ANTHRACITE CAPITAL, INC.
20,000,000 Shares of Common Stock
UNDERWRITING AGREEMENT
March __,
1998
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXXX BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
as Representatives of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Anthracite Capital, Inc., a Maryland corporation that intends to elect to
be taxed as a real estate investment trust (the "Company"), confirms its
agreement with Friedman, Billings, Xxxxxx & Co., Inc., Xxxxxx Brothers Inc.,
Prudential Securities Incorporated, and each of the other Underwriters listed
on Schedule I hereto (collectively, the "Underwriters"), for whom Friedman,
Billings, Xxxxxx & Co., Inc., Xxxxxx Brothers Inc., and Prudential Securities
Incorporated are acting as representatives (in such capacity, the
"Representatives"), with respect to (i) the sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of common stock of the Company, $.001 par value
per share (the "Common Shares "), set forth in Schedule I hereto and (ii) the
grant by the Company to the Underwriters, acting severally and not jointly, of
the option described in Section 1(b) hereof to purchase all or any part of
3,000,000 additional Common Shares to cover over-allotments, if any. The
20,000,000 Common Shares to be purchased by the Underwriters (the "Initial
Shares") and all or any part of the 3,000,000 Common Shares subject to the
option described in Section 1(b) hereof (the "Option Shares") are hereinafter
called, collectively, the "Shares."
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-11 (No. 333-40813) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations thereunder (the "Securities Act Regulations"). The Company has
prepared and filed such amendments thereto, if any, and such amended
preliminary prospectuses, if any, as may have been required to the date
hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. The registration statement has
been declared effective under the Securities Act by the Commission. The
registration statement as amended at the time it became effective (including
all information deemed to be a part of the registration statement at the time
it became effective pursuant to Rule 430A(b) of the Securities Act
Regulations) is hereinafter called the "Registration Statement," except that,
if the Company files a post-effective amendment to such registration statement
that becomes effective prior to the Closing Time (as defined below),
"Registration Statement" shall refer to such registration statement as so
amended. Any registration statement filed pursuant to Rule 462(b) of the
Securities Act Regulations is hereinafter called the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the 462(b) Registration Statement. Each prospectus included in the
registration statement, or amendments thereof or supplements thereto, before
it became effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant to
Rule 424(a) of the Securities Act Regulations is hereinafter called the
"Preliminary Prospectus." The term "Prospectus" means the final prospectus,
as first filed with the Commission pursuant to paragraph (1) or (4) of
Rule 424(b) of the Securities Act Regulations, and any amendments thereof or
supplements thereto.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a)Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, the Company agrees to sell to
each Underwriter, severally and not jointly, and each Underwriter agrees,
severally and not jointly, to purchase from the Company at the purchase price
per share of $_____, the number of Initial Shares set forth in Schedule I
opposite such Underwriter's name, plus any additional number of Initial Shares
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof subject, in each case, to such adjustments
among the Underwriters as the Representatives in their sole discretion shall
make to eliminate any sales or purchases of fractional shares.
(b)Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase from the Company all or any part of the Option Shares at the purchase
price per share set forth in paragraph (a) above plus any additional number of
Option Shares that such Underwriter may become obligated to purchase pursuant
to the provisions of Section 8 hereof. The option hereby granted will expire
30 days after the date hereof and may be exercised in whole or in part from
time to time only for the purpose of
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covering over-allotments, which may be made in connection with the offering
and distribution of the Initial Shares, upon notice by the Representatives to
the Company setting forth the number of Option Shares as to which the several
Underwriters are then exercising the option and the time and date of payment
and delivery for such Option Shares. Any such time and date of delivery (a
"Date of Delivery") shall be determined by the Representatives, but shall not
be later than seven full business days nor earlier than two full business days
after the exercise of said option, nor in any event prior to the Closing Time,
as hereinafter defined, unless otherwise agreed by the Representatives and the
Company. If the option is exercised as to all or any portion of the Option
Shares, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Shares then being
purchased which the number of Initial Shares set forth in Schedule I opposite
the name of such Underwriter bears to the total number of Initial Shares,
subject in each case to such adjustments as the Representatives in their sole
discretion shall make to eliminate any sales or purchases of fractional
shares.
(c)Terms of Public Offering. The Company is advised by you that the
Shares are to be offered to the public initially at $_____ per share (the
"Public Offering Price") and to certain dealers selected by you at a price
that represents a concession not in excess of $0.__ per share under the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $0.__ per share, to any Underwriter or
to certain other dealers. The Underwriters may from time to time increase or
decrease the Public Offering Price of the Shares after the initial public
offering to such extent as the Underwriters may determine.
2. Payment and Delivery:
(a)Initial Shares. Payment of the purchase price for the Initial Shares
shall be made to the Company by wire transfer of immediately available funds
or certified or official bank check payable in federal (same-day) funds at the
offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP, located at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (unless another place shall be agreed
upon by the Representatives and the Company) against delivery of the
certificates for the Initial Shares to the Representatives for the respective
accounts of the Underwriters. Such payment and delivery shall be made at
9:30 a.m., New York City time, on the third (fourth, if pricing occurs after
4:30 p.m., New York City time) business day after the date hereof (unless
another time, not later than ten business days after such date, shall be
agreed to by the Representatives and the Company). The time at which such
payment and delivery are actually made is hereinafter sometimes called the
"Closing Time." Unless the Representatives elect to take delivery of the
Initial Shares by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives, certificates for
the Initial Shares shall be delivered to the Representatives in definitive
form registered in such names and in such denominations as the Representatives
shall specify. For the purpose of expediting the checking of the certificates
for the Initial Shares by the Representatives, the Company agrees to make such
certificates available to the Representatives for such purpose at least one
full business day preceding the Closing Time.
