CAPITAL LEASE FUNDING, INC.
Shares of 8.125% Series A Cumulative Redeemable Preferred Stock
UNDERWRITING AGREEMENT
October 13, 2005
WACHOVIA CAPITAL MARKETS, LLC
as Representative of the several Underwriters
c/o Wachovia Capital Markets, LLC
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Capital Lease Funding, Inc., a Maryland corporation (the "Company"),
confirms its agreement with each of the Underwriters listed on Schedule I hereto
(collectively, the "Underwriters"), for whom Wachovia Capital Markets, LLC is
acting as Representative (in such capacity, the "Representative"), with respect
to (a) the sale by the Company of 1,400,000 shares (the "Initial Shares") of
8.125% Series A Cumulative Redeemable Preferred Stock, par value $.01 per share,
of the Company (the "Series A Preferred Stock"), and the purchase by the
Underwriters, acting severally and not jointly, of the respective number of
shares of Series A Preferred Stock set forth opposite the names of the
Underwriters in Schedule I hereto, and (b) the grant of the option described in
Section 1(b) hereof to purchase all or any part of 210,000 additional shares of
Series A Preferred Stock to cover over-allotments (the "Option Shares"), if any,
from the Company to the Underwriters, acting severally and not jointly. The
1,400,000 Initial Shares and all or any part of the 210,000 Option Shares are
hereinafter called, collectively, the "Shares."
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-3 (No. 333-124003) and a
related preliminary prospectus for the registration of, among other securities,
the Shares and the offering thereof from time to time under the Securities Act
of 1933, as amended (the "Securities Act"), and the rules and regulations
thereunder (the "Securities Act Regulations"). The Company has prepared and
filed such amendments thereto, if any, and such amended preliminary
prospectuses, if any, as may have been required to the date hereof, and agrees
to file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been declared effective
under the Securities Act by the Commission. The registration statement as
amended at the time it became effective (including all information deemed
(whether by incorporation by reference or otherwise) to be a part of the
registration statement is hereinafter called the "Registration Statement,"
except that, if the Company files any post-effective amendment to such
registration statement that becomes effective prior to the Initial Closing Time
(as hereinafter defined), "Registration Statement" shall refer to such
registration statement as so amended. Any registration statement filed pursuant
to Rule 462(b) of the Securities Act Regulations is hereinafter called the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the 462(b) Registration Statement. The Company proposes
to file with the Commission pursuant to Rule 424 under the Securities Act, a
supplement, dated the date hereof, to the prospectus dated May 20, 2005,
relating to the Shares and the method of distribution thereof. The term "Base
Prospectus" means the prospectus dated May 20, 2005; the term "Preliminary
Prospectus" means the preliminary form of the Prospectus (as defined herein)
dated October 11, 2005, specifically relating to the Shares, in the form first
filed with, or transmitted for filing to, the Commission pursuant to Rule 424 of
the Securities Act Regulations (including all information deemed (whether by
incorporation by reference or otherwise) to be a part thereof); the term
"Prospectus Supplement" means the prospectus supplement specifically relating to
the Shares, in the form first filed with, or transmitted for filing to, the
Commission pursuant to Rule 424 or Rule 497 under the Securities Act; the term
"Prospectus" means the Base Prospectus and the Prospectus Supplement.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, at the purchase price per share
of $24.2125, the Company agrees to sell to the Underwriters the Initial Shares,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the number of Initial Shares set forth in Schedule I opposite such
Underwriter's name, plus any additional number of Initial Shares that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 8 hereof, subject in each case, to such adjustments among the
Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per share set forth in paragraph (a), the Company hereby grants an option
to the Underwriters, acting severally and not jointly, to purchase from the
Company, all or any part of the Option Shares, plus any additional number of
Option Shares that such Underwriter may become obligated to purchase pursuant to
the provisions of Section 8 hereof. The option hereby granted will expire 30
days after the date hereof and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Shares upon notice
by the Representative to the Company setting forth the number of Option Shares
as to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Shares. Any such time and date
of delivery (an "Option Closing Time") shall be determined by the
Representative, but shall not be later than five full business days after the
exercise of such option, nor in any event prior to the Initial Closing Time (as
hereinafter defined). If the option is exercised as to all or any portion of the
Option Shares, the Company will sell that number of Option Shares then being
purchased, and each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Shares then being
purchased which the number of Initial Shares set forth in Schedule I opposite
the name of such Underwriter bears to the total number of Initial Shares,
subject in each case to such adjustments among the Underwriters as the
Representative in its sole discretion shall make to eliminate any sales or
purchases of fractional shares.
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2. Payment and Delivery
(a) Initial Shares. The Initial Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representative may request upon at least 48
hours' prior notice to the Company shall be delivered by or on behalf of the
Company to the Representative, including, at the option of the Representative,
through the facilities of The Depository Trust Company ("DTC") for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified in writing to the Representative by the Company upon at least
48 hours' prior notice. The Company will cause the certificates representing the
Initial Shares to be made available for checking and packaging at least 24 hours
prior to the Initial Closing Time with respect thereto at the office of Wachovia
Capital Markets, LLC, 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, or
at the office of DTC or its designated custodian, as the case may be (the
"Designated Office"). The time and date of such delivery and payment shall be
9:30 a.m., New York City time, on the third (fourth, if pricing occurs after
4:30 p.m., New York City time) business day after the date hereof (unless
another time and date shall be agreed to by the Representative and the Company).
The time at which such payment and delivery are actually made is hereinafter
sometimes called the "Initial Closing Time."
(b) Option Shares. Any Option Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representative may request upon at least 48
hours' prior notice to the Company shall be delivered by or on behalf of the
Company to the Representative, including, at the option of the Representative,
through the facilities of DTC for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified in writing to
the Representative by the Company upon at least 48 hours' prior notice. The
Company will cause the certificates representing the Option Shares to be made
available for checking and packaging at least 24 hours prior to the Option
Closing Time with respect thereto at the Designated Office. The time and date of
such delivery and payment shall be 9:30 a.m., New York City time, on the date
specified by the Representative in the notice given by the Representative to the
Company of the Underwriters' election to purchase such Option Shares or on such
other time and date as the Company and the Representative may agree upon in
writing.
