Sutherland Asset Management Corporation [ ] Shares Common Stock ($0.01 par value per Share) Underwriting Agreement
Exhibit 1.1
Xxxxxxxxxx Asset Management Corporation
[ ] Shares
Common Stock
($0.01 par value per Share)
($0.01 par value per Share)
July [ ], 2009
Exhibit 1.1
July [ ], 2009
UBS Securities LLC
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
as Managing Underwriters
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxxxxxxx Asset Management Corporation, a Maryland corporation (the “Company”),
proposes to issue and sell to the underwriters named in Schedule A annexed hereto (the
“Underwriters”), for whom you are acting as representatives, an aggregate of [ ] shares (the “Firm Shares”) of common stock, $0.01 par value per share (the “Common
Stock”), of the Company. In addition, solely for the purpose of covering over-allotments, the
Company proposes to grant to the Underwriters the option to purchase from the Company up to an
additional [ ] shares of Common Stock (the “Additional Shares”). The
Firm Shares and the Additional Shares are hereinafter collectively sometimes referred to as the
“Shares.” The Shares are described in the Prospectus which is referred to below.
The Company will be externally managed by Waterfall Asset Management, LLC, a Delaware limited
liability company (the “Manager”), pursuant to a management agreement between the Company
and the Manager (the “Management Agreement”), which will be entered into on or before the
Closing Date (as defined below). The Company and the Manager will also enter into a sub-advisory
agreement (the “Sub-Advisory Agreement”) with M.D. Sass Investor Services, Inc., a Delaware
corporation (the “Sub-Advisor”), which will be entered into on or before the Closing Date
(as defined below). Each of the Company and the Manager is referred to herein as a “Xxxxxxxxxx
Party” and collectively as the “Xxxxxxxxxx Parties.”
The Company hereby acknowledges that, in connection with the proposed offering of the Shares,
it has requested UBS Financial Services Inc. (“UBS-FinSvc”) to administer a directed share
program (the “Directed Share Program”) under which up to [ ] Firm Shares, or 5%
of the Firm Shares to be purchased by the Underwriters (the “Reserved Shares”), shall be
reserved for sale by UBS-FinSvc at the initial public offering price to the Company’s officers,
directors, employees and consultants and other persons having a relationship with the Company as
designated by the Company (the “Directed Share Participants”) as part of the distribution
of the Shares by the Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the Financial Industry Regulatory Authority, Inc.
(“FINRA”) and all other applicable laws, rules and regulations. The number of Shares
available for sale to the general public will be reduced to the extent that Directed Share
Participants purchase Reserved Shares. The Underwriters may offer any Reserved Shares not
purchased by Directed Share Participants to the general public on the same basis as the other
Shares being issued and sold hereunder. The Company has supplied UBS-
FinSvc with the names, addresses and telephone numbers of the individuals or other entities which
the Company has designated to be participants in the Directed Share Program. It is understood that
any number of those so designated to participate in the Directed Share Program may decline to do
so.
The Company has prepared and filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the “Act”), with
the Securities and Exchange Commission (the “Commission”) a registration statement on Form
S-11 (File No. 333-159388) under the Act, including a prospectus, relating to the Shares.
Except where the context otherwise requires, “Registration Statement,” as used herein,
means the registration statement, as amended at the time of such registration statement’s
effectiveness for purposes of Section 11 of the Act, as such section applies to the respective
Underwriters (the “Effective Time”), including (i) all documents filed as a part thereof,
(ii) any information contained in a prospectus filed with the Commission pursuant to Rule 424(b)
under the Act, to the extent such information is deemed, pursuant to Rule 430A or Rule 430C under
the Act, to be part of the registration statement at the Effective Time, and (iii) any registration
statement filed to register the offer and sale of Shares pursuant to Rule 462(b) under the Act.
The Company has furnished to you, for use by the Underwriters and by dealers in connection
with the offering of the Shares, copies of one or more preliminary prospectuses relating to the
Shares. Except where the context otherwise requires, “Preliminary Prospectus,” as used
herein, means each such preliminary prospectus, in the form so furnished.
Except where the context otherwise requires, “Prospectus,” as used herein, means the
prospectus, relating to the Shares, filed by the Company with the Commission pursuant to Rule
424(b) under the Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act), or, if no such filing is required, the final prospectus
included in the Registration Statement at the time it became effective under the Act, in each case
in the form furnished by the Company to you for use by the Underwriters and by dealers in
connection with the offering of the Shares.
“Applicable Time,” as used herein, means [ ], New York City time, on July
[ ], 2009.
“Permitted Free Writing Prospectuses,” as used herein, means the documents listed on
Schedule B attached and each “road show” (as defined in Rule 433 under the Act), if any,
related to the offering of the Shares contemplated hereby that is a “written communication” (as
defined in Rule 405 under the Act) (each such road show, an “Electronic Road Show”). The
Underwriters have not offered or sold and will not offer or sell, without the Company’s consent,
any Shares by means of any “free writing prospectus” (as defined in Rule 405 under the Act) that is
required to be filed by the Underwriters with the Commission pursuant to Rule 433 under the Act,
other than a Permitted Free Writing Prospectus.
“Covered Free Writing Prospectuses,” as used herein, means (i) each “issuer free
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writing prospectus” (as defined in Rule 433(h)(1) under the Act), if any, relating to the Shares,
which is not a Permitted Free Writing Prospectus and (ii) each Permitted Free Writing Prospectus.
“Disclosure Package,” as used herein, means any Preliminary Prospectus together with
any combination of one or more of the Permitted Free Writing Prospectuses listed on Schedule
B hereto, if any, and the information included on Schedule C attached.
As used in this Agreement, “business day” shall mean a day on which the New York Stock
Exchange (the “NYSE”) is open for trading. The terms “herein,” “hereof,” “hereto,”
“hereinafter” and similar terms, as used in this Agreement, shall in each case refer to this
Agreement as a whole and not to any particular section, paragraph, sentence or other subdivision of
this Agreement. The term “or,” as used herein, is not exclusive.
The Company has prepared and filed, in accordance with Section 12 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”), a registration statement (as amended, the “Exchange Act Registration Statement”)
on Form 8-A (File No. [ ]) under the Exchange Act to register, under Section 12(b)
of the Exchange Act, the class of securities consisting of the Common Stock.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the
respective Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase
from the Company the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in accordance with Section 10 hereof, in
each case at a purchase price of $[ ] per Share. The Company is advised by you that the
Underwriters intend (i) to make a public offering of their respective portions of the Firm Shares
as soon after the effective date of the Registration Statement as in your judgment is advisable and
(ii) initially to offer the Firm Shares upon the terms set forth in the Prospectus. You may from
time to time increase or decrease the public offering price after the initial public offering to
such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the option (the
“Over-Allotment Option”) to purchase, and upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Underwriters shall have
the right to purchase, severally and not jointly, from the Company, ratably in accordance with the
number of Firm Shares to be purchased by each of them, all or a portion of the Additional Shares as
may be necessary to cover over-allotments made in connection with the offering of the Firm Shares,
at the same purchase price per share to be paid by the Underwriters to the Company for the Firm
Shares. The Over-Allotment Option may be exercised by UBS Securities LLC (“UBS”) on behalf
of the several Underwriters at any time and from time to time on or before the thirtieth day
following the date of the Prospectus, by written notice to the Company. Such notice shall set
forth the aggregate number of Additional Shares as to which the Over-Allotment Option
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is being exercised and the date and time when the Additional Shares are to be delivered (any such
date and time being herein referred to as an “additional time of purchase”);
provided, however, that no additional time of purchase shall be earlier than the
“time of purchase” (as defined below) nor earlier than the second business day after the date on
which the Over-Allotment Option shall have been exercised nor later than the tenth business day
after the date on which the Over-Allotment Option shall have been exercised. The number of
Additional Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule A hereto bears to the
total number of Firm Shares (subject, in each case, to such adjustment as UBS may determine to
eliminate fractional shares), subject to adjustment in accordance with Section 10 hereof.
In addition to the discount from the public offering price of $[ ] per Share represented
by the purchase price set forth above, the Company hereby agrees to pay to the Underwriters a
deferred discount of $[ ] per Share (for both Firm Shares and Additional Shares) purchased
hereunder (the “Deferred Discount”); provided, however, the Deferred
Discount will only be payable (i) in the event that, during any full four calendar quarter period
during the 16 full calendar quarters after the Closing Date (as defined below) (excluding any
partial quarter following the Closing Date), the Company’s Core Earnings (as defined below) for
such four-quarter period equals or exceeds the Hurdle Rate (as defined below) (the
“Deferred Discount Condition”) or (ii) upon termination of the Management Agreement.
The “Hurdle Rate” for any calendar quarter shall be the product of (1) the weighted
average of the issue price per share of Common Stock in all of the Company’s offerings of Common
Stock (including this offering and the Concurrent Private Placement) through the end of the
applicable quarter multiplied by the weighted average number of shares of Common Stock outstanding
during such quarter and (2) 8.0% (expressed as a quarterly percentage). For purposes of
calculating the Hurdle Rate, the shares of Common Stock issued and sold by the Company and
purchased by the Manager pursuant to the Contingent Share Private Placement Agreement (as defined
below) shall not be considered to be outstanding and the proceeds from the sale of such shares
shall not be considered received by the Company.
“Core Earnings” means GAAP net income (loss) excluding non-cash equity compensation
expense, any unrealized gains, losses or other items that do not affect realized net income
(regardless of whether such items are included in other comprehensive income or loss, or in net
income), and adjusted to exclude one-time events pursuant to changes in GAAP and certain non-cash
items after discussions between the Manager (in its capacity as external manager of the Company)
and the Company’s independent directors and after approval by a majority of the Company’s
independent directors.
Prior to the payment of the Deferred Discount, the Manager, on behalf of the Company, shall
compute the Company’s Core Earnings for each full four-quarter period within 30 days after the end
of each applicable calendar quarter and shall promptly deliver such computations to the
Underwriters (but in no event later than the date that is 35 days after the end of each calendar
quarter). In the event that the Deferred Discount Condition has been met, the Deferred Discount
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shall be payable by the Company to the Underwriters by wire transfer of immediately available
funds to a bank account designated by UBS Securities LLC and Xxxxx, Xxxxxxxx & Xxxxx, Inc. no later
than the date which is five (5) business days after the date of delivery of such computations to
the Underwriters reflecting that the Deferred Discount Condition has
been met. If the Deferred Discount Condition has not been met at the
end of the 16 full calendar quarter period after the Closing Date,
the Company’s obligation to pay the Deferred Discount to the
Underwriters shall terminate.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares shall be
made to the Company by Federal Funds wire transfer against delivery of the certificates
representing the Firm Shares to you through the facilities of The Depository Trust Company
(“DTC”) for the respective accounts of the Underwriters. Such payment and delivery shall
be made at 10:00 A.M., New York City time, on July [ ], 2009 (unless another time shall be agreed
to by you and the Company or unless postponed in accordance with the provisions of Section 10
hereof) (the “Closing Date”). The time at which such payment and delivery are to be made
is hereinafter sometimes called the “time of purchase.” Electronic transfer of the Firm
Shares shall be made to you at the time of purchase in such names and in such denominations as you
shall specify.
Payment of the purchase price for the Additional Shares shall be made at the additional time
of purchase in the same manner and at the same office and time of day as the payment for the Firm
Shares. Electronic transfer of the Additional Shares shall be made to you at the additional time
of purchase in such names and in such denominations as you shall specify.