(b)Option Shares. In addition, payment of the purchase price for the
Option Shares shall be made to the Company by wire transfer of immediately
available funds or certified or
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official bank check payable in federal (same-day) funds at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, located at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000 (unless another place shall be agreed upon by the
Representatives and the Company), against delivery of the certificates for the
Option Shares to the Representatives for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 9:30 a.m., New York
City time, on each Date of Delivery. Unless the Representatives elect to take
delivery of the Option Shares by credit through full fast transfer to the
accounts at The Depository Trust Company designated by the Representatives,
certificates for the Option Shares shall be delivered to the Representatives
in definitive form registered in such names and in such denominations as the
Representatives shall specify. For the purpose of expediting the checking of
the certificates for the Option Shares by the Representatives, the Company
agrees to make such certificates available to the Representatives for such
purpose at least one full business day preceding the relevant Date of
Delivery.
3. Representations and Warranties of the Company: The Company
represents and warrants to the Underwriters that:
(a) each of the Company, each Subsidiary of the Company set forth
on Schedule II hereto (each a "Subsidiary" and, collectively, the
"Subsidiaries") and the Manager has been duly formed or incorporated, as
the case may be, and is validly existing and in good standing under the
laws of its respective jurisdiction of formation or incorporation with
all requisite corporate power and authority to own, lease and operate its
respective properties and to conduct its respective business as now
conducted and as proposed to be conducted as described in the
Registration Statement and Prospectus and, in the case of the Company, to
authorize, execute and deliver this Agreement, the Management Agreement
to be entered into at or prior to the Closing Time between the Company
and the Manager, the form of which has been filed as an exhibit to the
Registration Statement (the "Management Agreement") and the other
agreements described in the Prospectus and listed on Schedule III
attached hereto (the "Other Transaction Documents") and to consummate the
transactions described in each such agreement, and, in the case of the
Manager, to execute and deliver the Management Agreement and to
consummate the transactions described in the Management Agreement;
(b) the Company and the Subsidiaries are duly qualified or
registered to transact business in each jurisdiction in which they
conduct their respective businesses as now conducted and as proposed to
be conducted as described in the Registration Statement and the
Prospectus and in which the failure, individually or in the aggregate, to
be so qualified or registered could reasonably be expected to have a
material adverse effect on the assets, operations or condition (financial
or otherwise) of the Company and the Subsidiaries taken as a whole; and
the Company and the Subsidiaries are in good standing in each
jurisdiction in which they own or lease real property or maintain an
office or in which the nature or conduct of their respective businesses
as now conducted or proposed to be conducted as described in the
Registration Statement and the Prospectus requires such qualification,
except where the failure to be in good standing could be reasonably
expected to not have a material adverse effect on the assets,
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operations, business or condition (financial or otherwise) of the Company
and the Subsidiaries taken as a whole;
(c) the Company and the Subsidiaries are in compliance in all
material respects with all applicable laws, rules, regulations, orders,
decrees and judgments;
(d) 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 charter or by-laws, 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 that could be
reasonably expected not to have a material adverse effect on the assets,
operations, business or condition (financial or otherwise) of the Company
and the Subsidiaries taken as a whole, and the issuance, sale and
delivery by the Company of the Shares, the execution, delivery and
performance of this Agreement, the Management Agreement and the Other
Transaction Documents (as such term is defined in Section 3(a) hereof),
by the Company, and the execution, delivery and performance of the
Management Agreement by the Manager, and consummation of the transactions
contemplated hereby and thereby 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 charter or by-laws, of the
Company, any of the Subsidiaries or the Manager, (ii) any provision of
any license, indenture, mortgage, deed of trust, loan or credit agreement
or other agreement or instrument to which the Company, any of the
Subsidiaries or the Manager 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, any of the Subsidiaries or the
Manager, except in the case of clause (ii) for such breaches or defaults
which could be reasonably expected not to have a material adverse effect,
with respect to the Company or the Subsidiary, on the assets, operations,
business or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole or result in the creation or imposition of
any material lien, charge, claim or encumbrance upon any property or
asset of the Company or the Subsidiaries, or, with respect to the
Manager, not to have a material adverse effect on the Manager's abilities
to execute and perform its obligations under the Management Agreement;
(e) the Company has full legal right, power and authority to enter
into and perform this Agreement, the Management Agreement and the Other
Transaction Documents and to consummate the transactions contemplated
herein; this Agreement, the Management Agreement and the Other
Transaction Documents have been duly authorized, executed and delivered
by the Company and each 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
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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;
(f) the Manager has full legal right, power and authority to enter
into and perform the Management Agreement and to consummate the
transactions contemplated therein; the Management Agreement has been duly
authorized, executed and delivered by the Manager and constitutes a valid
and binding agreement of the Manager, 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;
(g) the issuance and sale of the Shares to the Underwriters
hereunder have been duly authorized by the Company; when issued and
delivered against payment therefor as provided in this Agreement, the
Shares will be validly issued, fully paid and non assessable and the
issuance of the Shares will not be subject to any preemptive or similar
rights; except as 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 charter and bylaws of
the Company and the requirements of the New York Stock Exchange;
(h) 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 (i) the
execution, delivery and performance by the Company of this Agreement, the
Management Agreement and the Other Transaction Documents, the
consummation of the transaction contemplated hereby and thereby, (ii) the
execution, delivery and performance by the Manager of the Management
Agreement or the consummation of the transactions contemplated thereby,