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3. Representations and Warranties of the Company: The Company represents
and warrants to the Underwriters that:
(a) the authorized, issued and outstanding shares of capital stock of the
Company are as set forth in the column entitled "Actual" in the "Capitalization"
section of the Prospectus (except for subsequent issuances thereof, if any,
contemplated by this Agreement or pursuant to employee benefit plans referred to
in the Prospectus or as otherwise disclosed in the Prospectus); the outstanding
shares of stock or, as applicable, partnership or membership interests, of the
Company and each of the subsidiaries of the Company (each, a "Subsidiary" and
collectively, the "Subsidiaries"), have been duly authorized and validly issued
and are fully paid and, with respect to shares of capital stock, limited
partnership interests and membership interests, non-assessable (except to the
extent such non-assessability may be affected by Section 17-607 of the Delaware
Revised Uniform Limited Partnership Act or Section 18-607 of the Delaware
Limited Liability Company Act), and, except as disclosed in the Registration
Statement and the Prospectus, all of the outstanding shares of capital stock or
partnership or membership interests of the Subsidiaries are directly or
indirectly owned of record and beneficially by the Company, free and clear of
any pledge, lien, encumbrance, security interest or other claim, and, except as
disclosed in the Prospectus and as otherwise set forth below, there are no
outstanding (i) securities or obligations of the Company or any of the
Subsidiaries convertible into or exchangeable or redeemable for any capital
stock or other equity interests of the Company or any Subsidiary, (ii) warrants,
rights or options to subscribe for or purchase from the Company or any
Subsidiary any such capital stock or other equity interests or any such
convertible or exchangeable securities or obligations (except for warrants,
rights or options issued under incentive, benefit or share purchase plans of the
Company referred to in the Prospectus for officers, employees and others
performing or providing similar services), or (iii) obligations of the Company
or any Subsidiary to issue any shares of capital stock or other equity
interests, any such convertible or exchangeable or redeemable securities or
obligations, or any such warrants, rights or options;
(b) each of the Company and the Subsidiaries (all of which Subsidiaries
are named on Schedule II, except for those Subsidiaries that, considered in the
aggregate as a single subsidiary, do not constitute a "significant subsidiary"
as defined in Rule 1-02 of Regulation S-X promulgated by the Commission) has
been duly incorporated or organized and is validly existing as a corporation,
limited partnership or limited liability company, as applicable, in good
standing under the laws of its respective jurisdiction of incorporation or
organization with full corporate or other power and authority to own its
respective assets and to conduct its respective businesses as described in the
Registration Statement and the Prospectus and, in the case of the Company, to
execute and deliver this Agreement and to consummate the transactions
contemplated herein;
(c) each of the Company and the Subsidiaries is duly qualified and is in
good standing in each jurisdiction in which the nature or conduct of its
business requires such qualification and in which the failure, individually or
in the aggregate, to be so qualified could reasonably be expected to have a
material adverse effect on the assets, business, operations, earnings or
financial condition of the Company and the Subsidiaries taken as a whole (a
"Material Adverse Effect"); except as disclosed in the Registration Statement
and the Prospectus, no Subsidiary is prohibited or restricted, directly or
indirectly, from paying dividends to the Company, or from making any other
distribution with respect to such Subsidiary's capital stock or other equity
interests or from repaying to the Company or any other Subsidiary any amounts
that may from time to time become due under any loans or advances to such
Subsidiary from the Company or such other Subsidiary; other than as disclosed in
the Registration Statement and the Prospectus and other than the Subsidiaries,
the Company does not own, directly or indirectly, any capital stock or other
equity securities of any other corporation or any ownership interest in any
limited liability company, partnership, joint venture or other association;
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(d) the Company and the Subsidiaries are in compliance in all material
respects with all applicable federal, state, local or foreign laws, regulations,
rules, decrees, judgments and orders, including those relating to transactions
with affiliates, except where any failures to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect;
(e) none of the Company and the Subsidiaries is in breach of or in default
under (nor has any event occurred which with notice, lapse of time, or both
would constitute a breach thereof, or default thereunder by the Company or the
Subsidiaries) its respective organizational documents, or in the performance or
observance of any obligation, agreement, covenant or condition contained in any
license, indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or their respective properties is bound, except
for such breaches or defaults that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect;
(f) the execution, delivery and performance of this Agreement and
consummation of the transactions contemplated herein will not (i) conflict with,
or result in any breach of, or constitute a default under (nor constitute any
event which with notice, lapse of time, or both would constitute a breach of, or
default under), (A) any provision of the organizational documents of the Company
or any Subsidiary, or (B) any provision of any license, indenture, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of them or their
respective assets may be bound or affected, or under any federal, state, local
or foreign law, regulation or rule or any decree, judgment or order applicable
to the Company or any Subsidiary, except in the case of this clause (B) for such
conflicts, breaches or defaults that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect; or (ii) result in
the creation or imposition of any lien, charge, claim or encumbrance upon any
asset of the Company or any Subsidiary that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
(g) this Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company enforceable
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and by general equitable principles (collectively, the
"Exceptions"), and except to the extent that the indemnification and
contribution provisions of Section 9 hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof; articles
supplementary to the Company's charter establishing the terms of the Series A
Preferred Stock (the "Articles Supplementary") will be, by the Initial Closing
Time, duly authorized, executed and filed by the Company with the Maryland State
Department of Assessments and Taxation;
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(h) 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 any other third party is required in connection
with the Company's execution, delivery and performance of this Agreement, its
consummation of the transactions contemplated herein or the Company's sale and
delivery of the Shares, other than (i) such as have been obtained, or will have
been obtained at the Initial Closing Time or the relevant Option Closing Time,
as the case may be, under the Securities Act and the Securities Exchange Act of
1934 (the "Exchange Act"), (ii) such approvals as have been obtained in
connection with the approval of the listing of the Shares on the New York Stock
Exchange, (iii) any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Shares are being offered by the
Underwriters, and (iv) filings with and approvals by the National Association of
Securities Dealers, Inc. and (v) such approvals, authorizations, consents or
orders or filings, the absence of which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect;
(i) each of the Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state, local or foreign law, regulation or rule, and
has obtained all necessary authorizations, consents and approvals from other
persons, required in order to conduct the business described in the Registration
Statement and the Prospectus, except to the extent that any failure to have any
such licenses, authorizations, consents or approvals, to make any such filings
or to obtain any such authorizations, consents or approvals could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; none of the Company and the Subsidiaries is in violation of, in
default under, or has received any notice regarding a possible violation,
default or revocation of any such license, authorization, consent or approval or
any federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of the Subsidiaries, the
effect of which could reasonably be expected to result in a Material Adverse
Effect; and no such license, authorization, consent or approval contains a
materially burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectus;
(j) the Company and the transactions contemplated by this Agreement meet
the requirements for the use of Form S-3 under the Securities Act; each of the
Registration Statement and any Rule 462(b) Registration Statement has become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the Securities Act and no proceedings for that
purpose have been instituted or are pending or, to the Company's knowledge, are
threatened by the Commission, and, to the Company's knowledge, the Company has
complied with any request on the part of the Commission for additional
information;
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(k) the Preliminary Prospectus and the Registration Statement comply, and
the Prospectus and any further amendments or supplements thereto will comply as
of their effective date or issue date, as the case may be, in all material
respects with the requirements of the Securities Act and the Securities Act
Regulations; the Registration Statement did not, and any amendment thereto will
not, in each case as of the applicable effective date, 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; and
the Preliminary Prospectus does not, and the Prospectus and any amendment or
supplement thereto will not, as of the applicable issue date and at the Initial
Closing Time and at the Option Closing Time (if any), 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
warranty or representation with respect to any statement contained in the
Registration Statement, the Preliminary Prospectus or the Prospectus, in
reliance upon and in conformity with the information furnished in writing by or
on behalf of the Underwriters through the Representative to the Company
expressly for use in the Registration Statement, the Preliminary Prospectus or
the Prospectus (that information being limited to that set forth in Schedule III
attached hereto);
(l) each document incorporated by reference in the Prospectus or the
Registration Statement (the "Incorporated Documents"), when it was filed with
the Commission, conformed in all material respects to the requirements of the
Securities Act and the Exchange Act, as applicable, and the Securities Act
Regulations and the rules and regulations under the Exchange Act (the "Exchange
