EXHIBIT 1.11
EXECUTION COPY
XXXXXXXXX MORTGAGE, INC.
3,200,000 Shares
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
February 5, 2003
February 5, 2003
UBS WARBURG LLC
X.X. XXXXXXX & SONS, INC.
U.S. BANCORP XXXXX XXXXXXX INC.
WACHOVIA SECURITIES, INC.
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxxxxxx Mortgage, Inc., a Maryland corporation (the "Company"),
proposes to issue and sell to UBS Warburg LLC ("UBS Warburg"), X.X. Xxxxxxx &
Sons, Inc. ("X.X. Xxxxxxx" and, together with UBS Warburg, the "Lead Managers"),
U.S. Bancorp Xxxxx Xxxxxxx, Inc. and Wachovia Securities, Inc. (collectively,
the "Underwriters"), an aggregate of 3,200,000 shares (the "Firm Shares") of
common stock, $0.01 par value (the "Common Stock"), of the Company. In addition,
solely for the purpose of covering over-allotments, the Company proposes to
grant to the Underwriters the option to purchase from the Company up to an
additional 480,000 shares of Common Stock (the "Additional Shares"). The Firm
Shares and the Additional Shares are hereinafter collectively sometimes referred
to as the "Shares." The Shares are described in the Prospectus which is referred
to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Securities Act"), with the Securities and Exchange
Commission (the "Commission") a registration statement (No. 333-98659),
including a base prospectus, relating to the Shares being sold by the Company
and incorporating by reference documents which the Company has filed or will
file in accordance with the provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder (collectively, the
"Exchange Act"). The Company has prepared a prospectus supplement (the
"Prospectus Supplement") to the base prospectus included as part of such
registration statement setting forth the terms of the offering, sale and plan of
distribution of the Shares and additional information concerning the Company and
its business. Except where the context otherwise requires, such registration
statement, as amended when it became effective, including all documents filed as
part thereof or incorporated by reference therein, and including any information
contained in a Prospectus (as defined below) subsequently filed with the
Commission pursuant to Rule 424(b) under the Securities Act, is herein called
the "Registration Statement" and the base prospectus, including all documents
incorporated therein by reference, included in the Registration Statement, as
supplemented by the Prospectus Supplement, in the form filed by the Company with
the Commission pursuant to Rule 424(b) under the Securities Act on or before the
second Business Day (as defined below) following the date of this Underwriting
Agreement (the "Agreement") (or on such other day as the parties may mutually
agree), is herein called the "Prospectus." Any reference herein to the
Registration Statement, the Prospectus or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated by reference
therein, and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement and the Prospectus shall
be deemed to refer to and include the filing after the execution hereof of any
document with the Commission deemed to be incorporated by reference therein. For
purposes of this Agreement, all references to the Registration Statement, the
Prospectus or to any amendment or supplement thereto shall be deemed to include
any copy filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System ("XXXXX"), and such copy shall be identical in
content to any Prospectus delivered to the Underwriters for use in connection
with the offering of the Shares.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Company agrees to issue and sell the Firm Shares to the several Underwriters,
and each of the Underwriters, severally and not jointly, agrees to purchase from
the Company the respective number of Firm Shares (subject to such adjustment as
the Lead Managers may determine to avoid fractional shares) set forth opposite
the name of such Underwriter in Schedule A annexed hereto at a purchase price of
$19.004 per Share. The Company is advised by the Lead Managers that the
Underwriters intend (i) to make a public offering of the Shares as soon as the
Underwriters deem advisable after this Agreement has been executed and delivered
and (ii) initially to offer the Firm Shares upon the terms set forth in the
Prospectus. The Underwriters may from time to time increase or decrease the
public offering price after the initial public offering to such extent as they
may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company ratably
in accordance with the number of Firm Shares to be purchased by each of them
(subject to such adjustment as the Lead Managers shall determine to avoid
fractional shares), all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company for the Firm Shares. This option may be exercised by the Lead
Managers on behalf of the several Underwriters at any time (but not more than
once) on or before the thirtieth day following the date hereof, by written
notice to the Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to as the "additional time of purchase"); provided, however,
that the additional time of purchase shall not be (i) earlier than the time of
purchase (as defined below) or (ii) later than the tenth Business Day after the
date on which the option shall have been exercised. The number of Additional
Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the aggregate number of Firm Shares (subject, in each
case, to such adjustment as the Lead Managers may determine to eliminate
fractional shares). As used herein "Business Day" shall mean a day on which the
New York Stock Exchange (the "NYSE") is open for trading or commercial banks in
the City of New York are open for business.
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company by federal funds wire transfer against
delivery of the certificates for the Firm Shares to the Lead Managers through
the facilities of the Depository Trust Company ("DTC") for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 10:00
A.M., New York City time, on February 10, 2003 (unless another time shall be
agreed to by the Lead Managers and the Company or unless postponed in accordance
with the provisions of Section 8 hereof). The time at which such payment and
delivery are actually made is herein sometimes called the "time of purchase."
Certificates for the Firm Shares shall be delivered to the Lead Managers,
through the facilities of DTC, in definitive form in such names and in such
denominations as the Lead Managers shall specify no later than the second
Business Day preceding the time of purchase. For the purpose of expediting the
checking of the certificates for the Firm Shares by the Lead Managers, the
Company agrees to make such certificates available to the Lead Managers for such
purpose at least one full Business Day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Certificates for
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the Additional Shares shall be delivered to the Lead Managers, through the
facilities of DTC, in definitive form in such names and in such denominations as
the Lead Managers shall specify no later than the second Business Day preceding
the additional time of purchase. For the purpose of expediting the checking of
the certificates for the Additional Shares by the Lead Managers, the Company
agrees to make such certificates available to the Lead Managers for such purpose
at least one full Business Day preceding the additional time of purchase.
3. Representations and Warranties of the Company. The Company and,
where applicable, Xxxxxxxxx Mortgage Advisory Corporation, the Company's
external manager (the "Manager"), represent and warrant to the Underwriters
that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act. The Registration Statement has been filed with, and has been
declared effective under the Securities Act by, the Commission. The Company has
not received, and has no notice of, any order of the Commission preventing or
suspending the use of the Registration Statement or threatening or instituting
proceedings for that purpose. Any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement have been so
described or filed. The Prospectus Supplement has been or will be so prepared
and will be filed pursuant to Rule 424(b) of the Securities Act on or before the
second Business Day following the date of this Agreement or on such other day as
UBS Warburg and the Company may mutually agree. Copies of the Registration
Statement and the Prospectus, any amendments or supplements thereto and all
documents incorporated by reference therein that were filed with the Commission
on or prior to the date of this Agreement (including one fully executed copy of
the Registration Statement and of each amendment thereto) have been delivered to
the Underwriters and their counsel. Neither the Company nor the Manager has
distributed any offering material in connection with the offering or sale of the
Shares other than the Registration Statement, the Prospectus or any other
materials, if any, permitted by the Securities Act.
(b) Each part of the Registration Statement, when such part became or
becomes effective or was or is filed with the Commission, and the Prospectus and
any amendment or supplement thereto, on the date of filing thereof with the
Commission and at the time of purchase and, if applicable, at the additional
time of purchase, conformed or will conform in all material respects with the
requirements of the Securities Act. Each part of the Registration Statement,
when such part became or becomes effective or was or is filed with the
Commission, did not or will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and at the
time of purchase and, if applicable, at the additional time of purchase, did not
or will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
foregoing shall not apply to statements in, or omissions from, any such document
in reliance upon, and in conformity with, written information concerning the
Underwriters that was furnished in writing to the Company by UBS Warburg, on
behalf of the Underwriters, specifically for use in the preparation thereof.
Neither the Commission nor any state or other jurisdiction or other regulatory
body has issued, or, to the knowledge of the Company, is threatening to issue,
any stop order under the Securities Act or other order suspending the
effectiveness of the Registration Statement or preventing or suspending the use
of the Prospectus or suspending the qualification or registration of the Shares
for offering or sale in any jurisdiction nor has instituted or, to the knowledge
of the Company, threatened to institute proceedings for any such purpose.
(c) The documents incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto, when they
became or become effective under the Securities Act or
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were or are filed with the Commission under the Securities Act or the Exchange
Act, as the case may be, conformed or will conform in all material respects with
the requirements of the Securities Act and the Exchange Act, as applicable.
(d) The consolidated financial statements of the Company and the
Subsidiaries (as defined below), together with the related schedules and notes
thereto, set forth or included or incorporated by reference in the Registration
Statement and Prospectus are accurate in all material respects and fairly
present the financial condition of the Company and the Subsidiaries as of the
dates indicated and the results of operations, changes in financial position,
shareholders' equity and cash flows for the periods therein specified and are in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein). The
selected financial and statistical data included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the information
shown therein and, to the extent based upon or derived from the financial
statements, have been compiled on a basis consistent with the financial
statements presented therein. Any pro forma financial statements of the Company
and the Subsidiaries, and the related notes thereto, included or incorporated by
reference in the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the basis described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein. No other financial statements are required to
be set forth or incorporated by reference in the Registration Statement or the
Prospectus under the Securities Act that are not so set forth or incorporated by
reference therein.
(e) The Prospectus delivered to the Underwriters for use in connection
with this offering will be identical to the version of the Prospectus created to
be transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T.
(f) The Company has been duly formed and incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction, each of which is listed on Schedule B annexed
hereto, in which its ownership or lease of property or assets or the conduct of
its business requires such qualification, except where the failure to so qualify
would not have a material adverse effect on the business, assets, properties,
prospects, financial condition or results of operation of the Company and the
Subsidiaries taken as a whole (a "Material Adverse Effect"), and has full
corporate power and authority necessary to own, hold, lease and/or operate its
assets and properties, to conduct the business in which it is engaged and as
described in the Prospectus and to enter into and perform its obligations under
this Agreement and to consummate the transactions contemplated hereby. The
Company is in compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by such jurisdictions.
