RESOURCE ASSET INVESTMENT TRUST
__________ Shares of Beneficial Interest
UNDERWRITING AGREEMENT
___________, 1998
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
GRUNTAL & CO., L.L.C.
as Representatives of the several Underwriters
c/o Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Resource Asset Investment Trust, a Maryland real estate investment
trust (the "Company"), confirms its agreement with Friedman, Billings, ▇▇▇▇▇▇ &
Co., Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. and Gruntal & Co., L.L.C. and each of the other
Underwriters listed on Schedule I hereto (collectively, the "Underwriters"), for
whom Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. and Gruntal &
Co., L.L.C. are acting as representative (in such capacity, the
"Representatives"), with respect to (i) the sale by the Company and the purchase
by the Underwriters, acting severally and not jointly, of the respective numbers
of common shares of beneficial interest of the Company, $.01 par value per share
(the "Common Shares "), set forth in Schedule I hereto and (ii) the grant by the
Company to the Underwriters, acting severally and not jointly, of the option
described in Section 1(b) hereof to purchase all or any part of _______ shares
of Common Shares to cover over-allotments, if any. The _________ Common Shares
to be purchased by the Underwriters (the "Initial Shares") and all or any part
of the _______ Shares subject to the option described in Section 1(b) hereof
(the "Option Shares") are hereinafter called, collectively, the "Shares". The
Company acknowledges that at its request, the Underwriters have reserved up to
_______ of the Initial Shares for sale to certain persons listed in Schedule IV
hereto at the public offering price of the Shares.
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-11 (No. 333-53067) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations thereunder (the "Securities Act Regulations"). The Company has
prepared and filed such amendments thereto, if any, and such amended preliminary
prospectuses, if any, as may have been required to the date hereof, and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been declared
effective under the Securities Act by the Commission. The registration statement
as amended at the time it became effective (including all information deemed to
be a part of the registration statement at the time it became effective pursuant
to Rule 430A(b) of the Securities Act Regulations) is hereinafter called the
"Registration Statement," except that, if the Company files a post-effective
amendment to such registration statement which becomes effective prior to the
Closing Time (as defined below), "Registration Statement" shall refer to such
registration statement as so amended. Any registration statement filed pursuant
to Rule 462(b) of the Securities Act Regulations is hereinafter called the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the 462(b) Registration Statement. Each prospectus
included in the registration statement, or amendments thereof or supplements
thereto, before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the Underwriters
pursuant to Rule 424(a) of the Securities Act Regulations is hereinafter called
the "Preliminary Prospectus." The term "Prospectus" means the final prospectus,
as first filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Securities Act Regulations, and any amendments thereof or
supplements thereto. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter agrees, severally and not jointly, to purchase from the Company at
the purchase price per share of $_____, the number of Initial Shares set forth
in Schedule I opposite such Underwriter's name, plus any additional number of
Initial Shares which such Underwriter may become obligated to purchase pursuant
to the provisions of Section 8 hereof subject, in each case, to such adjustments
among the Underwriters as the Representatives in their sole discretion shall
make to eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the
warranties and representations and other terms and conditions herein set forth,
the Company hereby grants an option to the Underwriters, severally and not
jointly, to purchase from the Company all or any part of the Option Shares at
the purchase price per share set forth in paragraph (a) above plus any
additional number of Option Shares which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 8 hereof. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments,
which may be made in connection with the offering and distribution of the
Initial Shares, upon notice by the Representatives to the Company setting forth
the number of Option Shares as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Shares. Any such time and date of delivery (a "Date of Delivery") shall
be determined by the Representatives, but shall not be later than three full
business days (or earlier, without the consent of the Company, than two full
business days) after the exercise of said option,
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nor in any event prior to the Closing Time, as hereinafter defined. If the
option is exercised as to all or any portion of the Option Shares, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Shares then being purchased which the number of
Initial Shares set forth in Schedule I opposite the name of such Underwriter
bears to the total number of Initial Shares, subject in each case to such
adjustments as the Representatives in their sole discretion shall make to
eliminate any sales or purchases of fractional shares.
(c) Terms of Public Offering. The Company is advised by you
that the Shares are to be offered to the public initially at $_____ per share
(the "Public Offering Price") and to certain dealers selected by you at a price
that represents a concession not in excess of $___ per share under the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $____ per share, to any Underwriter or
to certain other dealers. The Underwriters may from time to time increase or
decrease the Public Offering Price of the Shares after the initial public
offering to such extent as the Underwriters may determine.
2. Payment and Delivery:
(a) Initial Shares. Payment of the purchase price for the
Initial Shares shall be made to the Company by wire transfer of immediately
available funds or certified or official bank check payable in federal
(same-day) funds at the offices of Ledgewood Law Firm, P.C. located at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (unless another place shall be agreed
upon by the Representatives and the Company) against delivery of the
certificates for the Initial Shares to the Representatives for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 9:30
a.m., New York City time, on the third (fourth, if pricing occurs after 4:30
p.m., New York City time) business day after the date hereof (unless another
time, not later than ten business days after such date, shall be agreed to by
the Representatives and the Company). The time at which such payment and
delivery are actually made is hereinafter sometimes called the "Closing Time."
Certificates for the Initial Shares shall be delivered to the Representatives in
definitive form registered in such names and in such denominations as the
Representatives shall specify. For the purpose of expediting the checking of the
certificates for the Initial Shares by the Representatives, the Company agrees
to make such certificates available to the Representatives for such purpose at
least one full business day preceding the Closing Time.
(b) Option Shares. In addition, payment of the purchase price
for the Option Shares shall be made to the Company by wire transfer of
immediately available funds or certified or official bank check payable in
federal (same-day) funds at the offices of Ledgewood Law Firm, P.C. located at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (unless another place shall be
agreed upon by the Representatives and the Company), against delivery of the
certificates for the Option Shares to the Representatives for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 9:30
a.m., New York City time, on each Date of Delivery. Certificates for the Option
Shares shall be delivered to the Representatives in definitive form registered
in such names and in such denominations as the Representatives shall specify.
For the purpose of expediting the checking of the certificates for the Option
Shares by the Representatives, the Company agrees to make such
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certificates available to the Representatives for such purpose at least one full
business day preceding the relevant Date of Delivery.
