EXECUTION COPY
EXHIBIT 99.3
UNDERWRITING AGREEMENT
November 8, 2001
Xxxxxxxxx Xxxxxxxx, Inc.
Xxxxxx Xxxxxxx Incorporated
As Representatives of the several Underwriters
c/x Xxxxxxxxx Xxxxxxxx, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
INTRODUCTORY. Charter Municipal Mortgage Acceptance Company, a Delaware
business trust (the "COMPANY"), proposes to issue and sell to the several
underwriters named in SCHEDULE A hereto (the "UNDERWRITERS") an aggregate of
3,250,000 common shares of beneficial interest (the "FIRM SHARES"), no par
value (the "COMMON SHARES") of the Company, on the terms and subject to the
conditions set forth herein. In addition, the Company proposes to grant to
the Underwriters an option to purchase up to an aggregate of 487,500
additional Common Shares (the "OPTION SHARES"), for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Shares, as provided in Section 2 hereof. The Firm
Shares and, if and to the extent such option is exercised, the Option Shares
are collectively called the "SHARES."
You have agreed to act as representatives of the several Underwriters
(in such capacity, the "Representatives") in connection with the offering and
sale of the Shares, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you jointly or by Xxxxxxxxx Xxxxxxxx, Inc. ("Xxxxxxxxx
Xxxxxxxx") on behalf of you as the Representatives.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (File No.
333-57384), which contains a form of prospectus, subject to completion, to be
used in connection with the public offering and sale of the Shares. Each such
prospectus and prospectus supplement, subject to completion, used in
connection with such public offering is called a "PRELIMINARY PROSPECTUS."
Such prospectus and prospectus supplement, in the form first used by the
Underwriters to confirm sales of the Shares, is called the "PROSPECTUS." The
registration statement, as amended, including, without limitation, the
financial statements, exhibits and schedules thereto, in the form in which it
was declared effective by the Commission under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder
(collectively, the "SECURITIES ACT"), and including all documents incorporated
or deemed to be incorporated by reference therein (the "INCORPORATED DOCUMENTS")
is called the "REGISTRATION STATEMENT." Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called the "RULE
462(b) REGISTRATION STATEMENT" and, from and after the date and time of filing
of the Rule 462(b) Registration Statement, the term "REGISTRATION STATEMENT"
shall include the Rule 462(b) Registration Statement. All references in this
Agreement to the Registration Statement, the Rule 462(b) Registration Statement,
a Preliminary Prospectus, the Prospectus or any amendments or supplements to any
of the foregoing, shall include any copy thereof filed with the Commission via
its Electronic Data Gathering, Analysis and Retrieval System ("XXXXX"). All
references in this Agreement to financial statements and schedules and other
information which is "contained," "included" or "stated" in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement or
the Prospectus shall be deemed to mean and include the filing of any document
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") which
is or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.
The Company hereby confirms its agreements with the Underwriters as
follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to each Underwriter as
follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company has not
received, and has no notice of, any order of the Commission preventing or
suspending the use of any Preliminary Prospectus, or instituting proceedings for
that purpose, and each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Securities Act.
The Registration Statement is effective under the Securities Act, and no stop
order suspending the effectiveness of the Registration Statement has been issued
under the Securities Act and no proceedings for that purpose have been initiated
or are pending or threatened by the Commission.
At the time of effectiveness of the Registration Statement and any
post-effective amendment thereto, at the date of issuance of the Prospectus
and any amendment or supplement thereto the Registration Statement and each
amendment if any, thereto and the Prospectus and each amendment or
supplement, if any, thereto fully complied, fully complies and will fully
comply, as applicable, in all material respects with the provisions of the
Securities Act, and at the time of effectiveness of the Registration
Statement and any post-effective amendment thereto, at the date of issuance
of the Prospectus and any amendment or supplement thereto and at the First
Closing Date (as defined herein) and any Second Closing Date (as defined
herein), the Registration Statement did not, does not and will not, as
applicable, 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 not misleading, and the Prospectus did not, does not and
will not, as applicable, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER,
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that the Company makes no warranty or representation with respect to any
statement contained in the Registration Statement or the Prospectus in reliance
upon and in conformity with information concerning the Underwriters and
furnished in writing by or on behalf of any Underwriter through you to the
Company expressly for use in the Registration Statement or the Prospectus. All
legal or governmental proceedings, statutes, regulations, contracts, licenses,
agreements, leases or other documents of a character required to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required.
(b) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY. The Company has not
distributed any offering material in connection with the offering or sale of the
Shares other than the Registration Statement, the Preliminary Prospectus, the
Prospectus or any other materials, if any, permitted by the Securities Act and
approved in writing by you.
(c) THE UNDERWRITING AGREEMENT. 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 to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally or by
general principles of equity; it being understood that no warranty or
representation is being expressed as to the enforceability of the
indemnification or contribution provisions contained herein.
(d) AUTHORIZATION OF THE SHARES TO BE SOLD BY THE COMPANY. The Shares to
be purchased by the Underwriters from the Company have been duly and validly
authorized for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement, will be validly issued,
fully paid and nonassessable interests in the assets of the Company and the
issuance of such Shares will not be subject to any preemptive or similar rights.
(e) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. No person has the
right, contractual or otherwise, to cause the Company to issue to it, or
register pursuant to the Securities Act, any beneficial interests in the Company
upon the issue and sale of the Shares to the Underwriters hereunder, nor does
any person have preemptive rights, resale rights, rights of first refusal or
other similar rights to purchase any of the Shares other than those rights that
have been expressly waived, fully and unconditionally, prior to the date hereof;
it being understood that the Company has previously issued 1,882,364 Convertible
Community Reinvestment Act Preferred Shares ("CONVERTIBLE CRA SHARES")
convertible into Common Shares, and that the Company may issue up to 7,000,000
additional Convertible CRA Shares currently being offered to qualified
institutional buyers by Meridian Investments, Inc. and may issue Common Shares
upon the exercise of outstanding options described in the Prospectus.
(f) NO MATERIAL ADVERSE CHANGE. Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, there has not been (i) any change resulting
in a material adverse change in the financial condition, earnings, investment
portfolio, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "MATERIAL ADVERSE EFFECT"), (ii) any transaction
which is material to the Company or its subsidiaries, except transactions in the
ordinary course of business, (iii) any obligation, direct or contingent, which
is material to the Company and its subsidiaries taken as a whole, incurred by
the Company or its subsidiaries, except obligations incurred in the ordinary
course of business, (iv) any change in the beneficial interests in or
outstanding indebtedness of
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the Company or its subsidiaries, except changes in the ordinary course of
business or (v) except for regular quarterly dividends on the beneficial
interests in the Company in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind declared, paid
or made on the beneficial interests in the Company; and neither the Company nor
its subsidiaries has any material contingent obligation which is not disclosed
in the Registration Statement and the Prospectus.
(g) INDEPENDENT ACCOUNTANTS. Deloitte & Touche LLP, whose reports on the
consolidated financial statements of the Company and its subsidiaries are filed
with the Commission as part of the Registration Statement and the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2000, are
independent public accountants as required by the Securities Act and the
Exchange Act.
(h) PREPARATION OF THE FINANCIAL STATEMENTS. The financial statements
included in the Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as of the
dates indicated and the consolidated results of operations and cash flows of the
Company and its subsidiaries for the periods specified; and such financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved and have
been prepared in conformity with the Securities Act.
(i) SUBSIDIARIES OF THE COMPANY. The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
the subsidiaries listed in Exhibit 21 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2000, except for Charter Mac
Corporation, which was formed after such report was filed.
(j) ORGANIZATION AND GOOD STANDING OF THE COMPANY AND ITS SUBSIDIARIES.
The Company has been duly created and is validly existing as a business trust in
good standing under the laws of the State of Delaware, and under its trust
agreement, as amended (the "TRUST AGREEMENT"), resolutions of the board of
trustees of the Company and the Delaware Business Trust Act (the "TRUST ACT"),
has full trust power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and Prospectus.