Deliveries of the documents described in Section 8 hereof with respect to the purchase of the
Shares shall be made at the offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP at Xxx Xxx Xxxx
Xxxxx, Xxx Xxxx, XX 00000, at 9:00 A.M., New York City time, on the date of the closing of the
purchase of the Firm Shares or the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company represents and warrants
to and agrees with each of the Underwriters that:
(a) the Registration Statement has heretofore become effective under the Act or, with
respect to any registration statement to be filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the Act, will be filed with the Commission and become
effective under the Act no later than 10:00 P.M., New York City time, on the date of
determination of the public offering price for the Shares; no stop order of the Commission
preventing or suspending the use of any Preliminary Prospectus or Permitted Free Writing
Prospectus, or the effectiveness of the Registration Statement, has been issued, and no
proceedings for such purpose have been instituted or, to the Company’s knowledge, are
contemplated by the Commission; the Exchange Act Registration Statement has become effective
as provided in Section 12 of the Exchange Act;
(b) the Registration Statement complied when it became effective, complies as of the
date hereof and, as amended or supplemented, at the time of purchase, each additional time
of purchase, if any, and at all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172
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under the Act or any similar rule) in connection with any sale of Shares, will comply,
in all material respects, with the requirements of the Act; the Registration Statement did
not, as of the Effective Time, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements
therein not misleading; each Preliminary Prospectus complied, at the time it was filed with
the Commission, and complies as of the date hereof, in all material respects with the
requirements of the Act; as of the Applicable Time and at the time of purchase, the
Preliminary Prospectus, dated July 21, 2009 (which is the most recent prospectus included in
the Registration Statement distributed to investors generally) and the other information
included in the items reflected on Schedule B hereto and the information set forth
on Schedule C hereto, as then amended or supplemented, did not include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; the Prospectus will comply, as of its date, the date that it is filed with the
Commission, the time of purchase, each additional time of purchase, if any, and at all times
during which a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in connection with any
sale of Shares, in all material respects, with the requirements of the Act (including,
without limitation, Section 10(a) of the Act); at no time during the period that begins on
the earlier of the date of the Prospectus and the date the Prospectus is filed with the
Commission and ends at the later of the time of purchase, the latest additional time of
purchase, if any, and the end of the period during which a prospectus is required by the Act
to be delivered (whether physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Shares did or will the Prospectus, as then
amended or supplemented, include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; at no time during the period that
begins on the date of such Permitted Free Writing Prospectus and ends at the time of
purchase did or will any Permitted Free Writing Prospectus, when considered together with
the Disclosure Package, include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representation or warranty in this Section 3(b) with respect to
any statement contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with
information concerning an Underwriter and furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use in the Registration Statement, such
Preliminary Prospectus, the Prospectus or such Permitted Free Writing Prospectus;
(c) prior to the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of
the Act) or used any “prospectus” (within the meaning of the Act) in connection with the
offer or sale of the Shares, in each case other than the Preliminary Prospectuses and the
Permitted Free Writing Prospectuses, if any; the Company has not, directly or indirectly,
prepared, used or referred to any Permitted Free Writing Prospectus except in
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compliance with Rules 164 and 433 under the Act; assuming that such Permitted Free
Writing Prospectus is accompanied or preceded by the most recent Preliminary Prospectus that
contains a price range or the Prospectus, as the case may be, and that such Permitted Free
Writing Prospectus is so sent or given after the Registration Statement was filed with the
Commission (and after such Permitted Free Writing Prospectus was, if required pursuant to
Rule 433(d) under the Act, filed with the Commission), the sending or giving, by any
Underwriter, of any Permitted Free Writing Prospectus will satisfy the provisions of Rule
164 and Rule 433 (without reliance on subsections (b), (c) and (d) of Rule 164); the
Preliminary Prospectus dated July 21, 2009 is a prospectus that, other than by reason of
Rule 433 or Rule 431 under the Act, satisfies the requirements of Section 10 of the Act,
including a price range where required by rule; neither the Company nor the Underwriters are
disqualified, by reason of the application of subsection (f) or (g) of Rule 164 under the
Act to the Company, from using, in connection with the offer and sale of the Shares, “free
writing prospectuses” (as defined in Rule 405 under the Act) pursuant to Rules 164 and 433
under the Act; the Company is not an “ineligible issuer” (as defined in Rule 405 under the
Act) as of the eligibility determination date for purposes of Rules 164 and 433 under the
Act with respect to the offering of the Shares contemplated by the Registration Statement;
the parties hereto agree and understand that the content of any and all “road shows” (as
defined in Rule 433 under the Act) related to the offering of the Shares contemplated hereby
is solely the property of the Company; the Company has caused there to be made available at
least one version of a “bona fide electronic road show” (as defined in Rule 433 under the
Act) in a manner that, pursuant to Rule 433(d)(8)(ii) under the Act, causes the Company not
to be required, pursuant to Rule 433(d) under the Act, to file, with the Commission, any
Electronic Road Show;
(d) as of the date of this Agreement, the Company has an authorized and outstanding
capitalization as set forth in the Disclosure Package, and, as of the time of purchase and
any additional time of purchase, as the case may be, the Company had an authorized and
outstanding capitalization as set forth in the sections of the Registration Statement, the
Preliminary Prospectuses and the Prospectus entitled “Capitalization” and “Description of
Capital Stock” (and any similar sections or information, if any, contained in any Permitted
Free Writing Prospectus) (subject to, in the case of any additional time of purchase, the
issuance of Additional Shares to the Underwriters); all of the issued and outstanding shares
of stock, including the Common Stock, of the Company have been duly authorized and validly
issued and are fully paid and non-assessable, have been issued in compliance with all
applicable securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right; the Shares are duly listed, and admitted and
authorized for trading, subject to official notice of issuance and evidence of satisfactory
distribution, on the New York Stock Exchange (the “NYSE”);
(e) the Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Maryland with full corporate power to own or
lease, as the case may be, and operate its properties and conduct its business as described
in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, to execute and deliver
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this Agreement and to issue, sell and deliver the Shares as contemplated herein;
(f) the Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate, have a material
adverse effect on the business, properties, financial condition, results of operations or
prospects of the Company and the Subsidiaries (as defined below) taken as a whole (a
“Material Adverse Effect”);
(g) the Company has no subsidiaries (as defined under the Act) other than Xxxxxxxxxx
Asset I, LLC and Xxxxxxxxxx Asset II, LLC (collectively, the “Subsidiaries”); the
Company owns all of the issued and membership interests of each of the Subsidiaries; other
than the membership interests of the Subsidiaries, the Company does not own, directly or
indirectly, any shares of stock or any other equity interests or long-term debt securities
of any corporation, firm, partnership, joint venture, association or other entity; complete
and correct copies of the charters and of the bylaws or other formation documents of the
Company and each Subsidiary and all amendments thereto have been delivered to you, and,
except as set forth in the exhibits to the Registration Statement, no changes therein will
be made on or after the date hereof through and including the time of purchase or, if later,
any additional time of purchase; each Subsidiary has been duly formed and organized and is
validly existing as a limited liability company in good standing under the laws of the
jurisdiction of its formation or organization, with full corporate power and authority to
own, lease and operate its properties and to conduct its business as described in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any; each Subsidiary is duly qualified to do business as a foreign
limited liability company and is in good standing in each jurisdiction where the ownership
or leasing of its properties or the conduct of its business requires such qualification,
except where the failure to be so qualified and in good standing would not, individually or
in the aggregate, have a Material Adverse Effect; all of the outstanding equity interests of
each of the Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable, have been issued in compliance with all applicable securities laws, were not
issued in violation of any preemptive right, resale right, right of first refusal or similar
right and are owned by the Company subject to no security interest, other encumbrance or
adverse claims; and no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation into shares of capital stock
or ownership interests in the Subsidiaries are outstanding;
(h) the Shares have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued, fully paid and
non-assessable and free of statutory and contractual preemptive rights, resale rights,
rights of first refusal and similar rights; and, except as provided in the Registration
Statement, the Preliminary Prospectus and the Prospectus, the Shares, when issued and
delivered against payment therefor as provided herein, will be free of any restriction upon
the voting or transfer thereof pursuant to the Maryland General
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Corporation Law or the Company’s charter or bylaws or any agreement or other instrument
to which the Company is a party;
(i) the authorized stock of the Company, including the Shares, conforms in all material
respects to each description thereof, if any, contained in the Registration Statement, the
Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any; and the certificates for the Shares are in due and proper form;
(j) this Agreement has been duly authorized, executed and delivered by the Company;
(k) the Management Agreement has been duly authorized, and on the Closing Date will
have been duly executed and delivered by the Company and will constitute a valid and binding
agreement of the Company enforceable in accordance with its terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws
affecting enforcement of creditors’ rights or by general equitable principles;
(l) the Sub-Advisory Agreement has been duly authorized, and on the Closing Date will
have been duly executed and delivered by the Company and will constitute a valid and binding
agreement of the Company enforceable in accordance with its terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws
affecting enforcement of creditors’ rights or by general equitable principles;
(m) the private placement purchase agreements (the “Private Placement Purchase
Agreements”) between the Company and members of the Company’s senior management team and
affiliates of the Manager, relating to the sale by the Company and the purchase of [ ] shares of Common Stock for proceeds to the Company of $[ ] (the
“Concurrent Private Placement”) has been duly authorized, and on the Closing Date
will have been duly executed and delivered, by the Company and will constitute a valid and
binding agreement of the Company enforceable in accordance with its terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization or
other laws affecting enforcement of creditors’ rights or by general equitable principles;
(n) the contingent share private placement agreement (the “Contingent Share Private
Placement Agreement”) between the Company and the Manager, relating to the sale by the
Company and the purchase of [ ] shares of Common Stock for proceeds to the
Company of $[ ] (the “Contingent Share Placement”) has been duly authorized,
and on the Closing Date will have been duly executed and delivered, by the Company and will
constitute a valid and binding agreement of the Company enforceable in accordance with its
terms, except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other laws affecting enforcement of creditors’ rights or by
general equitable principles;
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(o) neither the Company nor any of the Subsidiaries is in breach or violation of or in
default under (nor has any event occurred which, with notice, lapse of time or both, would
result in any breach or violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness under) (A) its
respective charter or bylaws, certificate of formation or limited liability company
agreement, as the case may be, or (B) any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which it is a party or by which it or any of its properties may
be bound or affected, or (C) any federal, state, local or foreign law, regulation or rule,
or (D) any rule or regulation of any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the rules and regulations of the NYSE),
or (E) any decree, judgment or order applicable to it or any of its properties, except as
would not, individually or in the aggregate, have a Material Adverse Effect;
(p) the execution, delivery and performance of this Agreement, the Management
Agreement, the Sub-Advisory Agreement, the Private Placement Purchase Agreements and the
Contingent Share Private Placement Agreement, the issuance and sale of the Shares and the
consummation of the transactions contemplated hereby will not conflict with, result in any
breach or violation of or constitute a default under (nor constitute any event which, with
notice, lapse of time or both, would result in any breach or violation of, constitute a
default under or give the holder of any indebtedness (or a person acting on such holder’s
