, when such post-effective
amendment has become effective;
(c) to prepare the Final Prospectus in a form approved by the
Underwriter 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 10:00 a.m. (New York City time) on the day
following the execution and delivery of this Agreement) to the Underwriter 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
Underwriter may reasonably request for the purposes
13
contemplated by the Securities Act Regulations, which Prospectus and any
amendments or supplements thereto furnished to the Underwriter 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 Underwriter promptly and (if requested by the
Underwriter) to confirm such advice in writing, when any post-effective
amendment to the Registration Statement becomes effective under the Securities
Act Regulations;
(e) to advise the Underwriter 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 Underwriter promptly of any proposal to
amend or supplement the Registration Statement or Prospectus and to file no such
amendment or supplement to which the Underwriter shall reasonably object in
writing;
(f) 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 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 Underwriter and counsel for the Underwriter and obtain the
consent of the Underwriter to the filing;
(h) to furnish to the Underwriter for a period of five years from the
date of this Agreement, except to the extent such documents are readily
available to the Underwriter 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 Underwriter may reasonably request
regarding the Company and its Subsidiaries;
(i) to advise the Underwriter promptly during any period of time in
which a Prospectus relating to the Shares is required to be delivered under the
Securities Act Regulations (i) of any material change in the Company's assets,
operations, business or condition (financial or otherwise) or (ii) of the
happening of any event which would require the making of any change in the
Prospectus then being used so that the Prospectus would not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were
14
made, not misleading, and, during such time, to prepare and furnish, at the
Company's expense, to the Underwriter promptly such amendments or supplements to
the Prospectus as may be necessary to reflect any such change;
(j) to furnish promptly to the Underwriter a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith) and
such number of conformed copies of the foregoing as the Underwriter may
reasonably request;
(k) to furnish to the Underwriter, not less than two business days
before filing with the Commission, subsequent to the effective date of the
Prospectus and during 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;
(n) to cause and use its best efforts to 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) 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;
(p) 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;
(q) the Company will comply with all of the provisions of any
undertakings in the Registration Statement;
(r) the Company and the Subsidiaries will conduct their affairs in
such a manner so as to ensure that neither the Company nor any Subsidiary will
be an "investment company" or an entity "controlled" by an investment company
within the meaning of the 1940 Act;
(s) if at any time during the 30-day period after the date of this
Agreement, any rumor, publication or event relating to or affecting the Company
shall occur as a result of which in the Underwriter's reasonable opinion the
market price of the Common Shares has been or is
15
likely to be materially affected (regardless of whether such rumor, publication
or event necessitates a supplement to or amendment of the Prospectus) and after
written notice from the Underwriter advising the Company to the effect set forth
above, to forthwith prepare, consult with the Underwriter concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to the Underwriter, responding to or commenting on such
rumor, publication or event;
(t) 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
(u) 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 Underwriter's Blue Sky 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 Underwriter, and the Company's road show costs and
expenses.
(b) If this Agreement shall be terminated by the Underwriter because
of any failure or refusal on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company will reimburse the Underwriter for all out-of-pocket expenses (including
the fees and disbursements of its counsel) reasonably incurred by the
Underwriter in connection with this Agreement or the transactions contemplated
herein.
6. Conditions of the Underwriter's Obligations: The obligations of
the Underwriter hereunder are subject to (i) the accuracy of the representations
and warranties on the part of the Company in all material respects on the date
hereof and at the Closing Time, (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
16
the Shares may commence, such post-effective amendment shall have become
effective not later than 5:30 p.m., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you.