Complete and correct copies of the charter and the by-laws of the Company and
all amendments thereto have been delivered to the Underwriters and, except as
set forth in the exhibits to the Registration Statement, no changes therein will
be made subsequent to the date hereof and prior to the time of purchase or, if
applicable, the additional time of purchase.
(g) The Company has no "subsidiaries" (as such term is defined in Rule
1-02 of Regulation S-X promulgated under the Securities Act) other than
Xxxxxxxxx Mortgage Funding Corporation ("Funding I"), Xxxxxxxxx Mortgage
Acceptance Corporation ("Acceptance I"), Xxxxxxxxx Mortgage Home Loans, Inc.
("TMHL"), Xxxxxxxxx Mortgage Funding Corporation II ("Funding II") and Xxxxxxxxx
Mortgage Acceptance Corporation II ("Acceptance II") (each a "Subsidiary" and,
collectively, the "Subsidiaries"). Each of the Subsidiaries has been duly formed
and incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction, each of which is
listed on
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Schedule C annexed hereto, in which its ownership or lease of property or assets
or the conduct of its business requires such qualification, except where the
failure to so qualify would not have a Material Adverse Effect, and has full
corporate power and authority necessary to own, hold, lease and/or operate its
assets and properties and to conduct the business in which it is engaged and as
described in the Prospectus. Each of the Subsidiaries is in compliance in all
material respects with the laws, orders, rules, regulations and directives
issued or administered by such jurisdictions. Complete and correct copies of the
certificates of incorporation and of the by-laws of the Subsidiaries and all
amendments thereto have been delivered to the Underwriters and, except as set
forth in the exhibits to the Registration Statement, no changes therein will be
made subsequent to the date hereof and prior to the time of purchase or, if
applicable, the additional time of purchase.
(h) Other than the Subsidiaries, the Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity. All of the outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable, and are wholly owned by the Company, directly
or through TMHL, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or other equity or adverse claims. The Company directly
owns 100% of each of Funding I, Acceptance I and TMHL. Funding II and Acceptance
II are wholly owned by TMHL. No options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(i) The Manager has been duly formed and incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction, each of which is listed on Schedule D annexed
hereto, in which its ownership or lease of property or assets or the conduct of
its business requires such qualification, and has full corporate power and
authority necessary to own, hold, lease and/or operate its assets and
properties, to conduct the business in which it is engaged and as described in
the Prospectus and to enter into this Agreement, and the Manager is in
compliance in all material respects with the laws, orders, rules, regulations
and directives issued or administered by such jurisdictions. Complete and
correct copies of the certificate of incorporation and of the by-laws of the
Manager and all amendments thereto have been delivered to the Underwriters and
no changes therein will be made subsequent to the date hereof and prior to the
time of purchase or, if applicable, the additional time of purchase. The Manager
has no "subsidiaries" (as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the Securities Act).
(j) TMA Mortgage Funding Trust I and TMA Mortgage Funding Trust II
(collectively, the "Trusts") have each been duly formed and are validly existing
as business trusts under the Delaware Business Trust Act, in good standing under
the laws of Delaware, with full authority to perform all functions (i) which
business trusts are authorized to perform and (ii) which are described in the
Prospectus. The trustee for each of the Trusts is the Wilmington Trust Company.
(k) Neither the Company, any of the Subsidiaries, any of the Trusts nor
the Manager is in breach of, or in default under (nor has any event occurred
which with notice, lapse of time or both would result in any breach of, or
constitute a default under), (i) their respective charters, by-laws or
organizational documents, as the case may be, or (ii) any obligation, agreement,
covenant or condition contained in any contract, license, repurchase agreement,
management agreement, indenture, mortgage, deed of trust, bank loan or credit
agreement, note, lease or other evidence of indebtedness, or any lease, contract
or other agreement or instrument to which the Company, any of the Subsidiaries,
any of the Trusts or the Manager is a party or by which the Company, the
Subsidiaries, the Trusts, the Manager or any of their respective assets or
properties may be bound or affected. Except as set forth in Schedule E
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annexed hereto, to the knowledge of the Company and the Manager, no other party
under any contract or other agreement to which the Company or any of the
Subsidiaries is a party is in default in any respect thereunder. The execution,
delivery and performance of this Agreement, the issuance and sale of the Shares
and the consummation of the transactions contemplated hereby will not conflict
with, or result in any breach of or constitute a default under (or constitute
any event which with notice, lapse of time or both would result in any breach
of, or constitute a default under), (i) any provision of the charter, by-laws or
organizational documents, as the case may be, of the Company, any of the
Subsidiaries, any of the Trusts or the Manager, (ii) any provision of any
contract, license, repurchase agreement, management agreement, indenture,
mortgage, deed of trust, bank loan or credit agreement, note, lease or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company, any of the Subsidiaries, any of the Trusts or
the Manager is a party or by which the Company, any of the Subsidiaries, any of
the Trusts or the Manager, or any of their respective assets or properties may
be bound or affected, or, with respect to the Manager, which would have a
material adverse effect on the ability of the Manager to perform its obligations
under the Management Agreement, dated July 15, 1999, between the Company and the
Manager, as amended on October 17, 2000 (the "Management Agreement"), 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. Neither
the Company, any of the Subsidiaries, any of the Trusts nor the Manager has, at
any time during the past five years, (i) made any unlawful contributions to any
candidate for any political office or failed fully to disclose any contribution
in violation of law or (ii) made any payment to any state, federal or foreign
government official or other person charged with similar public or quasi-public
duty (other than payment required or permitted by applicable law).
(l) As of September 30, 2002, as of the date of this Agreement and as
of the time of purchase, the Company had, has or will have an authorized, issued
and outstanding capitalization as set forth under the headings "Historical," "As
adjusted for the December 2002 offering" and "As further adjusted for this
offering," respectively, in the section of the Prospectus Supplement entitled
"Capitalization." All of the issued and outstanding shares of capital stock,
including the Shares, have been duly and validly authorized and issued and are
fully paid and non-assessable, have been issued in compliance with all federal
and state securities laws and were not issued in violation of any preemptive
right, resale right, right of first refusal or similar right.
(m) This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
equitable principles.
(n) The capital stock of the Company, including the Shares, conforms in
all material respects to the description thereof contained in the Registration
Statement and Prospectus and such description conforms to the rights set forth
in the instruments defining the same. The certificates for the Shares are in due
and proper form and the holders of the Shares will not be subject to personal
liability by reason of being such holders.
(o) The Shares have been duly and validly authorized by the Company for
issuance and sale pursuant to this Agreement and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued and
fully paid and non-assessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim, and will be registered pursuant to Section 12
of the Exchange Act.
(p) No approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with
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the issuance and sale of the Shares or the consummation by the Company of the
transaction contemplated hereby other than (i) registration of the Shares under
the Securities Act, (ii) any necessary qualification under the securities or
blue sky laws of the various jurisdictions in which the Shares are being offered
by the Underwriters or (iii) such approvals as have been obtained in connection
with the approval of the listing of the Shares on the NYSE.
(q) Except for incentive awards to be granted under the Company's 2002
Long-Term Incentive Plan (the "Plan"), no person, as such term is defined in
Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a
"Person"), has the right, contractual or otherwise, to cause the Company to
issue to it any shares of capital stock or other securities of the Company upon
the issuance and sale of the Shares to the Underwriters hereunder, nor does any
Person have preemptive rights, co-sale rights, rights of first refusal or other
rights to purchase or subscribe for any of the Shares or any securities or
obligations convertible into or exchangeable for, or any contracts or
commitments to issue or sell any of, the Shares or any options, rights or
convertible securities or obligations, other than those that have been expressly
waived prior to the date hereof.
(r) PricewaterhouseCoopers LLP ("PWC"), whose report on the
consolidated financial statements of the Company is filed with the Commission as
part of the Registration Statement and the Prospectus, are and, during the
periods covered by their report, were independent public accountants as required
by the Securities Act. PWC is not in violation of the auditor independence
requirements of the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act") with
respect to the Company.
(s) Each of the Company, the Subsidiaries, the Trusts and the Manager
has all necessary licenses, permits, authorizations, consents and approvals and
has made all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all necessary permits,
authorizations, consents and approvals from other Persons, in order to conduct
its business as described in the Prospectus, except where the failure to obtain
such licenses, permits, authorizations, consents and approvals would not have a
Material Adverse Effect. Each of the Company, the Subsidiaries, the Trusts and
the Manager has obtained all accreditation or certification required by any
applicable law from any governmental agency or authority in order to provide the
products and services which it currently provides or which it proposes to
provide as set forth in the Prospectus. Neither the Company, any of the
Subsidiaries, any of the Trusts nor the Manager is in violation of, or in
default under, any such license, permit, 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, any of the Subsidiaries, any of the
Trusts or the Manager.
(t) The descriptions in the Registration Statement and the Prospectus
of the legal or governmental proceedings, contracts, leases and other legal
documents therein described present fairly the information required to be shown
and there are no legal or governmental proceedings, contracts, leases or other
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement which
are not described or filed as required. All agreements between the Company, any
of the Subsidiaries, any of the Trusts or the Manager, as the case may be, and
third parties expressly referenced in the Prospectus are legal, valid and
binding obligations of the Company, the Subsidiaries, the Trusts or the Manager,
as the case may be, 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 equitable principles.
(u) There are no actions, suits, claims, investigations, inquiries or
proceedings pending or, to the Company's knowledge, threatened to which the
Company, any of the Subsidiaries, any of the Trusts or the Manager or any of
their respective officers or directors is a party or of which the properties or
other
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assets of any such entity is subject at law or in equity, or before or by any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency which could result in a judgment, decree or order.