behalf) the right to require the repurchase, redemption or repayment of all or a part of
such indebtedness under) (or result in the creation or imposition of a lien, charge or
encumbrance on any property or assets of the Company or any Subsidiary pursuant to) (A) the
charter or bylaws of the Company or the certificate of formation or the limited liability
company agreement of any of the Subsidiaries, or (B) any indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Company or any of the Subsidiaries is
a party or by which any of them or any of their respective properties may be bound or
affected, the effect of which breach, violation or default under clause (B) could reasonably
be expected to result in a Material Adverse Effect, or (C) any federal, state, local or
foreign law, regulation or rule, or (D) any rule or regulation of any self-regulatory
organization or other non-governmental regulatory authority (including, without limitation,
the rules and regulations of the NYSE), or (E) any decree, judgment or order applicable to
the Company or any of the Subsidiaries or any of their respective properties, except as
would not, individually or in the aggregate, have a Material Adverse Effect;
(q) no approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority or agency, or
of or with any self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the NYSE), or approval of the shareholders of the Company,
is required in connection with the execution of this Agreement, the Management Agreement,
the Sub-Advisory Agreement, the Private
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Placement Purchase Agreements and the Contingent Share Private Placement Agreement, the
issuance and sale of the Shares or the consummation by the Company of the transactions
contemplated hereby, other than (i) registration of the Shares under the Act, which has been
effected (or, with respect to any registration statement to be filed hereunder pursuant to
Rule 462(b) under the Act, will be effected in accordance herewith), (ii) any necessary
qualification under the securities or blue sky laws of the various jurisdictions in which
the Shares are being offered by the Underwriters or (iii) under the Conduct Rules of the
Financial Industry Regulatory Authority, Inc. (“FINRA”);
(r) except as described in the Registration Statement (excluding the exhibits thereto),
each Preliminary Prospectus and the Prospectus, (i) no person has the right, contractual or
otherwise, to cause the Company to issue or sell to it any shares of Common Stock or shares
of any other class or series of stock or other equity interests of the Company, (ii) no
person has any preemptive rights, resale rights, rights of first refusal or other rights to
purchase any shares of Common Stock or shares of any other class or series of stock of or
other equity interests in the Company and (iii) no person has the right to act as an
underwriter or as a financial advisor to the Company in connection with the offer and sale
of the Shares; no person has the right, contractual or otherwise, to cause the Company to
register under the Act any shares of Common Stock or shares of any other class or series of
stock of or other equity interests in the Company, or to include any such shares or
interests in the Registration Statement or the offering contemplated thereby;
(s) each of the Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings required under any
applicable law, regulation or rule, and has obtained all necessary licenses, authorizations,
consents and approvals from other persons, in order to conduct their respective businesses,
except such as could not have a Material Adverse Effect; neither the Company nor any of the
Subsidiaries is in violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification 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 such Subsidiary, except where such
violation, default, revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect;
(t) there are no actions, suits, claims, investigations or proceedings pending or, to
the Company’s knowledge, threatened or contemplated to which the Company or, to the
Company’s knowledge, any of the Subsidiaries or any of their respective directors or
officers is or would be a party or of which any of their respective properties is or would
be subject at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency, or before or by any
self-regulatory organization or other non-governmental regulatory authority (including,
without limitation, the NYSE), except any such action, suit, claim, investigation or
proceeding which, if resolved adversely to the Company or any Subsidiary, would not,
individually or in the aggregate, have a Material Adverse Effect or prevent or materially
interfere with the consummation of the transactions contemplated hereby;
- 11 -
(u) Deloitte & Touche LLP, whose report on the consolidated financial statements of the
Company and the Subsidiaries is included in the Registration Statement, the Preliminary
Prospectuses and the Prospectus, are independent registered public accountants as required
by the Act and by the rules of the Public Company Accounting Oversight Board;
(v) the financial statements included in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, together
with the related notes and schedules, present fairly the consolidated financial position of
the Company and the Subsidiaries as of the dates indicated and the consolidated results of
operations, cash flows and changes in shareholders’ equity of the Company and the
Subsidiaries for the periods specified and have been prepared in compliance with the
requirements of the Act and Exchange Act and in conformity with U.S. generally accepted
accounting principles applied on a consistent basis during the periods involved; the other
Company financial and statistical data contained in the Registration Statement, the
Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any, are accurately and fairly presented and prepared on a basis consistent with the
financial statements and books and records of the Company; there are no financial statements
(historical or pro forma) that are required to be included in the Registration Statement,
any Preliminary Prospectus or the Prospectus that are not included as required; the Company
and the Subsidiaries do not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations), not described in the Registration
Statement (excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus;
(w) except as disclosed in the Registration Statement (excluding the exhibits thereto),
each Pre-Pricing Prospectus and the Prospectus, each stock option granted under any stock
option plan of the Company or any Subsidiary (each, a “Stock Plan”) was granted with
a per share exercise price no less than the fair market value per share of Common Stock on
the grant date of such option, and no such grant involved any “back-dating,”
“forward-dating” or similar practice with respect to the effective date of such grant;
except as would not, individually or in the aggregate, have a Material Adverse Effect, each
such option (i) was granted in compliance with applicable law and with the applicable Stock
Plan(s), (ii) was duly approved by the board of directors (or a duly authorized committee
thereof) of the Company or such Subsidiary, as applicable, and (iii) has been properly
accounted for in the Company’s financial statements in accordance with U.S. generally
accepted accounting principles and disclosed in the Company’s filings with the Commission;
(x) except as disclosed in the Registration Statement, the Preliminary Prospectuses,
the Prospectus and the Permitted Free Writing Prospectuses, if any, subsequent to the
respective dates as of which information is given, in each case excluding any amendments or
supplements to the foregoing made after the execution of this Agreement, there has not been
(i) any material adverse change, or any development involving a prospective material adverse
change, in the business, properties,
- 12 -
management, financial condition or results of operations of the Company and the
Subsidiaries taken as a whole, (ii) any transaction which is material to the Company and the
Subsidiaries taken as a whole, (iii) any obligation or liability, direct or contingent
(including any off-balance sheet obligations), incurred by the Company or any Subsidiary,
which is material to the Company and the Subsidiaries taken as a whole, (iv) any change in
the authorized stock or outstanding indebtedness of the Company or any Subsidiary or (v) any
dividend or distribution of any kind declared, paid or made on the stock of the Company or
any Subsidiary;
(y) the Company has obtained for the benefit of the Underwriters the agreement (a
“Lock-Up Agreement”), in the form set forth as Exhibit A hereto, of (i) each
of its directors and “officers” (within the meaning of Rule 16a-1(f) under the Exchange
Act), (ii) and each shareholder named in Exhibit A-1 hereto and (iii) each Directed
Share Participant;
(z) neither the Company nor any Subsidiary is, and at no time during which a prospectus
is required by the Act to be delivered (whether physically or through compliance with Rule
172 under the Act or any similar rule) in connection with any sale of Shares will either of
them be, and, after giving effect to the offering and sale of the Shares and the application
of the proceeds thereof, neither of them will be, an “investment company” or an entity
“controlled” by an “investment company,” as such terms are defined in the Investment Company
Act of 1940, as amended (the “Investment Company Act”);
(aa) commencing with its taxable year ending December 31, 2009, the Company has been
organized in conformity with the requirements for qualification as a “real estate investment
trust” (a “REIT”) under Sections 856 through 860 of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(collectively, the “Code”), and the Company’s proposed method of operation as
described in the Registration Statement, the Preliminary Prospectus and the Prospectus will
enable the Company to meet the requirements for qualification as a REIT under the Code. The
Company intends to operate in a manner which would permit it to qualify as a REIT under the
Code;
(bb) the Company and each of the Subsidiaries have good and marketable title to all
property (real and personal) described in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, as being
owned by any of them, free and clear of all liens, claims, security interests or other
encumbrances, except such as do not materially affect the value of such property and do not
materially interfere with the use made or proposed to be made of such property by the
Company or any Subsidiary; all the property described in the Registration Statement, the
Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any, as being held under lease by the Company or a Subsidiary is held thereby under valid,
subsisting and enforceable leases, with such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of such
- 13 -
property by the Company or any Subsidiary;
(cc) each of the Company and the Subsidiaries owns or possesses all inventions, patent
applications, patents, trademarks (both registered and unregistered), tradenames, service
names, copyrights, trade secrets and other proprietary information described in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, as being owned or licensed by it or which is necessary for the
conduct of, or material to, its businesses (collectively, the “Intellectual
Property”), and the Company is unaware of any claim to the contrary or any challenge by
any other person to the rights of the Company or any of the Subsidiaries with respect to the
Intellectual Property; neither the Company nor any of the Subsidiaries has infringed or is
infringing on the intellectual property of a third party, and neither the Company nor any
Subsidiary has received notice of a claim by a third party to the contrary;
(dd) except for matters which would not, individually or in the aggregate, have a
Material Adverse Effect, there is (A) no unfair labor practice complaint pending or, to the
Company’s knowledge, threatened against the Company or any of the Subsidiaries before the
National Labor Relations Board, and no grievance or arbitration proceeding arising out of or
under collective bargaining agreements is pending or, to the Company’s knowledge,
threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to the Company’s
knowledge, threatened against the Company or any of the Subsidiaries and (C) no union
representation dispute currently existing concerning the employees of the Company or any of
the Subsidiaries;
(ee) the Company and the Subsidiaries and their respective properties, assets and
operations are in compliance with, and the Company and each of the Subsidiaries holds all
permits, authorizations and approvals required under, Environmental Laws (as defined below),
except to the extent that failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, have a Material Adverse Effect; there
are no past, present or, to the Company’s knowledge, reasonably anticipated future events,
conditions, circumstances, activities, practices, actions, omissions or plans that could
reasonably be expected to give rise to any material costs or liabilities to the Company or
any Subsidiary under, or to interfere with or prevent compliance by the Company or any
Subsidiary with, Environmental Laws; except as would not, individually or in the aggregate,
have a Material Adverse Effect, neither of the Company nor any of the Subsidiaries (i) is
the subject of any investigation, (ii) has received any notice or claim, (iii) is a party to
or affected by any pending or, to the Company’s knowledge, threatened action, suit or
proceeding, (iv) is bound by any judgment, decree or order or (v) has entered into any
agreement, in each case relating to any alleged violation of any Environmental Law or any
actual or alleged release or threatened release or cleanup at any location of any Hazardous
Materials (as defined below) (as used herein, “Environmental Law” means any federal,
state, local or foreign law, statute, ordinance, rule, regulation, order, decree, judgment,
injunction, permit, license, authorization or other binding requirement, or common law,
relating to health, safety or the protection, cleanup or restoration of the environment or
natural resources,
- 14 -
including those relating to the distribution, processing, generation, treatment,
storage, disposal, transportation, other handling or release or threatened release of
Hazardous Materials, and “Hazardous Materials” means any material (including,
without limitation, pollutants, contaminants, hazardous or toxic substances or wastes) that
is regulated by or may give rise to liability under any Environmental Law);
(ff) the Company and its Subsidiaries have filed all material required federal, state,
local and foreign income and franchise tax returns in a timely manner and have paid all
material taxes required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them, except for any taxes,
assessments, fines or penalties as may be being contested in good faith and by appropriate
proceedings and for which adequate reserves have been established in accordance with
generally accepted accounting principles;
(gg) the Company and each of the Subsidiaries maintain insurance covering their