The Company's Trust Agreement, has been duly authorized, executed and delivered
by the Company and constitutes a valid, legal and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except to
the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally or by general principles of equity. The Company is duly qualified as a
business trust to transact business as a foreign entity and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
Each of the Company's subsidiaries has been duly created and is validly
existing and is in good standing under the laws of the state of its creation,
and under its respective organizational document and relevant state law, has
full power and authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and Prospectus; each of
the subsidiaries is duly qualified as a foreign entity and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
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(k) CAPITALIZATION OF THE SUBSIDIARIES. Except as otherwise disclosed in
the Prospectus, all of the issued and outstanding equity interests in each
subsidiary have been duly and validly authorized and issued and are fully paid
and nonassessable interests in the assets of each such subsidiary, and are owned
by the Company, directly or through other subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity; and
none of the outstanding equity interests in the subsidiaries were issued in
violation of any preemptive right, resale right, right of first refusal or
similar right.
(l) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. All of the issued and
outstanding beneficial interests in the Company have been duly and validly
authorized and issued and are fully paid and nonassessable interests in the
assets of the Company, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right. The Trust Agreement conforms,
and the beneficial interests in the Company, including, upon issuance, the
Shares, conform, in all material respects to the descriptions thereof contained
in the Registration Statement and the Prospectus; the certificates for the
Shares are in due and proper form. The holders of the Shares will be entitled to
the same limitation of personal liability as that extended to stockholders of
private corporations for profit organized under the General Corporation Law of
the State of Delaware, it being understood that a holder of Shares may be
obligated to make certain payments provided for in the Trust Agreement and
described in the Prospectus.
(m) NO CONSENTS, APPROVALS OR AUTHORIZATIONS REQUIRED. No approval,
authorization, consent or order of or filing with any national, state or local
governmental or regulatory commission, board, body, authority or agency is
required in connection with the issuance and sale of the Shares or the
consummation by the Company of the transactions as contemplated hereby other
than registration of the Shares under the Securities Act and any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters.
(n) NON-CONTRAVENTION OF EXISTING INSTRUMENTS AND/OR AGREEMENTS. The
execution, delivery and performance of this Agreement, and any other agreement
or instrument entered into or issued or to be entered into or issued by the
Company in connection with the transactions contemplated hereby or in the
Registration Statement or the Prospectus, the consummation of the transactions
contemplated herein and in the Registration Statement and the Prospectus
(including the issuance and sale of the Shares and the use of the proceeds from
the sale of the Shares as described in the Prospectus under the caption "Use of
Proceeds") and the compliance by the Company with its obligations hereunder have
been duly authorized by all necessary trust action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or a Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments, nor will such action
result in any violation of the provisions of the Trust Agreement or the Trust
Act (or any other organizational document) of any of its subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any of their
property or assets. The term "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.
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(o) NO DEFAULTS OR VIOLATIONS. Neither the Company nor any of its
subsidiaries is in violation of its trust agreement (or other organizational
document) or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which any of them may be bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject (collectively, "AGREEMENTS AND
INSTRUMENTS"), except for such violations or defaults that would not result in a
Material Adverse Effect.
(p) NO ACTIONS, SUITS OR PROCEEDINGS. Except as set forth in the
Prospectus, there is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened, against
or affecting the Company or any of its subsidiaries which, singly or in the
aggregate, would result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the property or assets of the
Company or any of its subsidiaries or the consummation of the transactions
contemplated herein or the performance by the Company of its obligations
hereunder.
(q) ALL NECESSARY PERMITS, ETC. The Company and its subsidiaries possess
such permits, licenses, approvals, consents and other authorizations
(collectively, "GOVERNMENTAL LICENSES") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them; the Company and its Subsidiaries are in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure to so comply would not, singly or in the aggregate,
result in a Material Adverse Effect; all of the Governmental Licenses are valid
and in full force and effect, except where the invalidity of Governmental
Licenses or the failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, result in a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(r) TITLE TO PROPERTIES. The Company and its subsidiaries do not own any
real property nor do they have any leases or subleases with respect to any real
property. The Company and its subsidiaries have good and marketable title to the
investments described in the Prospectus, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (i) are described in the Prospectus, or
(ii) do not, singly or in the aggregate, materially affect the value of any such
investments; and neither the Company nor any of its Subsidiaries has any notice
of any material claim of any sort that has been asserted by anyone adverse to
the rights of the Company or any of its Subsidiaries under any of such
investments, or affecting or questioning the rights of the Company or any
subsidiary thereof to the continued possession of the investments.
(s) PARTNERSHIP STATUS. The Company has been and is properly treated as a
partnership, and not as a publicly traded partnership taxable as a corporation
or as an association taxable as a corporation for federal income tax purposes,
and the holders of the Shares will be treated as partners for U.S. federal
income tax purposes.
(t) COMPANY NOT AN "INVESTMENT COMPANY". The Company is not, and upon the
issuance and sale of the Shares as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity
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"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT").
(u) ABSENCE OF EMPLOYEES. The Company does not have any employees,
although the Company does have officers who are officers and/or employees of
Related Capital Company as described in the Prospectus.
(v) LOCK-UP AGREEMENTS. The Company has obtained the agreement of each of
its trustees and each executive officer of Related Charter LLC, the sole general
partner of Related Charter LP, at the Senior Vice President level and above,
substantially in the form set forth in EXHIBIT A hereto, not to offer, sell,
contract to sell, hedge, or otherwise dispose of, directly or indirectly, any
Common Shares or securities convertible into or exchangeable for Common Shares
for a period of 90 days after the date of the Prospectus.
(w) ENVIRONMENTAL LAWS. Except as set forth in the Prospectus, to the best
of the Company's knowledge, except such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect (i) none of the properties
securing the Company's investments (the "SECURING PROPERTIES") is in violation
of any federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "HAZARDOUS
MATERIALS") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"ENVIRONMENTAL LAWS"), (ii) the Securing Properties have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (iii) there are no pending
or threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Securing Properties and (iv) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Securing Properties
relating to Hazardous Materials or Environmental Laws.
(x) EXCHANGE ACT COMPLIANCE. The documents incorporated by reference in
the Prospectus, at the time they were filed with the Commission, complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, and did not and do not, as applicable, include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
Any certificate signed by an officer of the Company and delivered to you or to
counsel for the Underwriters shall be deemed to be a representation and warranty
by the Company to each Underwriter as to the matters set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) THE FIRM SHARES. The Company agrees to issue and sell to the several
Underwriters the Firm Shares upon the terms herein set forth. On the basis of
the
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representations, warranties and agreements herein contained, and upon the terms
but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company the respective number of
Firm Shares set forth opposite their names on SCHEDULE A hereto. The purchase
price per Firm Share to be paid by the several Underwriters to the Company shall
be $14.212 per share.
(b) THE FIRST CLOSING DATE. Delivery by the Company of the Firm Shares to
be purchased by the Underwriters and payment by you therefor shall be made at
6:00 a.m., San Francisco time, at the offices of Sidley Xxxxxx Xxxxx & Xxxx LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 (or at such other place as may be
agreed upon among you and the Company), (i) on the third (3rd) full business day
following the first day that Shares are traded, (ii) if this Agreement is
executed and delivered after 1:30 P.M., San Francisco time, on the fourth (4th)
full business day following the first day that Shares are traded or (iii) at
such other time and date not later than seven (7) full business days after the
first day that Shares are traded as you and the Company may determine (or at
such time and date to which payment and delivery shall have been postponed
pursuant to Section 8 hereof), such time and date of payment and delivery being
herein called the "First Closing Date"; provided, however, that if the Company
has not made available to you copies of the Prospectus within the time provided
in Sections 2(g) and 3(e) hereof, you may, in your sole discretion, postpone the
Closing Date until no later than two (2) full business days following delivery
of copies of the Prospectus to you.
(c) THE OPTION SHARES; THE SECOND CLOSING DATE. In addition, on the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to an aggregate of 487,500 Option Shares from the Company at the purchase price
per share to be paid by the Underwriters for the Firm Shares. The option granted
hereunder is for use by the Underwriters solely in covering any over-allotments
in connection with the sale and distribution of the Firm Shares. The option
granted hereunder may be exercised at any time upon notice by you to the
Company, which notice may be given at any time within 30 days from the date of
this Agreement. The time and date of delivery of the Option Shares, if
subsequent to the First Closing Date, is called the "Second Closing Date" and
shall be determined by you and shall be on a date which is not earlier than the
third (3rd) business day nor later than the fifth (5th) business day after
delivery of such notice of exercise. If any Option Shares are to be purchased,
each Underwriter agrees, severally and not jointly, to purchase the number of
Option Shares (subject to such adjustments to eliminate fractional shares as you
may determine) that bears the same proportion to the total number of Option
Shares to be purchased as the number of Firm Shares set forth on SCHEDULE A
hereto opposite the name of such Underwriter bears to the total number of Firm
Shares. You may cancel the option at any time prior to its expiration by giving
written notice of such cancellation to the Company.