(v) During the period of at least the last 24 calendar months prior to
the date of this Agreement, the Company has timely filed with the Commission all
documents and other material required to be filed pursuant to Sections 13, 14
and 15(d) under the Exchange Act. During the period of at least the last 36
calendar months preceding the filing of the Registration Statement, the Company
has filed all reports required to be filed pursuant to Sections 13, 14 and 15(d)
under the Exchange Act. As of the date of this Agreement, the aggregate market
value of the Company's voting stock held by nonaffiliates of the Company was
equal to or greater than $150 million.
(w) Except as disclosed in the Prospectus (excluding any disclosure
contained in any amendment or supplement to, or incorporated by reference into,
the Prospectus after the date of this Agreement), since the date of the latest
audited financial statements included in the Prospectus there has been no
material adverse change, nor any development or event involving a prospective
material adverse change in the condition (financial or otherwise), business, net
worth, properties, assets or results of operations of the Company, the
Subsidiaries and the Trusts, taken as a whole. Subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus and during the time that a prospectus relating to the Shares is
required to be delivered under the Securities Act, there has not been and will
not be (i) any transaction which is material to the Company, the Subsidiaries
and the Trusts, except transactions in the ordinary course of business, (ii) any
obligation, direct or contingent, which is material to the Company, the
Subsidiaries and the Trusts taken as a whole, incurred by the Company, the
Subsidiaries or the Trusts, except obligations incurred in the ordinary course
of business, (iii) any change in the capital stock or outstanding indebtedness
of the Company or the Subsidiaries, or (iv) except for regular quarterly
dividends on the Common Stock and the 9.68% Cumulative Convertible Series A
Preferred Stock in amounts per share that are consistent with past practice, any
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock. Neither the Company, the Subsidiaries nor the
Trusts has any material contingent obligation which is not disclosed in the
Registration Statement or Prospectus.
(x) There are no Persons with registration or other similar rights to
have any equity or debt securities, including securities which are convertible
into or exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act.
(y) Neither the Company, the Subsidiaries nor the Trusts has defaulted
on any installment on indebtedness for borrowed money or on any rental on one or
more long term leases, which defaults would have a Material Adverse Effect.
Since it first became a publicly-registered entity, the Company has not filed a
report pursuant to Section 13(a) or 15(d) of the Exchange Act indicating that it
(i) has failed to pay any dividend or sinking fund installment on preferred
stock or (ii) has defaulted on any installment on indebtedness for borrowed
money or on any rental on one or more long term leases, which defaults would
have a Material Adverse Effect.
(z) Each of the Company, the Subsidiaries, the Trusts, the Manager and
each of their respective officers, directors and controlling Persons has not,
directly or indirectly, (i) taken any action designed to cause or to result in,
or that has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to facilitate the
sale of the Shares or (ii) since the filing of the Registration Statement
(except pursuant to the Company's Dividend Reinvestment and Stock Purchase Plan
(the "DRSPP"), the Company's sales agreements with Cantor Xxxxxxxxxx & Co. and
the public offerings completed in the third quarter and the fourth quarter of
2001 and the first quarter and the fourth quarter of 2002) (A) sold, bid for,
purchased, or paid anyone any
8
compensation for soliciting purchases of, shares of Common Stock or (B) paid or
agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company.
(aa) The Shares have been approved for listing on the NYSE, subject to
official notice of issuance.
(bb) Except as set forth in Schedule F annexed hereto, neither the
Company nor any of the Subsidiaries, the Trusts or its affiliates (including the
Manager) (i) is required to register as a "broker" or "dealer" in accordance
with the provisions of the Exchange Act or (ii) directly or indirectly through
one or more intermediaries, controls or has any other association with (within
the meaning of Article I of the By-laws of the National Association of
Securities Dealers ("NASD")) any member firm of the NASD.
(cc) The Company has not relied upon the Underwriters or their legal
counsel for any legal, tax or accounting advice in connection with the offering
and sale of the Shares.
(dd) Any certificate signed by any officer of the Company delivered to
the Lead Managers 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.
(ee) As of the date of this Agreement, the investment portfolio (other
than cash and cash equivalents) of the Company consists of adjustable-rate
mortgage securities and adjustable-rate mortgage loans. As of the date of this
Agreement, the derivative financial instruments held by the Company consist
solely of interest rate cap agreements, interest rate options contracts,
interest rate swap agreements and eurodollar futures contracts. As of the date
of this Agreement and except as otherwise disclosed in the Prospectus, the
Company has no plan or intention to materially alter its stated investment
policies and operating policies and strategies, as such are described in the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
2002, including making any change to any stated investment percentages or
guidelines or the stated equity-to-assets ratio currently employed by the
Company, the Subsidiaries and the Trusts. The Company, the Subsidiaries and the
Trusts have good and marketable title to all properties and assets owned,
directly or indirectly, by the Company, the Subsidiaries and the Trusts, in each
case free and clear of any security interests, liens, encumbrances, equities,
claims and other defects (except for any security interest, lien, encumbrance or
claim that may otherwise exist under any applicable repurchase agreement),
except such as do not interfere with the use made or proposed to be made of such
property or asset by the Company, the Subsidiaries and the Trusts. Except for
"real estate owned" properties owned by the Company as a result of foreclosures
on delinquent loans, the Company, the Subsidiaries and the Trusts do not own any
real property. Any real property and buildings held under lease by the Company,
the Subsidiaries and the Trusts are held under valid, existing and enforceable
leases, with such exceptions 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 and the Subsidiaries.
(ff) Each of the Company, the Subsidiaries and the Trusts has filed all
federal, state and foreign income and franchise tax returns required to be filed
on or prior to the date hereof and has paid taxes shown as due thereon (or that
are otherwise due and payable), other than taxes which are being contested in
good faith and for which adequate reserves have been established in accordance
with generally accepted accounting principles. Neither the Company nor the
Manager has knowledge, after due inquiry, of any tax deficiency which has been
asserted or threatened against the Company, any of the Subsidiaries or any of
the Trusts. To the knowledge of the Company and the Manager, there are no tax
returns of the Company, the Subsidiaries or the Trusts that are currently being
audited by federal, state or local taxing authorities or agencies which would
have a Material Adverse Effect.
9
(gg) The Company, the Subsidiaries and the Trusts 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 intellectual property rights and know-how
(collectively, "Intangibles") necessary to entitle the Company, the Subsidiaries
and the Trusts to conduct their business as described in the Prospectus, and the
Company, the Subsidiaries and the Trusts have not received notice of
infringement of or conflict with (and the Company knows of no such infringement
of or conflict with) asserted rights of others with respect to any Intangibles
which could have a Material Adverse Effect.
(hh) TMHL owns or possesses adequate and validly issued licenses, or is
otherwise authorized by law, to originate loans as a mortgage lender in all
states in which TMHL has originated or is currently originating loans. As of the
date of this Agreement, TMHL is licensed, or is otherwise authorized by law, to
originate loans in each of the jurisdictions set forth on Schedule G annexed
hereto. To the knowledge of the Company and the Manager, all third-party service
providers used, employed, hired or otherwise contracted with by the Company or
any of the Subsidiaries have obtained all necessary licenses or other relevant
authorization to do business in all jurisdictions in which such third-party
service providers do business on behalf of the Company or the Subsidiaries.
(ii) Each of the Company, the Subsidiaries, the Trusts and the Manager
maintains 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 as applied in the United States 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.
(jj) Each of the Company, the Subsidiaries and the Trusts is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the business in which it is
engaged, including, but not limited to, directors' and officers' insurance and
insurance covering real and personal property owned or leased by the Company,
the Subsidiaries and the Trusts against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect. Neither the Company, the Subsidiaries,
the Trusts nor the Manager has been refused any insurance coverage which has
been sought and applied for and has no reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.
(kk) Neither the Company, the Subsidiaries, the Trusts nor the Manager
is in violation, and has not received notice of any violation with respect to,
any applicable local, state or federal environmental, safety or similar law
applicable to the business of the Company, the Subsidiaries and the Trusts. Each
of the Company, the Subsidiaries, the Trusts and the Manager has received all
permits, licenses or other approvals required of it under applicable federal and
state occupational safety and health and environmental laws and regulations to
conduct its business, and each of the Company, the Subsidiaries, the Trusts and
the Manager is in compliance with all terms and conditions of any such permit,
license or approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals which could not,
singly or in the aggregate, have a Material Adverse Effect.
10
(ll) Neither the Company, the Subsidiaries, the Trusts nor any of their
affiliates has incurred any liability for any finder's fees or similar payments
in connection with the transactions herein contemplated, except as may otherwise
exist with respect to the Underwriters pursuant to this Agreement.
(mm) There are no existing or, to the knowledge of the Company,
threatened labor disputes with the employees of the Company, the Subsidiaries,
the Trusts or the Manager which are likely to have individually or in the
aggregate a Material Adverse Effect. None of the employees of the Company, the
Subsidiaries or the Trusts is represented by a union and, to the knowledge of
the Company, no union organizing activities are taking place. To the knowledge
of the Company and the Manager, neither the Company, the Subsidiaries, the
Trusts nor the Manager has violated any federal, state or local law relating to
discrimination in hiring, promotion or pay of employees, or any applicable wage
or hour laws, or the rules and regulations thereunder, which might, individually
or in the aggregate, result in a Material Adverse Effect.
(nn) Neither the Company, the Subsidiaries, the Trusts nor, to the
knowledge of the Company and the Manager, any employee or agent of the Company,
the Subsidiaries or the Trusts, has made any payment of funds of the Company,
the Subsidiaries or the Trusts, 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. No relationship, direct or indirect, exists between or among the
Company, the Subsidiaries, the Trusts or the Manager, on the one hand, and the
directors, officers and stockholders of the Company, the Subsidiaries, the
Trusts or the Manager, on the other hand, which is required by the Securities
Act to be described in the Registration Statement and the Prospectus that is not
so described.