respective properties, operations, personnel and businesses as the Company reasonably deems
adequate; such insurance insures against such losses and risks to an extent which is
adequate in accordance with customary industry practice to protect the Company and the
Subsidiaries and their respective businesses; all such insurance is fully in force on the
date hereof and will be fully in force at the time of purchase and each additional time of
purchase, if any; neither the Company nor any Subsidiary has reason to believe that it will
not be able to renew any such insurance as and when such insurance expires or obtain
comparable coverage;
(hh) the Company and each of the Subsidiaries 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 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;
(ii) the Company has established and maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) and
“internal control over financial reporting” (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act); such disclosure controls and procedures are designed to
ensure that material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s Co-Chief Executive Officers and its Chief
Financial Officer by others within those entities, and such disclosure controls and
procedures are effective to perform the functions for which they were established; the
Company’s independent registered public accountants and the Audit Committee of the Board of
Directors of the Company have been advised of: (i) all significant deficiencies, if any, in
the design or operation of internal controls which could adversely affect the Company’s
ability to record, process, summarize and report financial
- 15 -
data; and (ii) all fraud, if any, whether or not material, that involves management or
other employees who have a role in the Company’s internal controls; all “significant
deficiencies” and “material weaknesses” (as such terms are defined in Rule 1-02(a)(4) of
Regulation S-X under the Act) of the Company, if any, have been identified to the Company’s
independent registered public accountants and are disclosed in the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus; since the
date of the most recent evaluation of such disclosure controls and procedures and internal
controls, there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective actions with
regard to significant deficiencies and material weaknesses; and the Company has taken all
necessary actions to ensure that, upon and at all times after the filing of the Registration
Statement, the Company and the Subsidiaries and their respective officers and directors, in
their capacities as such, will be in compliance in all material respects with the applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”) and the
rules and regulations promulgated thereunder;
(jj) all third-party statistical or market-related data included in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, are based on or derived from sources that the Company reasonably
believes to be reliable and accurate, and the Company has obtained the written consent to
the use of such data from such sources to the extent required;
(kk) neither the Company nor any of the Subsidiaries nor, to the Company’s knowledge,
any employee or agent of the Company or any Subsidiary has made any payment of funds of the
Company or any Subsidiary or received or retained any funds in violation of any law, rule or
regulation (including, without limitation, the Foreign Corrupt Practices Act of 1977), which
payment, receipt or retention of funds is of a character required to be disclosed in the
Registration Statement, any Preliminary Prospectus or the Prospectus;
(ll) no Subsidiary is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such Subsidiary’s capital
stock, from repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary’s property or assets to the Company or
any other Subsidiary of the Company, except as described in the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus;
(mm) the issuance and sale of the Shares as contemplated hereby will not cause any
holder of any shares of stock, securities convertible into or exchangeable or exercisable
for stock or options, warrants or other rights to purchase stock or any other securities of
the Company to have any right to acquire any shares of preferred stock of the Company;
(nn) the Company has not received any notice from the NYSE regarding the delisting of
the Common Stock from the NYSE;
- 16 -
(oo) except pursuant to this Agreement, neither the Company nor any of the Subsidiaries
has incurred any liability for any finder’s or broker’s fee or agent’s commission in
connection with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby or by the Registration Statement;
(pp) neither the Company nor any of the Subsidiaries nor, to the Company’s knowledge,
any of their respective directors, officers, affiliates or controlling persons has taken,
directly or indirectly, any action designed, or which has constituted or might reasonably be
expected to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares;
(qq) to the Company’s knowledge, there are no affiliations or associations between (i)
any member of FINRA and (ii) the Company or any of the Company’s officers, directors or 5%
or greater security holders or any beneficial owner of the Company’s unregistered equity
securities that were acquired at any time on or after the 180th day immediately preceding
the date the Registration Statement was initially filed with the Commission, except as
disclosed in the Registration Statement (excluding the exhibits thereto), the Preliminary
Prospectuses and the Prospectus;
(rr) the Registration Statement, each Preliminary Prospectus, the Prospectus and each
Permitted Free Writing Prospectus comply, and any further amendments or supplements thereto
will comply, with any applicable laws or regulations of any foreign jurisdiction in which
any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus is
distributed in connection with the Directed Share Program; and no approval, authorization,
consent or order of or filing with any governmental or regulatory commission, board, body,
authority or agency, other than those heretofore obtained, is required in connection with
the offering of the Reserved Shares in any jurisdiction where the Reserved Shares are being
offered;
(ss) the Company has not offered, or, to the Company’s knowledge, caused the
Underwriters to offer, Shares to any person pursuant to the Directed Share Program with the
intent to influence unlawfully (i) a customer or supplier of the Company or any of the
Subsidiaries to alter the customer’s or supplier’s level or type of business with the
Company or any of the Subsidiaries or (ii) a trade journalist or publication to write or
publish favorable information about the Company or any of the Subsidiaries or any of their
respective products or services;
(tt) the statements in the Registration Statement, the Preliminary Prospectus and the
Prospectus under the headings “Summary—Operating and Regulatory Structure—REIT
Qualification,” “Risk Factors—Tax Risks,” “Capitalization,” “Business—Operating and
Regulatory Structure—REIT Qualification” and “U.S. Federal Income Tax Considerations,”
insofar as such statements summarize legal matters, agreements, documents or proceedings
discussed therein, are accurate and fair summaries of such legal matters, agreements,
documents or proceedings; and
- 17 -
(uu) the statements in the Registration Statement, the Preliminary Prospectus and the
Prospectus under the headings “Prospectus Summary—Our Manager,” “—Our Structure”,
“—Management Agreement,” “—Conflicts of Interest,” “—Operating and Regulatory
Structure—1940 Act Exemption,” “Business—Our Manager,” “—Operating and Regulatory
Structure—1940 Act Exemption,” “Our Manager and the Management Agreement,”
“Management—Limitation of Liability and Indemnification,” “Certain Relationships and
Related Transactions,” “Description of Capital Stock,” “Certain Provisions of the Maryland
General Corporation Law and Our Charter and Bylaws” and “ERISA Considerations,” insofar as
such statements summarize legal matters, agreements, documents or proceedings discussed
therein, are accurate and fair summaries of such legal matters, agreements, documents or
proceedings.
In addition, any certificate signed by any officer of the Company and delivered to any
Underwriter or counsel for the Underwriters in connection with the offering of the Shares shall be
deemed to be a representation and warranty by the Company or such Subsidiary, as the case may be,
as to matters covered thereby, to each Underwriter.
4. Representations and Warranties of the Manager. The Manager represents and warrants
and agrees with each of the Underwriters that:
(a) the information regarding the Manager in the Registration Statement, the
Preliminary Prospectus and the Prospectus as set forth on Schedule D hereto is true
and correct in all material respects;
(b) the Manager has been duly formed and is validly existing as a limited liability
company in good standing under the laws of the State of Delaware with full power and
authority to own, lease and operate its properties and conduct its business as described in
the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted
Free Writing Prospectuses, if any, to execute and deliver this Agreement;
(c) the Manager is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate, have a material
adverse effect on the business, properties, financial condition, results of operations or
prospects of the Manager (a “Manager Material Adverse Effect”);
(d) this Agreement has been duly authorized, executed and delivered by the Manager;
(e) the Management Agreement has been duly authorized, and on the Closing Date will
have been duly executed and delivered by the Manager and will constitute a valid and binding
agreement of the Manager enforceable in accordance with its terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws
affecting enforcement of creditors’ rights or by general equitable principles;
- 18 -
(f) the Sub-Advisory Agreement has been duly authorized, and on the Closing Date will
have been duly executed and delivered by the Manager and will constitute a valid and binding
agreement of the Manager enforceable in accordance with its terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws
affecting enforcement of creditors’ rights or by general equitable principles;
(g) the Contingent Share Private Placement Agreement has been duly authorized, and on
the Closing Date will have been duly executed and delivered by the Manager and will
constitute a valid and binding agreement of the Manager enforceable in accordance with its
terms, except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other laws affecting enforcement of creditors’ rights or by
general equitable principles;
(h) the Manager is not in breach or violation of or in default under (nor has any event
occurred which, with notice, lapse of time or both, would result in any breach or violation
of, constitute a default under or give the holder of any indebtedness (or a person acting on
such holder’s behalf) the right to require the repurchase, redemption or repayment of all or
a part of such indebtedness under) (A) its certificate of formation or limited liability
company agreement, or (B) any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which it is a party or by which it or any of its properties may
be bound or affected, the effect of which breach or default under clause (B) could have a
Manager Material Adverse Effect, or (C) any federal, state, local or foreign law, regulation
or rule, or (D) any rule or regulation of any self-regulatory organization or other
non-governmental regulatory authority, or (E) any decree, judgment or order applicable to it
or any of its properties;
(i) the execution, delivery and performance of this Agreement, the Management
Agreement, the Sub-Advisory Agreement and the Contingent Share Private Placement Agreement,
the issuance and sale of the Shares and the consummation of the transactions contemplated
hereby will not conflict with, result in any breach or violation of or constitute a default
under (nor constitute any event which, with notice, lapse of time or both, would result in
any breach or violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness under) (or result
in the creation or imposition of a lien, charge or encumbrance on any property or assets of
the Manager pursuant to) (A) any provision of the certificate of formation or the limited
liability company agreement of the Manager, or (B) any indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Manager is a party or by which the
Manager or any of its properties may be bound or affected, the effect of which could have a
Manager Material Adverse Effect, or (C) any federal, state, local or foreign law, regulation
or rule, or (D) any rule or regulation of any self-regulatory organization or other
non-governmental regulatory authority, or (E) any
- 19 -
decree, judgment or order applicable to the Manager or any of its properties;
(j) no approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority or agency, or
of or with any self-regulatory organization or other non-governmental regulatory authority,
or approval of any member of the Manager, is required in connection with the execution of
this Agreement, the Management Agreement, the Sub-Advisory Agreement and the Contingent
Share Private Placement Agreement or the consummation of the transactions contemplated
hereby and thereby, in each case on the terms contemplated by the Registration Statement,
the Preliminary Prospectus and the Prospectus, except such as have already been obtained;
(k) the Manager has all necessary licenses, authorizations, consents and approvals and
has made all necessary filings required under any applicable law, regulation or rule, and
has obtained all necessary licenses, authorizations, consents and approvals from other
persons, in order to conduct its business, except such as could not have a Manager Material
Adverse Effect; the Manager is not in violation of, or in default under, or has received
notice of any proceedings relating to revocation or modification 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 Manager, except where such
violation, default, revocation or modification would not, individually or in the aggregate,
have a Manager Material Adverse Effect;
(l) there are no actions, suits, claims, investigations or proceedings pending or, to
the Manager’s knowledge, threatened or contemplated to which the Manager or any of its
directors or officers is or would be a party or of which any of its properties is or would
be subject at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency, or before or by any
self-regulatory organization or other non-governmental regulatory authority, except any such
action, suit, claim, investigation or proceeding which, if resolved adversely to the
Manager, would not, individually or in the aggregate, have a Manager Material Adverse Effect
or prevent or materially interfere with consummation of the transactions contemplated
hereby; and
(m) the Manager is not prohibited by the Investment Advisers Act of 1940, as amended,
or the rules and regulations thereunder, from performing under the Management Agreement as
contemplated by the Management Agreement and the Registration Statement, the Preliminary
Prospectus and the Prospectus.