Act Regulations"), as applicable, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and, when
read together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the date hereof and at the Initial
Closing Time and the Option Closing Time (if any), each such incorporated
document did not or will not, as the case may be, 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;
(m) the Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical to the
respective version of the Preliminary Prospectus or Prospectus created to be
transmitted to the Commission under the Securities Act for filing via the
Electronic Data Gathering Analysis and Retrieval System ("XXXXX"), except to the
extent permitted by Regulation S-T;
(n) the financial statements, including the related supporting schedules
and notes, included in (or incorporated by reference into) the Registration
Statement and the Prospectus present fairly the consolidated financial position
of the entities to which such financial statements relate (the "Covered
Entities") as of the dates indicated and the consolidated results of operations
and changes in financial position and cash flows of the Covered Entities for the
periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles as applied in the United States
and on a consistent basis during the periods involved (except as may be
expressly stated in the related notes thereto) and in accordance with Regulation
S-X promulgated by the Commission; the financial data in the Registration
Statement and the Prospectus fairly presents the information shown therein and
has been compiled on a basis consistent with the financial statements included
in the Registration Statement and the Prospectus; no other financial statements
or supporting schedules are required to be included in the Registration
Statement or the Prospectus; the unaudited pro forma financial information
(including the related notes) included in the Registration Statement and the
Prospectus complies as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Securities Act Regulations
and the Exchange Act and Exchange Act Regulations, as applicable, and management
of the Company believes that the assumptions underlying the pro forma
adjustments are reasonable; such pro forma adjustments have been properly
applied to the historical amounts in the compilation of the information; no
other pro forma financial information is required to be included in the
Registration Statement or the Prospectus;
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(o) Ernst & Young LLP, whose reports on the consolidated financial
statements of the Company and the Subsidiaries and the Company's predecessor are
filed with the Commission as part of the Registration Statement and the
Prospectus or are incorporated by reference therein, were during the periods
covered by their reports independent registered public accountants as required
by the Securities Act, the Securities Act Regulations, the Exchange Act and the
Exchange Act Regulations;
(p) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or Prospectus, there has not been (i) any
Material Adverse Effect or any change or event that reasonably could be expected
to have a Material Adverse Effect, whether or not arising in the ordinary course
of business, (ii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any of the Subsidiaries that reasonably
could be expected to result in a Material Adverse Effect or (iii) except for
regular quarterly dividends on the Company's common stock, $.01 par value per
share (the "Common Stock"), described in the Registration Statement and the
Prospectus, any dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock;
(q) the Shares conform in all material respects to the description thereof
contained in the Registration Statement and the Prospectus, and such
descriptions conform to the rights set forth in the Articles Supplementary;
(r) the Shares have been duly authorized and, when issued and duly
delivered against payment therefor as contemplated by this Agreement, will be
validly issued, fully paid and non-assessable, free and clear of any pledge,
lien, encumbrance, security interest or other claim created by or known to the
Company, and the issuance and sale of the Shares by the Company is not subject
to preemptive or other similar rights arising by operation of law, under the
organizational documents of the Company or under any agreement to which the
Company or any Subsidiary is a party or otherwise;
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(s) at or before the Initial Closing Time, the Shares will have been
registered under Section 12(b) of the Exchange Act;
(t) all securities issued by the Company or any of the Subsidiaries prior
to the date hereof have been issued and sold in compliance with (i) all
applicable federal and state securities laws, and (ii) to the extent applicable
to the issuing entity, the requirements of the New York Stock Exchange;
(u) the Company has not taken, and will not take, directly or indirectly,
any action that is designed to or that has constituted or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares;
(v) in connection with the offering of the Series A Preferred Stock, the
Company has not offered and will not offer its Series A Preferred Stock or any
other securities convertible into or exchangeable or exercisable or redeemable
for Series A Preferred Stock in a manner in violation of the Securities Act; the
Company has not distributed and will not distribute any prospectus or other
offering material, other than the Preliminary Prospectus filed with the
Commission on October 11, 2005, pursuant to Rule 424 and the Prospectus, in
connection with the offer and sale of the Shares;
(w) except as set forth on Schedule IV, neither the Company nor any of its
affiliates (i) is required to register as a "broker" or "dealer" in accordance
with the provisions of the Exchange Act, or the Exchange Act Regulations, or
(ii) directly, or indirectly through one or more intermediaries, controls or has
any other association with (within the meaning of Article I of the Bylaws of the
National Association of Securities Dealers, Inc. (the "NASD")) any member firm
of the NASD;
(x) the Company has not relied upon the Representative or legal counsel
for the Representative for any legal, tax or accounting advice in connection
with the offering and sale of the Shares;
(y) there are no actions, suits, proceedings, inquiries or investigations
pending or, to the Company's knowledge, threatened against the Company or any of
the Subsidiaries or any of their respective officers and directors or to which
the assets of any such entity are subject, at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority, arbitral panel or agency, that could result in a judgment,
decree, award or order which could reasonably be expected to have a Material
Adverse Effect;
(z) the descriptions in the Registration Statement and the Prospectus of
the legal or governmental proceedings, contracts, leases and other legal
documents therein described present fairly in all material respects the
information required to be disclosed, and there are no legal or governmental
proceedings, contracts, leases, or other documents of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required; all agreements between the Company or any of the Subsidiaries and
third parties expressly referenced in the Registration Statement or the
Prospectus are legal, valid and binding obligations of the Company or one or
more of the Subsidiaries, enforceable in accordance with their respective terms,
except to the extent enforceability may be limited by the Exceptions and, to the
Company's knowledge, no party is in breach or default under any such agreements
that could reasonably be expected to have a Material Adverse Effect;
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(aa) the Company and the Subsidiaries own or possess adequate licenses or
other rights to use all patents, trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how (collectively
"Intangibles") necessary to entitle the Company and the Subsidiaries to conduct
their business as described in the Registration Statement and the Prospectus,
and none of the Company and the Subsidiaries has received notice of infringement
of or conflict with (and the Company knows of no such infringement of or
conflict with) asserted rights of others with respect to any Intangibles that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect;
(bb) the Company and the Subsidiaries have established and maintain
disclosure controls and procedures (as such term is defined in Rule 13a-15 and
15d-15 of the Exchange Act Regulations); such disclosure controls and procedures
are designed to ensure that material information relating to the Company and its
Subsidiaries is made known to the Company's Chief Executive Officer 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 and the Subsidiaries have established and maintain
internal control over financial reporting (as such term is defined in Rule
13a-15 and 15d-15 of the Exchange Act Regulations); such internal control over
financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles, including providing reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the
Company's assets that could have a material effect on the financial statements;
the Company's auditors and the audit committee of the board of directors have
been advised of: (i) any significant deficiencies and material weaknesses in the
design or operation of internal controls which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report
financial data; and (ii) any fraud, whether or not material, that involves
management or other employees who have a material role in the Company's internal
controls; since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no changes in internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting;
(cc) each of the Company and the Subsidiaries has filed on a timely basis
(including in accordance with any applicable extensions) all necessary federal,
state, local and foreign income and franchise tax returns required to be filed
through the date hereof or have properly requested extensions thereof, and have
paid all taxes shown as due thereon, and if due and payable, any related or
similar assessment, fine or penalty levied against the Company or any of the
Subsidiaries; no tax deficiency has been asserted against any such entity, and
the Company does not know of any tax deficiency that is likely to be asserted
against the Company or any of the Subsidiaries that, individually or in the
aggregate, if determined adversely to any such entity, could reasonably be
expected to have a Material Adverse Effect; all tax liabilities are adequately
provided for on the respective books of the Company and the Subsidiaries;
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(dd) commencing with the taxable year ended December 31, 2004, the Company
has been organized and operated in conformity with the requirements for
qualification as a real estate investment trust ("REIT") under the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder ("Code"), and the current and proposed method of
operation of the Company and the Subsidiaries as described in the Prospectus
will enable the Company to continue to meet the requirements for qualification
and taxation as a REIT under the Code; the Company intends to continue to
qualify as a REIT under the Code for all subsequent years, and the Company does