3. Representations and Warranties of the Company and the
Partnership: The Company and RAIT Partnership, L.P., a Delaware limited
partnership (the "Partnership"), represent and warrant to the Underwriters that:
(a) the Company and each Subsidiary of the Company set forth
on Schedule II hereto (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly formed or incorporated, as the case may be, and is
validly existing and in good standing under the laws of its respective
jurisdiction of formation or incorporation with all requisite corporate power
and authority to own, lease and operate its respective properties and to conduct
its respective business as now conducted and as proposed to be conducted as
described in the Registration Statement and Prospectus and, in the case of the
Company, to authorize, execute and deliver this Agreement, and the other
agreements described in the Prospectus and listed on Schedule III attached
hereto, if any (the "Other Transaction Documents"), and to consummate the
transactions described in each such agreement;
(b) the Company and the Subsidiaries are duly qualified or
registered to transact business in each jurisdiction in which they conduct their
respective businesses as now conducted and as proposed to be conducted as
described in the Registration Statement and the Prospectus and in which the
failure, individually or in the aggregate, to be so qualified or registered
could reasonably be expected to have a material adverse effect on the assets,
operations or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole, and the Company and the Subsidiaries are in good
standing in each jurisdiction in which they own or lease real property or
maintain an office or in which the nature or conduct of their respective
businesses as now conducted or proposed to be conducted as described in the
Registration Statement and the Prospectus requires such qualification, except
where the failure to be in good standing could be reasonably expected to not
have a material adverse effect on the assets, operations, business or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a whole;
(c) the Company and the Subsidiaries are in compliance in all
material respects with all applicable laws, rules, regulations, orders, decrees
and judgments;
(d) neither the Company nor any of the Subsidiaries is in
breach of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of, or default under), its
respective declaration of trust, charter, by-laws, certificate of limited
partnership or partnership agreement, as the case may be, or in the performance
or observance of any obligation, agreement, covenant or condition contained in
any license, indenture, mortgage, deed of trust, loan or credit agreement or
other agreement or instrument to which the Company or any of the Subsidiaries is
a party or by which any of them or their respective properties is bound, except
for such breaches or defaults which could be reasonably expected to not have a
material adverse effect on the assets, operations, business or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a whole,
and the issuance, sale and delivery by the Company of the Shares, the
4
execution, delivery and performance of this Agreement and the Other Transaction
Documents, and consummation of the transactions contemplated hereby and thereby
will not conflict with, or result in any breach of, or constitute a default
under (nor constitute any event which with notice, lapse of time, or both would
constitute a breach of, or default under), (i) any provision of the declaration
of trust, charter, by-laws, certificate of limited partnership or partnership
agreement, as the case may be, of the Company or any of the Subsidiaries, (ii)
any provision of any license, indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or their respective properties
may be bound or affected, or (iii) any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the Company or
any of the Subsidiaries, except in the case of clause (ii) for such breaches or
defaults which could be reasonably expected to not have a material adverse
effect on the assets, operations, business or condition (financial or otherwise)
of the Company and the Subsidiaries taken as a whole; or result in the creation
or imposition of any material lien, charge, claim or encumbrance upon any
property or asset of the Company or the Subsidiaries;
(e) the Company has full legal right, power and authority to
enter into and perform this Agreement and to consummate the transactions
contemplated herein; this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity, and except to
the extent that the indemnification and contribution provisions of Section 9
hereof may be limited by federal or state securities laws and public policy
considerations in respect thereof;
(f) the Partnership has full legal right, power and authority
to enter into and perform this Agreement and to consummate the transactions
contemplated herein; this Agreement has been duly authorized, executed and
delivered by the Partnership and constitutes a valid and binding agreement of
the Partnership enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and by general principles of equity, and
except to the extent the indemnification and contribution provisions set forth
in Section 9 hereof may be limited by federal or state securities laws and the
public policy considerations in respect thereof underlying such laws;
(g) the issuance and sale of the Shares to the Underwriters
hereunder have been duly authorized by the Company; when issued and delivered
against payment therefor as provided in this Agreement, the Shares will be
validly issued, fully paid and non-assessable and the issuance of the Shares
will not be subject to any preemptive or similar rights; except as contemplated
herein, no person or entity holds a right to require or participate in the
registration under the Securities Act of the Shares pursuant to the Registration
Statement; no person or entity has a right of participation or first refusal
with respect to the sale of the Shares by the Company; except as set forth in
the Prospectus, there are no contracts, agreements or understandings between the
Company and any person or entity granting such person or entity the right to
require the Company to file a registration
5
statement under the Securities Act with respect to any securities of the Company
or to require the Company to include such securities with the Shares registered
pursuant to the Registration Statement; the form of certificates evidencing the
Shares complies with all applicable legal requirements and, in all material
respects, with all applicable requirements of the declaration of trust and
bylaws of the Company and the requirements of the American Stock Exchange;
(h) the Other Transaction Documents have been duly authorized
and will be, upon execution and delivery by the Company, legal, valid and
binding agreements of the Company enforceable in accordance with their terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally, and by general principles
of equity;
(i) no approval, authorization, consent or order of or filing
with any federal, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the execution, delivery
and performance of this Agreement and the Other Transaction Documents, the
consummation of the transaction contemplated hereby and thereby or the sale and
delivery of the Shares by the Company as contemplated hereby other than (i) such
as have been obtained, or will have been obtained at the Closing Time or the
relevant Date of Delivery, as the case may be, under the Securities Act or the
Securities Exchange Act of 1934, (ii) such approvals as have been obtained in
connection with the approval of the listing of the Shares on the American Stock
Exchange and (iii) any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Shares are being offered by the
Underwriters;
(j) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state or local law, regulation or rule, and
has obtained all necessary authorizations, consents and approvals from other
persons required in order to conduct their respective businesses as described in
the Registration Statement and Prospectus, except to the extent that any failure
to have any such licenses, authorizations, consents or approvals, to make any
such filings or to obtain any such authorizations, consents or approvals could
reasonably be expected to not have, individually or in the aggregate, a material
adverse effect on the assets, operations, business or condition (financial or
otherwise) of the Company and the Subsidiaries taken as a whole; neither the
Company nor any of the Subsidiaries is in violation of, in default under, or has
received any notice regarding a possible violation, default or revocation of any
such license, authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to
the Company or any of the Subsidiaries, the effect of which could reasonably be
expected to be material and adverse to the assets, operations, business or
condition (financial or otherwise) of the Company and the Subsidiaries taken as
a whole; and no such license, authorization, consent or approval contains a
materially burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectus;
(k) each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the Securities Act and no stop
order suspending the effectiveness of the
6
Registration Statement or any Rule 462(b) Registration Statement has been issued
under the Securities Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are threatened by
the Commission, and any request on the part of the Commission for additional
information has been complied with;
(l) the Company and the transactions contemplated by this
Agreement meet the requirements and conditions for using a registration
statement on Form S-11 under the Securities Act, set forth in the General
Instructions to Form S-11; the Preliminary Prospectus and the Registration
Statement comply and the Prospectus and any further amendments or supplements
thereto will comply, when they have become effective or are filed with the
Commission, as the case may be, in all material respects with the requirements
of the Securities Act and the Securities Act Regulations and, in each case,
present, or will present, fairly the information required to be shown; the
Registration Statement did not, and any amendment thereto will not, in each case
as of the applicable effective date, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and the Preliminary Prospectus does not, and the
Prospectus or any amendment or supplement thereto will not, as of the applicable
filing date and at the Closing Time and on each Date of Delivery (if any),
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no warranty or representation with
respect to any statement contained in the Registration Statement or the
Prospectus in reliance upon and in conformity with the information concerning
the Underwriters and furnished in writing by or on behalf of the Underwriters
through the Representatives to the Company expressly for use in the Registration
Statement or the Prospectus (that information being limited to that described in
the last sentence of the first paragraph of Section 9(b) hereof);
(m) the Preliminary Prospectus was and the Prospectus
delivered to the Underwriters for use in connection with this offering will be
identical to the versions of the Preliminary Prospectus and Prospectus created
to be transmitted to the Commission for filing via the Electronic Data Gathering
Analysis and Retrieval System ("▇▇▇▇▇"), except to the extent permitted by
Regulation S-T;
(n) all legal or governmental proceedings, contracts or
documents which are material and of a character required to be filed as exhibits
to the Registration Statement or to be summarized or described in the Prospectus
have been so filed, summarized or described as required;
(o) there are no actions, suits, proceedings, inquiries or
investigations pending or, to the Company's knowledge, threatened against the
Company or any of the Subsidiaries or any of their respective officers and
directors or to which the properties, assets or rights of any such entity is
subject, at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority, arbitration panel
or agency which could reasonably be expected to result in a judgment, decree,
award or order having a material adverse effect on the
7
assets, operations, business or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole, or which could adversely affect
the consummation of the transactions contemplated by this Agreement in any
material respect;
(p) the financial statements, including the notes thereto,
included in the Registration Statement and the Prospectus present fairly the
financial position of the Company and the Subsidiaries as of the dates indicated
and the results of operations and changes in financial position and cash flows
of the Company and the Subsidiaries for the periods specified; such financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
indicated in the notes thereto); the financial statement schedules included in
the Registration Statement and the Prospectus fairly present the information
required to be shown therein; no other financial statements or schedules are
required by Form S-11 or otherwise to be included in the Registration Statement
or Prospectus; the unaudited pro forma financial information, including the
notes thereto, included in the Prospectus or any Preliminary Prospectus complies
as to form in all material respects to the applicable accounting requirements of
the Securities Act and the Securities Act Regulations, and management of the
Company believes that the assumptions underlying the pro forma adjustments are
reasonable; such pro forma adjustments have been properly applied to the
historical amounts in the compilation of the information and such information
fairly presents with respect to the Company and the Subsidiaries, the financial
position, results of operations and other information purported to be shown
therein at the respective dates and for the respective periods specified;
(q) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, whose reports on the audited financial
statements of the Company and the Subsidiaries are included as part of the