or (iii) the sale and delivery of the Shares, other than (x) such as have
been obtained, or will have been obtained at the Closing Time or the
relevant Date of Delivery, as the case may be, under the Securities Act
or the Securities Exchange Act of 1934, (y) such approvals as have been
obtained in connection with the approval of the listing of the Shares on
the New York Stock Exchange and (z) any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters;
(i) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all
necessary filings required under
6
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 reasonably be expected to not have, individually or in
the aggregate, a material adverse effect on the assets, operations,
business or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole; neither the Company nor any of the
Subsidiaries is in violation of, in default under, or has received any
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 be material and adverse to the assets,
operations, business or condition (financial or otherwise) of the Company
and the Subsidiaries taken as a whole; and no such license,
authorization, consent or approval contains a materially burdensome
restriction that is not adequately disclosed in the Registration
Statement and the Prospectus;
(j) each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the Securities Act and
no stop order suspending the effectiveness of the Registration Statement
or any Rule 462(b) Registration Statement has been issued under the
Securities Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are threatened by the
Commission, and any request on the part of the Commission for additional
information has been complied with;
(k) the Company and the transactions contemplated by this Agreement
meet the requirements and conditions for using a registration statement
on Form S-11 under the Securities Act, set forth in the General
Instructions to Form S-11; the Preliminary Prospectus and the
Registration Statement comply and the Prospectus and any further
amendments or supplements thereto will comply, when they have become
effective or are filed with the Commission, as the case may be, in all
material respects with the requirements of the Securities Act and the
Securities Act Regulations and, in each case, present, or will present,
fairly the information required to be shown; the Registration Statement
did not, and any amendment thereto will not, in each case as of the
applicable effective date, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the
Preliminary Prospectus does not, and the Prospectus or any amendment or
supplement thereto will not, as of the applicable filing date and at the
Closing Time and on each Date of Delivery (if any), contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no warranty or representation
with respect to any statement contained in the Registration Statement or
the Prospectus in reliance upon and in
7
conformity with the information concerning the Underwriters and furnished
in writing by or on behalf of the Underwriters through the
Representatives to the Company expressly for use in the Registration
Statement or the Prospectus (that information being limited to that
described in the last sentence of the first paragraph of Section 9(b)
hereof);
(l) the Preliminary Prospectus in paper format was and the
Prospectus in paper format delivered to the Underwriters for use in
connection with this offering will be identical to the versions of the
Preliminary Prospectus and 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;
(m) all legal or governmental proceedings, contracts or documents
that 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;
(n) 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, arbital panel or agency which could reasonably be
expected to result in a judgment, decree, award or order having a
material adverse effect on the assets, operations, business or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a
whole, or which could adversely affect the consummation of the
transactions contemplated by this Agreement in any material respect;
(o) the financial statements, including the notes thereto, included
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 in the Registration
Statement and the Prospectus fairly present the information required to
be shown therein; no other financial statements or schedules are required
by Form S-11 or otherwise to be included in the Registration Statement or
Prospectus;
(p) Deloitte & Touche, LLP, whose reports on the audited financial
statements of the Company and the Subsidiaries are included as part of
the Registration Statement and Prospectus, are and were during the
periods covered by their reports independent public accountants within
the meaning of the Securities Act and the Securities Act Regulations;
(q) 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
8
Registration Statement or Prospectus, there has not been (i) any material
adverse change in the assets, operations, business or condition
(financial or otherwise), present or prospective, of the Company and the
Subsidiaries taken as a whole, whether or not arising in the ordinary
course of business, (ii) any transaction, which is material to the
Company and the Subsidiaries taken as a whole, planned or entered into by
the Company or any of the Subsidiaries, (iii) any obligation, contingent
or otherwise, directly or indirectly incurred by the Company or any of
the Subsidiaries, which is material to the Company and the Subsidiaries
taken as a whole or (iv) any dividend or distribution of any kind
declared, paid or made with respect to the capital stock of the Company;
(r) the authorized shares of Common Shares 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"; immediately after the Closing Time, 21,357,573 Common
Shares will be issued and outstanding (subject to the Underwriter's
option described in Section 1(b) hereof) and no shares of any other class
of Common Shares or preferred stock will be issued and outstanding. All
of the issued and outstanding shares of Common Shares 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 Common
Shares of the Company have been issued in violation of any preemptive or
similar rights granted by the Company; except as disclosed in the
Prospectus, there is no outstanding option, warrant or other right
calling for the issuance of, and no commitment, plan or arrangement to
issue, any shares of Common Shares of the Company or any security
convertible into or exchangeable for shares of Common Shares of the
Company;
(s) all of the issued and outstanding shares of capital stock of
each Subsidiary have been duly authorized and are validly issued, fully
paid and non assessable, and 95% are owned of record and beneficially by
the Company, and have been offered, sold and issued by the Subsidiaries
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 the Subsidiaries 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 either Subsidiary or any security convertible into or
exchangeable for capital stock of either Subsidiary;
(t) 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;
9
(u) the Company (i) is not required to register as a "broker" or
"dealer" in accordance with the provisions of the Securities Exchange Act
of 1934 or the rules and regulations thereunder, and (ii) directly, or
indirectly through one or more intermediaries, does not control or have
any other association with (within the meaning of Article 1 of the
By-laws of the National Association of Securities Dealers, Inc. (the