(b) The Company shall furnish to the Underwriter at the Closing Time
an opinion of Ledgewood Law Firm, P.C., counsel for the Company, addressed to
the Underwriter and dated the Closing Time and in form satisfactory to Hunton &
Xxxxxxxx, counsel for the Underwriter, 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 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 beneficially by the Company; except as disclosed in
the Prospectus or pursuant to the Company's employee stock option
plan or dividend reinvestment plan, 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
employee stock option plan or dividend reinvestment plan, 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 obligation, or any such warrants, rights or options;
(ii) the Company and the Subsidiaries (other than the
Partnership) each 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, certificate of limited partnership or partnership
agreement, as the case may be, or, to the knowledge of such
17
counsel, otherwise, directly or indirectly, from paying dividends
to the Company, or from making any other 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, 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 material respects with all
applicable laws, rules, regulations and orders;
(vi) to such counsel's knowledge, except as disclosed in
the Registration Statement and the Prospectus, neither the Company
nor any of its Subsidiaries 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
18
opinion, or the federal securities laws, as to which counsel need
express only that nothing has come to its attention to lead it to
believe that such a violation has or will occur), except in the
case of 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 obtained 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 securities or blue
sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriter 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,
19
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 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 and the Common
Units by the Company or the Partnership, as the case may be, is
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 the Senior Indebtedness (as
defined below), to the best of such counsel's knowledge and solely
in reliance upon representation's 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, 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, 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
(collectively, the "Senior Indebtedness") 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;
(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;
20
(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 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 Shares have been approved for listing 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 is organized in conformity with the requirements
for qualification as a real estate investment trust pursuant to Sections
856 through 860 of the
21
Code, and the Company's current and proposed method of operation will
enable it to meet the requirements for qualification and taxation as a
real estate investment trust under the Code;
(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 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 need to be rendered) that are 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 Underwriter at which the contents of
the Registration Statement and Prospectus were discussed and, although such
counsel is not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectus (except as and to the extent stated in subparagraphs
(xx) and (xxi) above), nothing has caused 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).
(c) The Company shall furnish to the Underwriter at the Closing Time an
opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, special counsel for the
Company, addressed to the Underwriter and dated the Closing Time and in form
satisfactory to Hunton & Xxxxxxxx, counsel for the Underwriter, 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;
22
(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; 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
corporate power and authority to own its respective properties and to
conduct its respective business as described in the Registration Statement
and the Prospectus and, in the case of the Company, to execute, deliver
and perform this Agreement and to consummate the transactions described
herein;
(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, executed and delivered
by the Company.
(d) The Underwriter shall have received from Xxxxx Xxxxxxxx LLP,
independent public accountants for the Company, letters dated, respectively, as
of the date of this Agreement and the Closing Time addressed to the Underwriter
in form and substance satisfactory to the Underwriter, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
Underwriter 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 Underwriter shall have received at the Closing Time the favorable
opinion of Hunton & Xxxxxxxx, dated the Closing Time, addressed to the
Underwriter and in form and substance satisfactory to the Underwriter.
(f) No amendment or supplement to the Registration Statement or Prospectus
shall have been filed to which the Underwriter shall have objected in writing.
(g) Prior to the Closing Time (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
23
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
(i) no material and unfavorable change in the assets, results of operations,
business, or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole shall occur or become known (whether or not
arising in the ordinary course of business) or that makes it, in the judgment of
the Underwriter, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus, or (ii) no transaction which is material
and unfavorable to the Company shall have been entered into by the Company or
any of the Subsidiaries.
(i) Intentionally omitted.
(j) At the Closing Time, the Shares shall have been approved for listing
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, deliver to the Underwriter 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 Underwriter such other
documents and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Prospectus, the representations,
warranties and 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 as the Underwriter 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.
(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.
7. Termination: The obligations of the Underwriter hereunder shall be
subject to termination in the absolute discretion of the Underwriter, at any
time prior to the Closing Time, (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
24
in the ordinary course of business, or (iii) if there has occurred outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic, political or other conditions the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the Underwriter, impracticable to market or deliver the Shares or enforce
contracts for the sale of the Shares, or (iv) if trading in any securities of
the Company has been suspended by the Commission or by the New York Stock
Exchange or if trading generally on the New York Stock Exchange, 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 Underwriter has or will have 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
Underwriter 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 Underwriter, impracticable to market or deliver
the Shares on the terms and in the manner contemplated in the Prospectus.
If the Underwriter elects to terminate this Agreement as provided in this
Section 7, the Company shall be notified promptly by telephone, promptly
confirmed by facsimile.
If the sale to the Underwriter of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriter for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriter shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof).