not know of any event that could reasonably be expected to cause the Company to
fail to qualify as a REIT under the Code at any time;
(ee) the Company and the Subsidiaries maintain, and, to the Company's
knowledge, their borrowers maintain, insurance (issued by insurers of recognized
financial responsibility) of the types and in the amounts generally deemed
adequate for the business of the Company and the Subsidiaries;
(ff) each of the Company and the Subsidiaries is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any of the Subsidiaries would have any material
liability; none of the Company and the Subsidiaries has incurred or expects to
incur material liability under (i) Title IV of ERISA with respect to the
termination of, or withdrawal from, any "pension plan" (as defined in ERISA and
subject to Title IV of ERISA) or (ii) Section 412 or 4971 of the Code; and each
"pension plan" for which the Company or any of the Subsidiaries would have any
material liability and that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, that would cause the loss of such
qualification;
(gg) none of the Company and the Subsidiaries, or, to the Company's
knowledge, any officer or director purporting to act on behalf of the Company or
any of the Subsidiaries has at any time (i) made any payment outside the
ordinary course of business to any investment officer or loan broker or person
charged with similar duties of any entity to which the Company or any of the
Subsidiaries sells or from which the Company or any of the Subsidiaries buys
loans or servicing arrangements for the purpose of influencing such agent,
officer, broker or person to buy loans or servicing arrangements from or sell
loans or servicing arrangements to the Company or any of the Subsidiaries, (ii)
engaged in any transactions, maintained any bank account or used any corporate
funds except for transactions, bank accounts and funds that have been and are
reflected in the normally maintained books and records of the Company and the
Subsidiaries; or (iii) made any other payment of funds of the Company or any of
the Subsidiaries or received or retained any funds in violation of any law, rule
or regulation or of a character required to be disclosed in the Registration
Statement or the Prospectus;
11
(hh) except as otherwise disclosed in the Registration Statement and the
Prospectus, there are no outstanding loans or advances or guarantees of
indebtedness by the Company or any of the Subsidiaries to or for the benefit of
any of the officers or directors of the Company or any of the Subsidiaries or
any of the members of the families of any of them; except as otherwise disclosed
in the Registration Statement and the Prospectus, no other relationship, direct
or indirect, exists between or among the Company or any of the Subsidiaries on
the one hand, and the directors, officers, stockholders, customers or suppliers
of the Company or any of the Subsidiaries on the other hand, that is required by
the Securities Act and the Securities Act Regulations to be described in the
Registration Statement or the Prospectus and that is not so described;
(ii) except as disclosed in the Registration Statement and the Prospectus,
none of the Company and the Subsidiaries has incurred any liability for any
finder's fees or similar payments in connection with the transactions herein
contemplated;
(jj) none of the Company and the Subsidiaries is and, after giving effect
to the offering and sale of the Shares, 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");
(kk) the statistical and market-related data included in the Prospectus
and the Registration Statement are based on or derived from sources that the
Company believes to be reliable and accurate;
(ll) there are no persons with registration or other similar rights to
have any equity or debt securities, including securities that are convertible
into or exchangeable or redeemable for equity securities, registered pursuant to
the Registration Statement or otherwise registered by the Company under the
Securities Act except for those registration or similar rights that have been
waived or that are inapplicable with respect to the offering contemplated by
this Agreement;
(mm) except as disclosed in the Registration Statement and the Prospectus:
(i) the Company and the Subsidiaries have good title to (and are the sole legal,
beneficial and equitable owner of) all loan assets and other personal property
described in the Registration Statement or the Prospectus or shown on the
financial statements included in the Registration Statement and the Prospectus,
and own fee simple title to or have a valid leasehold interest in, as
applicable, all real property (other than real property not purported to be
owned or leased by the Company or the Subsidiaries) described in the
Registration Statement or the Prospectus or shown on the financial statements
included in the Registration Statement and the Prospectus, in each case free and
clear of all liens, security interests, pledges, charges, encumbrances,
encroachments, restrictions, mortgages and defects, except as do not materially
and adversely affect the value of such property or interfere with the use made
or proposed to be made of such property by the Company and the Subsidiaries; and
(ii) any real property improvements, equipment and personal property held under
lease by the Company or any of the Subsidiaries are held under valid, existing
and enforceable leases, with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such real property
improvements, equipment and personal property by the Company or such Subsidiary;
12
(nn) other than with respect to development loans described in the
Registration Statement and the Prospectus, the Company or a Subsidiary has
obtained, from a title insurance company licensed to issue such policy, a
lender's title insurance policy on any real property in respect of which the
Company or any of the Subsidiaries has a loan in its portfolio as of the date
hereof, the Initial Closing Time or the Option Closing Time secured thereby that
insures the lien of its mortgage on the real property with coverage equal to the
maximum aggregate principal amount of any indebtedness held by the Company or a
Subsidiary and so secured by the real property; the Company or a Subsidiary has
obtained, from a title insurance company licensed to issue such policy, an
owner's or leasehold title insurance policy on any real property owned in fee or
leased, as the case may be, by the Company or any of the Subsidiaries as of the
date hereof, the Initial Closing Time or the Option Closing Time that insures
its fee simple title or leasehold interest with coverage in an amount at least
equal to the amount generally deemed in the Company's industry to be
commercially reasonable in the market where the property is located;
(oo) there are no real property interests or loans in respect of real
property that any of the Company and the Subsidiaries directly or indirectly
intends to acquire, lease, originate or underwrite or any contracts, letters of
intent, term sheets, agreements, arrangements or understandings with respect to
the direct or indirect acquisition, disposition, origination or underwriting by
the Company or the Subsidiaries of interests in real property or loans in
respect of real property that are required to be described in the Registration
Statement or the Prospectus and are not so described;
(pp) except as set forth in the Registration Statement and the Prospectus,
the mortgages and deeds of trust encumbering any real property owned in fee or
leased by the Company or a Subsidiary (i) are not convertible (in the absence of
foreclosure) into an equity interest in such real property or in the Company or
any Subsidiary, (ii) are not and will not be cross-defaulted to any indebtedness
other than indebtedness of the Company or any of the Subsidiaries, and (iii) are
not and will not be cross-collateralized to any property not owned by the
Company or any of the Subsidiaries;
(qq) except as otherwise disclosed in the Registration Statement and the
Prospectus, (i) none of the Company and the Subsidiaries has at any time,
handled, stored, treated, transported, manufactured, spilled, leaked,
discharged, dumped, transferred or otherwise disposed of Hazardous Materials (as
hereinafter defined) on, in, under, to or from any of the Real Property (as
hereinafter defined), except as could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect; (ii) the Company has not
received any notice of any seepage, leak, discharge, release, emission, spill,
or dumping of Hazardous Materials into waters on or adjacent to any of the Real
Property; (iii) none of the Company and the Subsidiaries has received any notice
of any occurrence or circumstance that, with notice or passage of time or both,
would give rise to a claim under or pursuant to any federal, state or local
environmental statute, regulation or rule under common law, pertaining to
Hazardous Materials on or originating from any of the Real Property or any
assets described in the Registration Statement or the Prospectus or arising out
of the conduct of any of the Company and the Subsidiaries, including without
limitation a claim under or pursuant to any Environmental Statute (as
hereinafter defined), except for claims that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect; (iv) none of
the Real Property is included or, to the Company's knowledge, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA (as
hereinafter defined) by the United States Environmental Protection Agency or, to
the Company's knowledge, proposed for inclusion on any similar list or inventory
issued pursuant to any other Environmental Statute or issued by any other
governmental authority; and (v) in the operation of the Company's and its
predecessor's businesses, the Company or its predecessor has acquired, before
the acquisition or origination of any loan in respect of real property or the
acquisition of any real property, an environmental assessment of the real
property and, to the extent that any condition was revealed that could
reasonably have been expected to result in material liability associated with
the presence or release of a Hazardous Material, or any violation or potential
violation of any Environmental Statute, the Company or its predecessor took, or
required its borrower to take, all commercially reasonable action necessary or
advisable (including any capital improvements) for clean-up, closure or other
compliance with such Environmental Statute;
13
as used herein, "Real Property" means collectively any real property
underlying any loan held by the Company or any of the Subsidiaries or any
real property leased or owned by any of them;
as used herein, "Hazardous Material" means, without limitation, any
flammable explosives, radioactive materials, hazardous substances,
hazardous wastes, toxic substances, asbestos or any hazardous material as
defined by any applicable federal, state or local environmental law,
regulation or rule, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 U.S.C. Sections 9601-9675 ("CERCLA"), the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Sections 1801-1819, the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Sections 6901-6992K,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Sections 11001-11050, the Toxic Substances Control Act, 15 U.S.C. Sections
2601-2671, the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. Sections 136-136y, the Clean Air Act, 42 U.S.C. Sections 7401-7642,
the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C.