"NASD")) any member firm of the NASD;
(v) the Company has not relied upon the Representatives or legal
counsel for the Representatives for any legal, tax or accounting advice
in connection with the offering and sale of the Shares;
(w) any certificate signed by any officer of the Company or any
Subsidiary delivered to the Representatives or to counsel for the
Underwriters pursuant to or in connection with this Agreement shall be
deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby;
(x) 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; 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;
(y) no relationship, direct or indirect, exists between or among
the Company or any of the Subsidiaries, on the one hand, and the
directors, officers, shareholders, customers or suppliers of the Company,
the Subsidiary or the Manager, on the other hand, which is required by
the Act to be described in the Registration Statement and the Prospectus
that is not so described;
(z) neither the Company nor the Subsidiary own any real property;
and, except as described in the Prospectus, neither the Company nor the
Subsidiary has conducted any business;
(aa) neither the Company nor any of the Subsidiaries nor, to the
best of the Company's knowledge, any officer or director 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
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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;
(bb) except as otherwise disclosed in the Prospectus, there are no
material outstanding loans or advances or material guarantees of
indebtedness by the Company or any of the Subsidiaries to or for the
benefit of any of the officers or directors of the Company or any of the
Subsidiaries or any of the members of the families of any of them;
(cc) neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any 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;
(dd) neither the Company nor any of the Subsidiaries have any
employees;
(ee) the Company is organized 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 proposed
method of operation will enable it to meet the requirements for taxation
as a real estate investment trust under the Code;
(ff) the Shares have been approved for listing, upon official notice
of issuance, on the New York Stock Exchange;
(gg) 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 offering material
in connection with the offer and sale of the Shares, other than the
Prospectus, Registration Statement and other materials permitted by the
Act;
(hh) 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;
(ii) 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
11
"investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"); and
(jj) the Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions herein
contemplated.
4. Certain Covenants of the Company: The Company hereby covenants with
each Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as the Representatives may
designate and to maintain such qualifications in effect as long as
required for the distribution of the Shares, provided that the Company
shall not be required to maintain such qualification for more than 90
days from the date hereof or to qualify as a foreign corporation or to
consent to the service of process under the laws of any such state
(except service of process with respect to the offering and sale of the
Shares);
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause such post-effective amendment to become
effective as soon as possible and will advise the Representatives
promptly and, if requested by the Representatives, will confirm such
advice in writing, when such post-effective amendment has become
effective;
(c) to prepare the Prospectus in a form approved by the
Underwriters and file such Prospectus with the Commission pursuant to
Rule 424(b) within the time period prescribed by law, on the day
following the execution and delivery of this Agreement and to furnish
promptly (and with respect to the initial delivery of such Prospectus,
not later than 10:00 a.m. (New York City time) on the day following the
execution and delivery of this Agreement) to the Underwriters as many
copies of the Prospectus (or of the Prospectus as amended or supplemented
if the Company shall have made any amendments or supplements thereto
after the effective date of the Registration Statement) as the
Underwriters may reasonably request for the purposes contemplated by the
Securities Act Regulations, which Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to
the version created to be transmitted to the Commission for filing via
XXXXX, except to the extent permitted by Regulation S-T;
(d) to advise the Representatives promptly and (if requested by the
Representatives) to confirm such advice in writing, when the Registration
Statement has become effective and when any post-effective amendment
thereto becomes effective under the Securities Act Regulations;
(e) to advise the Representatives promptly, confirming such advice
in writing, of (i) the receipt of any comments from, or any request by,
the Commission for
12
amendments or supplements to the Registration Statement or Prospectus or
for additional information with respect thereto, or (ii) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus, or of the suspension of
the qualification of the Shares for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceedings for any of such
purposes and, if the Commission or any other government agency or
authority should issue any such order, to make every reasonable effort to
obtain the lifting or removal of such order as soon as possible; to
advise the Representatives promptly of any proposal to amend or
supplement the Registration Statement or Prospectus and to file no such
amendment or supplement to which the Representatives shall reasonably
object in writing;
(f) before amending or supplementing the Registration Statement or
the Prospectus, or, during any period of time in which a Prospectus
relating to the Shares is required to be delivered under the Securities
Act Regulations, to furnish to the Representatives a copy of each such
proposed amendment or supplement before filing any such amendment or
supplement with the Commission;
(g) to furnish to the Representatives and, upon request of the
Representatives, to each of the other Underwriters, for a period of five
years from the date of this Agreement (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 publicly filed by the Company
with the Commission, the NASD, New York Stock Exchange or any securities
exchange and (iii) such other publicly available information as the
Representatives may reasonably request regarding the Company and its
Subsidiaries;
(h) to advise the Underwriters promptly during any period of time
in which a Prospectus relating to the Shares is required to be delivered
under the Securities Act Regulations (i) of any material change in the
Company's assets, operations, business or condition (financial or
otherwise) or (ii) of the happening of any event which would require the
making of any change in the Prospectus then being used so that the
Prospectus would not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and, during such time, to prepare
and furnish, at the Company's expense, to the Underwriters promptly such
amendments or supplements to the Prospectus as may be necessary to
reflect any such change; provided that the requirements of this paragraph
shall not extend beyond 90 days after the date of this Agreement;
(i) to furnish promptly to the Representatives 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
