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AMERICA FIRST MORTGAGE INVESTMENTS, INC.
7,500,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
April ___, 2001
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
[CO-MANAGER, IF ANY]
as Representatives of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
America First Mortgage Investments, Inc., a Maryland corporation
(the "Company"), confirms its agreement with Friedman, Billings, Xxxxxx &
Co., Inc. and [NAME OF CO-MANAGER, IF ANY] and each of the other Underwriters
listed on SCHEDULE I hereto (collectively, the "Underwriters"), for whom
Friedman, Billings, Xxxxxx & Co., Inc. and [NAME OF CO-MANAGER, IF ANY] are
acting as representatives (in such capacity, the "Representatives"), with
respect to (i) the sale by the Company and the purchase by the Underwriters,
acting severally and not jointly, of the respective numbers of shares of
common stock of the Company, $0.01 par value per share (the "Common Shares"),
set forth in SCHEDULE I hereto and (ii) the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 1(b) hereof to purchase all or any part of 1,125,000 Common Shares to
cover over-allotments, if any. The 7,500,000 Common Shares to be purchased by
the Underwriters (the "Initial Shares") and all or any part of the 1,125,000
Common Shares subject to the option described in Section 1(b) hereof (the
"Option Shares") are hereinafter called, collectively, the "Shares."
The Company understands that the Underwriters propose to make a
public offering of the Shares as soon as the Underwriters deem advisable
after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission"), a registration statement on Form S-2 (No. 333-__________)
and a related preliminary prospectus for the registration of the Shares under
the Securities Act of 1933, as amended (the "Securities Act"), and the rules
and regulations thereunder (the "Securities Act Regulations"). The Company
has prepared and filed such amendments thereto, if any, and such amended
preliminary prospectuses, if any, as may have been required to the date
hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be
required. The registration statement has been declared effective under the
Securities Act by the Commission. The registration statement as amended at
the time it became effective (including all information deemed to be a part
of the registration statement at the time it became effective pursuant to
Rule 430A(b) of the Securities Act Regulations) is hereinafter called the
"Registration Statement," except that, if the Company files a post-effective
amendment to such registration statement which becomes effective prior to the
Closing Time (as defined below), "Registration Statement" shall refer to such
registration statement as so amended. Any registration statement filed
pursuant to Rule 462(b) of the Securities Act Regulations is hereinafter
called the "Rule 462(b) Registration Statement," and after such filing the
term "Registration Statement" shall include the Rule 462(b) Registration
Statement. Each prospectus included in the registration statement, or
amendments thereof or supplements thereto, before it became effective under
the Securities Act and any prospectus filed with the Commission by the
Company with the consent of the Underwriters pursuant to Rule 424(a) of the
Securities Act Regulations is hereinafter called the "Preliminary
Prospectus." The term "Prospectus" means the final prospectus, as first filed
with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Securities Act Regulations, and any amendments thereof or supplements
thereto. The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus.
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE:
(a) INITIAL SHARES. Upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter agrees, severally and not jointly, to purchase from the Company
at the purchase price per share of $__________, the number of Initial Shares
set forth in SCHEDULE I opposite such Underwriter's name, plus any additional
number of Initial Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 8 hereof subject, in each
case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional shares.
(b) OPTION SHARES. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase from the Company all or any part of the Option Shares at the
purchase price per share set forth in paragraph (a) above plus any additional
number of Option Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 8 hereof. The option hereby
granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments, which may be made in connection with the offering and
distribution of the Initial Shares, upon notice by the Representatives to the
Company setting forth the number of Option Shares as to which the several
Underwriters are then exercising the option and the time and date of payment
and delivery for such Option Shares. Any such time and date of delivery (a
"Date of Delivery") shall be determined by the Representatives, but shall not
be later than three full business days (or earlier, without the consent of
the Company, than two full business days) after the exercise of said option,
nor in any event prior to the Closing Time, as hereinafter
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defined. If the option is exercised as to all or any portion of the Option
Shares, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Shares then being
purchased which the number of Initial Shares set forth in SCHEDULE I opposite
the name of such Underwriter bears to the total number of Initial Shares,
subject in each case to such adjustments as the Representatives in their sole
discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) TERMS OF PUBLIC OFFERING. The Company is advised by you that the
Shares are to be offered to the public initially at $______ per share (the
"Public Offering Price") and to certain dealers selected by you at a price
that represents a concession not in excess of $.____ per share under the
Public Offering Price, and that any Underwriter may allow, and such dealers
may reallow, a concession, not in excess of $.____ per share, to any
Underwriter or to certain other dealers. The Underwriters may from time to
time increase or decrease the Public Offering Price of the Shares after the
initial public offering to such extent as the Underwriters may determine.