Sections 1251-1387, the Safe Drinking Water Act, 42 U.S.C. Sections
300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C.
Sections 651-678, as any of the above statutes may be amended from time to
time, and in the regulations promulgated pursuant to each of the foregoing
(individually, an "Environmental Statute" and collectively the
"Environmental Statutes") or by any federal, state or local governmental
authority having or claiming jurisdiction over the properties described in
the Registration Statement or the Prospectus;
(rr) to the Company's knowledge, there are no costs or liabilities
associated with any of the Real Property arising under any Environmental Statute
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with any Environmental Statute
or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) that, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect;
14
(ss) none of the entities that prepared Phase I or other environmental
assessments with respect to the Real Property was employed for such purpose on a
contingent basis or has any substantial interest in the Company or any of the
Subsidiaries, and none of their directors, officers or employees is connected
with the Company or any of the Subsidiaries as a promoter, selling agent,
trustee, officer, director or employee;
(tt) except as disclosed in the Registration Statement and the Prospectus,
(i) the Company does not know of any violation of any municipal, state or
federal law, rule or regulation concerning the Real Property or any part thereof
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; (ii) to the Company's knowledge, the Real Property
complies with all applicable zoning laws, ordinances, regulations and deed
restrictions or other covenants in all material respects and, if and to the
extent there is a failure to comply, such failure does not materially impair the
value of any of the Real Property and will not result in a forfeiture or
reversion of title; (iii) the Company has not received any written notice of any
condemnation of or zoning change affecting the Real Property or any part
thereof, and the Company does not know of any such condemnation or zoning change
that is threatened and that, individually or in the aggregate, if consummated
could reasonably be expected to have a Material Adverse Effect; (iv) to the
Company's knowledge, all improvements constituting a part of the Real Property
are free of material structural defects and all building systems contained
therein are in good working order in all material respects, subject to ordinary
wear and tear, except as could not reasonably be expected to have Material
Adverse Effect, (v) all liens, charges, encumbrances, claims, or restrictions on
or affecting the assets of the Company or any of the Subsidiaries that are
required to be described in the Registration Statement or the Prospectus are
disclosed therein; (vi) all leases of any of the Real Property constitute the
legal, valid and binding agreements of each party thereto (subject to the
Exceptions), to the Company's knowledge no tenant under any of such leases is in
default thereunder and there is no event that, but for the passage of time or
the giving of notice or both would constitute a default thereunder, except for
such defaults that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; (vii) all notes and other loan
agreements, mortgages, assignments of leases and rents, subordination agreements
and other security agreements in favor of the Company and the Subsidiaries with
respect to any of the Real Property constitute the legal, valid and binding
agreements of each party thereto (subject to the Exceptions), no party to any
such agreement is in default thereunder, and to the Company's knowledge there is
no event that, but for the passage of time or the giving of notice or both would
constitute a default thereunder, except for such failures to be legal, valid and
binding and such defaults that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect and (viii) no tenant
under any lease pursuant to which any of the Real Property is leased has an
option or right of first refusal to purchase the premises leased thereunder or
the building of which such premises are a part, except for such options or
rights of first refusal that, individually or in the aggregate, if exercised,
could not reasonably be expected to have a Material Adverse Effect; and
15
(uu) any certificate signed by any officer of the Company delivered to the
Representative or to counsel for the Underwriters pursuant to or in connection
with this Agreement shall be deemed a representation and warranty by the Company
to each Underwriter as to the matters covered thereby.
4. Certain Covenants:
The Company hereby agrees with each Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such jurisdictions (both domestic and foreign) as the
Representative may designate and to maintain such qualifications in effect as
long as requested by the Representative for the distribution of the Shares;
provided that the Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation;
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible;
(c) to prepare the Prospectus in a form reasonably approved by the
Underwriters and file such Prospectus with the Commission pursuant to Rule
424(b) under the Securities Act not later than 10:00 a.m. (New York City time),
on the second day following the execution and delivery of this Agreement or on
such other day as the parties may mutually agree and to furnish promptly (and
with respect to the initial delivery of such Prospectus, not later than 10:00
a.m. (New York City time) on the second day following the execution and delivery
of this Agreement, or on such other day as the parties may mutually agree) to
the Underwriters copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements
thereto) in such quantities and at such locations as the Underwriters may
reasonably request for the purposes contemplated by the Securities Act
Regulations, which Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the version created to be
transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T;
(d) during the time in which a prospectus relating to the Shares is
required to be delivered under the Securities Act or the Securities Act
Regulations, to advise the Representative promptly and, if requested by the
Representative, to confirm such advice in writing, when any post-effective
amendment to the Registration Statement becomes effective under the Securities
Act Regulations;
(e) during the time in which a prospectus relating to the Shares is
required to be delivered under the Securities Act or the Securities Act
Regulations, to advise the Representative immediately, and, if requested by the
Representative, confirming such advice in writing, of (i) the receipt of any
comments from, or any request by, the Commission for amendments or supplements
to the Registration Statement or Prospectus or for additional information with
respect thereto, or (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of the Preliminary Prospectus or the
Prospectus, or of the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes and, if the Commission or any other
government agency or authority should issue any such order, to make every
reasonable effort to obtain the lifting or removal of such order as soon as
possible; and to advise the Representative promptly of any proposal to amend or
supplement the Registration Statement or Prospectus and to file no such
amendment or supplement to which the Representative shall reasonably object in
writing (unless required to do so by law);
16
(f) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a prospectus relating to the
Shares is required to be delivered under the Securities Act or the Securities
Act Regulations that, in the judgment of the Company or in the reasonable
opinion of the Representative or counsel for the Underwriters, would 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 required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with the Securities Act and the Securities Act Regulations and, during
such time, to prepare and furnish promptly to the Underwriters copies of the
proposed amendment or supplement before filing any such amendment or supplement
with the Commission and thereafter promptly furnish at the Company's own expense
to the Underwriters and to dealers, copies in such quantities and at such
locations as the Representative may from time to time reasonably request of an