Underwriters may reasonably request;
13
(j) to furnish to the Representatives, not less than two business
days before filing with the Commission subsequent to the effective date
of the Prospectus and during the period referred to in paragraph (h)
above, a copy of any document proposed to be filed with the Commission
pursuant to Section 13, 14, or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act");
(k) to apply the net proceeds of the sale of the Shares
substantially in accordance with its statements under the caption "Use of
Proceeds" in the Prospectus;
(l) to make generally available to its security holders as soon as
practicable, but in any event not later than the end of the fiscal
quarter first occurring after the first anniversary of the effective date
of the Registration Statement, an earnings statement complying with the
provisions of Section 11(a) of the Securities Act (in form, at the option
of the Company, complying with the provisions of Rule 158 of the
Securities Act Regulations) covering a period of 12 months beginning on
the effective date of the Registration Statement;
(m) to use its best efforts to effect and maintain the listing of
the Shares on the 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;
(n) to refrain during a period of 180 days from the date of the
Prospectus, without the prior written consent of the Representatives,
from (i) offering, pledging, selling, contracting to sell, selling any
option or contract to purchase, purchasing any option or contract to
sell, granting any option for the sale of, or otherwise disposing of or
transferring, directly or indirectly, any Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares, or
filing any registration statement under the Securities Act with respect
to any of the foregoing or (ii) entering into any swap or any other
agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the
Common Shares, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Shares or
such other securities, in cash or otherwise; the foregoing sentence shall
not apply to (A) the Shares to be sold hereunder, (B) any Common Shares
issued by the Company upon the exercise of an option outstanding on the
date hereof or upon the exercise of option pursuant to any management
option plan described in the prospectus or pursuant to a dividend
reinvestment plan adopted hereafter and referred to in the Prospectus;
(o) the Company shall not, and shall use its best efforts to cause
its officers, directors and affiliates not to, (i) take, directly or
indirectly prior to termination of the underwriting syndicate
contemplated by this Agreement, any action designed to stabilize or
manipulate the price of any security of the Company, or which could be
reasonably likely to cause or result in, or which could be reasonably
likely to in the future reasonably be to cause or result in, the
stabilization or manipulation of the price of any security of the
14
Company, to facilitate the sale or resale of any of the Shares, (ii)
sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of the Shares other than pursuant to this Agreement or (iii)
pay or agree to pay to any person any compensation for soliciting any
order to purchase any other securities of the Company;
(p) the Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common
Shares;
(q) the Company will use its best efforts to meet the requirements
to qualify as a real estate investment trust under the Code;
(r) the Company will comply with all of the provisions of any
undertakings in the Registration Statement;
(s) the Company and the Subsidiaries will conduct their affairs in
such a manner so as to ensure that neither the Company nor any Subsidiary
will be an "investment company" or an entity subject to regulation as an
investment company within the meaning of the 1940 Act;
(t) if at any time during the 25-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to
or affecting the Company shall occur as a result of which in the
Representatives' reasonable opinion the market price of the Common Shares
has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus) and after written notice from the
Representatives advising the Company to the effect set forth above, to
forthwith prepare, consult with the Representatives concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to the Representatives, responding to or
commenting on such rumor, publication or event; and
(u) to maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles
and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
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 is terminated, including, but not limited to, all fees and
expenses of and filing with the Commission, the New York Stock Exchange
and the
15
NASD; all Blue Sky fees and expenses (in the United States and Canada),
including filing fees and reasonable legal fees and disbursements of the
Representatives' Blue Sky counsel (for United States and Canadian Blue
Sky), 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 Representatives, and
the Company's road show costs and expenses.
(b) If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform
its obligations under this Agreement, the Company will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement
with respect to themselves, severally, for all out-of-pocket expenses
(including the reasonable fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this
Agreement or the transactions contemplated herein.
6. Conditions of the Underwriters' Obligations: The obligations of the
Underwriters hereunder are subject to (i) the accuracy of the
representations and warranties on the part of the Company in all material
respects on the date hereof and at the Closing Time and on each Date of
Delivery, (ii) the performance by the Company of its obligations
hereunder in all material respects, and (iii) the following further
conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration
Statement to be declared effective before the offering of the Shares
may commence, such post-effective amendment shall have become
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 the Representatives.
(b) The Company shall furnish to the Underwriters at the Closing
Time and on each Date of Delivery an opinion of Skadden, Arps,
Slate, Xxxxxxx & Xxxx, LLP, counsel for the Company, addressed to
the Underwriters and dated the Closing Time and each Date of
Delivery and in form and substance satisfactory to the
Representatives. In rendering their opinion, Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP may rely as to matters of Maryland law upon the
opinion of Miles & Stockbridge, a Professional Corporation ("Miles
& Stockbridge"). In addition, Skadden, Arps, Slate, Xxxxxxx &
Xxxx, LLP shall state that they have participated in conferences
with officers and other representatives of the Company, independent
public accountants of the Company and Underwriters at which the
contents of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon and does
not assume responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement
or Prospectus (except as and to the extent stated in subparagraphs
(i) and (xvii) above), nothing has caused them to believe that the
Registration Statement, the Preliminary Prospectus or the
Prospectus, as of their respective effective or issue dates and as
of the date of such counsel's opinion, contained or contains any
untrue statement of a material fact or omitted or omits to state a
material
16
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, Preliminary Prospectus or
Prospectus).
