EXHIBIT 10.1
Execution Copy
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PURCHASE AGREEMENT
among
AMERICAN HOME MORTGAGE INVESTMENT CORP.,
▇▇▇▇▇▇ TRUST I
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
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Dated as of May 13, 2005
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PURCHASE AGREEMENT
($50,000,000 Trust Preferred Securities)
THIS PURCHASE AGREEMENT, dated as of May 13, 2005 (this "Purchase
Agreement"), is entered into among American Home Mortgage Investment Corp., a
Maryland corporation (the "Company"), and ▇▇▇▇▇▇ Trust I, a Delaware statutory
trust (the "Trust", and together with the Company, the "Sellers"), and ▇▇▇▇▇▇▇
▇▇▇▇▇ International or its assignee (the "Purchaser").
WITNESSETH:
WHEREAS, the Sellers propose that the Trust issue and sell Fifty Thousand
(50,000) Floating Rate Preferred Securities of the Trust, having a stated
liquidation amount of $1,000 per security, bearing a variable rate, reset
quarterly, equal to LIBOR (as defined in the Indenture (as defined below)) plus
3.00% per annum (the "Preferred Securities");
WHEREAS, the entire proceeds from the sale of the Preferred Securities
will be combined with the entire proceeds from the sale by the Trust to the
Company of its common securities (the "Common Securities"), and will be used by
the Trust to purchase Fifty One Million Five Hundred Fifty Thousand Dollars
($51,550,000) in principal amount of the unsecured junior subordinated,
deferrable interest notes of the Company (the "Junior Subordinated Notes");
WHEREAS, the Preferred Securities and the Common Securities for the Trust
will be issued pursuant to the Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of the Closing Date, among the Company, as depositor,
JPMorgan Chase Bank, National Association, a national banking association, as
property trustee (in such capacity, the "Property Trustee"), Chase Bank USA,
National Association, a national banking association, as Delaware trustee (in
such capacity, the "Delaware Trustee"), the Administrative Trustees named
therein (in such capacities, the "Administrative Trustees") and the holders from
time to time of undivided beneficial interests in the assets of the Trust; and
WHEREAS, the Junior Subordinated Notes will be issued pursuant to a Junior
Subordinated Indenture, dated as of the Closing Date (the "Indenture"), between
the Company and JPMorgan Chase Bank, National Association, a national banking
association, as indenture trustee (in such capacity, the "Indenture Trustee").
NOW, THEREFORE, in consideration of the mutual agreements and subject to
the terms and conditions herein set forth, the parties hereto agree as follows:
1. Definitions. The Preferred Securities, the Common Securities and
the Junior Subordinated Notes are collectively referred to
herein as the "Securities." This Purchase Agreement, the Indenture, the Trust
Agreement and the Securities are collectively referred to herein as the
"Operative Documents." All other capitalized terms used but not defined in this
Purchase Agreement shall have the respective meanings ascribed thereto in the
Indenture.
2. Purchase and Sale of the Preferred Securities.
(a) The Trust agrees to sell to the Purchaser, and the Purchaser
agrees to purchase from the Trust, the Preferred Securities for an amount (the
"Purchase Price") equal to Fifty Million Dollars ($50,000,000). The Purchaser
shall be responsible for the rating agency costs and expenses. The Trust shall
use the Purchase Price, together with the proceeds from the sale of the Common
Securities, to purchase the Junior Subordinated Notes from the Company.
(b) Delivery or transfer of, and payment for, the Preferred
Securities shall be made at 10:00 A.M. Chicago time (11:00 A.M. New York time),
on May 13, 2005 or such later date (not later than June 13, 2005) as the parties
may designate (such date and time of delivery and payment for the Preferred
Securities being herein called the "Closing Date"). The Preferred Securities
shall be transferred and delivered to the Purchaser against the payment of the
Purchase Price to the Trust made by wire transfer in immediately available funds
on the Closing Date to a U.S. account designated in writing by the Company at
least two business days prior to the Closing Date.
(c) Delivery of the Preferred Securities shall be made at such
location, and in such names and denominations, as the Purchaser shall designate
at least two business days in advance of the Closing Date. The Company and the
Trust agree to have, or cause to have, the Preferred Securities available for
inspection and checking by the Purchaser in Chicago, Illinois, not later than
1:00 P.M., Chicago time (2:00 P.M. New York time), on the business day prior to
the Closing Date. The closing for the purchase and sale of the Preferred
Securities shall occur at the offices of Mayer, Brown, ▇▇▇▇ & Maw LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as the parties
hereto shall agree.
3. Conditions. The obligations of the parties under this Purchase
Agreement are subject to the following conditions:
(a) The representations and warranties contained herein shall be
accurate as of the date of delivery of the Preferred Securities.
(b) [Reserved.]
(c) (i) Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company
and the Trust (the "Company Counsel"), shall have delivered an opinion, dated
the Closing Date, addressed to the Purchaser and JPMorgan Chase Bank, National
Association, in form and substance satisfactory to the Purchaser, (ii) ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, Maryland counsel for the Company and the Trust
(the "MD Company Counsel"), shall have delivered an opinion, dated the Closing
Date, addressed to the Purchaser and JPMorgan Chase Bank, National Association,
in form and substance satisfactory to the Purchaser, and (iii) the Company shall
have furnished to the Purchaser the opinion of the Company's General Counsel or
a certificate signed by the Company's Chief Executive Officer, President, an
Executive Vice President, Chief Financial Officer, Treasurer or Assistant
Treasurer, dated the Closing Date, addressed to
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the Purchaser, in form and substance satisfactory to the Purchaser. In rendering
their opinion, the Company Counsel and the MD Company Counsel may rely as to
factual matters upon certificates or other documents furnished by officers,
directors and trustees of the Company and the Trust and by government officials
(provided, however, that copies of any such certificates or documents are
delivered to the Purchaser) and by and upon such other documents as such counsel
may, in their reasonable opinion, deem appropriate as a basis for the Company
Counsel's opinion. The Company Counsel and the MD Company Counsel may specify
the jurisdictions in which they are admitted to practice and that they are not
admitted to practice in any other jurisdiction and are not experts in the law of
any other jurisdiction. If the Company Counsel is not admitted to practice in
the State of New York, the opinion of the Company Counsel may assume, for
purposes of the opinion, that the laws of the State of New York are
substantively identical, in all respects material to the opinion, to the
internal laws of the state in which such counsel is admitted to practice. Such
Company Counsel Opinion shall not state that they are to be governed or
qualified by, or that they are otherwise subject to, any treatise, written
policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
(d) The Purchaser shall have been furnished the opinion of Mayer,
Brown, ▇▇▇▇ & Maw LLP, special tax counsel for the Purchaser, dated the Closing
Date, addressed to the Purchaser, the Company and JPMorgan Chase Bank, National
Association, in substantially the form set out in Annex A hereto. In rendering
its opinion, Mayer, Brown, ▇▇▇▇ & Maw LLP may rely as to factual matters upon
certificates or other documents furnished by officers, directors and trustees of
the Company and by government officials (provided, however, that copies of any
such certificates or documents are delivered to the Company) and by and upon
such other documents as such counsel may, in its reasonable opinion deem
appropriate as a basis for its opinion.
(e) The Purchaser shall have received the opinion of ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Finger, P.A., special Delaware counsel for the Delaware Trustee, dated
the Closing Date, addressed to the Purchaser, JPMorgan Chase Bank, National
Association, the Delaware Trustee and the Company, in substantially the form set
out in Annex B hereto.