5. Certain Covenants of the Company. The Company hereby agrees:
(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 or other jurisdictions as you may designate and to maintain such qualifications in
effect so long as you may request for the distribution of the Shares; provided,
however, that the Company shall not be required to qualify as a foreign corporation
or to consent to
- 20 -
the service of process under the laws of any such jurisdiction (except service of
process with respect to the offering and sale of the Shares); and to promptly advise you of
the receipt by the Company of any notification with respect to the suspension of the
qualification of the Shares for offer or sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon as practicable
after this Agreement becomes effective, and thereafter from time to time to furnish 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 request for the
purposes contemplated by the Act; in case any Underwriter is required to deliver (whether
physically or through compliance with Rule 172 under the Act or any similar rule), in
connection with the sale of the Shares, a prospectus after the nine-month period referred to
in Section 10(a)(3) of the Act, the Company will prepare, at its expense, promptly upon
request such amendment or amendments to the Registration Statement and the Prospectus as may
be necessary to permit compliance with the requirements of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered, it is necessary or
appropriate for a post-effective amendment to the Registration Statement, or a Registration
Statement under Rule 462(b) under the Act, to be filed with the Commission and become
effective before the Shares may be sold, the Company will use its best efforts to cause such
post-effective amendment or such Registration Statement to be filed and become effective,
and will pay any applicable fees in accordance with the Act, as soon as possible; and the
Company will advise you promptly and, if requested by you, will confirm such advice in
writing, (i) when such post-effective amendment or such Registration Statement has become
effective, and (ii) if Rule 430A under the Act is used, when the Prospectus is filed with
the Commission pursuant to Rule 424(b) under the Act (which the Company agrees to file in a
timely manner in accordance with such Rules);
(d) to advise you promptly, confirming such advice in writing, of any request by the
Commission for amendments or supplements to the Registration Statement or the Exchange Act
Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free
Writing Prospectus or for additional information with respect thereto, or of notice of
institution of proceedings for, or the entry of a stop order, suspending the effectiveness
of the Registration Statement and, if the Commission should enter a stop order suspending
the effectiveness of the Registration Statement, to use its best efforts to obtain the
lifting or removal of such order as soon as possible; to advise you promptly of any proposal
to amend or supplement the Registration Statement or the Exchange Act Registration
Statement, any Preliminary Prospectus or the Prospectus, and to provide you and
Underwriters’ counsel copies of any such documents for review and comment a reasonable
amount of time prior to any proposed filing and to file no such amendment or supplement to
which you shall, after discussion with the Company, object in writing;
(e) subject to Section 5(d) hereof, to file promptly all reports and documents
- 21 -
and any preliminary or definitive proxy or information statement required to be filed
by the Company with the Commission in order to comply with the Exchange Act for so long as a
prospectus is required by the Act to be delivered (whether physically or through compliance
with Rule 172 under the Act or any similar rule) in connection with any sale of Shares; and
to provide you, for your review and comment, with a copy of such reports and statements and
other documents to be filed by the Company pursuant to Section 13, 14 or 15(d) of the
Exchange Act during such period a reasonable amount of time prior to any proposed filing,
and to file no such report, statement or document to which you shall, after discussion with
the Company, have objected in writing; and to promptly notify you of such filing;
(f) to advise the Underwriters promptly of the happening of any event known to the
Company within the period during which a prospectus is required by the Act to be delivered
(whether physically or through compliance with Rule 172 under the Act or any similar rule)
in connection with any sale of Shares, which event could require the making of any change in
the Prospectus then being used so that the Prospectus would not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are made, not
misleading, and to advise the Underwriters promptly if, during such period, it shall become
necessary to amend or supplement the Prospectus to cause the Prospectus to comply with the
requirements of the Act, and, in each case, during such time, subject to Section 5(d)
hereof, to prepare and furnish, at the Company’s expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be necessary to reflect any such change
or to effect such compliance;
(g) to make generally available to its security holders, and to deliver to you, an
earnings statement of the Company (which will satisfy the provisions of Section 11(a) of the
Act) covering a period of twelve months beginning after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Act) as soon as is reasonably
practicable after the termination of such twelve-month period but in any case not later than
[ ], 2010;
(h) to furnish to you, one copy for each Managing Underwriter and one copy for
Underwriters’ counsel, copies of the Registration Statement, as initially filed with the
Commission, and of all amendments thereto (including all exhibits thereto) and sufficient
copies of the foregoing (other than exhibits) for distribution of a copy to each of the
other Underwriters;
(i) to apply the net proceeds from the sale of the Shares in the manner set forth under
the caption “Use of Proceeds” in the Prospectus;
(j) to pay all costs, expenses, fees and taxes (other than disbursements of counsel for
the Underwriters, except as set forth under Section 7 hereof or in clause (iv) or (vi)
below) in connection with (i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, each Permitted Free Writing Prospectus and any
amendments or supplements thereto, and the printing and furnishing
- 22 -
of copies of each thereof to the Underwriters and to dealers (including costs of
mailing and shipment), (ii) the registration, issue, sale and delivery of the Shares
including any stock or transfer taxes and stamp or similar duties payable upon the sale,
issuance or delivery of the Shares to the Underwriters, (iii) the producing, word processing
and/or printing of this Agreement and any closing documents (including compilations thereof)
and the reproduction and/or printing and furnishing of copies of each thereof to the
Underwriters and (except closing documents) to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares, if any, for offering and sale under state
or foreign laws and the determination of their eligibility for investment under state or
foreign law (including the legal fees and filing fees and other disbursements of counsel
for the Underwriters) and the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v) any listing of the Shares
on any securities exchange or qualification of the Shares for quotation on the NYSE and any
registration thereof under the Exchange Act, (vi) any filing for review of the public
offering of the Shares by FINRA, including the legal fees and filing fees and other
disbursements of counsel to the Underwriters relating to FINRA matters, provided that the
Company’s obligations under this clause (vi) shall be subject to a ceiling of $16,000, (vii)
the fees and disbursements of any transfer agent or registrar for the Shares, (viii) the
costs and expenses of the Company relating to presentations or meetings undertaken in
connection with the marketing of the offering and sale of the Shares to prospective
investors and the Underwriters’ sales forces, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and expenses of any
consultants engaged by the Company in connection with the road show presentations, travel,
lodging and other expenses incurred by the officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road show (other than the
costs of first-class equivalent seats on any flights on such aircraft taken by employees of
the Underwriters), (ix) the costs and expenses of qualifying the Shares for inclusion in the
book-entry settlement system of the DTC, (x) the preparation and filing of the Exchange Act
Registration Statement, including any amendments thereto, (xi) the offer and sale of the
Reserved Shares, including all costs and expenses of UBS-FinSvc and the Underwriters,
including the fees and disbursement of counsel for the Underwriters and (xii) the
performance of the Company’s other obligations hereunder;
(k) to comply with Rule 433(d) under the Act (without reliance on Rule 164(b) under the
Act) and with Rule 433(g) under the Act;
(l) to use its best efforts to meet the requirements for qualification and taxation as
a REIT under the Code for its taxable year ending December 31, 2009 and, unless the Board of
Directors determines that it is no longer in the best interests of the Company or its
stockholders to maintain the Company’s qualification as a REIT, thereafter;
(m) to not be or become, at any time prior to the expiration of three years after the
date of the Agreement, an “investment company,” as such term is defined in the Investment
Company Act;
(n) beginning on the date hereof and ending on, and including, the date that is
- 23 -
180 days after the date of the Prospectus (the “Lock-Up Period”), without the
prior written consent of UBS, not to (i) issue, sell, offer to sell, contract or agree to
sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to
dispose of, directly or indirectly, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section 16 of the
Exchange Act and the rules and regulations of the Commission promulgated thereunder, with
respect to, any Common Stock or any other securities of the Company that are substantially
similar to Common Stock, or any securities convertible into or exchangeable or exercisable
for, or any warrants or other rights to purchase, the foregoing, (ii) file or cause to
become effective a registration statement under the Act relating to the offer and sale of
any Common Stock or any other securities of the Company that are substantially similar to
Common Stock, or any securities convertible into or exchangeable or exercisable for, or any
warrants or other rights to purchase, the foregoing, (iii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of Common Stock or any other securities of the Company that are substantially
similar to Common Stock, or any securities convertible into or exchangeable or exercisable
for, or any warrants or other rights to purchase, the foregoing, whether any such
transaction is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise or (iv) publicly announce an intention to effect any transaction specified in
clause (i), (ii) or (iii), except, in each case, for (A) the registration of the offer and
sale of the Shares as contemplated by this Agreement, (B) issuances of Common Stock upon the
exercise of options or warrants disclosed as outstanding in the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus, (C) the
issuance of employee stock options not exercisable during the Lock-Up Period pursuant to
stock option plans described in the Registration Statement (excluding the exhibits thereto),
each Preliminary Prospectus and the Prospectus, (D) the issuances of Common Stock to the
Company’s Chief Financial Officer and independent directors under the Company’s 2009 equity
incentive plan as described in the Prospectus, (E) the filing of a registration statement on
Form S-8 relating to the Company’s 2009 equity incentive plan, (F) the issuance of Common
Stock to members of the Company’s senior management team and affiliates of the Manager in
the Concurrent Private Placement, (G) the issuance of Common Stock to the Manager and its
affiliates pursuant to the Contingent Share Placement as described in the Prospectus, (H)
the registration and issuance of shares of Common Stock pursuant to the Company’s Directed
Share Program, (I) transfers pursuant to Article VII of the charter of the Company, and (J)
the filing of and issuances of Common Stock pursuant to a registration statement relating to
a dividend reinvestment plan of the Company; provided, however, that if (a)
during the period that begins on the date that is fifteen (15) calendar days plus three (3)
business days before the last day of the Lock-Up Period and ends on the last day of the
Lock-Up Period, the Company issues an earnings release or material news or a material event
relating to the Company occurs; or (b) prior to the expiration of the Lock-Up Period, the
Company announces that it will release earnings results during the sixteen (16) day period
beginning on the last day of the Lock-Up Period, then the restrictions imposed by this
Section 5(n) shall continue to apply until the expiration of the date that is fifteen (15)
calendar days plus three (3) business days after the date on which the issuance of the
earnings release or the material news or material event occurs;
- 24 -
(o) prior to the time of purchase or any additional time of purchase, as the case may
be, to issue no press release or other communication directly or indirectly and hold no
press conferences with respect to the Company or any Subsidiary, the financial condition,
results of operations, business, properties, assets, or liabilities of the Company or any
Subsidiary, or the offering of the Shares, without your prior consent;
(p) not, at any time at or after the execution of this Agreement, to, directly or
indirectly, offer or sell any Shares by means of any “prospectus” (within the meaning of the
Act), or use any “prospectus” (within the meaning of the Act) in connection with the offer
or sale of the Shares, in each case other than the Prospectus;
(q) in violation of the Act and the Exchange Act, not to, and to cause the Subsidiaries
not to, take, directly or indirectly, any action designed, or which will constitute, or has
constituted, or might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of
the Shares;
(r) to use its best efforts to cause the Common Stock, including the Shares, to be
listed on the NYSE and to maintain such listing, including the Shares, on the NYSE;
(s) to maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock;
(t) to use commercially reasonable efforts to cause each Directed Share Participant to
execute a Lock-Up Agreement and otherwise to cause the Reserved Shares to be restricted from
sale, transfer, assignment, pledge or hypothecation to such extent as may be required by
FINRA and its rules, and to direct the transfer agent to place stop transfer restrictions
upon such Reserved Shares during the Lock-Up Period or any such longer period of time as may
be required by FINRA and its rules; and to comply with all applicable securities and other
laws, rules and regulations in each jurisdiction in which the Reserved Shares are offered in
connection with the Directed Share Program; and
(u) to promptly pay to the Underwriters the Deferred Discount upon satisfaction of the
Deferred Discount Condition or upon termination of the Management Agreement.