(c) The Company shall furnish to the Underwriters at the
Closing Time and on each Date of Delivery an opinion of Miles &
Stockbridge, special counsel for the Company, addressed to the
Underwriters and dated the Closing Time and each Date of Delivery
and in form and substance satisfactory to the Representatives,
covering matters of Maryland law.
(d) The Representatives shall have received from Deloitte &
Touche LLP, letters dated, respectively, as of the date of this
Agreement, the Closing Time and each Date of Delivery, as the case
may be, addressed to the Representatives, as representatives, of the
Underwriters and in form and substance satisfactory to the
Representatives.
(e) The Representatives shall have received from Ernst &
Young, a letter dated as of the date of this Agreement, addressed to
the Representatives, as representatives, of the Underwriters and in
form and substance satisfactory to the Representatives.
(f) The Underwriters shall have received at the Closing Time
and on each Date of Delivery the favorable opinion of Hunton &
Xxxxxxxx, dated the Closing Time or such Date of Delivery, addressed
to the Representatives and in form and substance satisfactory to the
Representatives.
(g) No amendment or supplement to the Registration Statement
or Prospectus shall have been filed to which the Underwriters shall
have objected in writing.
(h) Prior to the Closing Time and each Date of Delivery (i) no
stop order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus has been issued by the
Commission, and no suspension of the qualification of the Shares for
offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes, has
occurred; and (ii) the Registration Statement and the Prospectus
shall not contain an untrue statement of 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.
(i) Between the time of execution of this Agreement and the
Closing Time or the relevant Date of Delivery (i) no material and
unfavorable change in the assets, results of operations, business,
or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole shall occur or become known (whether
or not arising in the ordinary course of business) or that makes it,
in the judgment of the Representatives, impracticable to market the
Shares on the terms and in the manner contemplated in the
17
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.
(j) At the Closing Time, the Management Agreement and the
Other Transaction Documents shall have been entered into and
delivered by all required parties.
(k) At the Closing Time, the Shares shall have been approved
for listing on the New York Stock Exchange.
(l) The Representatives shall have received letters (each, a
"Lock-up Agreement") from each person listed on Schedule IV hereto,
in form and substance satisfactory to the Representatives,
confirming that for a period of 180 days after the Closing Time,
such persons will not directly or indirectly (i) offer, pledge to
secure any obligation due on or within 180 days after the Closing
Time, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option
for the sale of, or otherwise dispose of or transfer, directly or
indirectly, any Common Shares (other than by participating as
selling stockholders in a registered offering of Common Shares
offered by the Company with the consent of the Representatives) or
any securities convertible into or exercisable or exchangeable for
Common Shares or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common
Shares, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Shares or such
other securities, in cash or otherwise, without the prior written
consent of Friedman, Billings, Xxxxxx & Co., Inc., which consent may
be withheld in its sole discretion.
(m) The Company will, at the Closing Time and on each Date of
Delivery, deliver to the Underwriters a certificate of two principal
executive officers, 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 (i), (j), (k) and (l) have been met and are true and
correct as of such date.
(n) The Company shall have furnished to the Underwriters such
other documents and certificates as to the accuracy and completeness
of any statement in the Registration Statement and the Prospectus,
the representations, warranties and statement of the Company
contained herein and in the Management Agreement, and the
performance by the Company of its covenants contained herein and
therein, and the fulfillment of any conditions contained herein or
therein, as of the Closing Time or any Date of Delivery as the
Underwriters may reasonably request.
(o) The Manager shall have furnished the Underwriters such
documents and certificates as of the Closing Time or any Date of
Delivery as the Underwriters may reasonably request, including the
letter agreement attached as Schedule V hereto.
(p) PNC Bank Corp. ("PNC") shall have furnished the
Underwriters such documents and certificates as to the description
of PNC contained in the Registration
18
Statement, as of the Closing Time or any Date of Delivery as the
Underwriters may reasonably request.
(q) All filings with the Commission required by Rule 424 under
the Securities Act to have been filed by the Closing Date shall have
been made within the applicable time period prescribed for such
filing by such Rule.
(r) The Company shall perform such of its obligations under
this Agreement as are to be performed by the terms hereof and
thereof at or before the Closing Time or the relevant Date of
Delivery.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the delivery to the Representatives on the Date if
Delivery of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the Option
Shares and other matters related to the issuance of the Option Shares.