(f) The Purchaser shall have received the opinion of Gardere ▇▇▇▇▇
▇▇▇▇▇▇ LLP, special counsel for the Property Trustee and the Indenture Trustee,
dated the Closing Date, addressed to the Purchaser, in substantially the form
set out in Annex C hereto.
(g) The Purchaser shall have received the opinion of ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Finger, P.A., special Delaware counsel for the Delaware Trustee, dated
the Closing Date, addressed to the Purchaser and JPMorgan Chase Bank, National
Association, in substantially the form set out in Annex D hereto.
(h) The Company shall have furnished to the Purchaser a certificate
of the Company, signed by the Chief Executive Officer, President or an Executive
Vice President, and Chief Financial Officer, Treasurer or Assistant Treasurer of
the Company, and the Trust shall have furnished to the Purchaser a certificate
of the Trust, signed by an Administrative Trustee of
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the Trust, in each case dated the Closing Date, and, in the case of the Company,
as to (i) and (ii) below and, in the case of the Trust, as to (i) below.
(i) the representations and warranties in this Purchase
Agreement are true and correct on and as of the Closing Date with the same
effect as if made on the Closing Date, and the Company and the Trust have
complied with all the agreements and satisfied all the conditions on
either of their part to be performed or satisfied at or prior to the
Closing Date; and
(ii) since the date of the Interim Financial Statements (as
defined below), there has been no material adverse change in or affecting
the condition (financial or other), earnings, business or assets of the
Company and its subsidiaries taken as a whole, whether or not arising from
transactions occurring in the ordinary course of business (a "Material
Adverse Change").
(i) Subsequent to the execution of this Purchase Agreement, there
shall not have been any Material Adverse Change, the effect of which is, in the
Purchaser's reasonable judgment, so material and adverse as to make it
impractical or inadvisable to proceed with the purchase of the Preferred
Securities.
(j) Prior to the Closing Date, the Company and the Trust shall have
furnished to the Purchaser and its counsel such further information,
certificates and documents as the Purchaser or its counsel may reasonably
request.
If any of the conditions specified in this Section 3 shall not have been
fulfilled when and as provided in this Purchase Agreement, or if any of the
opinions, certificates and documents mentioned above or elsewhere in this
Purchase Agreement shall not be reasonably satisfactory in form and substance to
the Purchaser or its counsel, this Purchase Agreement and all the Purchaser's
obligations hereunder may be canceled at, or at any time prior to, the Closing
Date by the Purchaser. Notice of such cancellation shall be given to the Company
and the Trust in writing or by telephone or facsimile confirmed in writing.
Each certificate signed by any trustee of the Trust or any officer of the
Company and delivered to the Purchaser or the Purchaser's counsel in connection
with the Operative Documents and the transactions contemplated hereby and
thereby shall be deemed to be a representation and warranty of the Trust and/or
the Company, as the case may be, and not by such trustee or officer in any
individual capacity.
4. Representations and Warranties of the Company and the Trust. The
Company and the Trust jointly and severally represent and warrant to, and agree
with the Purchaser, as follows:
(a) Neither the Company nor the Trust, nor any of their "Affiliates"
(as defined in Rule 501(b) of Regulation D ("Regulation D") under the Securities
Act (as defined below)), nor any person acting on its or their behalf, has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would
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require the registration of any of the Securities under the Securities Act of
1933, as amended (the "Securities Act").
(b) Neither the Company nor the Trust, nor any of their Affiliates,
nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of any of the Securities.
(c) The Securities (i) are not and have not been listed on a
national securities exchange registered under section 6 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or quoted on a U.S.
automated inter-dealer quotation system and (ii) are not of an open-end
investment company, unit investment trust or face-amount certificate company
that are, or are required to be, registered under section 8 of the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and the
Securities otherwise satisfy the eligibility requirements of Rule 144A(d)(3)
promulgated pursuant to the Securities Act ("Rule 144A(d)(3)").
(d) Neither the Company nor the Trust, nor any of their Affiliates,
nor any person acting on its or their behalf, has engaged, or will engage, in
any "directed selling efforts" within the meaning of Regulation S under the
Securities Act with respect to the Securities.
(e) Neither the Company nor the Trust is, and, immediately following
consummation of the transactions contemplated hereby and the application of the
net proceeds therefrom, will not be, an "investment company" or an entity
"controlled" by an "investment company," in each case within the meaning of
section 3(a) of the Investment Company Act.
(f) Neither the Company nor the Trust has paid or agreed to pay to
any person any compensation for soliciting another to purchase any of the
Securities, except for the Preferred Securities Commission and/or the sales
commission the Company has agreed to pay to ▇▇▇▇▇ Bros. & Company (or to the
Company's introducing agent on behalf of ▇▇▇▇▇ Bros. & Company) pursuant to the
letter agreement between the Company and ▇▇▇▇▇ Bros. & Company, dated May 3,
2005.
(g) The Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act, 12 Del. C.
ss.3801, et seq. (the "Statutory Trust Act"), with all requisite power and
authority to own property and to conduct the business it transacts and proposes
to transact and to enter into and perform its obligations under the Operative
Documents to which it is a party. The Trust is duly qualified to transact
business as a foreign entity and is in good standing in each jurisdiction in
which such qualification is necessary, except where the failure to so qualify or
be in good standing would not have a material adverse effect on the condition
(financial or otherwise), earnings, business or assets of the Trust, whether or
not occurring in the ordinary course of business. The Trust is not a party to or
otherwise bound by any agreement other than the Operative Documents. The Trust
is and will be, under current law, classified for federal income tax purposes as
a grantor trust and not as an association or publicly traded partnership taxable
as a corporation.
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(h) The Trust Agreement has been duly authorized by the Company and,
on the Closing Date specified in Section 2(b), will have been duly executed and
delivered by the Company and the Administrative Trustees of the Trust, and,
assuming due authorization, execution and delivery by the Property Trustee and
the Delaware Trustee, will be a legal, valid and binding obligation of the
Company and the Administrative Trustees, enforceable against them in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles of equity. Each
of the Administrative Trustees of the Trust is an employee of the Company and
has been duly authorized by the Company to execute and deliver the Trust
Agreement and other documents and agreements related to the transactions
contemplated hereby.
(i) The Indenture has been duly authorized by the Company and, on
the Closing Date, will have been duly executed and delivered by the Company,
and, assuming due authorization, execution and delivery by the Indenture
Trustee, will be a legal, valid and binding obligation of the Company
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and to general principles of equity.
(j) The Preferred Securities and the Common Securities have been
duly authorized by the Trust and, when issued and delivered against payment
therefor on the Closing Date in accordance with this Purchase Agreement, in the
case of the Preferred Securities, and in accordance with the Common Securities
Subscription Agreement, in the case of the Common Securities, will be validly
issued, fully paid and non-assessable and will represent undivided beneficial
interests in the assets of the Trust entitled to the benefits of the Trust
Agreement, enforceable against the Trust in accordance with their terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general principles of equity. The issuance of the
Securities is not subject to any preemptive or other similar rights. On the
Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance of any kind (each, a "Lien").
(k) The Junior Subordinated Notes have been duly authorized by the
Company and, on the Closing Date, will have been duly executed and delivered to
the Indenture Trustee for authentication in accordance with the Indenture and,
when authenticated in the manner provided for in the Indenture and delivered to
the Trust against payment therefor in accordance with the Junior Subordinated
Note Purchase Agreement, will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture, enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
principles of equity.
(l) This Purchase Agreement has been duly authorized, executed and
delivered by the Company and the Trust.