(oo) The Company, for all taxable years commencing with the taxable
year ended December 31, 1993, and each of the Subsidiaries, since its respective
date of inception, have been, and upon the sale of the Shares will continue to
be, organized and operated in conformity with the requirements for qualification
and taxation of the Company as a "real estate investment trust" ("REIT") under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"). The proposed method of operation of the Company and each of the
Subsidiaries and the Trusts as described in the Prospectus will enable the
Company to continue to meet the requirements for qualification and taxation as a
REIT under the Code, and no actions have been taken (or not taken which are
required to be taken) which would cause such qualification to be lost. The
Company intends to continue to operate in a manner which would permit it to
qualify as a REIT under the Code. The Company has no intention of changing its
operations or engaging in activities which would cause it to fail to qualify, or
make economically undesirable its continued qualification, as a REIT.
(pp) Neither the Company, the Subsidiaries nor the Trusts is and, after
giving effect to the offering and sale of the Shares, will be an "investment
company" or an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(qq) The Manager has full legal right, power and authority to perform
its duties in accordance with and under the Management Agreement and to
consummate the transactions contemplated therein. The Management Agreement has
been duly authorized, executed and delivered by the Manager and constitutes a
valid and binding agreement of the Manager, enforceable in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and by general equitable principles. To the knowledge of the
Company and the Manager, there is no breach of, or default under (nor has any
event occurred which with notice, lapse of time, or both would constitute a
breach of, or default under), the Management Agreement by the Manager.
11
(rr) No relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries, the Trusts or the Manager, on the one hand,
and the directors, officers, stockholders or trustees of the Company, any of the
Subsidiaries, the Trusts or the Manager, on the other hand, which is required by
the rules of the NASD to be described in the Registration Statement and the
Prospectus which is not so described. 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 or the
Trusts to or for the benefit of any of the officers or directors of the Company,
any of the Subsidiaries or the Manager or any of the members of the families of
any of them.
(ss) The Company, the Subsidiaries and the Trusts are in compliance in
all material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"). No "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company, the Subsidiaries and the Trusts would have any
liability. The Company, the Subsidiaries and the Trusts have not incurred and do
not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Code. Each "pension plan" for which the Company, the Subsidiaries or
the Trusts would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause the loss
of such qualification.
(tt) The Company is in compliance with applicable provisions of the
Xxxxxxxx-Xxxxx Act that are effective and is actively taking steps to ensure
that it will be in compliance with other applicable provisions of the
Xxxxxxxx-Xxxxx Act upon the effectiveness of such provisions.
4. Certain Covenants of the Company. The Company hereby covenants and
agrees with the Underwriters that:
(a) The Company will furnish such information as may be required and
otherwise will cooperate in qualifying the Shares for offering and sale under
the securities or blue sky laws of such jurisdictions (both domestic and
foreign) as the Lead Managers may designate and maintain such qualifications in
effect so long as required for the distribution of the Shares; provided,
however, that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
jurisdiction (except service of process with respect to the offering and sale of
the Shares). The Company will promptly advise the Lead Managers of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(b) The Company will prepare the Prospectus in a form approved by UBS
Warburg and file such Prospectus with the Commission pursuant to Rule 424(b)
under the Securities Act not later than 10:00 a.m., New York City time, on or
before the second Business Day following the date of this Agreement or on such
other day as the parties may mutually agree and will furnish promptly (and with
respect to the initial delivery of such Prospectus, not later than 10:00 a.m.,
New York City time, on or before the second Business Day following the date of
this Agreement or on such other day as the parties may mutually agree) to the
Underwriters copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements
thereto after the effective date of the Registration Statement) in such
quantities and at such locations as UBS Warburg may reasonably request for the
purposes contemplated by the Securities Act, which Prospectus and any amendments
or supplements thereto furnished to the Underwriters will be identical to the
version created to be transmitted to the Commission for filing via XXXXX, except
to the extent permitted by Regulation S-T.
12
(c) The Company will advise the Lead Managers immediately, confirming
such advice in writing, of (i) the receipt of any comments from the Commission
relating to the Registration Statement or the Prospectus or, prior to the
termination of the underwriting syndicate contemplated in this Agreement, any
other filing of the Company under the Securities Act or the Exchange Act, (ii)
any request by the Commission for amendments or supplements to the Prospectus
or, prior to the termination of the underwriting syndicate contemplated in this
Agreement, the Registration Statement or for additional information with respect
thereto, (iii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of the Prospectus, (iv) the suspension of the qualification
of the Shares for offering or sale in any jurisdiction or (v) the initiation,
threatening or contemplation of any proceedings for any of such purposes and, if
the Commission or any other governmental agency or authority should issue any
such order, the Company will make every reasonable effort to obtain the lifting
or removal of such order as soon as possible. The Company will promptly provide
the Lead Managers with copies of all correspondence to and from, and all
documents issued to and by, the Commission in connection with the registration
of the Shares under the Securities Act or, prior to the termination of the
underwriting syndicate contemplated in this Agreement, relating to any documents
incorporated by reference into the Registration Statement or the Prospectus. The
Company will advise the Lead Managers promptly of any proposal to amend or
supplement the Prospectus or, prior to the termination of the underwriting
syndicate contemplated in this Agreement, the Registration Statement, including
by filing any documents that would be incorporated therein by reference, will
afford the Lead Managers a reasonable opportunity to comment on any such
proposed amendment or supplement and will not file any such amendment or
supplement to which the Lead Managers shall object in writing.
(d) The Company will use its best efforts to advise the Lead Managers
promptly and, if requested by the Lead Managers, will confirm such advice in
writing when, prior to the termination of the underwriting syndicate
contemplated in the Agreement, any post-effective amendment to the Registration
Statement becomes effective under the Securities Act.
(e) The Company will furnish to the Lead Managers for a period of five
years from the date of this Agreement (i) copies of any reports or other
communications which the Company shall send to its stockholders or shall from
time to time publish or publicly disseminate, (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms 10-K, 10-Q and
8-K or such other similar form as may be designated by the Commission, (iii) if
different than the items contained in clauses (i) and (ii) above, copies of
documents or reports filed with any national securities exchange on which any
class of securities of the Company is listed (other than correspondence or other
similar communications) and (iv) such other information as the Lead Managers may
reasonably request regarding the Company, the Subsidiaries or the Trusts, in
each case as soon as such communications, documents or information become
available.
(f) The Company will advise the Lead Managers promptly of the happening
of any event known to the Company or the Manager within the time during which a
Prospectus relating to the Shares is required to be delivered under the
Securities Act which would require the making of any change in the Prospectus
then being used, or in the information incorporated by reference therein, so
that the Prospectus would not include 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, or if it is necessary at any time to amend or supplement
the Prospectus to comply with any law. If within the time during which a
Prospectus relating to the Shares is required to be delivered under the
Securities Act any event shall occur or condition shall exist which, in the
reasonable opinion of the Company, the Lead Managers or their respective
counsel, would require the making of any change in the Prospectus then being
used, or in the information incorporated by reference therein, so that the
Prospectus would not include an untrue statement of material fact or omit to
state a material fact
13
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to amend or supplement the Prospectus to comply with
any law, the Company will promptly prepare and furnish to the Lead Managers
copies of the proposed amendment or supplement before filing any such amendment
or supplement with the Commission and thereafter promptly furnish, at the
Company's own expense, to the Lead Managers and to dealers copies in such
quantities and at such locations as the Lead Managers may from time to time
reasonably request of an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the circumstances when it is so delivered, be
misleading or so that the Prospectus will comply with the law.
(g) The Company will make generally available to its stockholders as
soon as practicable, and in the manner contemplated by Rule 158 of the
Securities Act but in any event not later than 15 months after the end of the
Company's current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period beginning after the date upon which the
Prospectus Supplement is filed pursuant to Rule 424(b) under the Securities Act
that shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder.
(h) The Company will furnish to the Lead Managers a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents incorporated by
reference therein) and such number of conformed copies of the foregoing (other
than exhibits) as the Lead Managers may reasonably request.
(i) The Company will apply the net proceeds from the sale of the Shares
in the manner set forth under the caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to furnish to the Lead
Managers, not less than two Business Days before a filing with the Commission
during the period referred to in paragraph (f) above, a copy of any document
proposed to be filed pursuant to Section 13, 14 or 15(d) of the Exchange Act and
during such period to file all such documents in a manner and within the time
periods required by the Exchange Act.
(k) The Company will furnish to the Lead Managers, as early as
practicable prior to the time of purchase and the additional time of purchase,
as the case may be, but not later than two Business Days prior thereto, a copy
of the latest available unaudited interim consolidated financial statements of
the Company, the Subsidiaries and the Trusts which have been read by the
Company's independent certified public accountants, as stated in their letter to
be furnished pursuant to Section 6(f) hereof.
(l) The Company, the Subsidiaries and the Trusts will maintain and keep
accurate books and records reflecting their assets and maintain internal
accounting controls which provide reasonable assurance that (i) transactions are
executed in accordance with management's authorization, (ii) transactions are
recorded as necessary to permit the preparation of the Company's consolidated
financial statements and to maintain accountability for the assets of the
Company, the Subsidiaries and the Trusts, (iii) access to the assets of the
Company, the Subsidiaries and the Trusts is permitted only in accordance with
management's authorization and (iv) the recorded accounts of the assets of the
Company, the Subsidiaries and the Trusts are compared with existing assets at
reasonable intervals.