(d) PUBLIC OFFERING OF THE SHARES. You hereby advise the Company that the
Underwriters intend to offer for sale to the public, as described in the
Prospectus, their respective portions of the Shares as soon after this Agreement
has been executed and as you, in your sole judgment, have determined is
advisable and practicable.
(e) PAYMENT FOR THE SHARES. Payment for the Shares shall be made on the
First Closing Date (and the Second Closing Date, if applicable) by wire transfer
of immediately available funds to the account specified in writing by the
Company not less than two (2) business days prior to the First Closing Date or
the Second Closing Date, as applicable.
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It is understood that you have been authorized, for your own
account and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price for, the Firm Shares
and any Option Shares the Underwriters have agreed to purchase. Xxxxxxxxx
Xxxxxxxx, individually and not on behalf of the Underwriters, may (but shall
not be obligated to) make payment for any Shares to be purchased by any
Underwriter whose funds shall not have been received by you by the First
Closing Date or the Second Closing Date, as the case may be, for the account
of such Underwriter, but any such payment shall not relieve such Underwriter
from any of its obligations under this Agreement.
(f) DELIVERY OF THE SHARES. The Company shall deliver, or cause to be
delivered, a credit representing the Firm Shares to an account or accounts at
The Depository Trust Company, as designated by you for your accounts and the
accounts of the several Underwriters at the First Closing Date, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The Company shall also deliver, or
cause to be delivered, a credit representing any Option Shares the
Underwriters have agreed to purchase at the First Closing Date (or the Second
Closing Date, as the case may be), to an account or accounts at The
Depository Trust Company as designated by you for your accounts and the
accounts of the several Underwriters, against the irrevocable release of a
wire transfer of immediately available funds for the amount of the purchase
price therefor. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations
of the Underwriters.
(g) DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later than 12:00
noon, San Francisco time, on the second (2nd) business day following the date
of this Agreement and thereafter from time to time during the period in which
a Prospectus is required by law to be delivered by an underwriter or dealer,
the Company shall deliver or cause to be delivered copies of the Prospectus
in such quantities and at such places as you shall request.
SECTION 3. COVENANTS OF THE COMPANY.
A. COVENANTS OF THE COMPANY.
The Company further covenants and agrees with each Underwriter as
follows:
(a) REGISTRATION STATEMENT MATTERS. The Company will not file any
amendment or supplement to the Registration Statement or Prospectus, of which
you have not previously been advised and furnished a copy, or to which you have
reasonably objected in writing, or that is not in compliance with the Securities
Act. If the Company elects to rely on Rule 462(b) under the Securities Act, the
Company shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) under the Securities Act prior to 10:00 p.m.,
Washington, D.C. time, as of the date hereof, and the Company shall pay to the
Commission the applicable fee for the Rule 462(b) Registration Statement (or
give irrevocable instructions for the payment of such fee) in accordance with
Rule 111 under the Securities Act.
(b) SECURITIES ACT COMPLIANCE. The Company hereby advises you and counsel
for the Underwriters that the Registration Statement was declared effective by
the Commission on April 9, 2001. The Company will advise you and counsel for the
Underwriters (i) when any post-effective amendment to the Registration Statement
shall have been declared effective by the Commission, (ii) of the receipt of any
comments from the Commission, (iii) of any request of the Commission for
amendment of the Registration Statement or for supplement to the Prospectus or
for any additional information and (iv) of the issuance of any stop order or of
any order suspending the effectiveness of the Registration Statement or the use
of the Prospectus, or of
9
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 the preceding purposes. The Company will use its best efforts to prevent the
issuance of any such order and, if issued, to obtain as soon as possible the
lifting or withdrawal thereof.
(c) BLUE SKY COMPLIANCE. The Company will cooperate with you and counsel
for the Underwriters in endeavoring to qualify the Shares for sale under the
securities laws of such jurisdictions (both national and foreign) as you may
reasonably have designated in writing and will make such applications, file such
documents, and furnish such information as may be reasonably required for that
purpose, provided the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction where it is not now so qualified or required to file such a
consent. The Company will, from time to time, prepare and file such statements,
reports and other documents, as are or may be required to continue such
qualifications in effect for so long a period as you may reasonably request for
distribution of the Shares.
(d) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER SECURITIES ACT
MATTERS. The Company will comply with the Securities Act and the Exchange Act,
and the rules and regulations of the Commission thereunder, so as to permit the
completion of the distribution of the Shares as contemplated in this Agreement
and the Prospectus. If during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur as a
result of which, in the judgment of the Company or in your reasonable opinion or
the opinion of counsel for the Underwriters, it becomes necessary to amend or
supplement the Prospectus or to file under the Exchange Act any documents
incorporated by reference in the Prospectus in order to make the statements
therein, in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading, or, if it is necessary at any time
to amend or supplement the Prospectus or to file under the Exchange Act any
documents incorporated by reference in the Prospectus in order to comply with
the Securities Act or the Exchange Act or any applicable law, the Company
promptly will prepare and file with the Commission, and furnish at the Company's
own expense to the Underwriters and to dealers, as many copies as you may
require 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 applicable law.
(e) OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The Company will deliver
to you two complete conformed copies of the Registration Statement and of each
consent and certificate of experts filed as a part thereof, and conformed copies
of the Registration Statement (without exhibits) and Preliminary Prospectuses
and the Prospectus, as amended or supplemented, in such quantities and at such
places as you have reasonably requested for each of the Underwriters. The
Company further agrees to furnish to you, without charge, during the period
beginning on the date hereof and ending on the later of the First Closing Date
or such date, as in the opinion of counsel for the Underwriters, the Prospectus
is no longer required by law to be delivered in connection with sales by an
Underwriter or dealer (the "PROSPECTUS DELIVERY PERIOD"), as many copies of the
Prospectus and any amendments and supplements thereto (including any documents
incorporated or deemed incorporated by reference therein) as you may request.
(f) USE OF PROCEEDS. The Company shall apply the net proceeds from the
sale of the Shares sold by it in the manner described under the caption "Use of
Proceeds" in the Prospectus.
10
(g) TRANSFER AGENT. The Company shall engage and maintain, at its expense,
a registrar and transfer agent for the Common Shares.
(h) EARNINGS STATEMENT. As soon as practicable, the Company will make
generally available to its security holders and to you an earnings statement of
the Company and its subsidiaries (which need not be audited) covering the
twelve-month period ending June 30, 2002 that satisfies the provisions of
Section 11(a) of the Securities Act.
(i) PERIODIC REPORTING OBLIGATIONS. During the Prospectus Delivery Period,
the Company shall file, on a timely basis, with the Commission and the AMEX all
reports and documents required to be filed under the Exchange Act (including,
without limitation, pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act) in the manner and within the time periods required by the Exchange
Act.
(j) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. The Company will
not offer, sell or contract to sell, or otherwise dispose of or enter into any
transaction which is designed to, or could be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise by the Company or any affiliate of the Company
or any person in privity with the Company or any affiliate of the Company)
directly or indirectly, or announce the offering of, any other Common Shares or
any securities convertible into, exercisable for or exchangeable for, Common
Shares without the prior written consent of Xxxxxxxxx Xxxxxxxx; PROVIDED,
HOWEVER, that the Company may (i) issue and sell Common Shares pursuant to any
trustee or employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect at the date of the Prospectus and
described in the Prospectus so long as none of those shares may be transferred
and the Company shall enter stop transfer instructions with its transfer agent
and registrar against the transfer of any such Common Shares; (ii) the Company
may issue Common Shares issuable upon the conversion of securities or the
exercise of warrants outstanding at the date of the Prospectus and described in
the Prospectus; and (iii) the Company may issue Convertible Community
Reinvestment Act Preferred Shares. These restrictions terminate after the close
of trading of the Shares on the 90th day following the date the Shares commenced
trading on the AMEX (the "LOCK-UP PERIOD").