6. Certain Covenants of the Manager. The Manager hereby agrees that, during the
period when the Prospectus is required to be delivered under the Act or the Exchange Act, it shall
notify you and the Company of the occurrence of any material events respecting its activities,
affairs or condition, financial or otherwise, and the Manager will forthwith supply such
information to the Company as shall be necessary in the opinion of counsel to the Company and the
Underwriters for the Company to prepare any necessary amendment or supplement to the Prospectus so
that, as so amended or supplemented, the Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances existing at the time it is delivered to a
- 25 -
purchaser, not misleading.
7. Reimbursement of the Underwriters’ Expenses. If, after the execution and delivery
of this Agreement, the Shares are not delivered for any reason other than the termination of this
Agreement pursuant to Section 9(2) hereof, the fifth paragraph of Section 10 hereof or the default
by one or more of the Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 5(j) hereof, reimburse the
Underwriters for all of their out-of-pocket expenses, including the fees and disbursements of their
counsel.
8. Conditions of the Underwriters’ Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and warranties on the
part of the Company and the Manager on the date hereof, at the time of purchase and, if applicable,
at the additional time of purchase, the performance by each of the Company and the Manager of their
respective obligations hereunder and to the following additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of (i) Xxxxxxxx Chance US LLP, counsel for the
Company, addressed to the Underwriters, and dated the time of purchase or the additional
time of purchase, as the case may be, with executed copies for each Underwriter, in the form
set forth in Exhibit B-1 hereto, (ii) Xxxxxxxx Chance US LLP, counsel for the
Company with respect to tax matters, addressed to the Underwriters, and dated the time of
purchase or the additional time of purchase, as the case may be, with executed copies for
each Underwriter, in the form set forth in Exhibit B-2 hereto, and (ii) Xxxxxxx
LLP, counsel for the Company for matters related to Maryland law, dated the time of purchase
or the additional time of purchase, the form of which is attached as Exhibit B-3
hereto.
(b) You shall have received from Deloitte & Touche LLP letters dated, respectively, the
date of this Agreement, the date of the Prospectus, the time of purchase and, if applicable,
the additional time of purchase, and addressed to the Underwriters (with executed copies for
each Underwriter) in the forms satisfactory to UBS, which letters shall cover, without
limitation, the various financial disclosures contained in the Registration Statement, the
Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any.
(c) You shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the favorable opinion of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, dated the time of purchase or the additional
time of purchase, as the case may be, in form and substance reasonably satisfactory to UBS.
(d) No Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which you shall have objected in writing.
- 26 -
(e) The Registration Statement, the Exchange Act Registration Statement and any
registration statement required to be filed, prior to the sale of the Shares, under the Act
pursuant to Rule 462(b) shall have been filed and shall have become effective under the Act
or the Exchange Act, as the case may be. If Rule 430A under the Act is used, the Prospectus
shall have been filed with the Commission pursuant to Rule 424(b) under the Act at or before
5:30 P.M., New York City time, on the second full business day after the date of this
Agreement (or such earlier time as may be required under the Act).
(f) Prior to and at the time of purchase, and, if applicable, the additional time of
purchase, (i) no stop order with respect to the effectiveness of the Registration Statement
shall have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto shall not contain an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; (iii) none of the
Preliminary Prospectuses or the Prospectus, and no amendment or supplement thereto, shall
include an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they are
made, not misleading; (iv) no Disclosure Package, and no amendment or supplement thereto,
shall include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading; and (v) none of the Permitted Free Writing
Prospectuses, if any, shall include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(g) The Company will, at the time of purchase and, if applicable, at the additional
time of purchase, deliver to you (i) a certificate of its Co-Chief Executive Officers and
its Chief Financial Officer, dated the time of purchase or the additional time of purchase,
as the case may be, in the form attached as Exhibit C-1 hereto, (ii) a certificate
its Executive Vice President, dated the time of purchase, in the form attached as
Exhibit C-2 hereto, and (iii) a certificate its Chief Financial Officer, dated the
time of purchase, in the form attached as Exhibit C-3 hereto.
(h) You shall have received each of the signed Lock-Up Agreements referred to in
Section 3(y) hereof, and each such Lock-Up Agreement shall be in full force and effect at
the time of purchase and the additional time of purchase, as the case may be.
- 27 -
(i) On or before the Closing Date, the Company and the Manager shall have executed and
delivered the Management Agreement and the Management Agreement shall be in full force and
effect.
(j) On or before the Closing Date, the Company, the Manager and the Sub-Advisor shall
have executed and delivered the Sub-Advisory Agreement and the Sub-Advisory Agreement shall
be in full force and effect.
(k) On or before the Closing Date, the Concurrent Private Placement shall have been
consummated, and the Private Placement Purchase Agreements shall have been executed and
delivered.
(l) On or before the Closing Date, the Contingent Share Placement shall have been
consummated, and the Contingent Share Private Placement Agreement shall have been executed
and delivered.
(m) The Shares shall have been approved for listing on the NYSE, subject only to notice
of issuance and evidence of satisfactory distribution at or prior to the time of purchase or
the additional time of purchase, as the case may be.
(n) FINRA shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions, contemplated
hereby.
9. Effective Date of Agreement; Termination. This Agreement shall become effective
when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to termination in the
absolute discretion of UBS, if (1) since the time of execution of this Agreement or the earlier
respective dates as of which information is given in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, there has been
any change or any development involving a prospective change in the business, properties,
management, financial condition or results of operations of the Company and the Subsidiaries taken
as a whole, the effect of which change or development is, in the sole judgment of UBS, so material
and adverse as to make it impractical or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the Registration Statement,
the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any,
or (2) since the time of execution of this Agreement, there shall have occurred: (A) a suspension
or material limitation in trading in securities generally on the NYSE, the American Stock Exchange
or the NASDAQ; (B) a suspension or material limitation in trading in the Company’s securities on
the NYSE; (C) a general moratorium on commercial banking activities declared by either federal or
New York State authorities or a material disruption in commercial banking or securities settlement
or clearance services in the United States; (D) an outbreak or escalation of hostilities or acts of
terrorism involving the United States or a declaration by the United States of a national emergency
or war; or (E) any other calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event specified in clause
(D) or (E), in
- 28 -
the sole judgment of UBS, makes it impractical or inadvisable to proceed with the public offering
or the delivery of the Shares on the terms and in the manner contemplated in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any.
If UBS elects to terminate this Agreement as provided in this Section 9, the Company and each
other Underwriter shall be notified promptly in writing.
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 Xxxxxxxxxx Parties shall be unable to comply with any of the terms of
this Agreement, the Xxxxxxxxxx Parties shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5(j), 7 and 11 hereof), and the Underwriters
shall be under no obligation or liability to the Xxxxxxxxxx Parties under this Agreement (except to
the extent provided in Section 11 hereof) or to one another hereunder.
10. Increase in Underwriters’ Commitments. Subject to Sections 8 and 9 hereof, if any
Underwriter shall default in its obligation to take up and pay for the Shares to be purchased by it
hereunder (otherwise than for a failure of a condition set forth in Section 8 hereof or a reason
sufficient to justify the termination of this Agreement under the provisions of Section 9 hereof)
and if the number of Shares which all Underwriters so defaulting shall have agreed but failed to
take up and pay for does not exceed 10% of the total number of Shares, the non-defaulting
Underwriters (including the Underwriters, if any, substituted in the manner set forth below) shall
take up and pay for (in addition to the aggregate number of Shares they are obligated to purchase
pursuant to Section 1 hereof) the number of Shares agreed to be purchased by all such defaulting
Underwriters, as hereinafter provided. Such Shares shall be taken up and paid for by such
non-defaulting Underwriters in such amount or amounts as you may designate with the consent of each
Underwriter so designated or, in the event no such designation is made, such Shares shall be taken
up and paid for by all non-defaulting Underwriters pro rata in proportion to the aggregate number
of Shares set forth opposite the names of such non-defaulting Underwriters in Schedule A.
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 unless all
of the Shares are purchased by the Underwriters (or by substituted Underwriters selected by you
with the approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or by the Company for
a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the Company or
you shall have the right to postpone the time of purchase for a period not exceeding five business
days in order that any necessary changes in the Registration Statement and the 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 10 with like effect as if such substituted Underwriter
- 29 -
had originally been named in Schedule A hereto.
If the aggregate number of Shares which the defaulting Underwriter or Underwriters agreed to
purchase exceeds 10% of the total number of Shares which all Underwriters agreed to purchase
hereunder, and if neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the Shares which the
defaulting Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall terminate
without further act or deed and without any liability on the part of the Company to any Underwriter
and without any liability on the part of any non-defaulting Underwriter to the Company. Nothing in
this paragraph, and no action taken hereunder, shall relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
11. Indemnity and Contribution.
(a) The Company and the Manager, jointly and severally, agree to indemnify, defend and
hold harmless each Underwriter, its partners, directors, officers and members, any person
who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, and any “affiliate” (within the meaning of Rule 405 under the Act) of such
Underwriter, and the successors and assigns of all of the foregoing persons, from and
against any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any such person may
incur under the Act, the Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon (i) 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 arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading, except insofar as any such loss, damage, expense, liability 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 concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company expressly for use in,
the Registration Statement or arises out of or is based upon any omission or alleged
omission to state a material fact in the Registration Statement in connection with such
information, which material fact was not contained in such information and which material
fact was required to be stated in such Registration Statement or was necessary to make such
information not misleading, (ii) any untrue statement or alleged untrue statement of a
material fact included in any Prospectus (the term Prospectus for the purpose of this
Section 11 being deemed to include any Preliminary Prospectus, any information included in
the items reflected on Schedule B hereto and the information set forth on
Schedule C hereto, the Prospectus and any amendments or supplements to the
foregoing), in any Covered Free Writing Prospectus, in any “issuer information” (as defined
in Rule 433 under the Act) of the Company, or in any Prospectus together with any
combination of one or more of the Covered Free Writing Prospectuses, if any, or arises out
of or is based upon any omission or alleged omission to state a material fact necessary in
order to make the statements
- 30 -
therein, in the light of the circumstances under which they were made, not misleading,
except, with respect to such Prospectus or any Permitted Free Writing Prospectus, insofar as
any such loss, damage, expense, liability 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 concerning such Underwriter furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use in, such Prospectus or Permitted
Free Writing Prospectus or arises out of or is based upon any omission or alleged omission
to state a material fact in such Prospectus or Permitted Free Writing Prospectus in
connection with such information, which material fact was not contained in such information
and which material fact was necessary in order to make the statements in such information,
in the light of the circumstances under which they were made, not misleading or (iii) the
Directed Share Program, except, with respect to this clause (iii), insofar as such loss,
damage, expense, liability or claim is finally judicially determined to have resulted from
the gross negligence or willful misconduct of the Underwriters in conducting the Directed
Share Program; provided, however, that in the case of the Manager the
foregoing indemnity agreement shall only apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission based upon and in
conformity with written information furnished to the Company by the Manager expressly for
use in the Registration Statement, the Preliminary Prospectus, the Prospectus or any other
written information used by or on behalf of the Company in connection with the offer and
sale of the Shares (or any amendment or supplement thereto), it being understood and agreed
that the only such information furnished by the Manager are the statements set forth on
Schedule D hereto.