(m) Neither the Company, the Subsidiaries, the Trusts nor the Manager
will sell, offer, contract to sell, pledge, grant any option to purchase or
otherwise dispose of, directly or indirectly, or file with the Commission a
registration statement, or amend any effective registration statement under the
Securities Act relating to, any shares of capital stock, or any securities
convertible into, or exercisable, exchangeable or redeemable for shares of
capital stock, or publicly disclose the intention to make any
14
such offer, sale, contract to sell, pledge, disposition, filing or amendment,
for a period of 60 days after the date hereof, without the prior written consent
of the Lead Managers, which consent will not be unreasonably withheld. The
foregoing sentence shall not apply to (i) the Shares to be sold hereunder, (ii)
shares of Common Stock issued in connection with the DRSPP, (iii) the grant of
awards pursuant to the Plan, (iv) the filing of any amendment to the
Registration Statement and/or any new registration statement on Form S-3 by the
Company for the purpose of registering shares of Common Stock in contemplation
of any "at the market" offering of such shares pursuant to Rule 415(a)(4)
promulgated under the Securities Act (a "Rule 415(a)(4) Offering") or any
off-market offering following the expiration of a period of 30 days after the
date hereof; provided, however, that any such filing shall be in compliance with
the conditions set forth in this Section 4, (v) the issuance and sale of shares
of Common Stock by the Company in any Rule 415(a)(4) Offering or any off-market
offering that is in compliance with all applicable securities laws and the rules
and regulations of the NYSE following the expiration of a period of 15 days
after the date hereof through the 30th day after the date hereof; provided, that
any such issuance and sale of shares of Common Stock in any Rule 415(a)(4)
Offering or any off-market offering shall be at a purchase price per share equal
to or greater than the public sale price per share of Common Stock set forth on
the cover page of the Prospectus, or (vi) the issuance and sale of shares of
Common Stock by the Company in any Rule 415(a)(4) Offering or any off-market
offering that is in compliance with all applicable securities laws and the rules
and regulations of the NYSE following the expiration of a period of 30 days
after the date hereof.
(n) The Company will use its best efforts to cause each officer and
director of the Company to furnish to the Lead Managers, prior to the time of
purchase, a letter or letters, substantially in the form of Exhibit A attached
hereto, pursuant to which each such person shall agree not to sell, offer,
contract to sell, pledge, grant any option to purchase or otherwise dispose of,
directly or indirectly, any shares of capital stock, or any securities
convertible into, or exercisable, exchangeable or redeemable for shares of
capital stock of the Company for a period of 45 days after the date hereof,
without the prior written consent of the Lead Managers. The foregoing sentence
shall not apply to any shares of Common Stock sold by any such officer or
director to the Company, at the current market value, as reported on the NYSE,
at the time of any such sale pursuant to a stock repurchase plan instituted by
the Company and approved by the Company's Board of Directors, which is in
compliance with all applicable securities laws and the rules and regulations of
the NYSE.
(o) The Company will use its best efforts to cause the Shares to be
listed on the NYSE and to maintain such listing and to file with the NYSE all
documents and notices required by the NYSE of companies that have securities
that are listed on the NYSE.
(p) The Company will engage and maintain, at its expense, a registrar
and transfer agent for the Shares.
(q) The Company will pay all expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the Underwriters,
except as set forth under Section 5 hereof or (iii) or (iv) below) in connection
with (i) the preparation and filing of the Registration Statement, the
Prospectus, and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (ii) the issuance, sale and delivery
of the Shares by the Company, (iii) as relating to the offering by the Company
of the Shares, the word processing and/or printing of this Agreement, any
agreement among the Underwriters, any dealer agreements, any statements of
information, any custody agreement and any powers of attorney, as applicable,
and the reproduction and/or printing and furnishing of copies of each thereof to
the Underwriters and to dealers (including costs of mailing and shipment), (iv)
the qualification of the Shares for offering and sale under state laws and the
determination of their eligibility for investment under state law as aforesaid
(including the legal fees and filing fees and other disbursements of counsel to
the
15
Underwriters) and the printing and furnishing of copies of any blue sky surveys
or legal investment surveys to the Underwriters and to dealers, (v) any listing
of the Shares on the NYSE and any registration thereof under the Exchange Act,
(vi) the filing, if any, for review of the public offering of the Shares by the
NASD and (vii) the performance of the Company's other obligations hereunder.
(r) Prior to termination of the underwriting syndicate contemplated by
this Agreement, neither the Company, the Subsidiaries, the Trusts nor the
Manager will (i) take, directly or indirectly, any action designed to stabilize
or manipulate the price of any security of the Company, or which may cause or
result in, or which might in the future reasonably be expected to cause or
result in, the stabilization or manipulation of the price of any security of the
Company, to facilitate the sale or resale of any of the Shares, (ii) sell, bid
for, purchase or pay any Person (other than as contemplated by the provisions
hereof) 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.
(s) The Company will comply with all requirements imposed upon it by
the Securities Act and the Exchange Act as from time to time in force, so far as
necessary to permit the continuance of sales of, or dealings in, the Shares as
contemplated by the provisions hereof and the Prospectus.
(t) The Company will not invest in futures contracts, options on
futures contracts or options on commodities unless the Company is exempt from
the registration requirements of the Commodity Exchange Act, as amended, or
otherwise complies with the Commodity Exchange Act, as amended, or with an
applicable no-action letter to or on behalf of the Company from the Commodity
Futures Trading Commission. In addition, the Company will not engage in any
activities which might be subject to the Commodity Exchange Act, as amended,
unless such activities are exempt from that Act or otherwise comply with that
Act or with an applicable no-action letter to or on behalf of the Company from
the Commodity Futures Trading Commission.
(u) The Company will comply with all of the provisions of any
undertakings in the Registration Statement.
(v) The Company and the Subsidiaries have been organized and operated
in conformity with the requirements for qualification and taxation of the
Company as a REIT under the Code, and the Company's proposed methods of
operation will enable the Company to continue to meet the requirements for
qualification and taxation as a REIT under the Code for subsequent taxable
years.
(w) The Company will not be or become, at any time prior to the
expiration of three years after the date of this Agreement, an "investment
company," as such term is defined in the Investment Company Act.
(x) The Company has retained PWC (for all periods after January 1,
1999) as its qualified accountants and qualified tax experts (i) to test
procedures and conduct annual compliance reviews designed to determine
compliance with the REIT provisions of the Code and the Company's exempt status
under the Investment Company Act and (ii) to otherwise assist the Company in
monitoring appropriate accounting systems and procedures designed to determine
compliance with the REIT provisions of the Code and the Company's exempt status
under the Investment Company Act.
(y) Prior to the time of purchase (and, if applicable, the additional
time of purchase), neither the Company, the Subsidiaries, the Trusts nor the
Manager will issue any press releases or other communications directly or
indirectly and will hold no press conferences with respect to the Company, the
Subsidiaries or the Trusts, the financial condition, results of operations,
business, properties, assets or
16
liabilities of the Company, the Subsidiaries or the Trusts, or the offering of
the Shares, without the Lead Managers' prior written consent, which shall not be
unreasonably withheld.
(z) The Company, the Subsidiaries and the Trusts will maintain such
controls and other procedures, including, without limitation, those required by
Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act, and the applicable regulations
thereunder that are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Commission's rules and forms, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the Company's management, including its Chief
Executive Officer and Principal Financial Officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure and to ensure that material information relating to the Company, the
Subsidiaries and the Trusts is made known to them by others within those
entities, particularly during the period in which such periodic reports are
being prepared.
(aa) The Company, the Subsidiaries and the Trusts will comply with all
effective applicable provisions of the Xxxxxxxx-Xxxxx Act.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the default by one or more of the Underwriters in its or their respective
obligations hereunder, the Company shall, in addition to paying the amounts
described in Section 4(q) hereof, reimburse the Underwriters for all of their
out-of-pocket expenses, including the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Manager on the date hereof and
at the time of purchase (and the several obligations of the Underwriters at the
additional time of purchase are subject to the accuracy of the representations
and warranties on the part of the Company and the Manager on the date hereof, at
the time of purchase (unless previously waived) and at the additional time of
purchase, as the case may be), the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) The Company shall cause to be furnished to the Lead Managers at the
time of purchase and at the additional time of purchase, as the case may be, an
opinion of Dechert LLP, counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in form
satisfactory to Xxxxxxxx Chance US LLP, counsel for the Underwriters,
substantially in the form of Exhibit B attached hereto.
(b) The Lead Managers shall have received from PWC, a letter dated, the
date of this Agreement and the time of purchase and the additional time of
purchase, as the case may be, and addressed to the Lead Managers (with
reproduced copies for each of the Underwriters) in the form heretofore approved
by the Lead Managers relating to the financial statements, including any pro
forma financial statements of the Company and the Subsidiaries and such other
matters customarily covered by comfort letters issued in connection with a
registered public offering.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (i) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Lead Managers deems such explanation unnecessary, and (ii) such changes,
decreases or increases do not, in
17
the sole judgment of the Lead Managers, make it impractical or inadvisable to
proceed with the purchase and delivery of the Shares as contemplated by the
Registration Statement and the Prospectus.
(c) The Lead Managers shall have received at the time of purchase and
at the additional time of purchase, as the case may be, the favorable opinion of
Xxxxxxxx Chance US LLP, counsel for the Underwriters, dated the time of purchase
or the additional time of purchase, as the case may be, substantially in the
form of Exhibit C attached hereto. In rendering the foregoing opinion or
opinions, such counsel may rely, as to matters involving the laws of the State
of Maryland, upon the opinion or opinions addressed to the Underwriters of
Dechert LLP, counsel for the Company.
(d) No amendment or supplement to the Registration Statement or
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed to which the Underwriters object in writing.
(e) Prior to the time of purchase or the additional time of purchase,
as the case may be, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Securities Act or
proceedings initiated under Section 8(d) or 8(e) of the Securities Act; (ii) the
Registration Statement and all amendments thereto, or modifications thereof, if
any, shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and (iii) the Prospectus and all amendments or
supplements thereto, or modifications thereof, if any, shall not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading.
(f) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the time of purchase or the additional time
of purchase, as the case may be, shall have been made within the applicable time
period prescribed for such filing by Rule 424.
(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the business, condition, net worth or
prospects of the Company, the Subsidiaries or the Trusts shall occur or become
known and (ii) no transaction which is material and unfavorable to the Company,
the Subsidiaries, the Trusts or the Manager shall have been entered into by the
Company, any of the Subsidiaries or the Trusts.