(m) Neither the issue and sale of the Common Securities, the
Preferred Securities or the Junior Subordinated Notes, nor the purchase of the
Junior Subordinated Notes
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by the Trust, nor the execution and delivery of and compliance with the
Operative Documents by the Company or the Trust, nor the consummation of the
transactions contemplated herein or therein, (i) will conflict with or
constitute a violation or breach of the Trust Agreement or the charter or bylaws
of the Company or any subsidiary of the Company or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
governmental authority, agency or instrumentality or court, domestic or foreign,
having jurisdiction over the Trust or the Company or any of its subsidiaries or
their respective properties or assets (collectively, the "Governmental
Entities"), (ii) will conflict with or constitute a violation or breach of, or a
default or Repayment Event (as defined below) under, or result in the creation
or imposition of any Lien upon any property or assets of the Trust, the Company
or any of the Company's subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to which
(A) the Trust, the Company or any of its subsidiaries is a party or by which it
or any of them may be bound, or (B) to which any of the property or assets of
any of them is subject, or any judgment, order or decree of any court,
Governmental Entity or arbitrator, except, in the case of this clause (ii), for
such conflicts, breaches, violations, defaults, Repayment Events (as defined
below) or Liens which (X) would not, singly or in the aggregate, adversely
affect the consummation of the transactions contemplated by the Operative
Documents and (Y) would not, singly or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), earnings, business,
liabilities and assets (taken as a whole) of the Company and its subsidiaries
taken as a whole, whether or not occurring in the ordinary course of business (a
"Material Adverse Effect") or (iii) require the consent, approval, authorization
or order of any court or Governmental Entity. As used herein, a "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 Trust or the Company or any of its
subsidiaries prior to its scheduled maturity.
(n) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Maryland, with all requisite
corporate power and authority to own, lease and operate its properties and
conduct the business it transacts and proposes to transact, and is duly
qualified to transact business and is in good standing as a foreign corporation
in each jurisdiction where the nature of its activities requires such
qualification, except where the failure of the Company to be so qualified would
not, singly or in the aggregate, have a Material Adverse Effect.
(o) The Company has no subsidiaries that are material to its
business, financial condition or earnings other than those subsidiaries listed
in Schedule 1 attached hereto (collectively, the "Significant Subsidiaries").
Each Significant Subsidiary has been duly formed and is validly existing as a
corporation or limited liability company, as applicable in good standing under
the laws of the jurisdiction in which it is chartered or organized, with all
requisite power and authority to own, lease and operate its properties and
conduct the business it transacts and proposes to transact. Each Significant
Subsidiary is duly qualified to transact business and is in good standing as a
foreign entity in each jurisdiction where the nature of its activities requires
such qualification, except where the failure to be so qualified would not,
singly or in the aggregate, have a Material Adverse Effect.
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(p) Each of the Trust, the Company and each of the Company's
subsidiaries hold all necessary approvals, authorizations, orders, licenses,
consents, registrations, qualifications, certificates and permits (collectively,
the "Governmental Licenses") of and from Governmental Entities necessary to
conduct their respective businesses as now being conducted, and neither the
Trust, the Company nor any of the Company's subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such Government
License, except where the failure to be so licensed or approved or the receipt
of an unfavorable decision, ruling or finding, would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except where the invalidity or the failure
of such Governmental Licenses to be in full force and effect, would not, singly
or in the aggregate, have a Material Adverse Effect; and the Company and its
subsidiaries are in compliance with all applicable laws, rules, regulations,
judgments, orders, decrees and consents, except where the failure to be in
compliance would not, singly or in the aggregate, have a Material Adverse
Effect.
(q) All of the issued and outstanding shares of capital stock of the
Company and each of its subsidiaries are validly issued, fully paid and
non-assessable; all of the issued and outstanding capital stock of each
subsidiary of the Company is owned by the Company, directly or through
subsidiaries, free and clear of any Lien, claim or equitable right; and none of
the issued and outstanding capital stock of the Company or any subsidiary was
issued in violation of any preemptive or similar rights arising by operation of
law, under the charter or by-laws of such entity or under any agreement to which
the Company or any of its subsidiaries is a party.
(r) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective charter or by-laws or similar organizational
documents or (ii) in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which the
Company or any such 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 any of them is subject,
except, in the case of clause (ii), where such violation or default would not,
singly or in the aggregate, have a Material Adverse Effect.
(s) There is no action, suit or proceeding before or by any
Governmental Entity, arbitrator or court, domestic or foreign, now pending or,
to the knowledge of the Company or the Trust after due inquiry, threatened
against or affecting the Trust or the Company or any of the Company's
subsidiaries, except for such actions, suits or proceedings that, if adversely
determined, would not, singly or in the aggregate, adversely affect the
consummation of the transactions contemplated by the Operative Documents or have
a Material Adverse Effect; and the aggregate of all pending legal or
governmental proceedings to which the Trust or the Company or any of its
subsidiaries is a party or of which any of their respective properties or assets
is subject, including ordinary routine litigation incidental to the business,
are not expected to result in a Material Adverse Effect.
(t) The accountants of the Company who certified the Financial
Statements (as defined below) are independent public accountants of the Company
and its subsidiaries
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within the meaning of the Securities Act, and the rules and regulations of the
Securities and Exchange Commission (the "Commission") thereunder.
(u) The audited consolidated financial statements (including the
notes thereto) and schedules of the Company and its consolidated subsidiaries
for the fiscal year ended December 31, 2004 (the "Financial Statements") and the
interim unaudited consolidated financial statements of the Company and its
consolidated subsidiaries for the quarter ended March 31, 2005 (the "Interim
Financial Statements") provided to the Purchaser are the most recent available
audited and unaudited consolidated financial statements of the Company and its
consolidated subsidiaries, respectively, and fairly present in all material
respects, in accordance with U.S. generally accepted accounting principles, the
financial position of the Company and its consolidated subsidiaries, and the
results of operations and changes in financial condition as of the dates and for
the periods therein specified, subject, in the case of Interim Financial
Statements, to year-end adjustments (which are expected to consist solely of
normal recurring adjustments). Such consolidated financial statements and
schedules have been prepared in accordance with U.S. generally accepted
accounting principles ("GAAP") consistently applied throughout the periods
involved (except as otherwise noted therein).
(v) None of the Trust, the Company nor any of its subsidiaries has
any material liability, whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due, including
any liability for taxes (and there is no past or present fact, situation,
circumstance, condition or other basis for any present or future action, suit,
proceeding, hearing, charge, complaint, claim or demand against the Company or
its subsidiaries that could give rise to any such liability), except for (i)
liabilities set forth in the Financial Statements or the Interim Financial
Statements and (ii) normal fluctuations in the amount of the liabilities
referred to in clause (i) above occurring in the ordinary course of business of
the Trust, the Company and all of its subsidiaries since the date of the most
recent balance sheet included in such Financial Statements.
(w) Since the respective dates of the Financial Statements and the
Interim Financial Statements, there has not been (A) any Material Adverse Change
or (B) any dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock other than regular quarterly dividends
on the Company's common and preferred stock.