appropriate amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with the Securities Act and the Securities Act
Regulations;
(g) during the time in which a prospectus relating to the Shares is
required to be delivered under the Securities Act or the Securities Act
Regulations, to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representative, be required by
the Securities Act or requested by the Commission;
(h) prior to filing with the Commission any amendment to the Registration
Statement or supplement to the Prospectus or any prospectus pursuant to Rule 424
under the Securities Act in each case relating to the Shares, to furnish for
review a copy thereof to the Representative and counsel for the Underwriters and
not to file any such proposed amendment or supplement to which the
Representative reasonably object (unless required to do so by law);
(i) to furnish promptly to the Representative, upon request, such number
of conformed copies of the Registration Statement, as initially filed with the
Commission, and of all amendments or supplements thereto relating to the Shares
(including all exhibits filed therewith or incorporated by reference therein) as
the Representative may reasonably request;
17
(j) to furnish to the Representative, not less than one business day
before filing with the Commission subsequent to the date of the Prospectus and
during the period in which a prospectus relating to the Shares is required to be
delivered under the Securities Act or the Securities Act Regulations, a copy of
any document proposed to be filed with the Commission pursuant to Section 13,
14, or 15(d) of the Exchange Act and during such period to file all such
documents in the manner and within the time periods required by the Exchange Act
and the Exchange Act Regulations;
(k) to apply the net proceeds of the sale of the Shares in accordance with
its statements under the caption "Use of Proceeds" in the Prospectus;
(l) to make generally available to its security holders as soon as
practicable, but in any event not later than 45 days after the end of the fiscal
quarter first occurring after the first anniversary of the effective date of the
Registration Statement (or later than 90 days, if such fiscal quarter is the
last fiscal quarter of the Company's fiscal year) an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act (in such form,
at the option of the Company, as complies with Rule 158 under the Securities Act
Regulations) covering a period of 12 months beginning after the effective date
of the Registration Statement;
(m) to use its best efforts to list the Shares on the New York Stock
Exchange;
(n) to engage and maintain, at its expense, a registrar and transfer agent
for the Shares;
(o) to refrain during a period of 60 days from the date of the Prospectus,
without the prior written consent of the Representative, from, directly or
indirectly, (i) offering, pledging, selling, contracting to sell, selling any
option or contract to purchase, purchasing any option or contract to sell,
granting any option for the sale of, or otherwise disposing of or transferring
(or entering into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of), any share of Series A Preferred Stock or securities similar to or ranking
on par with or senior to the Series A Preferred Stock (including units of
preferred limited partnership interest in Caplease, LP) or any securities
convertible into or exercisable or exchangeable for Series A Preferred Stock or
such securities, or filing any registration statement under the Securities Act
with respect to any of the foregoing, or (ii) entering into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of Series A Preferred Stock
or such other securities, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Series A Preferred
Stock or such other securities, in cash or otherwise;
(p) not to, and to use its best efforts to cause its officers, directors
and affiliates not to, (i) take, directly or indirectly, prior to termination of
the underwriting syndicate contemplated by this Agreement, any action designed
to stabilize or manipulate the price of any security of the Company, or which
may cause or result in, or which might in the future 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 any of the Shares,
(ii) sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of the Shares or (iii) pay or agree to pay to any person any
compensation for soliciting any order to purchase any other securities of the
Company;
18
(q) to use its best efforts to meet the requirements to qualify as a REIT
under the Code, unless it is determined by the Company's board of directors to
be in the best interest of the Company for the Company to no longer so qualify;
and
(r) to use its best efforts not to invest, or otherwise use the proceeds
received by the Company from its sale of the Shares in such a manner as would
require the Company or any of its Subsidiaries to register as an investment
company under the Investment Company Act.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses and fees in connection with: (i) the preparation
and filing of the Registration Statement, the Preliminary Prospectus, the
Prospectus, and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment); (ii) the preparation, issuance and
delivery of the certificates for the Shares to the Underwriters, including any
stock or other transfer taxes or duties payable upon the sale of the Shares to
the Underwriters (other than transfer taxes on resales by the Underwriters);
(iii) the qualification of the Shares for offering and sale under state laws
that the Company and the Representative have mutually agreed are appropriate and
the determination of their eligibility for investment under state law as
aforesaid, and the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers; (iv) filing for
review of the public offering of the Shares by the NASD; (v) the fees and
expenses of any transfer agent or registrar for the Shares and miscellaneous
expenses referred to in the Registration Statement; (vi) the fees and expenses
incurred in connection with the inclusion of the Shares in the New York Stock
Exchange; (vii) all costs and expenses incident to the travel and accommodation
of employees of the Company in making road show presentations with respect to
the offering of the Shares; (viii) costs and expenses of any internet road show;
(ix) preparing and distributing three copies of bound volumes of transaction
documents for the Representative and its legal counsel; and (x) the performance
of the Company's other obligations hereunder; provided that, except as provided
in this Section 5 or in Section 9, the Underwriters shall pay their own costs
and expenses.
(b) If this Agreement shall be terminated by the Representative pursuant
to clause (a) of Section 7, the Company will reimburse the Underwriters for all
out-of-pocket expenses (such as printing, facsimile, courier service, direct
computer expenses, accommodations and travel, including the fees and expenses of
DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP) reasonably incurred by such Underwriters in
connection with this Agreement or the transactions contemplated herein.
19
6. Conditions of the Underwriters' Obligations:
The obligations of the Underwriters hereunder to purchase Shares at the
Initial Closing Time or at the Option Closing Time, as applicable, are subject
to the accuracy of the representations and warranties on the part of the Company
hereunder on the date hereof and at the Initial Closing Time and at the Option
Closing Time, as applicable, the performance by the Company of its obligations
hereunder and the satisfaction of the following further conditions at the
Initial Closing Time or at the Option Closing Time, as applicable:
(a) The Company shall furnish to the Representative at the Initial Closing
Time and at the Option Closing Time opinions of Hunton & Xxxxxxxx LLP, counsel
for the Company and the Subsidiaries, addressed to the Representative and dated
the Initial Closing Time and Option Closing Time, as set forth on Schedule V.
(b) The Company shall furnish to the Representative at the Initial Closing
Time and at the Option Closing Time an opinion of the Company's Vice President,
General Counsel and Corporate Secretary, addressed to the Representative, dated
the Initial Closing Time and Option Closing Time and otherwise in form and
substance satisfactory to DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP, counsel for the
Underwriters, stating as set forth on Schedule VI.