(h) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to the Lead Managers a certificate of two
of its executive officers (one of which shall be Xxxxxxx Xxxxxxxxx) to the
effect that the representations and warranties of the Company and the Manager as
set forth in this Agreement are true and correct as of each such date, that the
Company shall perform such of its obligations under this Agreement as are to be
performed at or before the time of purchase or the additional time of purchase,
as the case may be, and that the conditions set forth in paragraphs (e) and (g)
of this Section 6 have been met.
(i) The Company shall have furnished to the Lead Managers such other
documents and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Prospectus as of the time of purchase and
the additional time of purchase, as the case may be, as the Lead Managers may
reasonably request.
(j) The Shares shall have been approved for listing on the NYSE,
subject only to notice of issuance at or prior to the time of purchase or the
additional time of purchase, as the case may be.
18
(k) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(l) The Lead Managers shall have received lock-up agreements from the
Company and its officers and directors and the Manager, substantially in the
form of Exhibit A attached hereto, and such letter agreements shall be in full
force and effect.
(m) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall not
have occurred any downgrading, nor shall any notice or announcement have been
given or made of (i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company by any "nationally recognized
statistical rating organization," as that term is defined in Rule 436(g)(2)
under the Securities Act.
7. Effective Date of Agreement; Termination. This Agreement shall
become effective when the parties hereto have executed and delivered this
Agreement. The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of either of the Lead Managers
or any group of Underwriters (which may include the Lead Managers) which has
agreed to purchase in the aggregate at least 50% of the Firm Shares at any time
prior to the time of purchase or, if applicable, the additional time of
purchase, (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, (ii) if
any material adverse and unfavorable change occurs (financial or otherwise), or
any development involving a material adverse and unfavorable change occurs
(financial or otherwise) (in each case, other than as disclosed in, or
incorporated by reference into, the Registration Statement and Prospectus
(exclusive of any supplement thereto)), in the operations, business, net worth,
condition or prospects of the Company, the Subsidiaries or the Trusts, or a
material change in management of the Company, the Subsidiaries, the Trusts or
the Manager occurs, whether or not arising in the ordinary course of business,
which would, in the Lead Managers' sole judgment or in the judgment of such
group of Underwriters, make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus, (iii) if the
United States shall have declared a national emergency or war or there has
occurred an outbreak or escalation of hostilities or acts of terrorism involving
the United States or there has occurred any other national or international
calamity or crisis or change in financial, economic, political or other
conditions in the United States or elsewhere, the effect of which, in the Lead
Managers' sole judgment or in the judgment of such group of Underwriters, make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and the Prospectus or enforce contracts for the sale of
the Shares, (iv) if trading in any securities of the Company has been suspended
by the Commission or by the NYSE, or if trading generally on the NYSE, the
American Stock Exchange or the NASDAQ has been suspended (including an automatic
halt in trading pursuant to market-decline triggers other than those in which
solely program trading is temporarily halted), or limitations on or minimum
prices for trading (other than limitations on hours or numbers of days of
trading) shall have been fixed, or maximum ranges for prices for securities have
been required, by such exchange or the NASD or the NASDAQ or by order of the
Commission or any other governmental authority, (v) if a banking moratorium
shall have been declared by New York or United States authorities or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, (vi) if there shall have occurred any
downgrading, or any notice or announcement shall have been given or made of (a)
any intended or potential downgrading or (b) any watch, review or possible
change that does not indicate an affirmation or improvement, in the rating
accorded any securities of or guaranteed by the Company or any of the
Subsidiaries by any "nationally recognized statistical rating organization," as
that term is defined in Rule 436(g)(2) under the Securities Act, (vii) if
any federal or state statute, regulation, rule or order of any court or other
governmental authority has been
19
enacted, published, decreed or otherwise promulgated which, in the Lead
Managers' reasonable opinion or in the reasonable opinion of such group of
Underwriters, materially adversely affects or will materially adversely affect
the business or operations of the Company or any of the Subsidiaries, or (viii)
if 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 Lead Managers'
reasonable opinion or in the reasonable opinion of such group of Underwriters,
has a material adverse effect on the securities markets in the United States.
If the Lead Managers or any group of Underwriters elects to terminate
this Agreement as provided in this Section 7, the Company and each other
Underwriter shall be notified promptly by telephone, which shall be 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 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 4(q), 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. Subject to Sections 6 and 7,
if any Underwriter shall default in its obligation under this Agreement to take
up and pay for the Shares to be purchased by it under this Agreement (otherwise
than for reasons sufficient to justify the termination of this Agreement under
the provisions of Section 7 hereof), UBS Warburg 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 at the
time of purchase or the additional time of purchase, as the case may be, 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 number of Shares agreed to be purchased by all such
defaulting Underwriters in such amount or amounts as UBS Warburg may designate
with the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A; and (ii) if the total number of Defaulted Shares exceeds 10% of such
total number of Shares to be purchased at the time of purchase or the additional
time of purchase, as the case may be, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the five Business
Day period from the date of default for the purchase of such Defaulted Shares,
UBS Warburg may terminate this Agreement by notice to the Company, without
liability of any party to any other party except that the provisions of Sections
4(q), 5 and 9 shall at all times be effective and shall survive such
termination. Nothing in this paragraph, and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that they
will not sell any Shares hereunder unless all of the Shares are purchased by the
Underwriters (or by substituted Underwriters selected by UBS Warburg with the
approval of the Company or selected by the Company with UBS Warburg's approval).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter or Underwriters in accordance with the foregoing provisions, the
Company or UBS Warburg shall have the right to postpone the time of purchase or
the additional time of purchase, as the case may be, for a period not
20
exceeding five Business Days from the date of substitution 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 like effect as if
such substituted Underwriter had originally been named in Schedule A.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any Person who controls
any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing Persons from and against any loss, damage, expense, liability or claim
(including, but not limited to, the reasonable cost of investigation) which,
jointly or severally, any such Underwriter or any such Person may incur under
the Securities Act, the Exchange Act, federal or state statutory law or
regulation, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus (the term Prospectus for
the purpose of this Section 9 being deemed to include the Prospectus and the
Prospectus as amended or supplemented by the Company), or in any documents filed
under the Exchange Act and deemed to be incorporated by reference into the
Prospectus, or in any application or other document executed by or on behalf of
the Company or based on written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Shares under the
securities or blue sky laws thereof or filed with the Commission, (ii) upon any
omission or alleged omission to state in any such document a material fact
required to be stated therein or necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading or
(iii) any act or failure to act or any alleged act or failure to act by the
Underwriters in connection with, or relating in any manner to, the Shares or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, damage, expense, liability, claim or action arising out of or based
upon matters covered by clause (i) or (ii) above (provided that the Company
shall not be liable under this clause (iii) to the extent it is finally
judicially determined by a court of competent jurisdiction that such loss,
damage, expense, liability, claim or action resulted directly from any such acts
or failures to act undertaken or omitted to be taken by the Underwriters through
their gross negligence or willful misconduct), except insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by or on behalf of any
Underwriter through UBS Warburg to the Company expressly for use with reference
to such Underwriter in the 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 in the Prospectus or necessary to make such
information not misleading.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such Person in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such Underwriter
or such Person shall promptly notify the Company in writing of the institution
of such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the omission
to so notify the Company shall not relieve the Company from any liability which
the Company may have to any Underwriter or any such Person or otherwise. Such
Underwriter or such 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 of such Person unless the
employment of such counsel shall have been authorized in
21
writing by the Company in connection with the defense of such Proceeding or the
Company shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from, additional to
or in conflict with those available to the Company (in which case the Company
shall not have the right to direct the defense of such Proceeding on behalf of
the indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Company and paid as incurred (it being understood,
however, that the Company shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company shall not
be liable for any settlement of any such Proceeding effected without its written
consent (which shall not be unreasonably withheld) but if settled with the
written consent of the Company, the Company agrees to indemnify and hold
harmless any Underwriter and any such Person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the indemnifying
party agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered into more
than 60 Business Days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, any Person who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and each
director of the Company and each officer of the Company who signed the
Registration Statement from and against any loss, damage, expense, liability or
claim (including, but not limited to, the reasonable cost of investigation)
which, jointly or severally, the Company or any such Person may incur under the
Securities Act, the Exchange Act, federal or state statutory law or regulation,
the common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any (i) untrue statement or alleged untrue
statement of a material fact contained in, and in conformity with information
furnished in writing by or on behalf of such Underwriter through UBS Warburg to
the Company expressly for use with reference to such Underwriter in, the
Registration Statement (or in the Registration Statement as amended by or on
behalf of any post-effective amendment thereof by the Company) or in a
Prospectus, or in any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus, or in any application or other
document executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities or blue sky laws thereof or filed with
the Commission or (ii) omission or alleged omission to state in any such
document a material fact in connection with such information required to be
stated therein or necessary to make the statement therein, in the light of the
circumstances under which they were made, not misleading.
If any Proceeding is brought against the Company or any such Person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such Person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and
22
such Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such Person or otherwise.
The Company or such Person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such Person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the defense of such
Proceeding or such Underwriter shall not have employed counsel to have charge of
the defense of such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties,
but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company and any such
Person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 Business Days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding.
(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, damages, expenses, liabilities or claims
referred to therein, then in order to provide just and equitable contribution in
such circumstance, 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, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other hand
from the offering of the Shares or (ii) if, but only if, the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, damages, expenses, liabilities or claims, as well as
any other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be deemed to
be in the same respective proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, bear to the aggregate public offering price of the
shares. The relative fault of the
23
Company 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 by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, damages, expenses, liabilities and claims referred to in
this subsection shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating, preparing to
defend or defending any claim or Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, no Underwriter shall be liable or responsible
for, or be required to contribute, any amount pursuant to this Section 9 in
excess of the amount 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.