(x) The documents of the Company filed with the Commission in
accordance with the Exchange Act, from and including the commencement of the
fiscal year covered by the Company's most recent Annual Report on Form 10-K/A,
at the time they were or hereafter are filed by the Company with the Commission
(collectively, the "1934 Act Reports"), complied and will comply in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations"), and, at the date of
this Purchase Agreement and on the Closing Date, do not and will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and other than
such instruments, agreements, contracts and other documents as are filed as
exhibits to the Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-
10
Q or Current Reports on Form 8-K, there are no instruments, agreements,
contracts or documents of a character described in Item 601 of Regulation S-K
promulgated by the Commission to which the Company or any of its subsidiaries is
a party. The Company is in compliance in all material respects with all
currently applicable requirements of the Exchange Act that were added by the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
(y) No labor dispute with the employees of the Trust, the Company or
any of its subsidiaries exists or, to the knowledge of the executive officers of
the Trust or the Company, is imminent, except those which would not, singly or
in the aggregate, have a Material Adverse Effect.
(z) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any Governmental Entity, other
than those that have been made or obtained, is necessary or required for the
performance by the Trust or the Company of their respective obligations under
the Operative Documents, as applicable, or the consummation by the Trust and the
Company of the transactions contemplated by the Operative Documents.
(aa) Each of the Trust, the Company and each subsidiary of the
Company has good and marketable title to all of its respective real and personal
properties, in each case free and clear of all Liens and defects, except for
those that would not, singly or in the aggregate, have a Material Adverse
Effect; and all of the leases and subleases under which the Trust, the Company
or any subsidiary of the Company holds properties are in full force and effect,
except where the failure of such leases and subleases to be in full force and
effect would not, singly or in the aggregate, have a Material Adverse Effect,
and none of the Trust, the Company or any subsidiary of the Company has any
notice of any claim of any sort that has been asserted by anyone adverse to the
rights of the Trust, the Company or any subsidiary of the Company under any such
leases or subleases, or affecting or questioning the rights of such entity to
the continued possession of the leased or subleased premises under any such
lease or sublease, except for such claims that would not, singly or in the
aggregate, have a Material Adverse Effect.
(bb) The Company has no present intention to exercise its option to
defer payments of interest on the Junior Subordinated Notes as provided in the
Indenture. The Company believes that the likelihood that it would exercise its
rights to defer payments of interest on the Junior Subordinated Notes as
provided in the Indenture at any time during which the Junior Subordinated Notes
are outstanding is remote because of the restrictions that would be imposed on
the Company's ability to declare or pay dividends or distributions on, or to
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock and on the Company's ability to make any payments of
principal, interest or premium, if any, on, or repay, repurchase or redeem, any
of its debt securities that rank pari passu in all respects with or junior in
interest to the Junior Subordinated Notes.
(cc) Commencing with its taxable year ended December 31, 2003, the
Company has been, and upon the completion of the transactions contemplated
hereby, the Company will continue to be, organized and operated in conformity
with the requirements for qualification and taxation as a real estate investment
trust (a "REIT") under Sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the "Code"), and the Company's
11
proposed method of operation will enable it to continue to meet the requirements
for qualification and taxation as a REIT under the Code, and no actions have
been taken (or have not been taken which are required to be taken) which would
cause such qualification to be lost. The Company expects to continue to be
organized and to operate in a manner so as to qualify as a REIT in the taxable
year ending December 31, 2004 and succeeding taxable years.
(dd) The Company and each of the Significant Subsidiaries have
timely and duly filed all material Tax Returns required to be filed by them, and
all such Tax Returns are true, correct and complete in all material respects.
The Company and each of the Significant Subsidiaries have timely and duly paid
in full all material Taxes required to be paid by them (whether or not such
amounts are shown as due on any Tax Return). There are no material federal,
state, or other Tax audits or deficiency assessments proposed or pending with
respect to the Company or any of the Significant Subsidiaries, and no such
audits or assessments are threatened. As used herein, the terms "Tax" or "Taxes"
mean (i) all federal, state, local, and foreign taxes, and other assessments of
a similar nature (whether imposed directly or through withholding), including
any interest, additions to tax, or penalties applicable thereto, imposed by any
Governmental Entity, and (ii) all liabilities in respect of such amounts arising
as a result of being a member of any affiliated, consolidated, combined, unitary
or similar group, as a successor to another person or by contract. As used
herein, the term "Tax Returns" means all federal, state, local, and foreign Tax
returns, declarations, statements, reports, schedules, forms, and information
returns and any amendments thereto filed or required to be filed with any
Governmental Entity.
(ee) [Reserved].
(ff) The books, records and accounts of the Company and its
subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its subsidiaries. The Company and each of its
subsidiaries maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
accordance with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(gg) The Company and the Significant Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts in all material respects as are customary in the businesses
in which they are engaged or propose to engage after giving effect to the
transactions contemplated hereby including but not limited to, real or personal
property owned or leased against theft, damage, destruction, act of vandalism
and all other risks customarily insured against. All policies of insurance and
fidelity or surety bonds insuring the Company or any of the Significant
Subsidiaries or the Company's or Significant Subsidiaries' respective
businesses, assets, employees, officers and directors are in full force and
effect. The Company and each of the subsidiaries are in compliance with the
terms
12
of such policies and instruments in all material respects. Neither the Company
nor any Significant Subsidiary has reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a material adverse effect on the
Company and the Significant Subsidiaries, taken as a whole. Within the past
twelve months, neither the Company nor any Significant Subsidiary has been
denied any insurance coverage which it has sought or for which it has applied.
(hh) The Company and its subsidiaries or any person acting on behalf
of the Company and its subsidiaries including, without limitation, any director,
officer, agent or employee of the Company or its subsidiaries has not, directly
or indirectly, while acting on behalf of the Company and its subsidiaries (i)
used any corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (ii) made any unlawful
payment to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns from corporate funds; (iii) violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made any other material unlawful payment.
(ii) The information provided by the Company and the Trust pursuant
to this Purchase Agreement and the transactions contemplated hereby does not, as
of the date hereof, and will not as of the Closing Date, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(jj) Except as would not, individually or in the aggregate, result
in a Material Adverse Change, (i) the Company and its subsidiaries have been and
are in compliance with applicable Environmental Laws (as defined below), (ii)
none of the Company, any of its subsidiaries or, to the best of the Company's
knowledge, any other owners of any of the real properties currently or
previously owned, leased or operated by the Company (the "Properties") at any
time or any other party, has at any time released (as such term is defined in
CERCLA (as defined below)) or otherwise disposed of Hazardous Materials (as
defined below) on, to, in, under or from the Properties or any other real
properties previously owned, leased or operated by the Company or any of its
subsidiaries, (iii) neither the Company nor any of its subsidiaries intends to
use the Properties or any subsequently acquired properties, other than in
compliance with applicable Environmental Laws, (iv) neither the Company nor any
of its subsidiaries has received any notice of, or has any knowledge of any
occurrence or circumstance which, with notice or passage of time or both, would
give rise to a claim under or pursuant to any Environmental Law with respect to
the Properties, any other real properties previously owned, leased or operated
by the Company or any of its subsidiaries, or their respective assets or arising
out of the conduct of the Company or its subsidiaries, (v) none of the
Properties are included or, to the best of the Company's knowledge, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA by the
United States Environmental Protection Agency or, to the best of the Company's
knowledge, proposed for inclusion on any similar list or inventory issued
pursuant to any other Environmental Law or issued by any other Governmental
Entity, (vi) none of the Company, any of its subsidiaries or agents or, to the
best of the Company's knowledge, any other person or entity for whose conduct
any of them is or may be held responsible, has
13
generated, manufactured, refined, transported, treated, stored, handled,
disposed, transferred, produced or processed any Hazardous Material at any of
the Properties, except in compliance with all applicable Environmental Laws, and
has not transported or arranged for the transport of any Hazardous Material from
the Properties or any other real properties previously owned, leased or operated
by the Company or any of its subsidiaries to another property, except in
compliance with all applicable Environmental Laws, (vii) no lien has been
imposed on the Properties by any Governmental Entity in connection with the
presence on or off such Property of any Hazardous Material, and (viii) none of
the Company, any of its subsidiaries or, to the best of the Company's knowledge,
any other person or entity for whose conduct any of them is or may be held
responsible, has entered into or been subject to any consent decree, compliance
order, or administrative order with respect to the Properties or any facilities
or improvements or any operations or activities thereon.