(k) FUTURE REPORTS TO THE REPRESENTATIVES. During the five-year period
following the date of this Agreement, the Company will furnish to you (i) as
soon as practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders' equity and
cash flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants, (ii) as soon as practicable
after the filing thereof, copies of each proxy statement, Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report
filed by the Company with the Commission, the NASD or any securities exchange,
and (iii) as soon as available, copies of any report or communication of the
Company mailed generally to holders of its capital stock.
(l) REPORT OF OFFERING OF SECURITIES AND USE OF PROCEEDS. The Company
shall file with the Commission such information on Form 10-Q or Form 10-K as may
be required by Rule 463 under the Securities Act.
SECTION 4. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the Underwriters to purchase and pay for the Firm
Shares on
11
the First Closing Date and the Option Shares on the Second Closing Date as
provided herein shall be subject, (i) to the condition that all representations,
warranties and other statements of the Company herein and in any certificate
delivered pursuant hereto or in connection herewith are, at and as of the date
hereof and the First Closing Date (and with respect to the Option Shares, the
Second Closing Date), true and correct, (ii) to the condition that the Company
has performed all of its covenants and other obligations hereunder that are
required to be performed prior thereto, and (iii) to each of following
additional conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement
shall have been declared effective by the Commission as of a time prior to the
execution of this Agreement, the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Securities Act within the
applicable time period prescribed for such filing by the Securities Act and in
accordance with Section 3(A)(a)(i) hereof, and if the Company has elected to
rely upon Rule 462(b) under the Securities Act, the Rule 462(b) Registration
Statement shall have become effective prior to 10:00 p.m., Washington, D.C.
time, as of the date hereof; and no stop order or other order suspending the
effectiveness thereof or the use of the Prospectus shall have been issued and no
proceedings therefor have been initiated or threatened or are otherwise pending.
Any request by the Commission for additional information (to be included in the
Registration Statement or the Prospectus or any Incorporated Document or
otherwise) shall have been complied with to the satisfaction of counsel to the
Underwriters.
(b) CORPORATE PROCEEDINGS. All corporate proceedings and other legal
matters in connection with this Agreement, the form of Registration Statement
and the Prospectus and the registration, authorization, issue, sale and delivery
of the Shares shall have been reasonably satisfactory to counsel for the
Underwriters, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this Section.
(c) NO MATERIAL ADVERSE EFFECT. Subsequent to the execution and delivery
of this Agreement and prior to the First Closing Date and the Second Closing
Date, as applicable, in your sole judgment, there shall not have occurred any
Material Adverse Effect from that set forth in the Registration Statement or the
Prospectus or subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus.
(d) OPINIONS OF PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP. (i) You shall have
received on the First Closing Date and the Second Closing Date, as applicable,
an opinion of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for the Company,
substantially in the form of EXHIBIT B hereto, dated the First Closing Date or
the Second Closing Date, as applicable. Counsel rendering the opinion set forth
in EXHIBIT B hereto may rely as to questions of fact upon representations or
certificates of officers of the Company and of government officials, in which
case the opinion is to state that such counsel is so relying and that such
counsel has no knowledge of any material misstatement or inaccuracy in any such
representation or certificate. Copies of any representation or certificate so
relied upon shall be delivered to you, as Representatives of the Underwriters,
and to counsel to the Underwriters.
(ii) You shall have received on the First Closing Date and the Second
Closing Date, as applicable, an opinion of Paul, Hastings, Xxxxxxxx & Xxxxxx
LLP, counsel for the Company in form and substance reasonably satisfactory to
the Underwriters, to the effect that based on representations of the Company as
to its activities and certain assumptions as to the validity and enforceability
of the Company's organizational documents and certain future actions of the
Company, although the issue is not free from doubt, the Company has been, since
its
12
creation in October 1997, and is, properly treated as a partnership for
federal income tax purposes and that the information in the Prospectus under
"Risk Factors--Publicly traded partnership status," and "Federal Income Tax
Considerations" to the extent that it constitutes matters of law, summaries of
legal matters, the Trust Agreement, legal proceedings, or legal conclusions, has
been reviewed by them and is correct in all material respects.
(e) OPINION OF XXXXXXXXX TRAURIG LLP. You shall have received on the First
Closing Date and the Second Closing Date, as applicable, an opinion of Xxxxxxxxx
Xxxxxxx LLP, special bond counsel for the Company, substantially in the form of
EXHIBIT C hereto, dated the First Closing Date or the Second Closing Date, as
applicable. Counsel rendering the opinion set forth in EXHIBIT C hereto may rely
as to questions of fact upon representations or certificates of officers of the
Company and of government officials, in which case the opinion is to state that
such counsel is so relying and that such counsel has no knowledge of any
material misstatement or inaccuracy in any such representation or certificate.
Copies of any representation or certificate so relied upon shall be delivered to
you, as Representatives of the Underwriters, and to counsel to the Underwriters.
(f) XXXXXXXX, XXXXXX & FINGER, P.A.. You shall have received on the First
Closing Date and the Second Closing Date, as applicable, an opinion of Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel for the Company, substantially
in the form of EXHIBIT D hereto, dated the First Closing Date or the Second
Closing Date, as applicable. Counsel rendering the opinion set forth in EXHIBIT
D hereto may rely as to questions of fact upon representations or certificates
of officers of the Company and of government officials, in which case the
opinion is to state that such counsel is so relying and that such counsel has no
knowledge of any material misstatement or inaccuracy in any such representation
or certificate. Copies of any representation or certificate so relied upon shall
be delivered to you, as Representatives of the Underwriters, and to counsel to
the Underwriters.
(g) OPINION OF COUNSEL FOR THE UNDERWRITERS. You shall have received on
the First Closing Date and the Second Closing Date, as applicable, an opinion of
Sidley Xxxxxx Xxxxx & Xxxx LLP, Counsel for the Underwriters, substantially in
the form of EXHIBIT D hereto. The Company shall have furnished to such counsel
such documents as such counsel may have requested for the purpose of enabling
them to pass upon such matters.
(h) ACCOUNTANT'S COMFORT LETTER. You shall have received on the First
Closing Date and the Second Closing Date, as applicable, a letter from Deloitte
& Touche LLP addressed to the Underwriters, dated the First Closing Date or the
Second Closing Date, as applicable, confirming that such accountants are
independent certified public accountants with respect to the Company within the
meaning of the Securities Act and based upon the procedures described in the
letter delivered to you by such accountants concurrently with the execution of
this Agreement (herein called the "ORIGINAL LETTER"), but carried out to a date
not more than four (4) business days prior to the First Closing Date or the
Second Closing Date, as applicable, (i) confirming, to the extent true, that the
statements and conclusions set forth in the Original Letter are accurate as of
the First Closing Date or the Second Closing Date, as applicable, and (ii)
setting forth any revisions or additions to the statements and conclusions set
forth in the Original Letter which are necessary to reflect any changes in the
facts described in the Original Letter or to reflect the availability of more
recent financial statements, data or information. The letter shall not disclose
any Material Adverse Effect, as determined by you in your sole judgment, from
that set forth in the Registration Statement or Prospectus. The Original Letter
from Deloitte & Touche LLP shall be addressed to the Underwriters and shall be
in form and substance satisfactory to the Underwriters. The Original Letter
shall (i) represent, to the extent
13
true, that such accountants are independent certified public accountants with
respect to the Company within the meaning of the Securities Act, (ii) set forth
the opinion of such accountants with respect to their audit of the consolidated
balance sheet of the Company as of December 31, 2000 and related consolidated
statements of income, changes in shareholders' equity, and cash flows for the
twelve (12) months ended December 31, 2000, (iii) state that such accountants
have performed the procedures set out in Statement on Auditing Standards No. 71
("SAS 71") for a review of interim financial information ended June 30, 2001
(the "QUARTERLY FINANCIAL STATEMENTS"), (iv) state that, in the course of such
review, nothing came to the attention of such accountants that leads them to
believe that any modifications to any of the Quarterly Financial Statements are
required in order for them to be in compliance with generally accepted
accounting principles and, (v) address other matters agreed upon by such
accountants and you. In addition, you shall have received from the Company any
letter addressed to the Company from such accountants, and made available to you
for use by the Underwriters, stating that such accountants' review of the
Company's system of internal accounting controls, to the extent they deemed
necessary in establishing the scope of their audit of the Company's consolidated
financial statements as of December 31, 2000, did not disclose any weaknesses in
such controls that such accountants' considered to be material weaknesses.