Registration Statement and Prospectus, are and were during the periods covered
by their reports independent public accountants within the meaning of the
Securities Act and the Securities Act Regulations;
(r) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, and except as may be
otherwise stated in the Registration Statement or Prospectus, there has not been
(i) any material adverse change in the assets, operations, business or condition
(financial or otherwise), present or prospective, of the Company and the
Subsidiaries taken as a whole, whether or not arising in the ordinary course of
business, (ii) any transaction, which is material to the Company and the
Subsidiaries taken as a whole, planned or entered into by the Company or any of
the Subsidiaries, (iii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any of the Subsidiaries, which is material
to the Company and the Subsidiaries taken as a whole or (iv) except in
accordance with its ordinary practice as disclosed in the Registration Statement
and the Prospectus, any dividend or distribution of any kind declared, paid or
made with respect to the capital stock of the Company or with respect to the
partnership interests of the Partnership;
(s) there are no persons with registration or other similar
rights to have any equity securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the Securities;
8
(t) the authorized shares of beneficial interest of the
Company conform in all material respects to the description thereof contained in
the Prospectus; the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus under the caption
"Capitalization;" immediately after the Closing Time, _________ Common Shares
will be issued and outstanding (subject to the Underwriter's option described in
Section 1(b) hereof) and no shares of beneficial interest of any other class of
beneficial interest will be issued and outstanding. All of the issued and
outstanding shares of beneficial interest of the Company have been duly
authorized and are validly issued, fully paid and non-assessable, and have been
offered, sold and issued by the Company in compliance with all applicable laws
(including, without limitation, federal and state securities laws); none of the
issued shares of beneficial interest of the Company have been issued in
violation of any preemptive or similar rights granted by the Company; except as
disclosed in the Prospectus, there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or arrangement to
issue, any shares of beneficial interest of the Company or any security
convertible into or exchangeable for shares of beneficial interest of the
Company;
(u) all of the issued and outstanding shares of capital stock
of RAIT General, Inc., a Delaware corporation ("RAIT General"), and RAIT
Limited, Inc., a Delaware corporation ("RAIT Limited"), have been duly
authorized and are validly issued, fully paid and non-assessable, and are owned
of record and beneficially by the Company, and have been offered, sold and
issued by RAIT General and RAIT Limited in compliance with all applicable laws
(including, but not limited to, federal and state securities laws); none of the
issued shares of capital stock of RAIT General and RAIT Limited have been issued
in violation of any preemptive or similar rights; except as disclosed in the
Prospectus, there is no outstanding option, warrant or other right calling for
the issuance of, and no commitment, plan or arrangement to issue, any shares of
capital stock of RAIT General or RAIT Limited or any security convertible into
or exchangeable for capital stock of RAIT General or RAIT Limited;
(v) immediately after the Closing Time, all of the issued and
outstanding units of partnership interest in the Partnership ("Common Units") or
will be validly issued, fully paid and non-assessable; none of the Common Units
has been or will be issued or is owned or held in violation of any preemptive
right; the Common Units have been or will be offered, sold and issued by the
Partnership in compliance with all applicable laws (including, without
limitation, federal and state securities laws);
(w) each of the Company, the Subsidiaries, and each of their
respective officers, directors and controlling persons has not taken, and will
not take, directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(x) neither the Company nor any of its affiliates (i) is
required to register as a "broker" or "dealer" in accordance with the provisions
of the Securities Exchange Act of 1934 or the rules and regulations thereunder,
or (ii) directly, or indirectly through one or more intermediaries, controls or
9
has any other association with (within the meaning of Article 1 of the By-laws
of the National Association of Securities Dealers, Inc. (the "NASD")) any
member firm of the NASD;
(y) the Company has not relied upon the Representatives or
legal counsel for the Representatives for any legal, tax or accounting advice in
connection with the offering and sale of the Shares;
(z) any certificate signed by any officer of the Company or
any Subsidiary delivered to the Representatives or to counsel for the
Underwriters pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby;
(aa) the Company and the Subsidiaries have good and marketable
title in fee simple to all real property, if any, and good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except such as
are disclosed in the Prospectus or the financial statements thereto or such as
do not materially and adversely affect the value of such property and do not
interfere with the use made or proposed to be made of such property by the
Company and the Subsidiaries; and any real property and buildings held under
lease by the Company or any Subsidiary are held under valid, existing and
enforceable leases, with such exceptions, liens, security interests, pledges,
charges, encumbrances, mortgages and defects, as are disclosed in the Prospectus
or are not material and do not interfere with the use made or proposed to be
made of such property and buildings by the Company or such Subsidiary; the
Company or a Subsidiary has obtained an owner's title insurance policy, from a
title insurance company licensed to issue such policy, on any real property
owned by the Company or any Subsidiary, that insures the Company's or the
Subsidiary's fee or leasehold interest in such real property (other than the
leasehold interest of the Company with respect to its principal executive
offices as described in the Registration Statement), with coverage in an amount
at least equal to the fair market value of such fee or leasehold interest in the
real property, or a lender's title insurance policy insuring the lien of its
mortgage securing the real property with coverage equal to the maximum aggregate
principal amount of any indebtedness held by the Company or a Subsidiary and
secured by the real property;
(ab) neither the purchase nor the origination, as the case may
be, of the Loans, as such term is defined in the Prospectus, nor the execution
and delivery of, or performance by the borrowers thereunder of any mortgage,
deed of trust, deed, indenture, note, loan or credit agreement or any other
agreement or instrument in connection therewith, with the exception of the
Company or any of its Subsidiaries recording a deed-in-lieu of foreclosure with
respect to any Loan, has resulted in or, with notice and an opportunity to cure,
would result in a breach of or default under any mortgage, deed of trust,
indenture, note, loan or credit agreement or any other agreement or instrument
relating to any mortgage or other loan that may have priority over any such Loan
with respect to the assets of the borrower thereunder and that is in existence
at the time the Company or any of the Subsidiaries purchases or originates any
such Loan;
10
(ac) to the knowledge of the Company and the Partnership,
there are no statutes or regulations applicable to the Company or any of the
Subsidiaries or certificates, permits or other authorizations from governmental
regulatory officials or bodies required to be obtained or maintained by the
Company or any of the Subsidiaries of a character required to be disclosed in
the Registration Statement or the Prospectus which have not been so disclosed
and properly described therein; all agreements between the Company or any of the
Subsidiaries and third parties expressly referenced in the Prospectus are legal,
valid and binding obligations of the Company or one or more of the Subsidiaries,
enforceable in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
principles of equity;
(ad) no relationship, direct or indirect, exists between or
among the Company or any of the Subsidiaries on the one hand, and the directors,
trustees, officers, shareholders, customers or suppliers of the Company or any
of the Subsidiaries on the other hand, which is required by the Securities Act
to be described in the Registration Statement and the Prospectus which is not so
described;
(ae) the Company and each Subsidiary owns or possesses
adequate license or other rights to use all patents, trademarks, service marks,
trade names, copyrights, software and design licenses, trade secrets,
manufacturing processes, other intangible property rights and know-how, if any
(collectively "Intangibles"), necessary to entitle the Company and each
Subsidiary to conduct its business as described in the Prospectus, and neither
the Company, nor any Subsidiary, has received notice of infringement of or
conflict with (and knows of no such infringement of or conflict with) asserted
rights of others with respect to any Intangibles which could materially and
adversely affect the assets, operations, business or condition (financial or
otherwise) of the Company or any Subsidiary;
(af) each of the Company and the Subsidiaries has filed on a
timely basis all necessary federal, state, local and foreign income and
franchise tax returns, if any such returns were required to be filed, through
the date hereof and have paid all taxes shown as due thereon; and no tax
deficiency has been asserted against the Company or any of the Subsidiaries, nor
does the Company or any of the Subsidiaries know of any tax deficiency which is
likely to be asserted against any such entity which, if determined adversely to
any such entity, could materially adversely affect the assets, operations,
business or condition (financial or otherwise) of any such entity, respectively;
all tax liabilities, if any, are adequately provided for on the respective books
of such entities;
(ag) each of the Company and the Subsidiaries maintains
insurance (issued by insurers of recognized financial responsibility) of the
types and in the amounts generally deemed adequate, if any, for their respective
businesses and consistent with insurance coverage maintained by similar
companies in similar businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company and the
Subsidiaries against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect;
11
(ah) except as otherwise disclosed in the Prospectus, neither
the Company, any of the Subsidiaries nor, to the best of their knowledge, any
former owner of any real property owned by the Company or the Subsidiaries has
authorized or conducted or has knowledge of the generation, transportation,
storage, presence, use, treatment, disposal, release, or other handling of any
hazardous substance, hazardous waste, hazardous material, hazardous constituent,
toxic substance, pollutant, contaminant, asbestos, radon, polychlorinated
biphenyls ("PCBs"), petroleum product or waste (including crude oil or any
fraction thereof), natural gas, liquefied gas, synthetic gas or other material
defined, regulated, controlled or potentially subject to any remediation
requirement under any environmental law (collectively, "Hazardous Materials"),
on, in, under or affecting any real property currently leased or owned or by any
means controlled by the Company or any of the Subsidiaries, including any real
property underlying any Loan (collectively, the "Real Property"), except in
material compliance with applicable laws; to the knowledge of the Company and
the Partnership, the Real Property, and the Company's, the Subsidiaries' and the
former owners of the Real Property's operations with respect to the Real
Property, are and were in compliance with all federal, state and local laws,
ordinances, rules, regulations and other governmental requirements relating to
pollution, control of chemicals, management of waste, discharges of materials
into the environment, health, safety, natural resources, and the environment
(collectively, "Environmental Laws"), and the Company and the Subsidiaries are
in compliance with, all licenses, permits, registrations and government
authorizations necessary to operate under all applicable Environmental Laws;
except as otherwise disclosed in the Prospectus, neither the Company nor the
Subsidiaries or any former owner of any of the Real Property has received any
written or oral notice from any governmental entity or any other person and
there is no pending or threatened claim, litigation or any administrative agency
proceeding that: alleges a violation of any Environmental Laws by the Company or
any of the Subsidiaries; or that the Company or any of the Subsidiaries is a
liable party or a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601, et
seq., or any state superfund law; has resulted in or could result in the
attachment of an environmental lien on any of the Real Property; or alleges that
the Company or any of the Subsidiaries is liable for any contamination of the
environment, contamination of the Real Property, damage to natural resources,
property damage, or personal injury based on their activities or the activities
of their predecessors or third parties (whether at the Real Property or
elsewhere) involving Hazardous Materials, whether arising under the
Environmental Laws, common law principles, or other legal standards; in the
ordinary course of its business as necessary and appropriate, the Company will
conduct a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and the Subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures) required for
clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties;