As used herein, "Hazardous Materials" shall include, without limitation,
any flammable materials, explosives, radioactive materials, hazardous materials,
hazardous substances, hazardous wastes, toxic substances or related materials,
asbestos, petroleum, petroleum products and any hazardous material as defined by
any federal, state or local environmental law, statute, ordinance, rule or
regulation, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ▇▇.▇▇.
9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act, as amended, 49
U.S.C. ▇▇.▇▇. 5101-5127, the Resource Conservation and Recovery Act, as amended,
42 U.S.C. ▇▇.▇▇. 6901-6992k, the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. ▇▇.▇▇. 11001-11050, the Toxic Substances Control Act, 15
U.S.C. ▇▇.▇▇. 2601-2692, the Federal Insecticide, Fungicide and Rodenticide Act,
7 U.S.C. ▇▇.▇▇. 136-136y, the Clean Air Act, 42 U.S.C. ▇▇.▇▇. 7401-7642, the
Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. ▇▇.▇▇.
1251-1387, the Safe Drinking Water Act, 42 U.S.C. ▇▇.▇▇. 300f-300j-26, and the
Occupational Safety and Health Act, 29 U.S.C. ▇▇.▇▇. 651-678, and any analogous
state laws, as any of the above may be amended from time to time and in the
regulations promulgated pursuant to each of the foregoing (including
environmental statutes and laws not specifically defined herein) (individually,
an "Environmental Law" and collectively, the "Environmental Laws") or by any
Governmental Entity.
5. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to, and agrees with, the Company and the Trust as
follows:
(a) The Purchaser is aware that the Securities have not been and
will not be registered under the Securities Act and may not be offered or sold
within the United States or to "U.S. persons" (as defined in Regulation S under
the Securities Act) except in accordance with Rule 903 of Regulation S under the
Securities Act or pursuant to an exemption from the registration requirements of
the Securities Act.
(b) The Purchaser is an "accredited investor," as such term is
defined in Rule 501(a) of Regulation D under the Securities Act.
(c) Neither the Purchaser, nor any of the Purchaser's affiliates,
nor any person acting on the Purchaser's or the Purchaser's Affiliate's behalf
has engaged, or will engage, in
14
any form of "general solicitation or general advertising" (within the meaning of
Regulation D under the Securities Act) in connection with any offer or sale of
the Preferred Securities.
(d) The Purchaser understands and acknowledges that (i) no public
market exists for any of the Securities and that it is unlikely that a public
market will ever exist for the Securities, (ii) the Purchaser is purchasing the
Securities for its own account, for investment and not with a view to, or for
offer or sale in connection with, any distribution thereof in violation of the
Securities Act or other applicable securities laws, subject to any requirement
of law that the disposition of its property be at all times within its control
and subject to its ability to resell such Securities pursuant to an effective
registration statement under the Securities Act or pursuant to an exemption
therefrom or in a transaction not subject thereto, and the Purchaser agrees to
the legends and transfer restrictions applicable to the Securities contained in
the Indenture, and (iii) the Purchaser has had the opportunity to ask questions
of, and receive answers and request additional information from, the Company and
is aware that it may be required to bear the economic risk of an investment in
the Securities.
(e) The Purchaser is a company with limited liability duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is organized with all requisite (i) power and authority
to execute, deliver and perform the Operative Documents to which it is a party,
to make the representations and warranties specified herein and therein and to
consummate the transactions contemplated herein and (ii) right and power to
purchase the Securities.
(f) This Purchase Agreement has been duly authorized, executed and
delivered by the Purchaser and no filing with, or authorization, approval,
consent, license, order registration, qualification or decree of, any
governmental body, agency or court having jurisdiction over the Purchaser, other
than those that have been made or obtained, is necessary or required for the
performance by the Purchaser of its obligations under this Purchase Agreement or
to consummate the transactions contemplated herein.
(g) The Purchaser is a "Qualified Purchaser" as such term is defined
in Section 2(a)(51) of the Investment Company Act.
6. Covenants and Agreements of the Company and the Trust. The
Company and the Trust jointly and severally agree with the Purchaser as follows:
(a) During the period from the date of this Agreement to the Closing
Date, the Company and the Trust shall use their best efforts and take all action
necessary or appropriate to cause their representations and warranties contained
in Section 4 hereof to be true as of the Closing Date, after giving effect to
the transactions contemplated by this Purchase Agreement, as if made on and as
of the Closing Date.
(b) The Company and the Trust will arrange for the qualification of
the Preferred Securities for sale under the laws of such jurisdictions as the
Purchaser may designate and will maintain such qualifications in effect so long
as required for the sale of the Preferred Securities. The Company or the Trust,
as the case may be, will promptly advise the Purchaser of the receipt by the
Company or the Trust, as the case may be, of any notification with respect to
15
the suspension of the qualification of the Preferred Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(c) Neither the Company nor the Trust will, nor will either of them
permit any of its Affiliates to, nor will either of them permit any person
acting on its or their behalf (other than the Purchaser) to, resell any
Preferred Securities that have been acquired by any of them.
(d) Neither the Company nor the Trust will, nor will either of them
permit any of their Affiliates or any person acting on their behalf to, engage
in any "directed selling efforts" within the meaning of Regulation S under the
Securities Act with respect to the Securities.
(e) Neither the Company nor the Trust will, nor will either of them
permit any of their Affiliates or any person acting on their behalf to, directly
or indirectly, make offers or sales of any security, or solicit offers to buy
any security, under circumstances that would require the registration of any of
the Securities under the Securities Act.
(f) Neither the Company nor the Trust will, nor will either of them
permit any of its Affiliates or any person acting on their behalf to, engage in
any form of "general solicitation or general advertising" (within the meaning of
Regulation D) in connection with any offer or sale of the any of the Securities.
(g) So long as any of the Securities are outstanding, (i) the
Securities shall not be listed on a national securities exchange registered
under section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system and (ii) neither the Company nor the Trust shall be an open-end
investment company, unit investment trust or face-amount certificate company
that is, or is required to be, registered under section 8 of the Investment
Company Act, and, the Securities shall otherwise satisfy the eligibility
requirements of Rule 144A(d)(3).
(h) Each of the Company and the Trust shall furnish to (i) the
holders, and subsequent holders of the Preferred Securities, (ii) ▇▇▇▇▇ Bros. &
Company (at ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other address as
designated by ▇▇▇▇▇ Bros. & Company) and (iii) any beneficial owner of the
Securities reasonably identified to the Company and the Trust (which
identification may be made by either such beneficial owner or by ▇▇▇▇▇ Bros. &
Company), a duly completed and executed certificate substantially in the form
attached hereto as Annex E, including the financial statements referenced in
such Annex, which certificate and financial statements shall be so furnished by
the Company and the Trust not later than forty five (45) days after the end of
each of the first three fiscal quarters of each fiscal year of the Company and
not later than ninety (90) days after the end of each fiscal year of the
Company.