(i) OFFICERS' CERTIFICATE. You shall have received on the First Closing
Date and the Second Closing Date, as applicable, a certificate of the Company,
dated the First Closing Date or the Second Closing Date, as applicable, signed
by the Chief Executive Officer and Chief Financial Officer of the Company, to
the effect that, and you shall be satisfied that:
(i) the representations and warranties of the Company
in this Agreement are true and correct as if made on
and as of the First Closing Date or the Second
Closing Date, as applicable, and the Company has
complied with all the agreements and satisfied all
conditions on its part to be performed or satisfied
at or prior to the First Closing Date or the Second
Closing Date, as applicable;
(ii) no stop order or other order suspending the
effectiveness of the Registration Statement or the
use of the Prospectus has been issued and no
proceedings therefor have been initiated or
threatened or are otherwise pending;
(iii) at the time the Registration Statement became
effective and at all times subsequent thereto up to
the delivery of such certificate, the Registration
Statement and the Prospectus (and any amendments or
supplements thereto) and the Incorporated Documents,
when such Incorporated Documents became effective or
were filed with the Commission, (a) contained all
material information required to be included therein
by the Securities Act or the Exchange Act and the
applicable rules and regulations of the Commission
thereunder, as applicable, and (b) in all material
respects conformed to the requirements of the
Securities Act or the Exchange Act and the applicable
rules and regulations of the Commission thereunder,
as applicable; and the Registration Statement and the
Prospectus (and any amendments or supplements
thereto) did not and do not include any untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading; and, since the effective date of the
14
Registration Statement, there has occurred no event
that is required to be set forth in an amended or
supplemented Prospectus which has not been so set
forth; and
(iv) since the respective dates as of which
information is given in the Registration Statement
and Prospectus: (i) there has been no Material
Adverse Effect, or any development that could
reasonably be expected to result in a Material
Adverse Effect; (ii) the Company and its
subsidiaries, considered as one entity, has not
incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary
course of business nor entered into any material
transaction or agreement not in the ordinary course
of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by
the Company or, except for dividends paid to the
Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its
subsidiaries of any class of capital stock.
(j) LOCK-UP AGREEMENTS FROM CERTAIN STOCKHOLDERS OF THE COMPANY. The
Company shall have obtained and you shall have received a Lock-up Agreement
(substantially in the form of EXHIBIT A hereto) from each officer and trustee of
the Company.
(k) STOCK EXCHANGE LISTING. The Shares shall have been approved for
listing on the AMEX, subject only to official notice of issuance.
(l) COMPLIANCE WITH PROSPECTUS DELIVERY REQUIREMENTS. The Company shall
have complied with the provisions of Sections 2(g) and 3(A)(e) hereof with
respect to the furnishing of Prospectuses.
(m) ADDITIONAL DOCUMENTS. On or before each of the First Closing Date and
the Second Closing Date, as applicable, you and counsel for the Underwriters
shall have received such information, documents and opinions as they may
reasonably require to enable you and your counsel to pass upon the issuance and
sale of the Shares as contemplated herein or to evidence the accuracy of any
representation or warranty or the satisfaction of any condition or agreement
herein contained.
If any condition specified in this Section 4 is not satisfied, in
your sole discretion, when and as required hereunder, this Agreement may be
terminated by you on behalf of the Underwriters by notice to the Company at any
time on or prior to the First Closing Date (or with respect to the Option
Shares, the Second Closing Date), which termination shall be without liability
on the part of any party hereto to any other party hereto, except that Section 5
(Payment of Expenses), Section 6 (Reimbursement of Underwriters' Expenses),
Section 7 (Indemnification and Contribution) and Section 10 (Representations and
Indemnities to Survive Delivery) hereof, together with Sections 11, 12, 13, 14
and 15 hereof, shall at all times be effective and shall survive any such
termination. Xxxxxxxxx Xxxxxxxx may, in its sole discretion, waive the
satisfaction of any condition set forth in this Section 4.
SECTION 5. PAYMENT OF EXPENSES.
The Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including, without limitation: (i)
all expenses incident to the preparation,
15
issuance and delivery of any certificates representing the Shares (including,
without limitation, all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Shares, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Shares to the Underwriters, (iv) all fees and expenses of the
Company's counsel, independent public or certified public accountants and other
advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each Preliminary Prospectus and the Prospectus (and
all amendments and supplements thereto), and this Agreement, (vi) all fees and
expenses (including, without limitation, filing fees and reasonable attorney's
fees) incurred by the Company or the Underwriters in connection with qualifying
or registering (or obtaining exemptions from the qualification or registration
of) any or all Shares for offer and sale under state securities or blue sky
laws, provincial securities laws of Canada or the securities laws of any other
country, and, if requested by you, preparing and printing a "Blue Sky Survey,"
an "International Blue Sky Survey" or other memorandum (and all supplements
thereto) advising the Underwriters of such qualifications, registrations and
exemptions, (vii) the fees and expenses associated with listing the Shares on
the AMEX, (x) all costs and expenses incident to the travel and accommodation of
the Company's employees on the "roadshow," and (xi) all other fees, costs and
expenses referred to in Item 14 of Part II of the Registration Statement. Except
as provided in this Section 5 and Sections 6 and 7 hereof, the Underwriters
shall pay their own expenses, including the fees and disbursements of their
counsel.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.
If this Agreement is terminated pursuant to the last paragraph of
Section 4 or Section 9(iv) hereof, or the sale to the Underwriters of the Firm
Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or to comply with any provision hereof, in addition to its obligations under
Sections 5 and 7, the Company agrees to reimburse you and the other Underwriters
(or such Underwriters as have terminated this Agreement with respect to
themselves), severally, upon demand for all out-of-pocket expenses reasonably
incurred by you and the Underwriters in connection with the proposed purchase
and the offering and sale of the Shares (including, without limitation, any
Shares not so delivered), including, without limitation, reasonable fees and
disbursements of counsel, printing expenses, travel and accommodation expenses,
postage, facsimile and telephone charges.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION OF THE UNDERWRITERS.
(1) The Company agrees to indemnify and hold harmless each Underwriter,
its officers and employees, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act and the Exchange Act,
against any loss, claim, damage, liability or expense, as incurred, joint or
several, to which such indemnified person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including, without limitation, in
settlement of any litigation, if such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably withheld),
insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof) arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment or supplement thereto), or the omission or alleged omission to
state a material fact required to
16
be stated therein or necessary in order to make the statements therein not
misleading, or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission to
state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or (iii) in
whole or in part, any inaccuracy or alleged inaccuracy in the representations
and warranties of the Company contained herein or in any certificate
delivered pursuant hereto or delivered in connection herewith, or (iv) in
whole or in part, any failure of the Company to perform its obligations
hereunder or under applicable law, or (v) any untrue statement or alleged
untrue statement of a material fact contained in any audio or visual
materials provided or prepared by the Company or based upon written
information furnished by or on behalf of the Company, including, without
limitation, slides, videos, films or tape recordings, used in connection with
the marketing of the Shares, or (vi) any act or failure to act or any alleged
act or failure to act by any Underwriter in connection with or relating in
any manner to the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
expense (or any action in respect thereof) arising out of or based upon any
matter covered by clause (i), (ii), (iii), (iv) or (v) above, provided that
the Company shall not be liable under this clause (vi) to the extent that a
court of competent jurisdiction shall have determined by a final judgment
that such loss, claim, damage, liability or expense (or any action in respect
thereof) resulted directly from any such act or failure to act taken or
omitted to be taken by such Underwriter through its bad faith or willful
misconduct; and agrees to reimburse such indemnified person for any and all
expenses (including, without limitation, the reasonable fees and
disbursements of counsel chosen by Xxxxxxxxx Xxxxxxxx) as such expenses are
reasonably incurred by such indemnified person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability or expense (or any action in respect thereof);
PROVIDED, HOWEVER, that the foregoing indemnity agreement shall not apply to
any loss, claim, damage, liability or expense (or any action in respect
thereof) to the extent, but only to the extent, that such loss, claim,
damage, liability, expense or action arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any Preliminary Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by you expressly
for use therein. The indemnity agreement set forth in this subsection (a)
shall be in addition to any liabilities that the Company may otherwise have.