(ai) there are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
could, singly or in the
12
aggregate, reasonably be deemed to have a material adverse effect on the assets,
operations, business or condition (financial or otherwise) of the Company and
the Subsidiaries, taken as a whole;
(aj) none of the entities which prepared appraisals of the
Real Property, nor the entities which prepared Phase I environmental assessment
reports with respect to the Real Property, was employed for such purpose on a
contingent basis or has any substantial interest in the Company or any of the
Subsidiaries, and none of their directors, officers or employees is connected
with the Company or any of the Subsidiaries as a promoter, selling agent, voting
trustee, officer, director or employee;
(ak) neither the Company nor any of the Subsidiaries nor, to
the best of the Company's knowledge, any officer, director or trustee purporting
to act on behalf of the Company or any of the Subsidiaries has at any time; (i)
made any contributions to any candidate for political office, or failed to
disclose fully any such contributions, in violation of law, (ii) made any
payment to any state, federal or foreign governmental officer or official, or
other person charged with similar public or quasi-public duties, other than
payments required or allowed by applicable law, (iii) made any payment outside
the ordinary course of business to any investment officer or loan broker or
person charged with similar duties of any entity to which the Company or any of
the Subsidiaries sells or from which the Company or any of the Subsidiaries buys
loans or servicing arrangements for the purpose of influencing such agent,
officer, broker or person to buy loans or servicing arrangements from or sell
loans to the Company or any of the Subsidiaries, or (iv) engaged in any
transactions, maintained any bank account or used any corporate funds except for
transactions, bank accounts and funds which have been and are reflected in the
normally maintained books and records of the Company and the Subsidiaries;
(al) except as otherwise disclosed in the Prospectus, there
are no material outstanding loans or advances or material guarantees of
indebtedness by the Company or any of the Subsidiaries to or for the benefit of
any of the officers or directors of the Company or any of the Subsidiaries or
any of the members of the families of any of them;
(am) neither the Company nor any of the Subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or any of the
Subsidiaries, has made any payment of funds of the Company or of any Subsidiary
or received or retained any funds in violation of any law, rule or regulation or
of a character required to be disclosed in the Prospectus;
(an) the Company is organized in conformity with the
requirements for qualification as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"), and the Company's
proposed method of operation will enable it to meet the requirements for
taxation as a real estate investment trust under the Code; the Partnership will
be treated as a partnership for federal income tax purposes and not as a
corporation or association taxable as a corporation;
(ao) the Shares have been approved for listing, upon official
notice of issuance, on the American Stock Exchange;
13
(ap) in connection with this offering, the Company has not
offered and will not offer its Common Shares or any other securities convertible
into or exchangeable or exercisable for Common Shares in a manner in violation
of the Securities Act or the Securities Act Regulations; the Company has not
distributed and will not distribute any Prospectus or other offering material in
connection with the offer and sale of the Shares, except as contemplated herein;
(aq) the Company has complied and will comply with all the
provisions of Florida Statutes, Section 517.075 (Chapter 92-198, Laws of
Florida), neither the Company nor any of the Subsidiaries or their respective
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba;
(ar) neither the Company nor any of the Subsidiaries is, or
solely as a result of transactions contemplated hereby and the application of
the proceeds from the sale of the Shares, will become an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"); and
(as) the Company has not incurred any liability for any
finder's fees or similar payments in connection with the transactions herein
contemplated.
4. Certain Covenants of the Company and the Partnership: The
Company and the Partnership hereby covenant with each Underwriter:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as the Representatives may designate
and to maintain such qualifications in effect as long as required for the
distribution of the Shares, provided that the Company shall not be required to
qualify as a foreign corporation or to consent to the service of process under
the laws of any such state (except service of process with respect to the
offering and sale of the Shares);
(b) if, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause such post-effective amendment to become effective
as soon as possible and will advise the Representatives promptly and, if
requested by the Representatives, will confirm such advice in writing, when such
post-effective amendment has become effective;
(c) to prepare the Prospectus in a form approved by the
Underwriters and file such Prospectus with the Commission pursuant to Rule
424(b) within the time period prescribed by law, on the day following the
execution and delivery of this Agreement and to furnish promptly (and with
respect to the initial delivery of such Prospectus, not later than 10:00 a.m.
(New York City time) on the day following the execution and delivery of this
Agreement) to the Underwriters as many copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the Registration
Statement) as the Underwriters may reasonably request for the purposes
contemplated by the Securities Act
14
Regulations, which Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the version created to be
transmitted to the Commission for filing via ▇▇▇▇▇, except to the extent
permitted by Regulation S-T;
(d) to advise the Representatives promptly and (if requested
by the Representatives) to confirm such advice in writing, when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective under the Securities Act Regulations;
(e) to advise the Representatives immediately, confirming such
advice in writing, of (i) the receipt of any comments from, or any request by,
the Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes and, if
the Commission or any other government agency or authority should issue any such
order, to make every reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or Prospectus and to
file no such amendment or supplement to which the Representatives shall
reasonably object in writing;
(f) before amending or supplementing the Registration
Statement or the Prospectus, or, during any period of time in which a Prospectus
relating to the Shares is required to be delivered under the Securities Act
Regulations, to furnish to the Representatives a copy of each such proposed
amendment or supplement before filing any such amendment or supplement with the
Commission;
(g) to furnish to the Underwriters for a period of five years
from the date of this Agreement (i) as soon as available, copies of all annual,
quarterly and current reports or other communications supplied to holders of
Common Shares, (ii) as soon as practicable after the filing thereof, copies of
all reports filed by the Company with the Commission, the NASD or any securities
exchange and (iii) such other publicly available information as the Underwriters
may reasonably request regarding the Company and its Subsidiaries;
(h) to advise the Underwriters promptly during any period of
time in which a Prospectus relating to the Shares is required to be delivered
under the Securities Act Regulations (i) of any material change in the Company's
assets, operations, business or condition (financial or otherwise) or (ii) of
the happening of any event which would require the making of any change in the
Prospectus then being used so that the Prospectus would not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and, during such time,
to prepare and furnish, at the Company's expense, to the Underwriters promptly
such amendments or supplements to the Prospectus as may be necessary to reflect
any such change;
15
(i) to furnish promptly to the Representatives a signed copy
of the Registration Statement, as initially filed with the Commission, and of
all amendments or supplements thereto (including all exhibits filed therewith)
and such number of conformed copies of the foregoing as the Underwriters may
reasonably request;
(j) to furnish to the Underwriters, not less than two business
days before filing with the Commission subsequent to the effective date of the
Prospectus and during the period referred to in paragraph (h) above, a copy of
any document proposed to be filed with the Commission pursuant to Section 13,
14, or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act");
(k) to apply the net proceeds of the sale of the Shares
substantially in accordance with its statements under the caption "Use of
Proceeds" in the Prospectus;
(l) to make generally available to its security holders as
soon as practicable, but in any event not later than the end of the fiscal
quarter first occurring after the first anniversary of the effective date of the
Registration Statement, an earnings statement complying with the provisions of
Section 11(a) of the Securities Act (in form, at the option of the Company,
complying with the provisions of Rule 158 of the Securities Act Regulations)
covering a period of 12 months beginning on the effective date of the
Registration Statement;
(m) to use its best efforts to effect and maintain the listing
of the Shares on the American Stock Exchange and to file with the American Stock
Exchange all documents and notices required by the American Stock Exchange of
companies that have securities that are listed on the American Stock Exchange;
(n) except in the ordinary course of business in connection
with the acquisition of assets, to refrain during a period of 180 days from the
date of the Prospectus, without the prior written consent of the
Representatives, from (i) offering, pledging, selling, contracting to sell,
selling any option or contract to purchase, purchasing any option or contract to
sell, granting any option for the sale of, or otherwise disposing of or
transferring, directly or indirectly, any Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares, or filing any
registration statement under the Securities Act with respect to any of the
foregoing or (ii) entering into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Shares or such other securities, in cash or otherwise; the foregoing
sentence shall not apply to (A) the Shares to be sold hereunder, or (B) any
Common Shares issued by the Company upon the exercise of an option outstanding
on the date hereof or upon the exercise of option pursuant to any management
option plan described in the prospectus pursuant to a dividend reinvestment plan
adopted hereafter and referred to in the Prospectus;
(o) the Company shall not, and shall use its best efforts to
cause its officers, directors and affiliates not to, (i) take, directly or
indirectly prior to termination of the underwriting syndicate
16
contemplated by this Agreement, any action designed to stabilize or manipulate
the price of any security of the Company, or which could be reasonably likely to
cause or result in, or which could be reasonably likely to in the future
reasonably be to cause or result in, the stabilization or manipulation of the
price of any security of the Company, to facilitate the sale or resale of any of
the Shares, (ii) sell, bid for, purchase or pay anyone any compensation for
soliciting purchases of the Shares or (iii) pay or agree to pay to any person
any compensation for soliciting any order to purchase any other securities of
the Company;
(p) the Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common Shares;
(q) the Company will use its best efforts (i) to meet the
requirements to qualify as a real estate investment trust under the Code and
(ii) to cause the Partnership to be treated as a partnership for federal income
tax purposes;
(r) the Company will comply with all of the provisions of any
undertakings in the Registration Statement;
(s) the Company and the Subsidiaries will conduct their
affairs in such a manner so as to ensure that neither the Company nor any
Subsidiary will be an "investment company" or an entity "controlled" by an
investment company within the meaning of the 1940 Act;
(t) if at any time during the 30-day period after the
Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in the
Representatives' reasonable opinion the market price of the Common Shares has
been or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus) and after written notice from the Representatives advising the
Company to the effect set forth above, to forthwith prepare, consult with the
Representatives concerning the substance of, and disseminate a press release or
other public statement, reasonably satisfactory to the Representatives,
responding to or commenting on such rumor, publication or event; and
(u) to maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
17
5. Payment of Expenses;
(a) The Company agrees to pay all costs and expenses incident
to the performance of the Company's obligations under this Agreement whether or
not the transactions contemplated hereunder are consummated or this Agreement
terminated, including, but not limited to, all fees and expenses of and filing
with the Commission and the NASD; all Blue Sky fees and expenses, including
filing fees and disbursements of the Representatives' Blue Sky counsel (but
excluding the fees of such counsel), fees and disbursements of counsel and
accountants for the Company, and printing costs, including costs of printing the
prospectus, and any amendments thereto; all underwriting documents, Blue Sky
Memoranda, a reasonable quantity of prospectuses requested by the
Representatives, and the Company's road show costs and expenses.