8. Intentionally omitted.
9. Indemnity and Contribution by the Company, the Partnership and the
Underwriter:
(a) The Company and the Partnership, jointly and severally, agree to
indemnify, defend and hold harmless the Underwriter and any person who controls
the Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) which, jointly
or severally, the Underwriter or controlling person may incur under the
Securities Act, the Exchange Act or otherwise, insofar as such loss, expense,
liability, damage or claim arises out of or is based upon (i) any breach of any
representation, warranty or covenant of the Company or the Partnership contained
herein or (ii) any untrue statement or
25
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
Underwriter to the Company or the Partnership expressly for use in such
Registration Statement, such Prospectus or such Marketing Materials, provided,
however, that the indemnity agreement contained in this subsection (a) with
respect to the Prospectus shall not inure to the benefit of the Underwriter (or
to the benefit of any person controlling such Underwriter) with respect to any
person asserting any such loss, expense, liability, damage or claim which is the
subject thereof if the Prospectus or any supplement thereto prepared with the
consent of the Underwriter and furnished to the Underwriter prior to the Closing
Time corrected any such alleged untrue statement or omission and if the
Underwriter failed to send or give a copy of the Prospectus or supplement
thereto to such person at or prior to the written confirmation of the sale of
Shares to such person, unless such failure resulted from noncompliance by the
Company 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
Underwriter or any controlling person in respect of which indemnity may be
sought against the Company or the Partnership pursuant to the preceding
paragraph, the Underwriter shall promptly notify the Company and the Partnership
in writing of the institution of such claim or action or 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 Underwriter or
controlling person shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of the Underwriter or such controlling person unless the employment of such
counsel shall have been authorized in writing by the Company 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 Underwriter believes may present a conflict for counsel
representing the Company or the Partnership and the Underwriter (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
26
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 Underwriter 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) The Underwriter 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
Underwriter 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 U.S. Bancorp Xxxxx Xxxxxxx Inc. ("USBPJ"), and
entities associated with USBPJ in the Prospectus constitute the only information
furnished by or on behalf of the Underwriter 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
Underwriter pursuant to the foregoing paragraph, the Company, the Partnership or
such person shall promptly notify the Underwriter in writing of the institution
of such action and the Underwriter 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 Underwriter in connection
with the defense of such action or the Underwriter shall not have employed
counsel to have charge of the defense of such action within a reasonable time or
such indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Underwriter (in which
case the Underwriter shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the Underwriter and paid as incurred
(it being understood, however, that the Underwriter shall not be liable for the
expenses of more than one separate firm of attorneys in any one action or series
of related actions in the same jurisdiction representing the indemnified parties
who are parties to such action). Anything in this paragraph to the contrary
notwithstanding, the Underwriter shall not be liable for any settlement of any
such claim or action effected without the written consent of the Underwriter.
27
(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 Underwriter
on the other hand from the offering of the Shares or (ii) if (but only if) the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Partnership on the one hand and of the Underwriter on the other in
connection with the statements or omissions which resulted in such losses,
expenses, liabilities, damages or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Partnership on the one hand and the Underwriter on the other shall be deemed to
be in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and the Partnership bear to the underwriting discounts and
commissions received by the Underwriter. The relative fault of the Company and
the Partnership on the one hand and of the Underwriter on the other shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company or the Partnership or by the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
(d) The Company and the Partnership, on the one hand, and the Underwriter,
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 Underwriter shall not be
required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by the Underwriter. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
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 Underwriter, or any person who controls the
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, or by or on behalf of the Company, the 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 the Underwriter agree promptly to
notify the
28
others of the commencement of any litigation or proceeding against it and, in
the case of the Company, against any of the Company's officers and directors, in
connection with the sale and delivery of the Shares, or in connection with the
Registration Statement or Prospectus.
11. Notices: Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriter, shall be sufficient in all respects if delivered to U.S.
Bancorp Xxxxx Xxxxxxx Inc., 800 Nicollet Mall, Mail Station J1012005,
Xxxxxxxxxxx, XX 00000-0000, Attention: Equity Capital Markets; 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 Underwriter, 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 Underwriter) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
[signature page follows]
29
If the foregoing correctly sets forth the understanding among the Company
and the Underwriter, please so indicate in the space provided below for the
purpose, whereupon this Agreement shall constitute a binding agreement among the
Company, the Partnership and the Underwriter.
Very truly yours,
RAIT INVESTMENT TRUST
/s/ Xxxxx X. Xxxxx
-----------------------------------
By: Xxxxx X. Xxxxx
Its: Chief Executive Officer
RAIT PARTNERSHIP, L.P.
By: RAIT General, Inc.
Its: General Partner
/s/ Xxxxx X. Xxxxx
-----------------------------------
By: Xxxxx X. Xxxxx
Its: Chief Executive Officer
Accepted and agreed to as
of the date first above written:
U.S. BANCORP XXXXX XXXXXXX INC.
/s/ Xxxxx Xxxxxx Xxxxxxxx
----------------------------
By: Xxxxx Xxxxxx Xxxxxxxx
Its: Managing Director