(b) INDEMNIFICATION OF THE COMPANY. Each Underwriter, severally and not
jointly, agrees to indemnify and hold harmless the Company, its employees, each
of its trustees, each of its officers who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, against any loss, claim, damage, liability
or expense, as incurred, to which such indemnified person may become subject
under the Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law, or otherwise (including, without
limitation, in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter, which consent shall not be unreasonably
withheld) insofar as such loss, claim, damage, liability or expense (or any
action in respect thereof) arises out of or is based upon any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue or alleged
untrue statement or such omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus (or any
amendment or
17
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by you expressly for use therein; and agrees to
reimburse such indemnified person for any legal and other expense reasonably
incurred by such indemnified person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability or
expense (or any action in respect thereof). The indemnity agreement set forth in
this subsection (b) shall be in addition to any liabilities that each
Underwriter may otherwise have.
(c) INFORMATION PROVIDED BY THE UNDERWRITERS. The Company and each person,
if any, who controls the Company within the meaning of the Securities Act and
the Exchange Act hereby acknowledges that the only information that the
Underwriters have furnished to the Company expressly for use in the Registration
Statement, any Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto) are the statements set forth in the table in the first
paragraph and the second and eleventh and twelfth paragraphs under the caption
"Underwriting" in the Prospectus; and the Underwriters confirm that such
statements are correct.
(d) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES. Promptly after
receipt by an indemnified party under subsection (a) or (b) above of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from (x) any liability that it may have to any
indemnified party for contribution or otherwise under this Section 7 to the
extent it is not materially prejudiced as a proximate result of such omission or
(y) any liability that it may otherwise have. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; PROVIDED, HOWEVER, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have concluded in its sole discretion that a
conflict may arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that there may
be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with local counsel),
approved by the indemnifying party (Xxxxxxxxx Xxxxxxxx in the case of subsection
(b) above), representing the indemnified parties who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party, in each of which cases the fees
and expenses of counsel shall be at the expense of the indemnifying party.
18
(e) SETTLEMENTS. No indemnifying party under this Section 7 shall be
liable for any settlement or compromise of, or consent to the entry of judgment
with respect to, any pending or threatened action, suit or proceeding in respect
of which any indemnification or contribution may be sought hereunder that is
effected without its written consent, which consent shall not be unreasonably
withheld, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the immediately preceding sentence, if
at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by subsection (d) above, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if (x)
such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request and (y) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action, suit or proceeding in respect of which any indemnification
or contribution may be sought hereunder, unless such settlement, compromise or
judgment includes (i) an unconditional release of such indemnified party from
all liability arising out of or in connection with such action, suit or
proceeding and (ii) 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.
(f) CONTRIBUTION. If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any loss, claim, damage or liability,
or any action or proceeding in respect thereof, then each indemnifying party
with respect to such loss, claim, damage or liability, or any action or
proceeding in respect thereof, shall contribute to the aggregate amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability (or any action in respect thereof), when incurred, in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other hand from the offering of the
Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
loss, claim, damage or liability (or any action in respect thereof), as well as
any other relevant equitable considerations.
The relative benefit received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expense) received by the
Company bear to the total underwriting discounts and commission received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriters on the other hand
and their relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (f) 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
19
that does not take account of the equitable considerations referred to above in
this subsection (f).
The amount paid or payable by an indemnified party as a result of any
loss, claim, damage or liability (or any action in respect thereof) referred
to above in this subsection (f) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (f), (i) 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 and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (f) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(g) TIMING OF ANY PAYMENTS OF INDEMNIFICATION. Any loss, claim, damage,
liability or expense for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred, but in all cases, no later than forty-five
(45) days of invoice to the indemnifying party.
(h) SURVIVAL. The indemnity and contribution agreements contained in this
Section 7 and the representation and warranties set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, or the Company, its directors or officers or any person(s)
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder and (iii) any termination of this Agreement. A successor to any
Underwriter, or to the Company, its trustees or officers, shall be entitled to
the benefits of the indemnity and contribution agreements contained in this
Section 7.
(i) ACKNOWLEDGEMENTS OF PARTIES. Each of the parties hereto hereby
acknowledges that it is a sophisticated business person, was represented by
counsel during the negotiations regarding the provisions hereof, including,
without limitation, this Section 7, and is fully informed regarding such
provisions. Each of the parties hereto hereby further acknowledges that the
provisions of this Section 7 fairly allocate the risks in light of the ability
of such party to investigate the Company and its business in order to assure
that adequate disclosure is made in the Registration Statement and Prospectus as
required by the Securities Act and the Exchange Act.
SECTION 8. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.
If, on the First Closing Date or the Second Closing Date, as the case
may be, any one or more of the several Underwriters shall fail or refuse to
purchase Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Shares set forth in SCHEDULE A hereto opposite their respective names
bears to the aggregate number of Firm Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as may be
specified by you with the consent of the
20
non-defaulting Underwriters, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
and the aggregate number of Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Shares to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such Shares
are not made within 48 hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of
Sections 7 and 10 hereof shall at all times be effective and shall survive such
termination. In any such case either you or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
8. Any action taken under this Section 8 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 9. TERMINATION OF THIS AGREEMENT.
This Agreement may be terminated by you, as Representatives of the
Underwriters, by notice given to the Company if, at any time since the execution
and delivery of this Agreement, (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
AMEX, or trading in securities generally on either the Nasdaq Stock Market, the
NYSE or the AMEX shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or the NASD, (ii) a general banking moratorium shall have been
declared by any of federal, New York, Delaware or California authorities, (iii)
there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective change in United States' or international
political, financial or economic conditions, as in your judgment is material and
adverse and makes it impracticable or inadvisable to market the Shares in the
manner and on the terms contemplated in the prospectus (as filed pursuant to
Rule 424 under the Securities Act) or to enforce contracts for the sale of
securities, or (iv) in your judgment there shall have occurred any Material
Adverse Effect.
Any termination pursuant to this Section 9 shall be without liability
of (x) the Company to any Underwriter, except that if this Agreement is
terminated pursuant to clause (iv) of this Section 9, the Company shall be
obligated to reimburse your expenses and the expense of the Underwriters
pursuant to Sections 5 and 6 hereof, (y) any Underwriter to the Company or any
person controlling the Company, or (z) of any party hereto to any other party
hereto except that the provisions of Sections 7, 10, 13, 14 and 15 hereof shall
at all times be effective and shall survive any such termination.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND INDEMNITIES.
The respective indemnities, agreements, representations, warranties
and other statements of the Company, or of its officers and trustees and of the
Underwriters set forth in or made pursuant to this Agreement or in any
certificate delivered pursuant hereto or in connection
21
herewith will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or the Company, or any of their
respective partners, officers, directors or controlling persons, as applicable,
and will survive delivery of and payment for the Shares sold hereunder and any
termination of this Agreement.
SECTION 11. NOTICES.
All communications hereunder shall be in writing and shall be mailed,
hand delivered or telecopied and confirmed to the parties hereto as follows:
If to the Representatives:
XXXXXXXXX XXXXXXXX, INC.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
If to the Company or the Principal Subsidiary:
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
Any party hereto may change the address for receipt of communications by giving
written notice to the other parties.
SECTION 12. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Underwriters pursuant to Section 8
hereof, and to the benefit of the indemnified parties referred to in Section
7 hereof, and to their respective successors, assigns, heirs, executors,
administrators and personal representatives, and no other person will have
any right or obligation hereunder. The term "successors" shall not include
any purchaser of the Shares as such from any of the Underwriters merely by
reason of such purchase.
SECTION 13. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability
of any other Section, paragraph or provision hereof. If any Section,
paragraph or provision of this Agreement is for any reason determined to be
invalid or unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and
enforceable.
SECTION 14. GOVERNING LAW PROVISIONS.
(n) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
22
(o) CONSENT TO JURISDICTION. Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby
("RELATED PROCEEDINGS") may be instituted in the federal courts of the United
States of America located in the City and County of San Francisco or the courts
of the State of California located in the City and County of San Francisco
(collectively, the "SPECIFIED COURTS"), and each party irrevocably submits to
the personal jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "RELATED JUDGMENT"), as to which
such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum. Each party not located in the United States
irrevocably appoints CT Corporation System, which currently maintains a San
Francisco office at 00 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Xxxxxx
Xxxxxx of America, as its agent to receive service of process or other legal
summons for purposes of any such suit, action or proceeding that may be
instituted in any state or federal court in the City and County of San
Francisco.