(b) If this Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the transactions contemplated herein.
6. Conditions of the Underwriters' Obligations: The
obligations of the Underwriters hereunder are subject to (i) the accuracy of the
representations and warranties on the part of the Company in all material
respects on the date hereof and at the Closing Time and on each Date of
Delivery, (ii) the performance by the Company of its obligations hereunder in
all material respects, and (iii) the following further conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become effective not later than 5:30 p.m.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by you.
(b) The Company shall furnish to the Underwriters at the
Closing Time and on each Date of Delivery an opinion of Ledgewood Law Firm,
P.C., counsel for the Company, addressed to the Underwriters and dated the
Closing Time and each Date of Delivery and in form satisfactory to Hunton &
▇▇▇▇▇▇▇▇, counsel for the Underwriters, stating that:
i) the authorized shares of beneficial interest of the
Company conform as to legal matters to the description thereof
contained in the Prospectus and meet the requirements of Form S-11
under the Securities Act; the Company has an authorized capitalization
as set forth in the Prospectus under the caption "Capitalization"; the
outstanding shares of beneficial interest or capital stock, as the case
may be, of the Company and the Subsidiaries (other than the
Partnership) have been duly and validly authorized and issued and are
fully paid and non-assessable; all of the authorized and validly issued
shares
18
of capital stock of or interests in the Subsidiaries, as the case may
be, are directly or indirectly owned of record and beneficially by the
Company; except as disclosed in the Prospectus, there are no authorized
and validly issued (A) securities or obligations of the Company or any
of the Subsidiaries convertible into or exchangeable for any shares of
beneficial interest of the Company or any capital stock or interests in
any such Subsidiary or (B) warrants, rights or options to subscribe for
or purchase from the Company or any such Subsidiary any such shares of
beneficial interest, capital stock, interests or any such convertible
or exchangeable securities or obligations; except as set forth in the
Prospectus or contemplated by this Agreement, there are no outstanding
obligations of the Company or any such Subsidiary to issue any shares
of beneficial interest, capital stock or interests, any such
convertible or exchangeable securities or obligation, or any such
warrants, rights or options;
ii) the Company and the Subsidiaries (other than the
Partnership) each has been duly formed or incorporated, as the case may
be, and is validly existing and in good standing under the laws of its
respective jurisdiction of formation or incorporation with the
requisite power and authority to own its respective properties and to
conduct its respective business as described in the Registration
Statement and Prospectus and, in the case of the Company, to execute
and deliver this Agreement, and the Other Transaction Documents and to
consummate the transactions described in each such agreement;
iii) the Company and the Subsidiaries (other than the
Partnership) are duly qualified in or registered by and are in good
standing in each jurisdiction specifically referred to in the
Registration Statement and Prospectus as jurisdictions in which
property securing loans proposed to be made or acquired by the Company
is located and in which the failure, individually or in the aggregate,
to be so qualified could reasonably be expected to have a material
adverse effect on the assets, operations, business or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a
whole. Except as disclosed in the Prospectus, no Subsidiary is
prohibited or restricted by its charter, bylaws, certificate of limited
partnership or partnership agreement, as the case may be, or, to the
knowledge of such counsel, otherwise, directly or indirectly, from
paying dividends to the Company, or from making any other distribution
with respect to such Subsidiary's capital stock or interests or from
paying the Company or any other Subsidiary, any loans or advances to
such Subsidiary from the Company or such other Subsidiary, or from
transferring any such Subsidiary's property or assets to the Company or
to any other Subsidiary; to such counsel's knowledge, other than as
disclosed in the Prospectus, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any other
corporation or any ownership interest in any partnership, joint venture
or other association;
iv) the Partnership has been duly formed and is validly
existing as a limited partnership under the laws of the jurisdiction of
its organization, with all requisite partnership power and authority to
own, lease and operate its properties and to conduct its business as
now conducted as described in the Registration Statement and the
Prospectus. The
19
Partnership has been duly qualified or registered to do business as a
foreign partnership in those jurisdictions specifically referred to in
the Registration Statement and Prospectus as jurisdictions in which
property securing loans proposed to be made or acquired by the
Partnership is located and in which the failure, individually or in the
aggregate, to be so qualified or registered would have a material
adverse effect on the assets, operations, business or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a
whole;
(iv) except as disclosed in the Prospectus, no
Subsidiary is prohibited or restricted from paying dividends to the
Company or from making any other distribution with respect to such
Subsidiary's capital stock or interests or from paying the Company or
any other Subsidiary, any loans or advances to such Subsidiary from the
Company or such other Subsidiary, or from transferring any such
Subsidiary's property or assets to the Company or to any other
Subsidiary;
v) to such Counsel's knowledge, the Company and the
Subsidiaries are in compliance in all material respects with all
applicable laws, rules, regulations and orders;
vi) to such counsel's knowledge, except as disclosed on
the Registration Statement and the Prospectus, neither the Company nor
any of its Subsidiaries is in material breach of, or in material
default under (nor has any event occurred which with notice, lapse of
time, or both would constitute a material breach of, or material
default under) its respective declaration of trust, charter, by-laws,
certificate of limited partnership or partnership agreement, as the
case may be, or in the performance or observation of any obligation,
agreement, covenant, or condition contained in any license, indenture,
mortgage, deed of trust, loan or credit agreement or any other
agreement or instrument to which the Company or any of the Subsidiaries
is a party or by which any of them or their respective properties may
be bound or affected, except such breaches or defaults which would not
have a material adverse effect on the assets, operations, business or
condition (financial or otherwise) of the Company and the Subsidiaries
taken as a whole;
vii) the execution, delivery and performance of this
Agreement, and the Other Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated under this
Agreement or the Other Transaction Documents, as the case may be, do
not and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice,
lapse of time, or both would constitute a breach of or default under),
(i) any provisions of the declaration of trust, charter, by-laws,
certificate of limited partnership or partnership agreement, as the
case may be, of the Company or any Subsidiary, (ii) to such counsel's
knowledge, any provision of any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of them
or
20
their respective properties may be bound or affected, or (iii) to such
counsel's knowledge, any law or regulation or any decree, judgment or
order applicable to the Company or any Subsidiary, except in the case
of clauses (ii) and (iii) for such conflicts, breaches or defaults,
laws, regulations, decrees, judgments or orders, which individually or
in the aggregate could not be reasonably expected to have a material
adverse effect on the assets, operations, business or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a
whole; or, with the exception of the Other Transaction Documents,
result in the creation or imposition of any lien, encumbrance, or to
such counsel's knowledge, charge or claim upon any property or assets
of the Company or the Subsidiaries;
viii) the Company has full trust right, power and
authority to enter into and perform this Agreement and to consummate
the transactions contemplated herein; this Agreement has been duly
authorized, executed and delivered by the Company and is a legal, valid
and binding agreement of the Company enforceable in accordance with its
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and by general principles of equity, and except that
enforceability of the indemnification and contribution provisions set
forth in Section 9 hereof may be limited by the federal or state
securities laws of the United States or public policy underlying such
laws;
ix) the Partnership has full partnership right, power
and authority to enter into and perform this Agreement and to
consummate the transactions contemplated herein. This Agreement has
been duly authorized, executed and delivered by the Partnership and
constitutes a valid and binding agreement of the Partnership
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and by general principles of
equity, and except that enforceability of the indemnification and
contribution provisions set forth in Section 9 hereof may be limited by
federal or state securities laws of the United States or public policy
underlying such laws;