(c) The Company shall furnish to the Representative at the Initial Closing
Time and at the Option Closing Time an opinion of Xxxxxxx LLP, special Maryland
counsel of the Company, addressed to the Representative, dated the Initial
Closing Time and Option Closing Time and in form and substance satisfactory to
DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP, counsel for the Underwriters, stating that:
(i) the Company is a corporation duly incorporated and existing
under and by virtue of the laws of the State of Maryland and in good
standing with the State Department of Assessments and Taxation of
Maryland;
(ii) the Company has the corporate power to own its assets and to
conduct its businesses as described in the Prospectus Supplement under the
caption "Summary" and to execute and deliver this Agreement and perform
the obligations thereunder;
(iii) the authorized stock of the Company is as set forth under the
caption "Capitalization" in the Prospectus Supplement;
(iv) the Initial Shares (or Option Shares, applicable) have been
duly authorized and, when issued in exchange for the consideration recited
in this Agreement, will be validly issued, fully paid and non-assessable;
(v) no holder of outstanding shares of Common Stock or Series A
Preferred Stock has any statutory preemptive right under the Maryland
General Corporation Law or any similar right under the charter of the
Company (the "Charter") or bylaws of the Company (the "Bylaws") to
subscribe for any of the Shares;
20
(vi) this Agreement has been duly authorized, executed and, so far
as is known to such counsel, delivered on behalf of the Company;
(vii) the Series A Preferred Stock conforms as to legal matters in
all material respects to the description thereof set forth in the
Prospectus under the caption "Description of the Series A Preferred Stock"
and "Description of Preferred Stock"; and the statements under the
captions "Description of Common Stock," "Certain Provisions of Maryland
Law and of our Charter and Bylaws," and "Restrictions on Ownership and
Transfer" in the Prospectus and under Item 15 of the Registration
Statement, insofar as such statements constitute a summary of the
Company's charter or bylaws or of Maryland law, constitute accurate
summaries thereof in all material respects;
(viii) the execution, delivery and performance by the Company of
this Agreement, and the consummation of the transactions contemplated
herein, do not and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice,
lapse of time, or both would constitute a breach of or default under) (A)
the Charter or Bylaws of the Company, (B) any provision of the Maryland
General Corporation Law, or (C) so far as is known to such counsel, any
Maryland court or administrative order, judgment or decree applicable to
the Company;
(ix) the Articles Supplementary have been filed with the Maryland
State Department of Assessment and Taxation; and
(x) no approval, authorization, consent or order of or filing with
any Maryland regulatory agency is required to be obtained or made by the
Company under the Maryland General Corporation Law in connection with the
execution, delivery and performance, on the date hereof, by the Company of
this Agreement, the consummation of the transactions contemplated herein
or the sale and delivery of the Shares as contemplated herein, except as
have been made, obtained or waived, if any.
Counsel may call attention to the fact that, in connection with the
delivery of its opinion, counsel has not ordered or reviewed judgment, lien or
any other searches of public or private records of the Company or its
properties.
(d) The Representative shall have received from Ernst & Young LLP and
McGladrey & Xxxxxx, LLP, letters dated, respectively, as of the date of this
Agreement, the Initial Closing Time and the Option Closing Time, as the case may
be, addressed to the Representative, in form and substance satisfactory to the
Representative, relating to the financial statements, including pro forma
financial statements, of the Company, and such other matters customarily covered
by comfort letters issued in connection with registered public offerings.
(e) The Representative shall have received at the Initial Closing Time and
the Option Closing Time the favorable opinion of DLA Piper Xxxx Xxxx US LLP,
dated the Initial Closing Time and Option Closing Time, addressed to the
Representative and in form and substance satisfactory to the Representative.
21
(f) No amendment or supplement to the Registration Statement or Prospectus
shall have been filed to which the Underwriters shall have reasonably objected
in writing.
(g) Prior to the Initial Closing Time and the Option Closing Time (i) no
stop order suspending the effectiveness of the Registration Statement or any
order preventing or suspending the use of the Preliminary Prospectus or
Prospectus shall have been issued, and no proceedings for such purpose shall
have been initiated or threatened, by the Commission, and no suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or the
initiation or threatening of any proceedings for any of such purposes, shall
have occurred; (ii) all requests for additional information on the part of the
Commission shall have been complied with to the reasonable satisfaction of the
Representative; and (iii) the Registration Statement and the Prospectus shall
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(h) All filings with the Commission required by Rule 424 and Rule 430A
under the Securities Act to have been filed by the Initial Closing Time shall
have been made within the applicable time period prescribed for such filing by
such Rule.
(i) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(j) The Representative shall have received at or before the Initial
Closing Time and at the Option Closing Time, a certificate of the Company's
Chief Executive Officer or Chief Financial Officer, in each case on behalf of
the Company and not individually, to the effect that:
(i) the representations and warranties of the Company in this
Agreement that are not qualified by materiality or Material Adverse Effect
are true and correct in all material respects and those representations
and warranties of the Company in this Agreement that are qualified by
materiality or Material Adverse Effect are true and correct in all
respects, as if made on and as of such date, and the Company has complied
with all the agreements in all material respects and all the conditions on
its part to be performed or satisfied at or prior to the date hereof;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto has been issued and no
proceedings for that purpose have been instituted or are pending or, to
such officer's knowledge, threatened under the Securities Act; and
(iii) the Registration Statement, when it became effective, did not,
and the Prospectus, as of its date or the date of such certificate, did
not and does not include any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
22
7. Termination:
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representative, at any time prior
to the Initial Closing Time or the Option Closing Time, (a) if any of the
conditions specified in Section 6 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, or (b) if there has been since the
respective dates as of which information is given in the Registration Statement,
any change or event that has had, or reasonably could be expected to have, a
Material Adverse Effect, whether or not arising in the ordinary course of
business, or (c) if there has occurred any outbreak or escalation of hostilities
or other national or international calamity or crisis or change in economic,
political or other conditions, the effect of which on the financial markets of
the United States is such as to make it, in the judgment of the Representative,
impracticable to market the Shares or enforce contracts for the sale of the
Shares, or (d) if trading in any securities of the Company has been suspended by
the Commission or by the New York Stock Exchange, or if trading generally on the
New York Stock Exchange has been suspended (including an automatic halt in
trading pursuant to market-decline triggers, other than those in which solely
program trading is temporarily halted), or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been fixed,
or maximum ranges for prices for securities have been required, by such exchange
or by order of the Commission or any other governmental authority or (e) a
general banking moratorium shall have been declared by any federal, Maryland or
New York authorities, or (f) any federal or state statute, regulation, rule or
order of any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated that, in the reasonable opinion of the
Representative, will have a Material Adverse Effect.
If the Representative elects to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments:
If any Underwriter shall default at the Initial Closing Time or at an
Option Closing Time in its obligation to take up and pay for the Shares to be
purchased by it under this Agreement on such date, the Representative shall have
the right, within 48 hours after such default, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Shares which such Underwriter shall have
agreed but failed to take up and pay for (the "Defaulted Shares"). Absent the
completion of such arrangements within such 48-hour period, (a) if the total
number of Defaulted Shares does not exceed 10% of the total number of Shares to
be purchased on such date, each non-defaulting Underwriter shall take up and pay
for (in addition to the number of Shares which it is otherwise obligated to
purchase on such date pursuant to this Agreement) the portion of the total
number of Shares agreed to be purchased by the defaulting Underwriter on such
date in the proportion that its underwriting obligations hereunder bears to the
underwriting obligations of all non-defaulting Underwriters; and (b) if the
total number of Defaulted Shares exceeds 10% of such total, the Representative
may terminate this Agreement by notice to the Company, without liability of any
party to any other party (other than the defaulting Underwriter), except that
the provisions of Sections 5 and 9 hereof shall at all times be effective and
shall survive such termination.
23
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Initial Closing
Time or relevant Option Closing Time for a period not exceeding five business
days in order that any necessary changes in the Registration Statement and
Prospectus and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with the same effect as
if such substituted Underwriter had originally been named in this Agreement.
Nothing in this Section 8 shall relieve a defaulting Underwriter from liability
for its default.