SECTION 15. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. The parties hereto agree that time is of the essence with respect
to each party's performance hereunder. For purposes of this Agreement, the term
"business day" shall mean any day on which the Commission's office in
Washington, D.C. is open for business. This Agreement may be executed in any
number of counterparts, each of which shall be an original and all of which
shall together constitute one and the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by
each party hereto whom the condition is meant to benefit. Section headings
herein are for convenience only and shall not affect the construction or
interpretation of this Agreement.
[The remainder of this page has been intentionally left blank.]
23
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Xxxx X. Xxxxxx
Managing Trustee and Executive Vice President
24
The foregoing Underwriting Agreement is hereby confirmed and
accepted by the Representatives as of the date first above written.
XXXXXXXXX XXXXXXXX, INC.
XXXXXX XXXXXXX INCORPORATED
On their behalf and on behalf of each of the Underwriters named in SCHEDULE A
hereto.
BY XXXXXXXXX XXXXXXXX, INC.
By: /s/ G. Xxxxxxxx Xxxxxxxxx
----------------------------------
G. Xxxxxxxx Xxxxxxxxx
25
SCHEDULE A
NUMBER OF FIRM SHARES
UNDERWRITERS TO BE PURCHASED
--------------------------------------------------------------------------------
XXXXXXXXX XXXXXXXX, INC. 2,600,000
Xxxxxx Xxxxxxx Incorporated 650,000
---------
Total 3,250,000
=========
S-A
EXHIBIT A
LOCK-UP AGREEMENT
Xxxxxxxxx Xxxxxxxx, Inc.
Xxxxxx Xxxxxxx Incorporated
As Representatives of the Several Underwriters
c/x Xxxxxxxxx Xxxxxxxx, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE:
Charter Municipal Mortgage Acceptance Company (the "COMPANY")
Ladies & Gentlemen:
The undersigned is a trustee of the Company and/or an executive officer
of Related Charter LLC with a position of senior vice president or superior, and
is (or may become) an owner of record or beneficially of certain common shares
of beneficial interest of the Company ("COMMON SHARES") or securities
convertible into or exchangeable or exercisable for Common Shares. The Company
proposes to carry out a public offering of Common Shares (the "OFFERING") for
which you will act as the representatives (the "REPRESENTATIVES") of the
underwriters. The undersigned recognizes that the Offering will be of benefit to
the undersigned and will benefit the Company by, among other things, raising
additional capital for its operations. The undersigned acknowledges that you and
the other underwriters are relying on the representations and agreements of the
undersigned contained in this letter agreement in carrying out the Offering and
in entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that
the undersigned will not offer to sell, contract to sell, or otherwise sell,
dispose of, loan, pledge or grant any rights (whether by actual disposition or
effective economic disposition due to each settlement or otherwise)
(collectively, a "DISPOSITION"), with respect to (i) any Common Shares, (ii) any
options or warrants to purchase any Common Shares or (iii) any securities
convertible into or exchangeable or exercisable for Common Shares now owned or
hereafter acquired directly by such person or with respect to which such person
has or hereafter acquires the power of disposition (collectively, "SECURITIES"),
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a distribution
to partners or shareholders of such person, provided that the distributees
thereof agree in writing to be bound by the terms of this restriction or (iii)
with the prior written consent of Xxxxxxxxx Xxxxxxxx, Inc. It is understood that
nothing herein shall prevent the undersigned from acquiring Common Shares
through the exercise of securities exercisable for Common Shares, provided the
Common Shares so acquired shall be subject to the restrictions contained herein.
The foregoing restrictions will terminate after the close of trading of the
Common Shares on the 90th day following the day the Common Shares sold in the
Offering commenced trading on the AMEX (the "LOCK-UP PERIOD"). The foregoing
restrictions have been expressly agreed to preclude the holder of the Securities
from engaging in any hedging or other transaction which is designed to or
reasonably expected to lead to or result in a Disposition of Securities during
the Lock-up Period, even if such Securities would be disposed of by someone
other than such holder. Such prohibited hedging or other transactions would
include, without limitation, any short sale (whether or not against the box) or
any purchase, sale or grant of any right (including,
A-1
without limitation, any put or call option) with respect to any Securities or
with respect to any security (other than a broad-based market basket or index)
that included, relates to or derives any significant part of its value from
Securities. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of Common Shares or Securities held by the undersigned except in
compliance with the foregoing restrictions.
This agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives and assigns of
the undersigned. In the event the Offering has not occurred on or before
November 15, 2001, this Lock-Up Agreement shall be of no further force or
effect.
Dated
-------------------------------------
-------------------------------------------
Printed Name of Holder
By:
-------------------------------------
Signature
-------------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing
if signing as custodian, trustee, or on
behalf of an entity)
A-2
EXHIBIT B
MATTERS TO BE COVERED IN THE OPINION OF PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP
(i) The Registration Statement, has been declared effective under the Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and , to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
(ii) The Registration Statement, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which we need
express no opinion) complied as to form in all material respects with
the requirements of the Act and the Exchange Act.
(iii) The documents incorporated by reference in the Prospectus (other than
the financial statements and supporting schedules included therein or
omitted therefrom, as to which we need express no opinion), at the time
they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act and the
rules and regulations thereunder.
(iv) All of the issued and outstanding beneficial interests in the Company,
including the Shares, have been issued in compliance with all federal
and state securities laws and to the best of our knowledge were not
issued in violation of any preemptive right, resale right, right of
first refusal or similar right.
(v) The Company is duly qualified as a business trust to transact business
as a foreign entity and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vi) The authorized, issued and outstanding beneficial interests in the
Company are as set forth in the Registration Statement and Prospectus.
To the best of our knowledge, no person has the right, contractual or
otherwise, to cause the Company to issue to it, or register pursuant to
the Act, any beneficial interests in the Company upon the issue and
sale of the Shares to the Underwriters pursuant to the Agreement, nor,
to the best of our knowledge, does any person have preemptive rights,
resale rights, rights of first refusal or other similar rights to
purchase any of the Shares other than those rights that have been
expressly waived, fully and unconditionally, prior to the date of the
Agreement; it being understood that the Company has previously issued
1,882,364 Convertible Community Reinvestment Act Preferred Shares
("Convertible CRA Shares") convertible into Common Shares, and may
issue Common Shares upon the exercise of outstanding options described
in the Prospectus.
(vii) Each of the Subsidiaries is duly qualified as a business trust to
transact business as a foreign entity and is in good standing in each
jurisdiction in which such qualification is
B-1
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(viii) The Agreement has been duly executed and delivered by the Company,
constitutes a valid, legal and binding agreement of the Company, and is
enforceable against the Company in accordance with its terms except to
the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors'
rights generally or by general principles of equity; it being
understood that no opinion is being expressed as to the enforceability
of the indemnification or contribution provisions contained therein.
(ix) The Trust Agreement conforms, and the beneficial interests in the
Company, including, upon issuance, the Shares, will conform in all
material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(x) No approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the issuance
and sale of the Shares or the consummation by the Company of the
transactions as contemplated hereby other than registration of the
Shares under the Act and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters.
(xi) To the best of our knowledge, there is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending or threatened against
or affecting the Company or any of its Subsidiaries which, singly or in
the aggregate, would result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
property or assets of the Company or any of its Subsidiaries or the
consummation of the transactions contemplated by the Agreement or the
performance by the Company of its obligations under the Agreement.
(xii) All descriptions in the Registration Statement and Prospectus of
contracts and other documents to which the Company or any of its
Subsidiaries are a party are accurate in all material respects.
(xiii) All legal or governmental proceedings, statutes, regulations,
contracts, licenses, agreements, leases or other documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required.