(e) The indemnity and contribution agreements contained in this Section
9 and the covenants, warranties and representations of the Company contained in
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, its directors and
officers or any Person (including each partner, officer or director of such
Person) who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, its directors or officers or any Person who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and shall survive any termination of this Agreement or the issuance and
delivery of the Shares. The Company and each Underwriter agree promptly to
notify each other upon the commencement of any Proceeding against it and, in the
case of the Company, against any of the Company's officers or directors in
connection with the issuance and sale of the Shares, or in connection with the
Registration Statement or Prospectus.
10. 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 or sent c/o
UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department (with a copy to Xxxxxxxx Chance US LLP, Attention: Xxxxxxx
X. Xxxxx, facsimile number (000) 000-0000), and if to the Company, shall be
sufficient in all respects if delivered or sent to the Company at the offices of
the Company at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xx, Xxx Xxxxxx 00000,
Attention: Xxxxx Xxxxxxxxx, President (with a copy to Dechert LLP, Attention:
Xxxxxxx Xxxxxxx, facsimile number (000) 000-0000).
11. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement (a "Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim may
be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Xxxxxxxx Xxxxxxxx xx Xxx Xxxx,
00
which courts shall have jurisdiction over the adjudication of such matters, and
the Company consents to the jurisdiction of such courts and personal service
with respect thereto. The Company hereby consents to personal jurisdiction,
service and venue in any court in which any Claim arising out of or in any way
relating to this Agreement is brought by any third party against the Lead
Managers or any indemnified party. Each of the Lead Managers and the Company (on
its behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement. The Company agrees that a
final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding upon the Company and may be enforced
in any other courts in the jurisdiction of which the Company is or may be
subject, by suit upon such judgment.
13. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company and to the extent
provided in Section 9 hereof the controlling Persons, directors and officers
referred to in such Section, and their respective successors, assigns, heirs,
pursuant representatives and 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 one or
more counterparts which together shall constitute one and the same agreement
among the parties.
15. Successors and Assigns. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
16. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned
subsidiary of UBS AG, is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of UBS AG. Because UBS Warburg LLC is a
separately incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended by UBS Warburg
LLC are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending relationships
with issuers of securities underwritten or privately placed by UBS Warburg LLC.
To the extent required under the securities laws, prospectuses and other
disclosure documents for securities underwritten or privately placed by UBS
Warburg LLC will disclose the existence of any such lending relationships and
whether the proceeds of the issue will be used to repay debts owed to affiliates
of UBS Warburg LLC.
25
If the foregoing correctly sets forth the understanding among the
Company, the Manager and the Underwriters, please so indicate in the space
provided below for the purpose, whereupon this letter and your acceptance shall
constitute a binding agreement among the Company, the Manager and the
Underwriters, severally.
Very truly yours,
XXXXXXXXX MORTGAGE, INC.
By: /Xxxxx X Xxxxxxxxx/
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President and Chief Operating
Officer
Accepted and agreed to as of the date first above written, on behalf of itself
and the other several Underwriters named in Schedule A
UBS WARBURG LLC
By: UBS WARBURG LLC
By: /Xxxxxxxx X. Xxxxx/
----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Director
By: /Xxxxx X. Xxxxxx/
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Director
X.X. XXXXXXX & SONS, INC.
By: / Xxxxxxx X. Xxxxx/
----------------------------------
Name: Xxxxxxx. X. Xxxxx
Title: Vice President
Accepted and agreed to as of the date first
above written, only as to the
representations and warranties of the
Manager as set forth in Section 3 hereof.
XXXXXXXXX MORTGAGE ADVISORY CORPORATION
By: /Xxxxxxx Xxxxxxxxx/
-------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Xxxxxxx Xxxxxxxxx
2
SCHEDULE A
Number of
Underwriter Firm Shares
----------- ------------
UBS Warburg LLC 1,600,000
------------
X.X. Xxxxxxx & Sons, Inc. 960,000
------------
U.S. Bancorp Xxxxx Xxxxxxx Inc. 320,000
------------
Wachovia Securities, Inc. 320,000
------------
Total: 3,200,000
Sch A-1
SCHEDULE B
LIST OF JURISDICTIONS IN WHICH XXXXXXXXX MORTGAGE, INC.
IS QUALIFIED AS A FOREIGN CORPORATION
New Mexico
Sch B-1
SCHEDULE C
LIST OF JURISDICTIONS IN WHICH EACH SUBSIDIARY IS QUALIFIED
AS A FOREIGN CORPORATION
Subsidiaries of Xxxxxxxxx Mortgage, Inc.:
Xxxxxxxxx Mortgage Acceptance Corporation - None
Xxxxxxxxx Mortgage Funding Corporation - None
Xxxxxxxxx Mortgage Home Loans, Inc. - Arizona
California
Connecticut
Delaware
Florida
Georgia
Idaho
Illinois
Kentucky
Louisiana
Maine
Massachusetts
Michigan
Minnesota
Montana
New Mexico
New York
North Carolina
North Dakota
Oregon
Rhode Island
South Carolina
Tennessee
Utah
Vermont
Virginia
West Virginia
Wisconsin
(See Schedule F for jurisdictions in which Xxxxxxxxx Mortgage Home Loans, Inc.
is authorized or licensed to originate loans.)
Subsidiaries of Xxxxxxxxx Mortgage Home Loans, Inc.:
Xxxxxxxxx Mortgage Acceptance Corporation II - None
Xxxxxxxxx Mortgage Funding Corporation II - None
Sch C-1
SCHEDULE D
LIST OF JURISDICTIONS IN WHICH XXXXXXXXX MORTGAGE
ADVISORY CORPORATION (THE MANAGER) IS QUALIFIED
AS A FOREIGN CORPORATION
New Mexico
Sch D-1
SCHEDULE E
None.
Sch E-1
SCHEDULE F
REQUIREMENTS TO REGISTER AS BROKER/DEALER;
RELATIONSHIPS WITH MEMBER FIRMS OF NASD
Xxxxxxxxx Securities Corporation, an affiliate of Xxxxxxxxx Mortgage, Inc., is
registered as a broker/dealer and is a member of the NASD.
Sch F-1
SCHEDULE G
JURISDICTIONS IN WHICH XXXXXXXXX MORTGAGE HOME LOANS, INC. ("TMHL")
IS AUTHORIZED OR LICENSED TO ORIGINATE LOANS
STATES WHERE TMHL HAS OBTAINED LICENSES TO LEND:
Alabama Massachusetts
Alaska Michigan
Arizona Minnesota
California Nebraska
Connecticut New Mexico
Delaware North Carolina
Florida North Dakota
Georgia Oregon
Idaho South Dakota
Illinois Tennessee
Iowa Utah
Kansas Vermont
Louisiana* Virginia
Maine West Virginia
Maryland Wisconsin
STATES WHERE LICENSING IS NOT REQUIRED:
Colorado South Carolina
Indiana Texas
Kentucky Wyoming
Montana
STATES WITH A LICENSE EXEMPTION:
Arkansas Nevada
Mississippi Ohio
Missouri Oklahoma
STATES IN WHICH APPLICATIONS ARE PENDING:
New York
Washington, D.C.
* Under Louisiana law, Xxxxxxxxx Mortgage Home Loans, Inc. is exempt. However,
if a company is exempt it is required to obtain a registration certificate which
the state calls a "license."
Sch G-1
EXHIBIT A
February , 2003
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Wachovia Securities, Inc.
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
In consideration of the agreement of UBS Warburg LLC ("UBS Warburg"),
X.X. Xxxxxxx & Sons, Inc., U.S. Bancorp Xxxxx Xxxxxxx Inc. and Wachovia
Securities, Inc. and certain other underwriters to underwrite a proposed public
offering (the "Offering") of shares (the "Shares") of common stock, par value
$0.01 per share (the "Common Stock"), of Xxxxxxxxx Mortgage, Inc., a Maryland
corporation (the "Company"), as contemplated by a registration statement on Form
S-3 (File No. 333-98659), including a prospectus (the "Registration Statement"),
with respect to the Shares, the undersigned hereby agrees that the undersigned
will not, for a period of 45 days after the commencement of the public offering
of such Shares, without the prior written consent of the Lead Managers (which
consent will not be unreasonably withheld), offer, sell, contract to sell,
pledge, grant any option to purchase or otherwise dispose of, directly or
indirectly, any shares of capital stock, or any securities convertible into, or
exercisable, exchangeable or redeemable for, shares of capital stock, except
that no consent shall be required for (i) for issuances of Common Stock upon the
exercise of outstanding options, (ii) for purchases of Common Stock through the
Company's Dividend Reinvestment and Stock Purchase Plan or (iii) sales of any
shares of Common Stock sold by any such officer or director to the Company, at
the current market value, as reported on the NYSE, at the time of any such sale,
issued by the Company in connection with the reinvestment of dividends or other
distributions by the Company pursuant to a stock repurchase plan instituted by
the Company and approved by the Company's Board of Directors, which is in
compliance with all applicable securities laws and the rules and regulations of
the NYSE.
Very truly yours,
By:
-------------------------------
Name:
Title:
Ex A-1
EXHIBIT B
OPINION OF DECHERT LLP
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, with the corporate power and corporate authority to own, lease and
operate its assets and properties and conduct its business as described in the
Prospectus, to execute and deliver this Agreement and to issue, sell and deliver
the Shares as herein contemplated.
(b) The Subsidiaries and the Manager have been duly
incorporated and are validly existing as corporations in good standing under the
laws of the State of Delaware, with the corporate power and corporate authority
to own, lease and operate their assets and properties and conduct their business
as described in the Prospectus.
(c) The Trusts have each been duly formed and are validly
existing as business trusts under the Delaware Business Trust Act in good
standing under the laws of Delaware, with the authority to perform all functions
(i) which business trusts are authorized to perform and (ii) which are described
in the Prospectus.
(d) The Company, the Subsidiaries, the Trusts and the Manager
are duly licensed or qualified by each jurisdiction listed on Schedule A to such
opinion.