Without limitation of and in addition to its obligations under the other paragraphs of
this Section 11, the Company agrees to indemnify, defend and hold harmless UBS-FinSvc and
its partners, directors, officers and members, and any person who controls UBS-FinSvc within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors
and assigns of all of the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which, jointly or
severally, UBS-FinSvc or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or claim (1)
arises out of or is based upon (a) any of the matters referred to in clauses (i) through
(iii) of the first paragraph of this Section 11(a), or (b) any untrue statement or alleged
untrue statement of a material fact contained in any material prepared by or on behalf or
with the consent of the Company for distribution to Directed Share Participants in
connection with the Directed Share Program or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (2) is or was caused by the failure of any Directed Share
Participant to pay for and accept delivery of Reserved Shares that the Directed Share
Participant has agreed to purchase; or (3) otherwise arises out of or is based upon the
Directed Share Program, provided, however, that the Company shall not be
responsible under this clause (3) for any loss, damage, expense, liability or claim that is
finally judicially determined to have resulted from the gross negligence or willful
misconduct of UBS-FinSvc in conducting the Directed Share
- 31 -
Program. Section 11(c) shall apply equally to any Proceeding (as defined below)
brought against UBS-FinSvc or any such person in respect of which indemnity may be sought
against the Company pursuant to the immediately preceding sentence, except that the Company
shall be liable for the expenses of one separate counsel (in addition to any local counsel)
for UBS-FinSvc and any such person, separate and in addition to counsel for the persons who
may seek indemnification pursuant to the first paragraph of this Section 11(a), in any such
Proceeding.
(b) Each Underwriter severally agrees to indemnify, defend and hold harmless the
Company, its directors and officers, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which, jointly or
severally, the Company or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or claim arises
out of or is based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in, and in conformity with information concerning such Underwriter furnished
in writing by or on behalf of such Underwriter through you 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 arises out of or is based upon any
omission or alleged omission to state a material fact in such Registration Statement in
connection with such information, which material fact was not contained in such information
and which material fact was required to be stated in such Registration Statement or was
necessary to make such information not misleading or (ii) any untrue statement or alleged
untrue statement of a material fact contained in, and in conformity with information
concerning such Underwriter furnished in writing by or on behalf of such Underwriter through
you to the Company expressly for use in, a Prospectus or a Permitted Free Writing
Prospectus, or arises out of or is based upon any omission or alleged omission to state a
material fact in such Prospectus or Permitted Free Writing Prospectus in connection with
such information, which material fact was not contained in such information and which
material fact was necessary in order to make the statements in such information, in the
light of the circumstances under which they were made, not misleading.
(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against
a person (an “indemnified party”) in respect of which indemnity may be sought
against the Company or an Underwriter (as applicable, the “indemnifying party”)
pursuant to subsection (a) or (b), respectively, of this Section 11, such indemnified party
shall promptly notify such indemnifying party in writing of the institution of such
Proceeding and such indemnifying party shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such indemnifying party shall not relieve such indemnifying party from any liability
which such indemnifying party may have to any indemnified party or otherwise. The
indemnified party or parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of such
- 32 -
indemnified party or parties unless the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense of such
Proceeding or the indemnifying party shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to defend such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses available to it
or them which are different from, additional to or in conflict with those available to such
indemnifying party (in which case such indemnifying party shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by such indemnifying party and paid as
incurred (it being understood, however, that, except as provided in the second paragraph of
Section 11(a), such indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified parties who are
parties to such Proceeding). The indemnifying party shall not be liable for any settlement
of any Proceeding effected without its written consent but, if settled with its written
consent, such indemnifying party agrees to indemnify and hold harmless the indemnified party
or parties from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this Section 11(c), then the indemnifying
party agrees that it shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have fully reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days’ prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault or culpability or a failure to act by
or on behalf of such indemnified party.
(d) If the indemnification provided for in this Section 11 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 11 or insufficient to hold
an indemnified party harmless in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses, damages,
expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Manager on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) 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 Manager on the one hand and of the
Underwriters on the
- 33 -
other in connection with the statements or omissions which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Manager on the one
hand and the Underwriters on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company, and the total
underwriting discounts and commissions received by the Underwriters, bear to the aggregate
public offering price of the Shares. The relative fault of the Company and the Manager 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 and the Manager
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, damages, expenses, liabilities and claims
referred to in this subsection shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(e) The Company and the Manager and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 11 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 that does not take account of the equitable considerations
referred to in subsection (d) above. Notwithstanding the provisions of this Section 11, no
Underwriter shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by such Underwriter and distributed to the
public were offered to the public exceeds the amount of any damage which such Underwriter
has otherwise been required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 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 11 are several in proportion to their
respective underwriting commitments and not joint.
(f) The indemnity and contribution agreements contained in this Section 11 and the
covenants, warranties and representations of the Company and the Manager contained in this
Agreement shall remain in full force and effect regardless of any investigation made by or
on behalf of any Underwriter, its partners, directors, officers or members or any person
(including each partner, officer, director or member of such person) who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
or by or on behalf of the Company and the Manager, their directors or officers or any person
who controls the Company and the Manager within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the Shares. The Company and the Manager and each Underwriter agree
promptly to notify each other of the commencement of any Proceeding against it and, in the
case of the Company and the Manager, against any of their officers or directors in
connection with the issuance and
- 34 -
sale of the Shares, or in connection with the Registration Statement, any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing Prospectus.
12. Information Furnished by the Underwriters. The statements set forth in the
seventh, 16th and 17th paragraphs under the caption “Underwriting” in the
Prospectus, only insofar as such statements relate to the amount of selling concession and
reallowance or to over-allotment and stabilization activities that may be undertaken by the
Underwriters, constitute the only information furnished by or on behalf of the Underwriters, as
such information is referred to in Sections 3 and 11 hereof.
13. Notices. Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram or facsimile and, if to the Underwriters, shall
be sufficient in all respects if delivered or sent to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000-0000, Attention: Syndicate Department; and if to the Company or the Xxxxxxxxxx
Parties, shall be sufficient in all respects if delivered or sent to the Company at the offices of
the Company at 1185 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention:
Xxxxxx X. Xxxxxxx and Xxxx X. Xxxx, Co-Chief Executive Officers of the Company.
14. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement
(“Claim”), directly or indirectly, shall be governed by, and construed in accordance with,
the laws of the State of New York. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
15. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the
Xxxxxxxxxx Parties consent to the jurisdiction of such courts and personal service with respect
thereto. The Xxxxxxxxxx Parties hereby consent to personal jurisdiction, service and venue in any
court in which any Claim arising out of or in any way relating to this Agreement is brought by any
third party against any Underwriter or any indemnified party. Each Underwriter and each of the
Company (on its behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) and the Manager waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out
of or relating to this Agreement. Each of the Company and the Manager agrees that a final judgment
in any such action, proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and the Manager, as the case may be, and may be enforced in any other
courts to the jurisdiction of which the Company and the Manager, as the case may be, are or may be
subject, by suit upon such judgment.
16. Parties at Interest. The Agreement herein set forth has been and is made solely
for the benefit of the Underwriters and the Xxxxxxxxxx Parties and to the extent provided in
Section 11 hereof the controlling persons, partners, directors, officers, members and affiliates
referred to in such Section, and their respective successors, assigns, heirs, personal
representatives and executors and administrators. No other person, partnership, association or
- 35 -
corporation (including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
17. No Fiduciary Relationship. The Xxxxxxxxxx Parties hereby acknowledge that the
Underwriters are acting solely as underwriters in connection with the purchase and sale of the
Company’s securities. The Xxxxxxxxxx Parties further acknowledge that the Underwriters are acting
pursuant to a contractual relationship created solely by this Agreement entered into on an arm’s
length basis, and in no event do the parties intend that the Underwriters act or be responsible as
a fiduciary to the Xxxxxxxxxx Parties, their management, stockholders or creditors or any other
person in connection with any activity that the Underwriters may undertake or has undertaken in
furtherance of the purchase and sale of the Company’s securities, either before or after the date
hereof. The Underwriters hereby expressly disclaim any fiduciary or similar obligations to the
Xxxxxxxxxx Parties, either in connection with the transactions contemplated by this Agreement or
any matters leading up to such transactions, and the Xxxxxxxxxx Parties hereby confirm their
understanding and agreement to that effect. The Xxxxxxxxxx Parties and the Underwriters agree that
they are each responsible for making their own independent judgments with respect to any such
transactions and that any opinions or views expressed by the Underwriters to the Xxxxxxxxxx Parties
regarding such transactions, including, but not limited to, any opinions or views with respect to
the price or market for the Company’s securities, do not constitute advice or recommendations to
the Xxxxxxxxxx Parties. The Xxxxxxxxxx Parties and the Underwriters agree that the Underwriters
are acting as principal and not the agent or fiduciary of the Xxxxxxxxxx Parties, and no
Underwriter assumed, and none of them will assume, any advisory responsibility in favor of the
Xxxxxxxxxx Parties with respect to the transactions contemplated hereby or the process leading
thereto (irrespective of whether any Underwriter has advised or is currently advising the
Xxxxxxxxxx Parties on other matters). The Xxxxxxxxxx Parties hereby waive and release, to the
fullest extent permitted by law, any claims that the Xxxxxxxxxx Parties may have against the
Underwriters with respect to any breach or alleged breach of any fiduciary, advisory or similar
duty to the Xxxxxxxxxx Parties in connection with the transactions contemplated by this Agreement
or any matters leading up to such transactions.
18. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among the parties.
19. Successors and Assigns. This Agreement shall be binding upon the Underwriters and
the Xxxxxxxxxx Parties and their successors and assigns and any successor or assign of any
substantial portion of the Xxxxxxxxxx Parties’ and any of the Underwriters’ respective businesses
and/or assets.
20. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG, is not a bank
and is separate from any affiliated bank, including any U.S. branch or agency of UBS AG. Because
UBS is a separately incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBS are not deposits, are not insured by
the Federal Deposit Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
- 36 -
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
- 37 -
If the foregoing correctly sets forth the understanding among the Xxxxxxxxxx Parties and the
several Underwriters, please so indicate in the space provided below for that purpose, whereupon
this Agreement and your acceptance shall constitute a binding agreement among the Xxxxxxxxxx
Parties and the Underwriters, severally.
| Very truly yours, Xxxxxxxxxx Asset Management Corporation |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Waterfall Asset Management, LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Accepted and agreed to as of the date first above
written, on behalf of themselves and the other
several Underwriters named in Schedule A
written, on behalf of themselves and the other
several Underwriters named in Schedule A
UBS Securities LLC
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
JMP Securities LLC
Macquarie Capital (USA) Inc.
Xxxxxx, Xxxxxxxx & Company, Incorporated
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
JMP Securities LLC
Macquarie Capital (USA) Inc.