x) the Other Transaction Documents have been duly
authorized, executed, and delivered by the Company and are legal, valid
and binding agreements of the Company enforceable in accordance with
their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and by general principles of equity;
xi) no approval, authorization, consent or order of or
filing with any federal or state governmental or regulatory commission,
board, body, authority or agency is required in connection with the
execution, delivery and performance of this Agreement and the Other
Transaction Documents or the consummation of the transactions
contemplated hereby and thereby by the Company and the Partnership, the
sale and delivery of the Shares by the Company as contemplated hereby
other than such as have been obtained or made under the Securities Act
and except that such counsel need express no opinion as to any
necessary
21
qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters or any approval of the underwriting terms and arrangements
by the National Association of Securities Dealers, Inc.;
xii) to such counsel's knowledge, each of the Company
and the Subsidiaries has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings required
under any federal, state or local law, regulation or rule, and has
obtained all necessary authorizations, consents and approvals from
other persons, required to conduct their respective businesses, as
described in the Registration Statement and the Prospectus, except to
the extent that any failure to have any such authorizations, consents
or approvals would not, individually or in the aggregate, have a
material adverse effect on the assets, operations, business or
condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole; to such counsel's knowledge, neither the Company nor
any of the Subsidiaries is in violation of, in default under, or has
received any notice regarding a possible violation, default or
revocation of any such license, authorization, consent or approval or
any federal, state, local or foreign law, regulation or decree, order
or judgment applicable to the Company or any of the Subsidiaries, the
effect of which could be material and adverse to the assets,
operations, business or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole; and no such license,
authorization, consent or approval contains a materially burdensome
restriction that is not adequately disclosed in the Registration
Statement and the Prospectus;
xiii) the Shares have been duly authorized and, when
the Shares have been issued and duly delivered against payment therefor
as contemplated by this Agreement, the Shares will be validly issued,
fully paid and nonassessable, and, except for any action that may have
been taken by the holder thereof, free and clear of any pledge, lien,
encumbrance, security interest, or other claim;
xiv) immediately after the Closing Time, all of the
issued and outstanding Common Units will be validly issued, fully paid
and non-assessable. None of the Common Units has been or will be issued
or is owned or held in violation of any preemptive right. The
outstanding Common Units have been offered, sold and issued by the
Partnership in compliance with all federal and state securities laws;
xv) the issuance and sale of the Shares or the
Partnership, as the case may be, and the Common Units by the Company or
the Partnership, as the case may be, is not subject to preemptive or
other similar rights arising by operation of law, under the declaration
of trust or by-laws of the Company or the certificate of limited
partnership or Partnership Agreement of the Partnership, under any
agreement known to such counsel to which the Company or any of the
Subsidiaries is a party or, to such counsel's knowledge, otherwise;
xvi) neither the purchase nor the origination, as the
case may be, of the Loans, nor the execution and delivery of, or
performance by the borrowers thereunder of any mortgage,
22
deed of trust, deed, indenture, note, loan or credit agreement or any
other agreement or instrument in connection therewith, has resulted in
or, with notice and an opportunity to cure, would result in a breach of
or default under any mortgage, deed of trust, indenture, note, loan or
credit agreement or any other agreement or instrument relating to any
mortgage or other loan (collectively, the "Senior Indebtedness") that
may have priority over any such Loan with respect to the assets of the
borrower thereunder and that is in existence at the time the Company or
any of the Subsidiaries purchases or originates any such Loan;
xvii) no party to any mortgage, deed of trust,
indenture, note, loan or credit agreement or any other agreement or
instrument relating to any Senior Indebtedness of which such counsel
has knowledge has the right to limit, hinder, delay or otherwise
interfere with the exercise of any remedies that the Company or any of
the Subsidiaries may have under any mortgage, deed of trust, indenture,
note, loan or credit agreement or any other agreement or instrument
relating to any of the Loans, including, without limitation, the
possession of a deed-in-lieu of foreclosure and a power of attorney
granting the right to record any such deed-in-lieu of foreclosure by
the Company or any of the Subsidiaries pursuant to any documents
evidencing the Loans;
xviii) to such counsel's knowledge, there are no
persons with registration or other similar rights to have any
securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the Securities Act;
xix) the form of certificate used to evidence the
Shares complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the declaration of
trust and bylaws of the Company and the requirements of the American
Stock Exchange;
xx) the Registration Statement has become effective
under the Securities Act and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the Registration
Statement has been issued and, to such counsel's knowledge, no
proceedings with respect thereto have been commenced or threatened;
xxi) as of the effective date of the Registration
Statement, the Registration Statement and the Prospectus (except as to
the financial statements and other financial and statistical data
contained therein, as to which such counsel need express no opinion)
complied as to form in all material respects with the requirements of
the Securities Act and the Securities Act Regulations;
xxii) the statements under the captions
"Capitalization," "Risk Factors," "Price Range of Common Shares and
Distribution Policy," "Prospectus Summary - Tax Status of the Company,"
"Certain Provisions of Maryland Law and of the Declaration of Trust and
Bylaws," "Description of Shares of Beneficial Interest," "Common Shares
Available for Future Sale," "Federal Income Tax Considerations,"
"Benefit Plan Considerations " and "Certain Legal Aspects of Real
Property Loans and Investments," in the Registration
23
Statement and the Prospectus, insofar as such statements constitute a
summary of the legal matters referred to therein, constitute accurate
summaries thereof in all material respects;
xxiii) the Shares have been approved for listing on the
American Stock Exchange;
xxiv) to such counsel's knowledge, there are no
actions, suits or proceedings, inquiries, or investigations pending or
threatened against the Company or any of the Subsidiaries or any of
their respective officers and directors or to which the properties,
assets or rights of any such entity are subject, at law or in equity,
before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority, arbitration panel or
agency that are required to be described in the Prospectus but are not
so described;
xxv) to such counsel's knowledge, there are no
contracts or documents of a character that are required to be filed as
exhibits to the Registration Statement or to be described or summarized
in the Prospectus which have not been so filed, summarized or
described; to such counsel's knowledge, all agreements between the
Company or any of the Subsidiaries, respectively, and third parties
expressly referenced in the Prospectus (other than agreements relating
to the Loans which are specifically addressed in Section 6(d)(iv)) are
legal, valid and binding obligations of the Company or the
Subsidiaries, as the case may be, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and by general principles of equity;
xxvi) the Company is organized in conformity with the
requirements for qualification as a real estate investment trust
pursuant to Sections 856 through 860 of the Code, and the Company's
proposed method of operation will enable it to meet the requirements
for qualification and taxation as a real estate investment trust under
the Code; the Partnership will be treated as a partnership for federal
income tax purposes and not as a corporation or an association taxable
as a corporation;
xxvii) neither the Company nor any of the Subsidiaries
is, or solely as a result of the transactions contemplated hereby and
the application of the proceeds from the sale of the Shares as
described in the Registration Statement and the Prospectus under the
caption "Use of Proceeds," will become an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the 1940 Act; and
xxviii) to such counsel's knowledge, each of the
Company and the Subsidiaries has filed on a timely basis all necessary
federal, state, local and foreign income and franchise tax returns
through the date hereof, if any such returns are required to be filed,
and have paid all taxes shown as due thereon; and no tax deficiency has
been asserted against any such entity, nor does any such entity know of
any tax deficiency which is likely to be asserted against any such
entity which, if determined adversely to any such entity, could have a
material adverse effect on the assets, operations, business or
condition (financial or otherwise) of any such entity, respectively.