(xiv) To the best of our knowledge, (i) neither the Company nor any of its
Subsidiaries is in violation of its Trust Agreement or other
organizational documents and (ii) no default by the Company or any of
its Subsidiaries exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Prospectus. The execution, delivery and performance of the Agreement,
and any other agreement or instrument entered into or issued or to be
entered into or issued by the Company in connection with the
transactions contemplated by the Agreement or in the Registration
Statement or the Prospectus, the consummation
B-2
of the transactions contemplated by the Agreement and in the
Registration Statement and the Prospectus (including the issuance and
sale of the Shares and the use of the proceeds from the sale of the
Shares as described in the Prospectus under the caption "Use of
Proceeds") and the compliance by the Company with its obligations under
the Agreement have been duly authorized by all necessary trust action
and do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
default or a Repayment Event (as defined in Section 1(A)(n) of the
Agreement) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its Subsidiaries pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement
or instrument, known to us, to which the Company or any Subsidiary is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the Trust
Agreement or the trust agreement (or any other organizational document)
of any of its Subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or any of
their property or assets.
(xv) The Company is not, and solely as a result of the consummation of the
transactions contemplated by the Prospectus and the Agreement, will not
become, an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment
Company Act.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no statement),
at the time such Registration Statement or amendment became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any supplement thereto (except for
financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which we need make
no statement), at the date of such Prospectus or such supplement, and at all
times up to and including the time of purchase or additional time of purchase,
as the case may be, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
B-3
EXHIBIT C
MATTERS TO BE COVERED IN THE OPINION OF
XXXXXXXXX TRAURIG LLP
The discussion set forth in the Prospectus under the heading
"Risk Factors - The value of our common shares, our Convertible CRA Shares and
our preferred shares, if any, and our ability to make distributions of
tax-exempt income depends upon the application of tax laws", to the extent it
pertains to matters of law or legal conclusions with respect thereto, is
accurate in all material respects under the Code, the regulation thereunder,
published administrative rulings and judicial decisions published on or prior to
the date of this opinion.
C-1
EXHIBIT D
MATTERS TO BE COVERED IN THE OPINION OF XXXXXXXX, XXXXXX & FINGER, P.A.
(i) The Company has been duly created and is validly existing as a
business trust in good standing under the laws of the State of Delaware, and
under its trust agreement, as amended (the "Trust Agreement"), resolutions of
the board of trustees of the Company (the "Resolutions") and the Delaware
Business Trust Act (the "Trust Act"), has full trust power and authority to own,
lease and operate its properties and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under, and contemplated by, the Agreement.
(ii) The beneficial interests in the Company issued prior to the date
hereof have been duly authorized for issuance by the Trust Agreement and are
validly issued, fully paid and, subject to the qualifications set forth in this
paragraph (ii), nonassesable undivided interests in the assets of the Company.
The certificates for the beneficial interests in the Company being issued on the
date of the opinion (the "Firm Shares") are in due and proper form. Each holder
of such interests, in its capacity as a beneficial owner of the Company, will be
entitled to the same limitation of personal liability as that extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that a holder of such
interests may be obligated to make certain payments provided for in the Trust
Agreement. Under the Trust Agreement and the Trust Act, the issuance of such
interests was not subject to preemptive or similar rights.
(iii) The Firm Shares have been duly authorized for issuance by the Trust
Agreement, and, when issued, executed and authenticated in accordance with the
Trust Agreement and when delivered against payment therefor in accordance with
the Agreement will be fully paid and, subject to the qualifications set forth in
this paragraph (iii), non-assessable undivided beneficial interests in the
assets of the Company. Each holder of Firm Shares, in its capacity as a
beneficial owner of the Company, will be entitled to the same limitation of
personal liability as that extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware. We
note that a holder of Firm Shares may be obligated to make certain payments
provided for in the Trust Agreement. Under the Trust Agreement and the Trust
Act, the issuance of the Firm Shares is not subject to preemptive or other
similar rights.
(iv) Each of the Subsidiaries has been duly created and is validly
existing as a business trust in good standing under the laws of the State of
Delaware and, under their respective trust agreements and the Trust Act, has
full trust power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and Prospectus.
(v) Except as otherwise disclosed in the Prospectus, all of the issued and
outstanding equity interests of each Subsidiary have been duly and validly
authorized and issued and are fully paid and non-assessable interests in the
assets of such Subsidiary that are owned by the Company, directly or through
other Subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; and none of the outstanding equity interests
of the Subsidiaries were issued in violation of any preemptive right, resale
right, right of first refusal or similar right.
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(vi) Under the Trust Agreement, the Resolutions and the Trust Act, the
Agreement and the Registration Statement have been duly authorized by all
requisite trust action on the part of the Company.
(vii) The Company's Trust Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid, legal and binding agreement of
the Company, and is enforceable against the Company, in accordance with its
terms.
(viii) After due inquiry, as of a recent date, limited to, and solely to
the extent disclosed thereupon, Court dockets for active cases of the Court of
Chancery of the State of Delaware in and for New Castle County, Delaware, of the
Superior Court of the State of Delaware in and for New Castle County, Delaware,
and of the United States District Court sitting in the State of Delaware, we are
not aware of any legal or governmental proceeding pending against the Company.
(ix) The issuance, sale and delivery by the Company of the Firm Shares,
the execution, delivery and performance of the Agreement and the Registration
Statement and Prospectus by the Company and the consummation of the transactions
contemplated in the Agreement, the Registration Statement and the Prospectus
(including the use of the proceeds from the sale of the Securities as described
in the Prospectus under the caption "Use of Proceeds") and the compliance by the
Company with their respective obligations under the Agreement, the Registration
Statement and the Firm Shares do not and will not, whether with or without the
giving of notice or lapse of time or both, violate the Trust Agreement or
violate any applicable Delaware statute or regulation.
(x) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Delaware court or Delaware
governmental authority or Delaware agency is necessary or required for the
performance by the Company of its obligations under the Agreement or in
connection with the offering, issuance or sale of the Firm Shares or the
consummation of the transactions contemplated by the Agreement, except such as
have been already obtained or as contemplated in the Registration Statement and
Prospectus.
D-2
EXHIBIT E
MATTERS TO BE COVERED IN THE OPINION OF UNDERWRITERS' COUNSEL
(i) The Trust has been duly created and is validly existing as a business
trust in good standing under the laws of the State of Delaware.
(ii) The
Underwriting Agreement has been duly authorized, executed and
delivered by the Trust.
(iii) The Shares have been duly authorized for issuance by the Trust
Agreement and, when issued in accordance with the Trust Agreement and delivered
against payment therefor in accordance with the
Underwriting Agreement, will be
fully paid and, subject to the qualifications set forth below, non-assessable
undivided beneficial interests in the assets of the Trust. Each shareholder, in
its capacity as a beneficial owner of the Trust, will be entitled to the same
limitation of personal liability as that extended to stockholders of private
corporations for profit organized under the Delaware General Corporation Law. We
note, however, that a shareholder may be obligated to make certain payments
provided for in the Trust Agreement. Under the Trust Agreement and the Delaware
Business Trust Act, the issuance of the Shares is not subject to preemptive or
other similar rights.
(iv) The Shares conform as to legal matters in all material respects to
the description thereof contained in the Prospectus.
(v) The Registration Statement has been declared effective under the 1933
Act and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement is in effect and no proceedings for
such purpose are pending before or threatened by the Commission.
(vi) The Registration Statement, at the time it became effective, and the
Prospectus, as of its date of issue, in each case, except for the financial
statements and the notes thereto and the schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to which
we express no opinion, complied as to form in all material respects with the
requirements of the 1933 Act and the rules and regulations of the Commission
promulgated thereunder.
We have endeavored to see that the Registration Statement and the
Prospectus comply with the 1933 Act and the rules and regulations of the
Commission promulgated thereunder relating to registration statements on Form
S-3 and related prospectuses, but we have not participated in the preparation of
the documents incorporated by reference in the Registration Statement and the
Prospectus and we cannot, of course, make any representation to you as to the
accuracy or completeness of any statements contained in the Registration
Statement or the Prospectus, including the documents incorporated therein by
reference, except to the extent covered in clause (iv) above. Nothing, however,
has come to our attention that would lead us to believe that the Registration
Statement (other than the financial statements and the notes thereto and the
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which we have not been requested to comment), at the
time the Registration Statement became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus (other than the financial statements and the notes thereto and the
schedules and other financial data included or incorporated by
E-1
reference therein or omitted therefrom, as to which we have not been requested
to comment), as of its issue date or the date hereof, included or includes an
untrue statement of a material fact or omitted or omits 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.
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