7. Termination: The obligations of the several Underwriters hereunder
shall be subject to termination in the absolute discretion of the
Representatives, at any time prior to the Closing Time or any Date of
Delivery, (i) if any of the conditions specified in Section 6 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, or (ii)
if there has been since the respective dates as of which information is given
in the Registration Statement, any material adverse change, or any development
involving a prospective material adverse change, in or affecting the assets,
operations, business or condition (financial or otherwise) of the Company,
whether or not arising in the ordinary course of business, or (iii) if there
has occurred outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic, political or other
conditions the effect of which on the financial markets of the United States
is such as to make it, in the judgment of the Representatives, impracticable
to market or deliver the Shares or enforce contracts for the sale of the
Shares, or (iv) if trading in any securities of the Company has been suspended
by the Commission or by the 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 Representatives has a material adverse affect or will have a material
adverse affect on the
19
assets, operations, business or condition (financial or otherwise) of the
Company, (vii) any action has been taken by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
reasonable opinion of the Representatives has a material adverse effect on the
securities markets in the United States, and (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 Representatives,
impracticable to market or deliver the Shares on the terms and in the manner
contemplated in the Prospectus.
If the Representatives elect to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company
shall be unable to comply in all material respects with any of the terms of
this Agreement, the Company shall not be under any obligation or liability
under this Agreement (except to the extent provided in Sections 5 and 9
hereof) and the Underwriters shall be under no obligation or liability to the
Company under this Agreement (except to the extent provided in Section 9
hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments: If any Underwriter shall
default at the Closing Time or on a Date of Delivery in its obligation to take
up and pay for the Shares to be purchased by it under this Agreement on such
date, the Representatives shall have the right, within 36 hours after such
default, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Shares which such Underwriter shall have agreed but failed to take
up and pay for (the "Defaulted Shares"). Absent the completion of such
arrangements within such 36 hour period, (i) if the total number of Defaulted
Shares does not exceed 10% of the total number of Shares to be purchased on
such date, each non-defaulting Underwriter shall take up and pay for (in
addition to the number of Shares which it is otherwise obligated to purchase
on such date pursuant to this Agreement) the portion of the total number of
Shares agreed to be purchased by the defaulting Underwriter on such date in
the proportion that its underwriting obligations hereunder bears to the
underwriting obligations of all non-defaulting Underwriters; and (ii) if the
total number of Defaulted Shares exceeds 10% of such total, the
Representatives may terminate this Agreement by notice to the Company, without
liability to any non-defaulting Underwriter.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it
will not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by the Representatives with the approval of
the Company or selected by the Company with the approval of the
Representatives).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time
or the relevant Date of Delivery for a period not
20
exceeding five business days in order that any necessary changes in the
Registration Statement and Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with the like effect as if
such substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company and the Underwriters:
(a)The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or controlling person may incur under the Securities Act, the
Exchange Act or otherwise, insofar as such loss, expense, liability, damage or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in
the Registration Statement as amended by any post-effective amendment thereof
by the Company) or in a Prospectus (the term Prospectus for the purpose of
this Section 9 being deemed to include any Preliminary Prospectus, the
Prospectus and the Prospectus as amended or supplemented by the Company), or
arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated in either such Registration Statement or
Prospectus or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading, except insofar
as any such loss, expense, liability, damage or claim arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in and in conformity with
information furnished in writing by the Underwriters through the
Representatives to the Company expressly for use in such Registration
Statement or such Prospectus, provided, however, that the indemnity agreement
contained in this subsection (a) with respect to the Preliminary Prospectus or
the Prospectus shall not inure to the benefit of an Underwriter (or to the
benefit of any person controlling such Underwriter) with respect to any person
asserting any such loss, expense, liability, damage or claim which is the
subject thereof if the Prospectus or any supplement thereto prepared with the
consent of the Representatives and furnished to the Underwriters prior to the
Closing Time corrected any such alleged untrue statement or omission and if
such Underwriter failed to send or give a copy of the Prospectus or supplement
thereto to such person at or prior to the written confirmation of the sale of
Shares to such person, unless such failure resulted from noncompliance by the
Company with Section 4(a) of this Agreement.
If any action is brought against an Underwriter or controlling person in
respect of which indemnity may be sought against the Company pursuant to the
preceding paragraph, such Underwriter shall promptly notify the Company in
writing of the institution of such action and the Company shall assume the
defense of such action, including the employment of counsel and payment of
expenses, provided, however, that any failure or delay to so notify the
Company will not relieve the Company of any obligation hereunder, except to
the extent that its ability to defend is actually impaired by such failure or
delay. Such Underwriter or controlling person shall have the right to employ
its or their own counsel in any such case, but the fees and expenses
21
of such counsel shall be at the expense of such Underwriter or such
controlling person unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action or the Company shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Company and which counsel to the
Underwriter believes may present a conflict for counsel representing the
Company and the Underwriter (in which case the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party
or parties), in any of which events such fees and expenses shall be borne by
the Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate firm of
attorneys for the Underwriters or controlling persons in any one action or
series of related actions in the same jurisdiction representing the
indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Company shall not be liable for
any settlement of any such claim or action effected without its written
consent.
(b)Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, the Subsidiaries, their trustees and
directors, the officers that signed the Registration Statement and any person
who controls the Company or any Subsidiary within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against any
loss, expense, liability, damage or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such person may
incur under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, expense, liability, damage or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by such Underwriter
through the Representatives to the Company expressly for use in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus, or arises
out of or is based upon any omission or alleged omission to state a material
fact in connection with such information required to be stated either in the
Registration Statement or Prospectus or necessary to make such information, in
the light of the circumstances under which made, not misleading. The
statements set forth in the last paragraph on the cover page and in paragraphs
3, 6, 9, 10 and 11 under the caption "Underwriting", the information regarding
"Stabilizing" in the Preliminary Prospectus and the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by or on behalf of any Underwriter through the Representatives to
the Company for purposes of Section 3(o) and this Section 9.