Xxxxxx, Xxxxxxxx & Company, Incorporated
By: UBS Securities LLC
| By: | ||||
| Name: | ||||
| Title: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
SCHEDULE A
| Underwriter | Number of Firm Shares | |||
UBS SECURITIES LLC |
[____] | |||
XXXXX,
XXXXXXXX & XXXXX, INC. |
[____] | |||
JMP SECURITIES LLC |
[____] | |||
MACQUARIE CAPITAL (USA) INC |
[____] | |||
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED |
[____] | |||
Total |
[____] | |||
SCHEDULE B
Free Writing Prospectus dated July 28, 2009
SCHEDULE C
Information
| Number of Firm Shares | [ ] | ||||
| Initial public offering price per share | $ | [ ] |
SCHEDULE D
The statements in the Registration Statement, the Preliminary Prospectus and the Prospectus set
forth under:
| • | “Prospectus Summary — Our Manager” |
| • | The first sentence of “Prospectus Summary — Our Competitive Advantages — Access to Our Manager’s and its Affiliates Analytical Capabilities, Infrastructure and Experience” |
| • | The first sentence of “Prospectus Summary — Our Competitive Advantages — Loan Origination and Whole Loan/Trading Infrastructure” |
| • | The first sentence of “Prospectus Summary — Our Competitive Advantages — Strategic Relationships and Access to Deal Flow” |
| • | “Prospectus Summary — Historical Performance” |
| • | “Business — Our Manager” |
| • | The first sentence of “Business — Our Competitive Advantages — Access to Our Manager’s and its Affiliates Analytical Capabilities, Infrastructure and Experience” |
| • | The first sentence of “Business — Our Competitive Advantages — Loan Origination and Whole Loan/Trading Infrastructure” |
| • | The first sentence of “Business — Our Competitive Advantages — Strategic Relationships and Access to Deal Flow” |
| • | “Business — Historical Performance” |
| • | “Our Manager and the Management Agreement — Executive Officers and Key Personnel of Our Manager” |
| • | “Appendix II” |
EXHIBIT A
Lock-Up Agreement
July [ ], 2009
UBS Securities LLC
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
Together with the other Underwriters
named in Schedule A to the Underwriting Agreement
referred to herein
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
Together with the other Underwriters
named in Schedule A to the Underwriting Agreement
referred to herein
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
This Lock-Up Agreement is being delivered to you in connection with the proposed Underwriting
Agreement (the “Underwriting Agreement”) to be entered into by Xxxxxxxxxx Asset Management
Corporation, a Maryland corporation (the “Company”), Waterfall Asset Management, LLC, a
Delaware limited liability company, and you and the other underwriters named in Schedule A to the
Underwriting Agreement, with respect to the public offering (the “Offering”) of common
stock, par value $0.01 per share, of the Company (the “Common Stock”).
In order to induce you to enter into the Underwriting Agreement, the undersigned agrees that,
for a period (the “Lock-Up Period”) beginning on the date hereof and ending on, and
including, the date that is 180 days after the date of the final prospectus relating to the
Offering, the undersigned will not, without the prior written consent of UBS Securities LLC and
Xxxxx, Xxxxxxxx & Xxxxx, Inc., (i) sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, or file (or participate in the filing of) a registration statement with the Securities
and Exchange Commission (the “Commission”) in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder (the “Exchange Act”) with respect to, any Common Stock or
any other securities of the Company that are substantially similar to Common Stock, or any
securities convertible into or exchangeable or exercisable for, or any warrants or other rights to
purchase, the foregoing, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common Stock or any other
securities of the Company that are substantially similar to Common Stock, or any securities
convertible into or exchangeable or exercisable for, or any warrants or other rights to purchase,
the foregoing, whether any such transaction is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise or (iii) publicly announce an intention to effect any
A-1
transaction specified in clause (i) or (ii). The foregoing sentence shall not apply to (a) the
registration of the offer and sale of Common Stock as contemplated by the Underwriting Agreement
and the sale of the Common Stock to the Underwriters (as defined in the Underwriting Agreement) in
the Offering, (b) bona fide gifts, provided the recipient thereof agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Agreement, (c) dispositions to any trust for
the direct or indirect benefit of the undersigned and/or the immediate family of the undersigned,
provided that such trust agrees in writing with the Underwriters to be bound by the terms of this
Lock-Up Agreement or (d) transfers pursuant to Article VII of the charter of the Company. For
purposes of this paragraph, “immediate family” shall mean the undersigned and the spouse, any
lineal descendent, father, mother, brother or sister of the undersigned.
In addition, the undersigned hereby waives any rights the undersigned may have to require
registration of Common Stock in connection with the filing of a registration statement relating to
the Offering. The undersigned further agrees that, for the Lock-Up Period, the undersigned will
not, without the prior written consent of UBS Securities LLC and Xxxxx, Xxxxxxxx & Xxxxx, Inc.,
make any demand for, or exercise any right with respect to, the registration of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock or any such securities.
Notwithstanding the above, if (a) during the period that begins on the date that is fifteen
(15) calendar days plus three (3) business days before the last day of the Lock-Up Period and ends
on the last day of the Lock-Up Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (b) prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during the sixteen (16) day
period beginning on the last day of the Lock-Up Period, then the restrictions imposed by this
Lock-Up Agreement shall continue to apply until the expiration of the date that is fifteen (15)
calendar days plus three (3) business days after the date on which the issuance of the earnings
release or the material news or material event occurs. In addition, the undersigned hereby waives
any and all preemptive rights, participation rights, resale rights, rights of first refusal and
similar rights that the undersigned may have in connection with the Offering or with any issuance
or sale by the Company of any equity or other securities before the Offering, except for any such
rights as have been heretofore duly exercised.
The undersigned hereby confirms that the undersigned has not, directly or indirectly, taken,
and hereby covenants that the undersigned will not, directly or indirectly, take, any action
designed, or which has constituted or will constitute or might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of shares of Common Stock in violation of the Act.
The undersigned hereby authorizes the Company and its transfer agent, during the Lock-Up
Period, to decline the transfer of or to note stop transfer restrictions on the stock register and
other records relating to shares of Common Stock or other securities subject to this Lock-Up
Agreement of which the undersigned is the record holder, and, with respect to shares of Common
Stock or other securities subject to this Lock-Up Agreement of which the undersigned
A-2
is the beneficial owner but not the record holder, the undersigned hereby agrees to cause such
record holder to authorize the Company and its transfer agent, during the Lock-Up Period, to
decline the transfer of or to note stop transfer restrictions on the stock register and other
records relating to such shares or other securities.
A-3
* * *
If (i) the Company notifies you in writing that it does not intend to proceed with the
Offering, (ii) the registration statement filed with the Commission with respect to the Offering is
withdrawn or (iii) for any reason the Underwriting Agreement shall be terminated prior to the “time
of purchase” (as defined in the Underwriting Agreement), this Lock-Up Agreement shall be terminated
and the undersigned shall be released from its obligations hereunder.
Yours very truly,
Name:
X-0
XXXXXXX X-0
LIST OF PARTIES TO EXECUTE LOCK-UP AGREEMENTS
| Name | Position | ||
1. |
Waterfall Asset Management,
LLC
|
Manager |
|
| 2. | Xxxxxx X. Xxxxxxx
|
President, Co-Chief Executive Officer and Director | |
| 3. | Xxxx X. Xxxx
|
Chairman and Co-Chief Executive Officer | |
| 4. | Xxxxxxx Xxxxx
|
Executive Vice President, Director Nominee | |
| 5. | Xxxxx X. Fillipps
|
Director Nominee | |
| 6. | Xxxxx X. Xxxxxxxx
|
Director Nominee | |
| 7. | Xxxx X. XxXxxxxx
|
Director Nominee | |
| 8. | Xxxxx X. Xxxxxx
|
Director Nominee | |
| 9. | Xxxxxxxxx X. Xxxxxx
|
Chief Financial Officer and Treasurer | |
| 10. | Xxxxx Xxx
|
Corporate Secretary | |
| 11. | Xxxx Xxxxxxx
|
Portfolio Manager | |
| 12. | Xxxx Xxxx
|
Portfolio Manager | |
| 13. | Xxxxxxx Xx
|
Portfolio Manager | |
| 14. | Lipkee Lu
|
Portfolio Manager | |
A-1-1
EXHIBIT B-1
OPINION OF XXXXXXXX CHANCE US LLP
[ ]
B-1
EXHIBIT B-2
OPINION OF XXXXXXXX CHANCE US LLP
[ ]
B-2
EXHIBIT B-3
OPINION OF XXXXXXX LLP
[ ]
B-3
EXHIBIT C-1
OFFICERS’ CERTIFICATE
Each of the undersigned, Xxxx X. Xxxx, Chairman and Co-Chief Executive Officer of Xxxxxxxxxx
Asset Management Corporation, a Maryland corporation (the “Company”), Xxxxxx X. Xxxxxxx,
President and Co-Chief Executive Officer of the Company, and Xxxxxxxxx X. Xxxxxx, Chief Financial
Officer and Treasurer of the Company, on behalf of the Company, does hereby certify pursuant to
Section 8(g) of that certain Underwriting Agreement dated July [ ], 2009 (the “Underwriting
Agreement”) among the Xxxxxxxxxx Parties (as defined therein) and UBS Securities LLC and Xxxxx,
Xxxxxxxx & Xxxxx, Inc, on behalf of the several Underwriters named therein, that as of July [ ],
2009:
| 1. | He has reviewed the Registration Statement, each Preliminary Prospectus, the Prospectus and each Permitted Free Writing Prospectus. | |
| 2. | The representations and warranties of the Company as set forth in the Underwriting Agreement are true and correct as of the date hereof and as if made on the date hereof. | |
| 3. | The Company has performed all of its obligations under the Underwriting Agreement as are to be performed at or before the date hereof. | |
| 4. | The conditions set forth in paragraph (f) of Section 8 of the Underwriting Agreement have been met. |
Capitalized terms used herein without definition shall have the respective meanings ascribed
to them in the Underwriting Agreement.
C-1
In Witness Whereof, the undersigned have hereunto set their hands on this ___day of
July, 2009.
| Name: | Xxxx X. Xxxx | ||
| Title: | Chairman and Co-Chief Executive Officer | ||
| Name: | Xxxxxx X. Xxxxxxx | ||
| Title: | President and Co-Chief Executive Officer | ||
| Name: | Xxxxxxxxx X. Xxxxxx | ||
| Title: | Chief Financial Officer and Treasurer | ||
C-2
EXHIBIT C-2
OFFICER’S CERTIFICATE
I, Xxxxxxx Xxxxx, do hereby certify that I am the Executive Vice President of Xxxxxxxxxx Asset
Management Corporation, a Maryland corporation (the “Company”), and, on behalf of the
Company and in my capacity as Executive Vice President of the Company, do hereby certify pursuant
to Section 8(g) of that certain Underwriting Agreement dated July [ ], 2009 (the
“Underwriting Agreement”) among the Xxxxxxxxxx Parties (as defined therein) and UBS
Securities LLC and Xxxxx, Xxxxxxxx & Xxxxx, Inc., on behalf of the several Underwriters named
therein, that as of July [ ], 2009:
| 1. | From [ ] through [ ], I was [role] at M.D. Sass Investor Services, Inc. (“MD Sass”). | |
| 2. | To the best of my knowledge, the information identified on Schedule 1 hereto is true and correct in all material respects. |
C-3
In Witness Whereof, the undersigned has hereunto set his hand on this ___ day of
July, 2009.
| Name: | Xxxxxxx Xxxxx | ||
| Title: | Executive Vice President | ||
C-4
SCHEDULE 1
C-5
EXHIBIT C-3
OFFICER’S CERTIFICATE
I, Xxxxxxxxx X. Xxxxxx, do hereby certify that I am the Chief Financial Officer and Treasurer
of Xxxxxxxxxx Asset Management Corporation, a Maryland corporation (the “Company”), and, on
behalf of the Company and in my capacity as Chief Financial Officer and Treasurer of the Company,
do hereby certify pursuant to Section 8(g) of that certain Underwriting Agreement dated July [ ],
2009 (the “Underwriting Agreement”) among the Xxxxxxxxxx Parties (as defined therein) and
UBS Securities LLC and Xxxxx, Xxxxxxxx & Xxxxx, Inc., on behalf of the several Underwriters named
therein, that as of July [ ], 2009:
| 1. | To the best of my knowledge, the information identified on Schedule 1 hereto is true and correct in all material respects. |
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In Witness Whereof, the undersigned has hereunto set his hand on this ___ day of
July, 2009.
| Name: | Xxxxxxxxx X. Xxxxxx | ||
| Title: | Chief Financial Officer and Treasurer | ||
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SCHEDULE 1
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