2. PAYMENT AND DELIVERY:
(a) INITIAL SHARES. The Initial Shares to be purchased by each
Underwriter hereunder, in definitive form, and in such authorized
denominations and registered in such names as the Representative may request
upon at least forty-eight hours' prior notice to the Company shall be
delivered by or on behalf of the Company to the Representatives, including,
at the option of the Representatives, through the facilities of The
Depository Trust Company ("DTC") for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified to the
Representative by the Company upon at least forty-eight hours' prior notice.
The Company will cause the certificates representing the Shares to be made
available for checking and packaging at least twenty-four hours prior to the
Closing Time (as defined below) with respect thereto at the office of the
Winston & Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or at the
office of DTC or its designated custodian, as the case may be (the
"Designated Office"). The time and date of such delivery and payment shall be
9:30 a.m., New York City time, on ________________, 2001 or on such other
time and date as the Company and the Representative may agree upon in
writing. The time at which such payment and delivery are actually made is
hereinafter sometimes called the "Closing Time" and the date of delivery of
both Initial Shares and Option Shares is hereinafter sometimes called the
"Date of Delivery."
(b) OPTION SHARES. Any Option Shares to be purchased by each
Underwriter hereunder, in definitive form, and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company shall be
delivered by or on behalf of the Company to the Representatives, including,
at the option of the Representatives, through the facilities of DTC for the
account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of federal
(same-day) funds to the account specified to the Representatives by the
Company upon at least forty-eight hours' prior notice. The Company will cause
the certificates representing the Option Shares to be made available for
checking and packaging at least twenty-four hours prior to the Date of
Delivery with respect thereto at the Designated Office. The time and date of
such delivery and payment shall be 9:30 a.m., New York City time, on the date
specified by the Representatives in the notice given by the Representatives
to the
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Company of the Underwriters' election to purchase such Option Shares or on
such other time and date as the Company and the Representatives may agree
upon in writing.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY: The Company
represents and warrants to the Underwriters that:
(a) each of the Company, the subsidiaries of the Company and certain
other related companies as set forth on SCHEDULE II hereto (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly formed or
incorporated, as the case may be, and is validly existing and in good
standing under the laws of its respective jurisdiction of formation or
incorporation with all requisite corporate power and authority to own, lease
and operate its respective properties and to conduct its respective business
as now conducted and, in the case of the Company, to authorize, execute and
deliver this Agreement, and the other agreements described in the Prospectus
and listed on SCHEDULE III attached hereto, if any (the "Other Transaction
Documents"), and to consummate the transactions described in each such
agreement;
(b) the Company and the Subsidiaries are duly qualified or
registered to transact business in each jurisdiction in which they conduct
their respective businesses as now conducted and in which the failure,
individually or in the aggregate, to be so qualified or registered could
reasonably be expected to have a material adverse effect on the assets,
operations or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole, and the Company and the Subsidiaries are in
good standing in each jurisdiction in which they maintain an office or in
which the nature or conduct of their respective businesses as now conducted
requires such qualification, except where the failure to be in good standing
could not reasonably be expected to have a material adverse effect on the
assets, operations, business or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole;
(c) the Company and the Subsidiaries are in compliance in all
material respects with all applicable laws, rules, regulations, orders,
decrees and judgments;
(d) neither the Company nor any of the Subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under), its respective
charter, by-laws, certificate of limited liability company, agreement of
limited liability company, certificate of limited partnership or partnership
agreement, as the case may be, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any license,
advisory agreement, management agreement, indenture, mortgage, deed of trust,
loan or credit agreement or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or
their respective properties is bound, except for such breaches or defaults
which could be reasonably expected to not have a material adverse effect on
the assets, operations, business or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole, and the issuance, sale and
delivery by the Company of the Shares, the execution, delivery and
performance of this Agreement and the Other Transaction Documents (as such
term is defined in Section 3(a) hereof), and consummation of the transactions
contemplated hereby and thereby will not conflict with, or result in any
breach of, or constitute a default under (nor constitute any event which with
notice, lapse of time, or both would constitute a breach of, or default
under), (i) any provision of the charter, by-laws, certificate of limited
liability company,
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agreement of limited liability company, certificate of limited partnership or
partnership agreement, as the case may be, of the Company or any of the
Subsidiaries, (ii) any provision of any license, advisory agreement,
management agreement, indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or their respective