(i) Each of the Company and the Trust will, during any period in
which it is not subject to and in compliance with section 13 or 15(d) of the
Exchange Act, or it is not exempt from such reporting requirements pursuant to
and in compliance with Rule 12g3-2(b) under the Exchange Act, shall provide to
each holder of the Securities and to each prospective purchaser (as designated
by such holder) of the Securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Securities Act. If the Company and the Trust are required
to register under the Exchange Act, such reports filed in compliance with Rule
12g3-2(b) shall be sufficient information as required
16
above. This covenant is intended to be for the benefit of the Purchaser, the
holders of the Securities, and the prospective purchasers designated by the
Purchaser and such holders, from time to time, of the Securities.
(j) Neither the Company nor the Trust will, until one hundred eighty
(180) days following the Closing Date, without the Purchaser's prior written
consent, offer, sell, contract to sell, grant any option to purchase or
otherwise dispose of, directly or indirectly, (i) any Preferred Securities or
other securities substantially similar to the Preferred Securities other than as
contemplated by this Purchase Agreement or (ii) any other securities convertible
into, or exercisable or exchangeable for, any Preferred Securities or other
securities substantially similar to the Preferred Securities; provided, however,
the parties hereby agree that if the Company enters into an agreement or
transaction to offer, sell, contract to sell, grant any option to purchase or
otherwise dispose of (a "Substantially Similar Transaction"), directly or
indirectly, any preferred securities substantially similar to the Preferred
Securities (the "Substantially Similar Securities"), the Company will provide
the Purchaser with (i) an opinion of counsel (such counsel to have experience
and sophistication in the matters addressed in such opinion) addressed to the
Purchaser stating that the Substantially Similar Transaction will not result in
the Preferred Securities being integrated in a transaction that would require
registration under, or deemed to be a public offering, under the Securities Act
and (ii) an indemnity substantially similar to that provided under Section 8(a)
hereof.
(k) The Company will use its best efforts to meet the requirements
to qualify as a REIT under Sections 856 through 860 of the Code, effective for
the taxable year ending December 31, 2004 (and each fiscal quarter of such year)
and succeeding taxable years, unless and until the Company's Board of Directors
determines that it is not in the best interests of the Company's shareholders to
so qualify.
(l) Neither the Company nor the Trust will identify any of the
Indemnified Parties (as defined below) in a press release or any other public
statement without the consent of such Indemnified Party.
7. Payment of Expenses. The Company, as depositor of the Trust,
agrees to pay all costs and expenses incident to the performance of the
obligations of the Company and the Trust under this Purchase Agreement, whether
or not the transactions contemplated herein are consummated or this Purchase
Agreement is terminated, including all costs and expenses incident to (i) the
authorization, issuance, sale and delivery of the Preferred Securities and any
taxes payable in connection therewith; (ii) the fees and expenses of qualifying
the Preferred Securities under the securities laws of the several jurisdictions
as provided in Section 6(b); (iii) the fees and expenses of the counsel, the
accountants and any other experts or advisors retained by the Company or the
Trust; (iv) the fees and all reasonable expenses of the Property Trustee, the
Delaware Trustee, the Indenture Trustee and any other trustee or paying agent
appointed under the Operative Documents, including the fees and disbursements of
counsel for such trustees, which fees shall not exceed a $2,000 acceptance fee,
$3,500 for the fees and expenses of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., special
Delaware counsel retained by the Delaware Trustee in connection with the
Closing, and $4,000 in administrative fees annually; (v) $50,000 for the fees
and expenses of Mayer, Brown, ▇▇▇▇ & Maw LLP, special counsel retained by the
17
Purchaser; and (vi) a due diligence fee in an amount equal to $12,500 ($5,000
payable upon execution of the Letter of Intent) payable to ▇▇▇▇▇ Bros. &
Company.
If the sale of the Preferred Securities provided for in this
Purchase Agreement is not consummated because any condition set forth in Section
3 hereof to be satisfied by either the Company or the Trust is not satisfied,
because this Purchase Agreement is terminated pursuant to Section 9 or because
of any failure, refusal or inability on the part of the Company or the Trust to
perform all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder other than by reason of a default by the Purchaser, the
Company will reimburse the Purchaser upon demand for all reasonable
out-of-pocket expenses (including the fees and expenses of each of the
Purchaser's counsel specified in subparagraphs (v) and (vi) of the immediately
preceding paragraph) that shall have been incurred by the Purchaser in
connection with the proposed purchase and sale of the Preferred Securities. The
Company shall not in any event be liable to the Purchaser for the loss of
anticipated profits from the transactions contemplated by this Purchase
Agreement.
8. Indemnification. (a) The Company and the Trust agree jointly and
severally to indemnify and hold harmless the Purchaser, the Purchaser's
affiliates, ▇▇▇▇▇ Bros. & Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. (collectively, the
"Indemnified Parties"), each person, if any, who controls any of the Indemnified
Parties within the meaning of the Securities Act, or the Exchange Act, and the
Indemnified Parties' respective directors, officers, employees and agents and
each person who "controls" the Indemnified Parties within the meaning of either
the Securities Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any information or documents furnished or made
available to the Purchaser by or on behalf of the Company, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, (iii) the breach or
alleged breach of any representation, warranty or agreement of either Seller
contained herein or (iv) the execution and delivery by the Company and/or the
Trust of this Purchase Agreement or any of the other Operative Documents and/or
the consummation by the Company and/or the Trust of the transactions
contemplated hereby and thereby, and agrees to reimburse each such Indemnified
Party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which the Company or the Trust may otherwise have.
(b) The Company agrees to indemnify the Trust against all loss,
liability, claim, damage and expense whatsoever due from the Trust under
paragraph (a) above.
(c) Promptly after receipt by an Indemnified Party under this
Section 8 of notice of the commencement of any action, such Indemnified Party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, promptly notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the
18
indemnifying party (i) will not relieve the indemnifying party from liability
under paragraph (a) above unless and to the extent that such failure results in
the forfeiture by the indemnifying party of material rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any Indemnified Party other than the indemnification obligation provided in
paragraph (a) above. Purchaser shall be entitled to appoint counsel reasonably
acceptable to the indemnifying party to represent the Indemnified Party in any
action for which indemnification is sought. An indemnifying party may
participate at its own expense in the defense of any such action; provided, that
counsel to the indemnifying party shall not (except with the consent of the
Indemnified Party) also be counsel to the Indemnified Party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all Indemnified Parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. An indemnifying party will not, without
the prior written consent of the Indemnified Parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not the Indemnified Parties are actual or potential
parties to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising out of such claim, action, suit or proceeding.
9. Termination; Representations and Indemnities to Survive. This
Purchase Agreement shall be subject to termination in the absolute discretion of
the Purchaser, by notice given to the Company and the Trust prior to delivery of
and payment for the Preferred Securities, if prior to such time (i) a
downgrading shall have occurred in the rating accorded the Company's debt
securities or preferred stock by any "nationally recognized statistical rating
organization," as that term is used by the Commission in Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act, or such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Company's debt securities or preferred
stock, (ii) the Trust shall be unable to sell and deliver to the Purchaser at
least $50,000,000 stated liquidation value of Preferred Securities, (iii) a
suspension or material limitation in trading in securities generally shall have
occurred on the New York Stock Exchange, (iv) a suspension or material
limitation in trading in any of the Company's securities shall have occurred on
the exchange or quotation system upon which the Company' securities are traded,
if any, (v) a general moratorium on commercial business activities shall have
been declared either by federal or Maryland authorities or (vi) there shall have
occurred any outbreak or escalation of hostilities, or declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the Purchaser's reasonable
judgment, impracticable or inadvisable to proceed with the offering or delivery
of the Preferred Securities. The respective agreements, representations,
warranties, indemnities and other statements of the Company and the Trust or
their respective officers or trustees and of the Purchaser set forth in or made
pursuant to this Purchase Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Purchaser, the
Company or the Trust or any of the their respective officers, directors,
trustees or controlling persons, and will survive delivery of and payment for
the Preferred Securities. The provisions of Sections 7 and 8 shall survive the
termination or cancellation of this Purchase Agreement.