24
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, independent
public accountants of the Company and Underwriters at which the contents of the
Registration Statement and Prospectus were discussed and, although such counsel
is not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectus (except as and to the extent stated in subparagraphs
(xxii) and (xxiii) above), nothing has caused them to believe that the
Registration Statement, the Preliminary Prospectus or the Prospectus, as of
their respective effective or issue dates and as of the date of such counsel's
opinion, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that, in each
case, such counsel need express no view with respect to the financial statements
and other financial and statistical data included in the Registration Statement,
Preliminary Prospectus or Prospectus).
(c) The Company shall furnish to the Underwriters at the
Closing Time and on each Date of Delivery an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special
counsel for the Company, addressed to the Underwriters and dated the Closing
Time and each Date of Delivery and in form satisfactory to Hunton & ▇▇▇▇▇▇▇▇,
counsel for the Underwriters, stating that, as a matter of Maryland law:
i) the statements under the captions "Certain
Provisions of Maryland Law and of the Declaration of Trust and Bylaws,"
and "Description of Shares of Beneficial Interest," in the Registration
Statement and the Prospectus, insofar as such statements constitute
summaries of Maryland corporate law, constitute accurate summaries
thereof in all material respects;
ii) the Company has an authorized capitalization as set
forth in the Prospectus under the caption "Capitalization"; the
outstanding shares of beneficial interest or capital stock, as the case
may be, of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable; all of the outstanding shares of
capital stock of or interests in the Subsidiaries, as the case may be,
are directly or indirectly owned of record by the Company;
iii) the Company has been duly incorporated and is
validly existing and in good standing under the laws of the state of
Maryland with the requisite corporate power and authority to own its
properties and to conduct its business as described in the Registration
Statement and Prospectus and to execute, deliver and perform this
Agreement and the Other Transaction Documents and to consummate the
transactions described in each such agreement;
iv) this Agreement has been duly authorized, executed
and delivered by the Company and is a legal, valid and binding
agreement of the Company enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, and
by
25
general principles of equity, and except that enforceability of the
indemnification and contribution provisions set forth in Section 9
hereof may be limited by the federal or state securities laws of the
United States or public policy underlying such laws; and
v) the Other Transaction Documents have been duly
authorized, executed, and delivered by the Company and are legal, valid
and binding agreements of the Company enforceable in accordance with
their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and by general principles of equity.
(d) The Representatives shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, letters dated, respectively, as of the date of this Agreement, the
Closing Time and each Date of Delivery, as the case may be, addressed to the
Representatives as representatives of the Underwriters and in form and substance
satisfactory to the Representatives.
(e) The Underwriters shall have received at the Closing Time
and on each Date of Delivery the favorable opinion of Hunton & ▇▇▇▇▇▇▇▇, dated
the Closing Time or such Date of Delivery, addressed to the Representatives and
in form and substance satisfactory to the Representatives.
(f) No amendment or supplement to the Registration Statement
or Prospectus shall have been filed to which the Underwriters shall have
objected in writing.
(g) Prior to the Closing Time and each Date of Delivery (i) no
stop order suspending the effectiveness of the Registration Statement or any
order preventing or suspending the use of any Preliminary Prospectus or
Prospectus has been issued by the Commission, and no suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes, has
occurred; and (ii) the Registration Statement and the Prospectus shall not
contain an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(h) Between the time of execution of this Agreement and the
Closing Time or the relevant Date of Delivery (i) no material and unfavorable
change in the assets, results of operations, business, or condition (financial
or otherwise) of the Company and its Subsidiaries taken as a whole shall occur
or become known (whether or not arising in the ordinary course of business) or
that makes it, in the judgment of the Representatives, impracticable to market
the Shares on the terms and in the manner contemplated in the Prospectus, or
(ii) no transaction which is material and unfavorable to the Company shall have
been entered into by the Company or any of the Subsidiaries.
(i) At the Closing Time, the Other Transaction Documents shall
have been entered into and delivered by all required parties.
26
(j) At the Closing Time, the Shares shall have been approved
for listing on the American Stock Exchange.
(k) The NASD shall not have raised any objection with respect
to the fairness and reasonableness of the underwriting terms and arrangements.
(l) The Company will, at the Closing Time and on each Date of
Delivery, deliver to the Underwriters a certificate of two principal executive
officers or, in the case of the Partnership two principal executive officers of
RAIT General, to the effect that, to each of such officer's knowledge, the
representations and warranties of the Company set forth in this Agreement and
the conditions set forth in paragraphs (g), (h), (i) and (j) have been met and
are true and correct as of such date.
(m) The Company shall have furnished to the Underwriters such
other documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus, the representations,
warranties and statements of the Company contained herein, and the performance
by the Company of its covenants contained herein, and the fulfillment of any
conditions contained herein, as of the Closing Time or any Date of Delivery as
the Underwriters may reasonably request.
(n) All filings with the Commission required by Rule 424 under
the Securities Act shall have been made within the applicable time period
prescribed for such filing by such Rule.
(o) The Company shall perform such of its obligations under
this Agreement are to be performed by the terms hereof and thereof at or before
the Closing Time or the relevant Date of Delivery.
The several obligations of the Underwriters to purchase Option
Shares hereunder are subject to the delivery to the Representatives on the Date
if Delivery of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the Option
Shares and other matters related to the issuance of the Option Shares.
7. Termination: The obligations of the several Underwriters
hereunder shall be subject to termination in the absolute discretion of the
Representatives, at any time prior to the Closing Time or any Date of Delivery,
(i) if any of the conditions specified in Section 6 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, or (ii) if
there has been since the respective dates as of which information is given in
the Registration Statement, any material adverse change, or any development
involving a prospective material adverse change, in or affecting the assets,
operations, business or condition (financial or otherwise) of the Company,
whether or not arising in the ordinary course of business, or (iii) if there has
occurred outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic, political or other
conditions the effect of which on the financial markets of the United States is
such as to make it, in the judgment of the Representatives, impracticable to
market or deliver the Shares or enforce contracts for the sale of the Shares, or
(iv) if trading in any securities of the Company has been suspended by the
Commission or by the NASD or if trading generally on the New York Stock
27
Exchange, the American Stock Exchange or in the Nasdaq over-the-counter market
has been suspended (including automatic halt in trading pursuant to
market-decline triggers other than those in which solely program trading is
temporarily halted), or limitations on prices for trading (other than
limitations on hours or numbers of days of trading) have been fixed, or maximum
ranges for prices for securities have been required, by such exchange or the
NASD or by order of the Commission or any other governmental authority, or (v)
if there has been any downgrading in the rating of any of the Company's debt
securities or preferred stock by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities Act),
or (vi) any federal or state statute, regulation, rule or order of any court or
other governmental authority has been enacted, published, decreed or otherwise
promulgated which in the reasonable opinion of the Representatives has a
material adverse affect or will have a material adverse affect on the assets,
operations, business or condition (financial or otherwise) of the Company, or
(viii) any action has been taken by any federal, state or local government or
agency in respect of its monetary or fiscal affairs which in the reasonable
opinion of the Representatives has a material adverse effect on the securities
markets in the United States, or (ix) in the case of any of the events specified
in clauses (i) through (viii), such event, singly or together with any other
such events, makes it, in the judgment of the Representatives, impracticable to
market or deliver the Shares on the terms and in the manner contemplated in the
Prospectus.
If the Representatives elects to terminate this Agreement as
provided in this Section 7, the Company and the Underwriters shall be notified
promptly by telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply in all material respects with any of the terms
of this Agreement, the Company shall not be under any obligation or liability
under this Agreement (except to the extent provided in Sections 5 and 9 hereof)
and the Underwriters shall be under no obligation or liability to the Company
under this Agreement (except to the extent provided in Section 9 hereof) or to
one another hereunder.
8. Increase in Underwriters' Commitments: If any Underwriter
shall default at the Closing Time or on a Date of Delivery in its obligation to
take up and pay for the Shares to be purchased by it under this Agreement on
such date, the Representatives shall have the right, within 36 hours after such
default, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Shares which such Underwriter shall have agreed but failed to take up and
pay for (the "Defaulted Shares"). Absent the completion of such arrangements
within such 36 hour period, (i) if the total number of Defaulted Shares does not
exceed 10% of the total number of Shares to be purchased on such date, each
non-defaulting Underwriter shall take up and pay for (in addition to the number
of Shares which it is otherwise obligated to purchase on such date pursuant to
this Agreement) the portion of the total number of Shares agreed to be purchased
by the defaulting Underwriter on such date in the proportion that its
underwriting obligations hereunder bears to the underwriting obligations of all
28
non-defaulting Underwriters; and (ii) if the total number of Defaulted Shares
exceeds 10% of such total, the Representatives may terminate this Agreement by
notice to the Company, without liability to any non-defaulting Underwriter.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Shares hereunder on such date unless all of the Shares
to be purchased on such date are purchased on such date by the Underwriters (or
by substituted Underwriters selected by the Representatives with the approval of
the Company or selected by the Company with the approval of the
Representatives).