9. Indemnity and Contribution by the Company and the Underwriters:
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) that, jointly or severally, any such Underwriter or
controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim arises out
of or is based upon (i) any failure on the part of the Company to comply with
any applicable law, rule or regulation relating to the offering of securities
being made pursuant to the Prospectus, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the
Prospectus (the term Prospectus for the purpose of this Section 9 being deemed
to include the Preliminary Prospectus and any other preliminary prospectus, the
Prospectus and any amendment or supplement thereto and any prospectus wrapper
material), or (iii) any omission or alleged omission to state a material fact
required to be stated in any such Registration Statement or Prospectus or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading; except insofar as any such loss,
expense, liability, damage or claim arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in and in conformity with information furnished in
writing by the Underwriters through the Representative to the Company expressly
for use in such Registration Statement or Prospectus; and except that, with
respect to the Preliminary Prospectus or other preliminary prospectus, the
foregoing indemnity agreement shall not inure to the benefit of any Underwriter
from whom the person asserting any loss, expense, liability, damage or claim
purchased Shares, or any person controlling such Underwriter, if copies of the
Prospectus were timely delivered to the Underwriter pursuant to Section 1 hereof
and a copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required by law so
to have been delivered, at or prior to the written confirmation of the sale of
the Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, expense, liability, damage
or claim. The indemnity agreement set forth in this Section 9(a) shall be in
addition to any liabilities that the Company may otherwise have.
24
If any action is brought against an Underwriter or controlling person in
respect of which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such Underwriter shall promptly notify the Company in
writing of the institution of such action, and the Company shall assume the
defense of such action, including the employment of counsel and payment of
expenses; provided, however, that any failure or delay to so notify the Company
will not relieve the Company of any obligation hereunder, except to the extent
that its ability to defend is actually impaired by such failure or delay. Such
Underwriter or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action, or the Company shall not have
employed counsel to have charge of the defense of such action within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available
to it or them which are different from or additional to those available to the
Company (in which case the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the Company and paid as
incurred (it being understood, however, that the Company shall not be liable for
the expenses of more than one separate firm of attorneys for the Underwriters or
controlling persons in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action).
(b) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, the Company's directors, the Company's
officers that signed the Registration Statement and any person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any loss, expense, liability, damage or claim
(including the reasonable cost of investigation) that, jointly or severally, the
Company or any such person may incur under the Securities Act, the Exchange Act
or otherwise, but only insofar as such loss, expense, liability, damage 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
furnished in writing by such Underwriter through the Representative to the
Company expressly for use in the Registration Statement or the Prospectus, or
(ii) any omission or alleged omission to state a material fact in connection
with such information required to be stated either in such Registration
Statement or Prospectus or necessary to make such information, in the light of
the circumstances under which made, not misleading; provided, however, that the
statements identified in Schedule III attached hereto constitute the only
information furnished by or on behalf of any Underwriter through the
Representative to the Company for purposes of this Section 9. The indemnity
agreement set forth in this Section 9(b) shall be in addition to any liabilities
that such Underwriter may otherwise have.
25
If any action is brought against the Company or any such person in respect
of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Representative in writing of the institution of such action and the
Representative, on behalf of the Underwriters, shall assume the defense of such
action, including the employment of counsel and payment of expenses; provided,
however, that any failure or delay to so notify the Representative will not
relieve the Underwriters of any obligation hereunder, except to the extent that
their ability to defend is actually impaired by such failure or delay. The
Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such person unless the employment of such counsel shall have been
authorized in writing by the Representative in connection with the defense of
such action or the Representative shall not have employed counsel to have charge
of the defense of such action within a reasonable time or such indemnified party
or parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them that are different from or
additional to those available to the Underwriters (in which case the
Representative shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Underwriters and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the expenses
of more than one separate firm of attorneys in any one action or series of
related actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action).
(c) The indemnifying party under this Section 9 shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify (to the extent provided in this Section
9) the indemnified party against any loss, expense, liability, damage or claim
by reason of such settlement or judgment. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and does not
include a statement as to, or an admission of, fault, culpability or a failure
to act by or on behalf of any indemnified party.
26
(d) If the indemnification provided for in this Section 9 is unavailable
or insufficient to hold harmless an indemnified party under subsections (a), (b)
and (c) of this Section 9 in respect of any losses, expenses, liabilities,
damages or claims referred to therein, then each applicable indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, expenses,
liabilities, damages or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and by the Underwriters
from the offering of the Shares or (ii) if (but only if) the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above, but also the relative fault of the Company and of the Underwriters in
connection with the statements or omissions that resulted in such losses,
expenses, liabilities, damages or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and by
the Underwriters shall be deemed to be in the same proportion as the total
proceeds from the sale of the Shares (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bear to the
underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company and of the Underwriters shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any claim or action.
(e) The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in clause (i) and, if applicable clause
(ii), of subsection (d) above. Notwithstanding the provisions of this Section 9,
no Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint. For purposes of this Section 9, each officer and director of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Section 15 of the Securities Act and Section 20 of the Exchange
Act shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act shall
have the same rights to contribution as the Company.
27
10. Survival:
The indemnity and contribution agreements contained in Section 9 and the
covenants, warranties and representations of the Company contained in Sections
3, 4 and 5 of this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, or any person who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors and officers or any person who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the sale and delivery of the
Shares. The Company and each Underwriter agree promptly to notify the others of
the commencement of any litigation or proceeding against it and, in the case of
the Company, against any of the Company's officers and directors, in connection
with the sale and delivery of the Shares, or in connection with the Registration
Statement or Prospectus.
11. Notices:
Except as otherwise herein provided, all statements, requests, notices and
agreements shall be in writing or by telegram and, if to the Underwriters, shall
be sufficient in all respects if delivered to Wachovia Capital Markets, LLC, 000
X. Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, or if to the Company shall
be sufficient in all respects if delivered to the Company at the offices of the
Company at 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000.
12. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. No Fiduciary Relationship:
The Company acknowledges and agrees that (a) it is contracting with the
Underwriters on an arm's length basis to provide the services described herein,
(b) the Underwriters are not acting in a fiduciary capacity with respect to it,
and (c) the Underwriters are not assuming any duties or obligations in
connection with the offering of the Shares, other than those expressly set forth
in this Agreement. Further, the Company and the Underwriters acknowledge and
agree that it is not their intention to create a fiduciary relationship among
the parties to this Agreement.
14. Parties at Interest:
The Agreement herein set forth has been and is made solely for the benefit
of the Underwriters, the Company and the controlling persons, directors and
officers referred to in Sections 9 and 10 hereof, and their respective
successors, assigns, executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
28
15. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts, which
together shall constitute one and the same agreement among the parties. A
facsimile signature shall constitute an original signature for all purposes.
16. U.S.A. Patriot Act Notification :
The Company acknowledges that federal law, to help fight the funding of
terrorism and money laundering activities, requires the Underwriters to obtain,
verify and record vital information that identifies each person or entity that
opens an account and/or enters into a business relationship with such financial
institutions.
[Signature page follows.]
29
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this Agreement shall constitute a binding agreement among the
Company and the Underwriters.
Very truly yours,
CAPITAL LEASE FUNDING, INC.
By: /s/ Xxxx X. XxXxxxxx
-------------------------------------
Name: Xxxx X. XxXxxxxx
Title: Chief Executive Officer
Accepted and agreed to as
of the date first above written:
WACHOVIA CAPITAL MARKETS, LLC
By: /s/ Xxxxxx Xxx
------------------------------
Name: Xxxxxx Xxx
Title: Director
For itself and as the Representative of the other
Underwriters named on Schedule I hereto.