19
10. Amendments. This Purchase Agreement may not be modified,
amended, altered or supplemented, except upon the execution and delivery of a
written agreement by each of the parties hereto.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Purchaser, will be mailed,
delivered by hand or courier or sent by facsimile and confirmed to the Purchaser
c/▇ ▇▇▇▇▇ Bros. & Company, ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇; with a copy to Mayer, Brown, ▇▇▇▇ &
Maw LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇
▇▇▇▇▇▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ or other address as the Purchaser shall
designate for such purpose in a notice to the Company and the Trust; and if sent
to the Company or the Trust, will be mailed, delivered by hand or courier or
sent by facsimile and confirmed to it at American Home Mortgage Investment
Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇,
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇ ▇. ▇▇▇▇, General Counsel,
American Home Mortgage Investment Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
12. Successors and Assigns. This Purchase Agreement will inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing expressed or mentioned in this
Purchase Agreement is intended or shall be construed to give any person other
than the parties hereto and the affiliates, directors, officers, employees,
agents and controlling persons referred to in Section 8 hereof and their
successors, assigns, heirs and legal representatives, any right or obligation
hereunder. None of the rights or obligations of the Company or the Trust under
this Purchase Agreement may be assigned, whether by operation of law or
otherwise, without the Purchaser's prior written consent. The rights and
obligations of the Purchaser under this Purchase Agreement may be assigned by
the Purchaser without the Company's or the Trust's consent; provided that the
assignee assumes the obligations of the Purchaser under this Purchase Agreement.
13. Applicable Law. THIS PURCHASE AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW).
14. Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING BY OR
AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS PURCHASE
AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK,
IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF
MANHATTAN). BY EXECUTION AND DELIVERY OF THIS PURCHASE AGREEMENT, EACH PARTY
ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS
THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
PURCHASE AGREEMENT.
20
15. Counterparts and Facsimile. This Purchase Agreement may be
executed by any one or more of the parties hereto in any number of counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument. This Purchase Agreement may be
executed by any one or more of the parties hereto by facsimile.
21
IN WITNESS WHEREOF, this Purchase Agreement has been entered into as of
the date first written above.
AMERICAN HOME MORTGAGE INVESTMENT
CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President & Chief Executive
Officer
▇▇▇▇▇▇ TRUST I
By: AMERICAN HOME MORTGAGE
INVESTMENT CORP., as Depositor
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President & Chief Executive
Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
22
SCHEDULE 1
List of Significant Subsidiaries
American Home Mortgage Holdings, Inc. Delaware corporation
American Home Mortgage Corp. New York corporation
American Home Mortgage Servicing, Inc. Maryland corporation
American Home Mortgage Acceptance, Inc. Maryland corporation
Melville Funding, LLC Delaware LLC
Broadhollow Funding, LLC Delaware LLC
23
ANNEX A
Pursuant to Section 3(d) of the Purchase Agreement, Mayer, Brown,
▇▇▇▇ & Maw LLP, special tax counsel for the Purchaser, shall deliver an opinion
to the effect that:
(i) the Trust will be classified for United States federal
income tax purposes as a grantor trust and not as an association or a
publicly traded partnership taxable as a corporation; and
(ii) for United States federal income tax purposes, the Junior
Subordinated Notes will constitute indebtedness of the Company.
In rendering such opinions, such counsel may (A) state that its opinion is
limited to the federal laws of the United States and (B) rely as to matters of
fact, to the extent deemed proper, on certificates of responsible officers of
the Company and public officials.
A-1
ANNEX B
Pursuant to Section 3(e) of the Purchase Agreement, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& Finger, P.A., special Delaware counsel for the Delaware Trustee, shall deliver
an opinion to the effect that:
(i) the Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act, and
all filings required under the laws of the State of Delaware with respect
to the creation and valid existence of the Trust as a statutory trust have
been made;
(ii) under the Delaware Statutory Trust Act and the Trust Agreement,
the Trust has the trust power and authority (A) to own property and
conduct its business, all as described in the Trust Agreement, (B) to
execute and deliver, and to perform its obligations under, each of the
Purchase Agreement, the Common Securities Subscription Agreement, the
Junior Subordinated Note Purchase Agreement and the Preferred Securities
and the Common Securities and (C) to purchase and hold the Junior
Subordinated Notes;
(iii) under the Delaware Statutory Trust Act, the certificate
attached to the Trust Agreement as Exhibit C is an appropriate form of
certificate to evidence ownership of the Preferred Securities; the
Preferred Securities have been duly authorized by the Trust Agreement and,
when issued and delivered against payment of the consideration as set
forth in the Purchase Agreement, the Preferred Securities will be validly
issued and (subject to the qualifications set forth in this paragraph)
fully paid and nonassessable and will represent undivided beneficial
interests in the assets of the Trust; the holders of the Preferred
Securities will be entitled to the benefits of the Trust Agreement and, as
beneficial owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware; and such counsel may note that the holders of the Preferred
Securities may be obligated, pursuant to the Trust Agreement, to (A)
provide indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of Preferred
Securities certificates and the issuance of replacement Preferred
Securities certificates and (B) provide security or indemnity in
connection with requests of or directions to the Property Trustee to
exercise its rights and remedies under the Trust Agreement;
(iv) the Common Securities have been duly authorized by the Trust
Agreement and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Trust Agreement and the
Common Securities Subscription Agreement, will be validly issued and fully
paid and will represent undivided beneficial interests in the assets of
the Trust entitled to the benefits of the Trust Agreement;
(v) under the Delaware Statutory Trust Act and the Trust Agreement,
the issuance of the Preferred Securities and the Common Securities is not
subject to preemptive or other similar rights;
B-1
(vi) under the Delaware Statutory Trust Act and the Trust Agreement,
the execution and delivery by the Trust of the Purchase Agreement, the
Common Securities Subscription Agreement and the Junior Subordinated Note
Purchase Agreement, and the performance by the Trust of its obligations
thereunder, have been duly authorized by all necessary trust action on the
part of the Trust;
(vii) the Trust Agreement constitutes a legal, valid and binding
obligation of the Company and the Trustees, and is enforceable against the
Company and the Trustees, in accordance with its terms subject, as to
enforcement, to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation,
fraudulent conveyance or transfer and other similar laws relating to or
affecting the rights and remedies of creditors generally, (ii) principles
of equity, including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding in equity or
at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution;
(viii) the issuance and sale by the Trust of the Preferred
Securities and the Common Securities, the purchase by the Trust of the
Junior Subordinated Notes, the execution, delivery and performance by the
Trust of the Purchase Agreement, the Common Securities Subscription
Agreement and the Junior Subordinated Note Purchase Agreement, the
consummation by the Trust of the transactions contemplated by the Purchase
Agreement and compliance by the Trust with its obligations thereunder do
not violate (i) any of the provisions of the Certificate of Trust or the
Amended and Restated Trust Agreement or (ii) any applicable Delaware law,
rule or regulation;
(ix) no filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any Delaware court or
Delaware Governmental Entity or Delaware agency is necessary or required
solely in connection with the issuance and sale by the Trust of the Common
Securities or the Preferred Securities, the purchase by the Trust of the
Junior Subordinated Notes, the execution, delivery and performance by the
Trust of the Purchase Agreement, the Common Securities Subscription
Agreement and the Junior Subordinated Note Purchase Agreement, the
consummation by the Trust of the transactions contemplated by the Purchase
Agreement and compliance by the Trust with its obligations thereunder; and
(x) the holders of the Preferred Securities (other than those
holders who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a
result of their participation in the Trust and the Trust will not be
liable for any income tax imposed by the State of Delaware.