(e) The execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company and the
Manager. This Agreement has been duly authorized, executed and delivered by the
Company and the Manager.
(f) The Shares have been duly authorized by the Company and,
when issued and delivered to and paid for by the Underwriters, will be duly and
validly issued and will be fully paid and non-assessable. The Shares when issued
and outstanding will conform in all material respects with the description
thereof contained in the Prospectus. The certificates for the Shares are in due
and proper form and comply with all applicable requirements of the General
Corporation Law of the State of Maryland (the "MGCL"), with any applicable
requirements of the Company's charter and by-laws and with the requirements of
the NYSE. No holder of the Shares is or will be subject to personal liability,
under the MGCL or the Company's charter or by-laws, by reason of being a holder.
(g) The Company has an authorized capitalization as set forth
in the Prospectus. All of the issued and outstanding shares of capital stock of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable and conform, in all material respects, to the description
thereof contained in the Prospectus.
(h) The issuance of the Shares is not subject to preemptive or
other similar rights of any stockholder of the Company arising by operation of
the MGCL or under the Company's charter or by-laws or, to the knowledge of such
counsel, any contractual preemptive rights, resale rights, rights of first
refusal or similar rights. Except as disclosed in the Registration Statement and
the Prospectus, there is no outstanding option, warrant or other right calling
for the issuance of, and, to the best of such counsel's knowledge, no
commitment, plan or arrangement to issue, any shares of capital stock of the
Company or any security convertible into, exercisable, exchangeable or
redeemable for shares of capital stock of the Company. No holder of any security
of the Company has the right to require any security owned by such holder to be
included for registration in the Registration Statement.
Ex B-1
(i) The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
Subsidiaries listed on Schedule A to such opinion.
(j) Each part of the Registration Statement, when such part
became effective, and the Prospectus and any amendment or supplement thereto
(except as to the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein, as to which
such counsel need not express an opinion) on the date of filing with the
Commission and at the time of purchase (and, if applicable, the additional time
of purchase) complied as to form in all material respects with the requirements
of the Securities Act and the Exchange Act, including, without limitation, Item
503 of Regulation S-K.
(k) The Registration Statement has been declared effective
under the Securities Act, the Prospectus has been filed as required by this
Agreement and, to the best of such counsel's knowledge, no stop order has been
issued or proceedings with respect thereto pending, contemplated or threatened
under the Securities Act and any required filings of the Prospectus and any
supplement thereto pursuant to Rule 424 under the Securities Act have been made
in the manner and within the time period required by such Rule 424.
(l) No approval, authorization, consent or order of or filing
with any national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the authorization,
issuance, transfer, sale and delivery of the Shares and the consummation by the
Company of the transaction as contemplated by this Agreement or with the taking
by the Company of any action contemplated thereby other than registration of the
Shares under the Securities Act and except as may be required under state
securities laws or by the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares.
(m) The execution, delivery and performance of this Agreement
by the Company and the Manager and the consummation by the Company of the
transactions contemplated hereby 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 result in any breach of or constitute
a default under, nor cause the time for performance of any obligation to be
accelerated under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the assets of the Company pursuant to the terms of)
(i) any provisions of the charter, by-laws or other organizational documents, as
the case may be, of the Company, the Subsidiaries, the Trusts or the Manager,
(ii) any provision of any contract, document or other agreement or instrument
listed on Schedule B to such opinion, (iii) the MGCL or the Delaware General
Corporation Law (the "DGCL") or any federal law, regulation or rule or any
decree, judgment or order applicable to the Company, the Subsidiaries or the
Trusts, or (iv) any existing obligation of the Company under any court or
administrative order, judgment or decree of which such counsel has knowledge, or
violate applicable provisions of the MGCL, the DGCL or any statute or regulation
of the United States.
(n) All descriptions in the Registration Statement and
Prospectus (i) under the captions "Prospectus Supplement Summary," "Price Range
of Common Stock and Dividends," "Capitalization," "Compliance with REIT
Requirements and Investment Company Act of 1940," "Manager," "About This
Prospectus," "Risk Factors," "Description of Stock," "Federal Income Tax
Considerations," and "Plan of Distribution" of statutes, regulations, legal and
governmental proceedings or other legal matters, or (ii) of contracts,
instruments, leases, licenses and other agreements (collectively, the
"Documents"), are accurate and fairly present the information required to be
shown and such counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Registration Statement or the
Prospectus that are not described as required, or of any Documents of a
character required to be described in the Registration Statement or Prospectus
that are not described as
Ex B-2
required, and any Document required to be filed as an exhibit to the
Registration Statement has been filed as an exhibit thereto or has been
incorporated as an exhibit by reference into the Registration Statement.
(o) To the best of such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending, threatened or
contemplated to which the Company, the Subsidiaries, the Trusts or the Manager
are subject or of which any of their assets or properties are subject at law or
in equity or before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which are required to be
described in the Prospectus but are not so described or which (i) seek to
challenge the legality or enforceability of this Agreement, (ii) seek to
challenge the legality or enforceability of any of the Documents filed, or
required to be filed, or incorporated by reference as exhibits to the
Registration Statement, (iii) seek damages or other remedies with respect to any
of the Documents filed, or required to be filed, as exhibits to the Registration
Statement, (iv) except as set forth in or contemplated by the Registration
Statement and the Prospectus, seek money damages or seek to impose criminal
penalties upon the Company, the Subsidiaries, the Trusts or the Manager, or any
of their respective officers or directors in their capacities as such or (v)
seek to enjoin any of the business activities of the Company, the Subsidiaries,
the Trusts or the Manager or the transactions described in the Prospectus.
(p) The statements made in the Prospectus under the
"Description of Stock," "Plan of Distribution" and "Risk Factors" and in the
Registration Statement in Item 15 of Part II, to the extent that they constitute
summaries of provisions of the Company's charter and by-laws or matters of law
or legal conclusions, have been reviewed by such counsel and are accurate
summaries, in all material respects.
(q) The documents incorporated by reference into the
Registration Statement and Prospectus, when they became effective or were filed
(or, if an amendment with respect to any such document was filed when such
amendment was filed) with the Commission, complied as to form in all material
respects with the Exchange Act (except as to the financial statements and
schedules and other financial and statistical data contained or incorporated by
reference therein, as to which such counsel need not express an opinion).
(r) Each of the Company, the Subsidiaries and the Trusts is
not and will not, upon consummation of the transactions contemplated by this
Agreement, be an "investment company," or a "promoter" or "principal
underwriter" for, a "registered investment company," as such terms are defined
in the Investment Company Act, or a "broker" within the meaning of Section
3(a)(4) of the Exchange Act or a "dealer" within the meaning of Section 3(a)(5)
of the Exchange Act or required to be registered pursuant to Section 15(a) of
the Exchange Act.
(s) The Company, for all taxable years commencing with the
taxable year ended December 31, 1993, and each of the Subsidiaries, since its
respective date of inception, have been, and upon the sale of Shares will
continue to be, organized and operated in conformity with the requirements for
qualification and taxation of the Company as a REIT under Sections 856 through
860 of the Code. To the extent that the foregoing opinion refers to any period
prior to the taxable year beginning January 1, 2002, such opinion is solely
based on the opinion of Xxxx, Xxxxx & Xxxxxxx LLP (which Xxxx, Xxxxx & Xxxxxxx
LLP has permitted such counsel to rely upon and such reliance is expressly
permitted by the Underwriter). The proposed method of operation of the Company
and each of the Subsidiaries and the Trusts as described in the Prospectus will
enable the Company to continue to meet the requirements for qualification and
taxation as a REIT under the Code, and, to the best knowledge of such counsel,
no actions have been taken (or not taken which are required to be taken) which
would cause such qualification to be lost. The disclosure contained in the
Prospectus under the caption "Federal Income
Ex B-3
Tax Considerations," to the extent such information constitutes matters of law,
summaries of legal matters or legal conclusions, has been reviewed by such
counsel and is accurate in all material respects.
(t) The Shares have been duly authorized for listing by the
NYSE, subject to official notice of issuance.
Such counsel shall confirm that during the preparation of the
Registration Statement and Prospectus, such counsel participated in conferences
with the Underwriters and their counsel and with officers and representatives of
the Company and its independent accountants, at which conferences the contents
of the Registration Statement and the Prospectus (including all documents filed
under the Exchange Act and deemed incorporated by reference therein) were
discussed, reviewed and revised. On the basis of the information which was
developed in the course thereof, considered in light of such counsel's
understanding of applicable law and the experience gained by such counsel
through their practice thereunder, without such counsel assuming responsibility
for, or independently verifying, the accuracy and completeness of such
statements, except to the extent expressly provided above in the applicable
opinion paragraph preceding this paragraph, such counsel shall confirm that
nothing came to their attention that would lead them to believe that either the
Registration Statement (including any document filed under the Exchange Act and
deemed incorporated by reference therein), as of its effective date, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
the Prospectus or any amendment or supplement thereto (including any document
filed under the Exchange Act and deemed incorporated by reference therein) as of
its respective issue date and as of the time of purchase, or, if applicable, the
additional time of purchase, 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 (except for in each of
the above cases the financial statements and schedules and other financial or
statistical data as to which such counsel need express no opinion).
In rendering the foregoing opinion, such counsel may rely as to matters
of fact, upon certificates and written statements of the executive officers of,
and accountants for, the Company. In rendering the foregoing opinions, all
statements and opinions given "to the knowledge of such counsel" (or similar
phrases) shall refer to the actual present knowledge of the attorneys of such
firm who have devoted substantive attention to the offering and related matters
(and who shall be named in such opinion), and not to the knowledge of the firm
or its partners or employees generally, and all such statements and opinions
given to the knowledge of such counsel shall be supported, as to matters of
fact, by officer's certificates obtained from the Company, the Subsidiaries or
the Trusts, as appropriate, executed copies of which shall be delivered to the
Underwriters on the time of purchase.
Ex B-4