If a new Underwriter or Underwriters are substituted for a
defaulting Underwriter in accordance with the foregoing provision, the Company
or the non-defaulting Underwriters shall have the right to postpone the Closing
Time or the relevant Date of Delivery for a period not exceeding five business
days in order that any necessary changes in the Registration Statement and
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 8 with the like
effect as if such substituted Underwriter had originally been named in this
Agreement.
9. Indemnity and Contribution by the Company, the Partnership
and the Underwriters:
(a) The Company and the Partnership, jointly and severally
agree to indemnify, defend and hold harmless each Underwriter and any person who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any loss, expense,
liability, damage or claim (including the reasonable cost of investigation)
which, jointly or severally, any such Underwriter or controlling person may
incur under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, expense, liability, damage or claim arises out of or is based upon (i) any
breach of any representation, warranty or covenant of the Company or the
Partnership contained herein or (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this Section
9 being deemed to include any Preliminary Prospectus, the Prospectus and the
Prospectus as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in either such Registration Statement or Prospectus or necessary to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading, except insofar as any such loss, expense,
liability, damage or claim arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission of a material fact
contained in and in conformity with information furnished in writing by the
Underwriters through the Representatives to the Company or the Partnership
expressly for use in such Registration Statement or such Prospectus, provided,
however, that the indemnity agreement contained in this subsection (a) with
respect to the Preliminary Prospectus or the Prospectus shall not inure to the
benefit of an Underwriter (or to the
29
benefit of any person controlling such Underwriter) with respect to any person
asserting any such loss, expense, liability, damage or claim which is the
subject thereof if the Prospectus or any supplement thereto prepared with the
consent of the Representatives and furnished to the Underwriters prior to the
Closing Time corrected any such alleged untrue statement or omission and if such
Underwriter failed to send or give a copy of the Prospectus or supplement
thereto to such person at or prior to the written confirmation of the sale of
Shares to such person, unless such failure resulted from noncompliance by the
Company or the Partnership with Section 4(a) of this Agreement.
If any action is brought against an Underwriter or controlling
person in respect of which indemnity may be sought against the Company or the
Partnership pursuant to the preceding paragraph, such Underwriter shall promptly
notify the Company and the Partnership in writing of the institution of such
action and the Company and the Partnership shall assume the defense of such
action, including the employment of counsel and payment of expenses, provided,
however, that any failure or delay to so notify the Company or the Partnership
will not relieve the Company or the Partnership of any obligation hereunder,
except to the extent that its ability to defend is actually impaired by such
failure or delay. Such Underwriter or controlling person shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or such controlling
person unless the employment of such counsel shall have been authorized in
writing by the Company and the Partnership in connection with the defense of
such action or the Company and the Partnership shall not have employed counsel
to have charge of the defense of such action within a reasonable time or such
indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Company or the
Partnership and which counsel to the Underwriter believes may present a conflict
for counsel representing the Company or the Partnership and the Underwriter (in
which case the Company and the Partnership shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the Company and the
Partnership and paid as incurred (it being understood, however, that the Company
and the Partnership shall not be liable for the expenses of more than one
separate firm of attorneys for the Underwriters or controlling persons in any
one action or series of related actions in the same jurisdiction representing
the indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, neither the Company nor the
Partnership shall be liable for any settlement of any such claim or action
effected without the its written consent.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify, defend and hold harmless the Partnership, the Company, the
Subsidiaries, their trustees and directors, the officers that signed the
Registration Statement and any person who controls the Partnership, the Company
or any Subsidiary within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) which, jointly
or severally, the Company, the Partnership or any such person may incur under
the Securities Act, the Exchange Act or otherwise, insofar as such loss,
expense, liability, damage or claim arises out of or is based upon any untrue
statement or alleged untrue
30
statement of a material fact contained in and in conformity with information
furnished in writing by such Underwriter through the Representatives to the
Company or the Partnership expressly for use in the Registration Statement (or
in the Registration Statement as amended by any post-effective amendment thereof
by the Company) or in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated either in the Registration Statement or
Prospectus or necessary to make such information, in the light of the
circumstances under which made, not misleading. The statements set forth in the
last paragraph on the cover page and under the caption "Underwriting", the
information regarding "Stabilizing" and "Passive Market Making" in the
Preliminary Prospectus and the Prospectus (to the extent such statements relate
to the Underwriters) constitute the only information furnished by or on behalf
of any Underwriter through the Representatives to the Company for purposes of
Section 3(l) and this Section 9.
If any action is brought against the Company, the Partnership
or any such person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company, the Partnership or
such person shall promptly notify the Representatives in writing of the
institution of such action and the Representatives, on behalf of the
Underwriters, shall assume the defense of such action, including the employment
of counsel and payment of expenses. The Company, the Partnership or such person
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Company, the
Partnership or such person unless the employment of such counsel shall have been
authorized in writing by the Representatives in connection with the defense of
such action or the Representatives shall not have employed counsel to have
charge of the defense of such action within a reasonable time or such
indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Underwriters (in which
case the Representatives shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred
(it being understood, however, that the Underwriters shall not be liable for the
expenses of more than one separate firm of attorneys in any one action or series
of related actions in the same jurisdiction representing the indemnified parties
who are parties to such action). Anything in this paragraph to the contrary
notwithstanding, no Underwriter shall be liable for any settlement of any such
claim or action effected without the written consent of the Representatives.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, expenses, liabilities, damages or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, expenses,
liabilities, damages or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Partnership on the
one hand and the Underwriters on the other hand from the offering of the Shares
or (ii) if (but only if) the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i)
31
above but also the relative fault of the Company and the Partnership on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, expenses, liabilities, damages or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Partnership on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and the Partnership bear
to the underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company and the Partnership on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by the
Company or the Partnership or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any claim or action.
(d) The Company and the Partnership, on the one hand, and the
Underwriters, on the other, agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in subsection (c)(i) and, if applicable (ii), above.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section 9 are several in proportion to their
respective underwriting commitments and not joint.
10. Survival: The indemnity and contribution agreements
contained in Section 9 and the covenants, warranties and representations of the
Company, the Partnership and the Subsidiaries contained in Sections 3, 4 and 5
of this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, or any person who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, the
Partnership, the Subsidiaries, their trustees or directors and officers or any
person who controls the Company, any Subsidiary or the Partnership within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and shall survive any termination of this Agreement or the sale and delivery of
the Shares. The Company, the Partnership and each Underwriter agree promptly to
notify the others of the commencement of any litigation or proceeding against it
and, in the case of the Company, against any of the Company's officers and
directors, in connection with the sale and delivery of the Shares, or in
connection with the Registration Statement or Prospectus.
32
11. Notices: Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered to
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department; if to the Company, shall be
sufficient in all respects if delivered to the Company at the offices of the
Company at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
and, if to the Partnership, shall be sufficient in all respects if delivered to
the Partnership at the offices of the Partnership at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
12. Governing Law; Consent to Jurisdiction; Headings: THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The
parties hereto agree to be subject to, and hereby irrevocably submit to, the
nonexclusive jurisdiction of any United States federal or Virginia state court
sitting in Alexandria, Virginia, in respect of any suit, action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
herein, and irrevocably agree that all claims in respect of any such suit,
action or proceeding may be heard and determined in any such court. Each of the
parties hereto irrevocably waives, to the fullest extent permitted by applicable
law, any objection to the laying of the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum. The section headings in
this Agreement have been inserted as a matter of convenience of reference and
are not a part of this Agreement.
13. Parties in Interest: The Agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the Company, the
Partnership and the controlling persons, directors and officers referred to in
Sections 9 and 10 hereof, and their respective successors, assigns, executors
and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
14. Counterparts: This Agreement may be signed by the parties
in counterparts which together shall constitute one and the same agreement among
the parties.
33
If the foregoing correctly sets forth the understanding among
the Company and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this Agreement shall constitute a binding agreement
among the Company, the Partnership and the Underwriters.
Very truly yours,
RESOURCE ASSET INVESTMENT TRUST
-------------------------------
By:
Its:
RAIT PARTNERSHIP, L.P.
By: RAIT General, Inc.
Its: General Partner
-------------------------------
By:
Its:
34
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ &
CO., INC.
-------------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its: Managing Director
For themselves and as Representatives
of the other Underwriters named on
Schedule I hereto.
35
Schedule I
Number of Initial
Underwriter Shares to be Purchased
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Gruntal & Co., L.L.C.
36
Schedule II
Subsidiaries of the Company
RAIT General, Inc.
RAIT Limited, Inc.
RAIT Partnership, L.P.
37
Schedule III
Other Transaction Documents
38
Schedule IV
Persons For Whom Shares Have Been Reserved
NAME SHARES