In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware, (B) rely as to matters of fact, to
the extent deemed proper, on certificates of responsible officers of the Company
and public officials and (C) take customary assumptions and exceptions as to
enforceability and other matters.
C-2
ANNEX C
Pursuant to Section 3(f) of the Purchase Agreement, Gardere ▇▇▇▇▇ ▇▇▇▇▇▇
LLP, special counsel for the Property Trustee and the Indenture Trustee, shall
deliver an opinion to the effect that:
(i) JPMorgan Chase Bank, National Association (the "Bank") is a
national banking association with trust powers, duly and validly existing under
the laws of the United States of America, with corporate power and authority to
execute, deliver and perform its obligations under the Indenture and to
authenticate and deliver the Securities, and is duly eligible and qualified to
act as Trustee under the Indenture pursuant to Section 6.1 thereof and as
Property Trustee under the Trust Agreement pursuant to Section 8.2 thereof. (The
Indenture and the Trust Agreement are each, an "Agreement" and together, the
"Agreements").
(ii) Each Agreement has been duly authorized, executed and delivered
by the Bank and constitutes the valid and binding obligation of the Bank,
enforceable against it in accordance with its terms except (A) as may be limited
by bankruptcy, fraudulent conveyance, fraudulent transfer, insolvency,
reorganization, liquidation, receivership, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally, and by general
equitable principles, regardless of whether considered in a proceeding in equity
or at law and (B) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(iii) Neither the execution or delivery by the Bank of the
Agreements, the authentication and delivery of the Preferred Securities (as
defined in the Trust Agreement) and junior subordinated notes (issued under the
Indenture, and together with the Preferred Securities, the "Securities") by the
Trustee pursuant to the terms of the Agreements, nor the performance by the Bank
of its obligations under the Agreements (A) requires the consent or approval of,
the giving of notice to or the registration or filing with, any governmental
authority or agency under any existing law of the United States of America
governing the banking or trust powers of the Bank or (B) violates or conflicts
with the Articles of Association or By-laws of the Bank or any law or regulation
of the State of New York or the United States of America governing the banking
or trust powers of the Bank.
(iv) The Securities have been authenticated and delivered by a duly
authorized officer of the Bank.
In rendering such opinions, such counsel may (A) state that its
opinion is limited to the laws of the State of New York and the laws of the
United States of America, (B) rely as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of JPMorgan Chase Bank, National
Association, the Company and public officials, and (C) make customary
assumptions and exceptions as to enforceability and other matters.
C-1
ANNEX D
Pursuant to Section 3(g) of the Purchase Agreement, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& Finger, P.A., counsel for the Delaware Trustee, shall deliver an opinion to
the effect that:
(i) Chase Bank USA, National Association is duly formed and
validly existing as a national banking association under the federal
laws of the United States of America with trust powers and with its
principal place of business in the State of Delaware;
(ii) Chase Bank USA, National Association has the corporate
power and authority to execute, deliver and perform its obligations
under, and has taken all necessary corporate action to authorize the
execution, delivery and performance of, the Trust Agreement and to
consummate the transactions contemplated thereby;
(iii) The Trust Agreement has been duly authorized, executed
and delivered by Chase Bank USA, National Association and
constitutes a legal, valid and binding obligation of Chase Bank USA,
National Association, and is enforceable against Chase Bank USA,
National Association, in accordance with its terms subject as to
enforcement, to the effect upon the Trust Agreement of (i)
applicable bankruptcy, insolvency, reorganization, moratorium,
receivership, fraudulent conveyance or transfer and similar laws
relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law
relating to fiduciary duties (regardless of whether considered and
applied in a proceeding in equity or at law), and (iii) the effect
of applicable public policy on the enforceability of provisions
relating to indemnification or contribution;
(iv) The execution, delivery and performance by Chase Bank
USA, National Association of the Trust Agreement do not conflict
with or result in a violation of (A) articles of association or
by-laws of Chase Bank USA, National Association or (B) any law or
regulation of the State of Delaware or the United States of America
governing the trust powers of Chase Bank USA, National Association
or, to our knowledge, without independent investigation, of any
indenture, mortgage, bank credit agreement, note or bond purchase
agreement, long-term lease, license or other agreement or instrument
to which Chase Bank USA, National Association is a party or by which
it is bound or, to our knowledge, without independent investigation,
of any judgment or order applicable to Chase Bank USA, National
Association; and
(v) No approval, authorization or other action by, or filing
with, any Governmental Entity of the State of Delaware or the United
States of America governing the trust powers of Chase Bank USA,
National Association is required in connection with the execution
and delivery by Chase Bank USA, National Association of the Trust
Agreement or the performance by Chase Bank USA,
D-1
National Association of its obligations thereunder, except for the
filing of the Certificate of Trust with the Secretary of State of
the State of Delaware, which Certificate of Trust has been filed
with the Secretary of State of the State of Delaware.
In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and the federal laws of the United
States governing the trust powers of Chase Bank USA, National Association, (B)
rely as to matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Company and public officials and (C) take customary
assumptions and exceptions.
E-2
ANNEX E
Officer's Financial Certificate
The undersigned, the [Chairman/Vice Chairman/Chief Executive
Officer/President/ Vice President/Chief Financial Officer/Treasurer/Assistant
Treasurer], hereby certifies, pursuant to Section 6(h) of the Purchase
Agreement, dated as of May 13, 2005, among American Home Mortgage Investment
Corp. (the "Company"), ▇▇▇▇▇▇ Trust I (the "Trust") and ▇▇▇▇▇▇▇ ▇▇▇▇▇
International, that, as of [date], [20__], the Company, if applicable, and its
Subsidiary had the following ratios and balances:
As of [Quarterly/Annual Financial Date], 20__
Senior secured indebtedness for borrowed money ("Debt") $_____
Senior unsecured Debt $_____
Subordinated Debt $_____
Total Debt $ _____
Ratio of (x) senior secured and unsecured Debt to (y) total Debt _____%
* A table describing the quarterly report calculation procedures is provided on
page __
[FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of the Company and its consolidated subsidiaries for the
three years ended [date], 20__ and all required Statutory Financial Statements
(as defined in the Purchase Agreement) for the year ended [date], 20__]
[FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income
statement) of the Company and its consolidated subsidiaries and all required
Statutory Financial Statements (as defined in the Purchase Agreement) for the
year ended [date], 20__] for the fiscal quarter ended [date], 20__.]
The financial statements fairly present in all material respects, in accordance
with U.S. generally accepted accounting principles ("GAAP"), the financial
position of the Company and its consolidated subsidiaries, and the results of
operations and changes in financial condition as of the date, and for the [___
quarter interim] [annual] period ended [date], 20__, and such financial
statements have been prepared in accordance with GAAP consistently applied
throughout the period involved (expect as otherwise noted therein).
E-1
IN WITNESS WHEREOF, the undersigned has executed this Officer's Financial
Certificate as of this _____ day of _____________, 20__.
AMERICAN HOME MORTGAGE
INVESTMENT CORP.
By:____________________________________
Name:__________________________________
American Home Mortgage Investment Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
E-2