If any action is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Company or such person shall promptly notify the
Representatives in writing of the institution of such action and the
Representatives, on behalf of the Underwriters, shall assume the defense of
such action, including the employment of counsel and payment of expenses. The
Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense
of the Company or such person unless the
22
employment of such counsel shall have been authorized in writing by the
Representatives in connection with the defense of such action or the
Representatives shall not have employed counsel to have charge of the defense
of such action within a reasonable time or such indemnified party or parties
shall have reasonably concluded (based on the advice of counsel) that there
may be defenses available to it or them which are different from or additional
to those available to the Underwriters (in which case the Representatives
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by such Underwriter and paid as incurred (it being understood,
however, that the Underwriters shall not be liable for the expenses of more
than one separate firm of attorneys in any one action or series of related
actions in the same jurisdiction representing the indemnified parties who are
parties to such action). Anything in this paragraph to the contrary
notwithstanding, no Underwriter shall be liable for any settlement of any such
claim or action effected without the written consent of the Representatives.
(c)If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under subsections (a) and (b) of this Section 9 in
respect of any losses, expenses, liabilities, damages or claims referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, expenses, liabilities, damages
or claims (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if (but only if) the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, expenses, liabilities,
damages or claims, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bear to the
underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative 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 Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in subsection (c)(i) and, if
applicable (ii), above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the total
price at which the securities underwritten
23
by such Underwriter exceeds the amount of damages that it has been required to
pay be reason of such untrue or alleged untrue statement, or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 9 are several in proportion to their respective underwriting
commitments and not joint.
10. Survival: The indemnity and contribution agreements contained in
Section 9 and the covenants, warranties and representations of the Company and
the Subsidiaries contained in Sections 3, 4 and 5 of this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Underwriter, or any person who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, or by or on behalf of the Company, the Subsidiaries, their directors and
officers or any person who controls the Company or any Subsidiary within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and shall survive any termination of this Agreement or the sale and delivery
of the Shares. The Company and each Underwriter agree promptly to notify the
others of the commencement of any litigation or proceeding against it and, in
the case of the Company, against any of the Company's officers and directors,
in connection with the sale and delivery of the Shares, or in connection with
the Registration Statement or Prospectus.
11. Notices: Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered to
Friedman, Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Syndicate Department; if to the Company, shall be
sufficient in all respects if delivered to the Company at the offices of the
Company at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 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; provided that
Sections 5-1401 and 5-1402 of the New York General Obligations Law shall apply
to this Agreement. The parties hereto agree to be subject to, and hereby
irrevocably submit to, the nonexclusive jurisdiction of any United States
federal or New York state court sitting in New York, New York, in respect of
any suit, action or proceeding arising out of or relating to this Agreement or
the transactions contemplated herein, and irrevocably agree that all claims in
respect of any such suit, action or proceeding may be heard and determined in
any such court. Each of the parties hereto irrevocably waives, to the fullest
extent permitted by applicable law, any objection to the laying of the venue
of any such suit, action or proceeding brought in any such court and any claim
that any such suit, action or proceeding has been brought in an inconvenient
forum. The section headings in this Agreement have been inserted as a matter
of convenience of reference and are not a part of this Agreement.
13. Parties in Interest: The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company and the
controlling persons, directors and
24
officers referred to in Sections 9 and 10 hereof, and their respective
successors, assigns, executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this Agreement shall constitute a binding agreement among
the Company and the Underwriters.
Very truly yours,
ANTHRACITE CAPITAL, INC.
_______________________________
By:
Its:
25
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXXX BROTHERS INC.
PRUDENTIAL SERVICES INCORPORATED
For themselves and as Representatives
of the other Underwriters named on
Schedule I hereto.
By: Friedman, Billings, Xxxxxx & Co., Inc.
_____________________________________
Xxxxx X. Xxxxxxxxx
Managing Director
26
Schedule I
Underwriter Number of Initial
Shares to be Purchased
Friedman, Billings, Xxxxxx & Co., Inc. _________
Xxxxxx Brothers Inc. _________
Prudential Securities Incorporated _________
Total 20,000,000
Schedule II
Subsidiaries of the Company
Anthracite Securitization Corp.
Schedule III
Other Transaction Documents
Lock-up Agreements
Stock Option Plan
Rights of First Offer Agreement between the Company and PNC Bank National
Association
Purchase Agreement between the Company and Xxxxxx Brothers Inc. relating to
the Initial Investment
Share Purchase Agreements between the Company and PNC Bank Corp., and between
the Company and FBR Asset Investment Corp.
Registration Rights Agreements between the Company and PNC Bank Corp., and
between the Company and FBR Asset Investment Corp.
Schedule IV
Persons From Whom the Underwriters Have Received Lock-Up Agreements
PNC Bank Corp.
BlackRock Financial Management, Inc.
FBR Asset Investment Corporation
Xxxxxxxx X. Xxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxx Xxxxxxx
Xxxxxxx X. Xxxx
Xxxxxxxx X. Xxxxxx, III
Xxxxxxx X. Xxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxx Xxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxx
Schedule V
[Letter Agreement between Manager and Underwriters]