properties may be bound or affected, or (iii) any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable
to the Company or any of the Subsidiaries, except in the case of clause (ii)
for such breaches or defaults which could be reasonably expected to not have
a material adverse effect on the assets, operations, business or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a
whole; or result in the creation or imposition of any material lien, charge,
claim or encumbrance upon any property or asset of the Company or the
Subsidiaries;
(e) the Company has full legal right, power and authority to enter
into and perform this Agreement and to consummate the transactions
contemplated herein; this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity, and except
to the extent that the indemnification and contribution provisions of Section
9 hereof may be limited by federal or state securities laws and public policy
considerations in respect thereof;
(f) the issuance and sale of the Shares to the Underwriters
hereunder have been duly authorized by the Company; when issued and delivered
against payment therefor as provided in this Agreement, the Shares will be
validly issued, fully paid and non-assessable and the issuance of the Shares
will not be subject to any preemptive or similar rights; except as
contemplated herein, no person or entity holds a right to require or
participate in the registration under the Securities Act of the Shares
pursuant to the Registration Statement; no person or entity has a right of
participation or first refusal with respect to the sale of the Shares by the
Company; there are no contracts, agreements or understandings between the
Company and any person or entity granting such person or entity the right to
require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement; the form of certificates evidencing the Shares
complies with all applicable legal requirements and, in all material
respects, with all applicable requirements of the charter and bylaws of the
Company and the requirements of the New York Stock Exchange;
(g) the Other Transaction Documents, if any, have been duly
authorized and will be, upon execution and delivery by the Company, legal,
valid and binding agreements of the Company enforceable in accordance with
their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and by general principles of equity;
(h) no approval, authorization, consent or order of or filing with
any federal, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the execution,
delivery and performance of this Agreement and the Other Transaction
Documents, the consummation of the transactions contemplated hereby and
thereby
5
or the sale and delivery of the Shares as contemplated hereby other than (i)
such as have been obtained, or will have been obtained at the Closing Time or
the relevant Date of Delivery, as the case may be, under the Securities Act
or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii)
such approvals as have been obtained in connection with the approval of the
listing of the Shares on the New York Stock Exchange and (iii) any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters;
(i) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state or local law, regulation or rule,
and has obtained all necessary authorizations, consents and approvals from
other persons required in order to conduct their respective businesses as
described in the Registration Statement and Prospectus, except to the extent
that any failure to have any such licenses, authorizations, consents or
approvals, to make any such filings or to obtain any such authorizations,
consents or approvals could not reasonably be expected to have, individually
or in the aggregate, a material adverse effect on the assets, operations,
business or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole; neither the Company nor any of the
Subsidiaries is in violation of, in default under, or has received any notice
regarding a possible violation, default or revocation of any such license,
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, the effect of which could reasonably be
expected to be material and adverse to the assets, operations, business or
condition (financial or otherwise) of the Company and the Subsidiaries taken
as a whole; and no such license, authorization, consent or approval contains
a materially burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectus;
(j) each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the Securities Act and no
stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the Securities Act
and no proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are threatened by the Commission, and any
request on the part of the Commission for additional information has been
complied with;
(k) the Company and the transactions contemplated by this Agreement
meet the requirements and conditions for using a registration statement on
Form S-2 under the Securities Act, set forth in the General Instructions to
Form S-2; the Preliminary Prospectus and the Registration Statement comply
and the Prospectus and any further amendments or supplements thereto will
comply, when they have become effective or are filed with the Commission, as
the case may be, in all material respects with the requirements of the
Securities Act and the Securities Act Regulations and, in each case, present,
or will present, fairly the information required to be shown; the
Registration Statement did not, and any amendment thereto will not, in each
case as of the applicable effective date, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Preliminary
Prospectus does not, and the Prospectus or any amendment or supplement
thereto will not, as of the applicable filing date and at the Closing Time
and on each Date of Delivery (if
6
any), contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the Company makes no warranty
or representation with respect to any statement contained in the Registration
Statement or the Prospectus in reliance upon and in conformity with the
information concerning the Underwriters and furnished in writing by or on
behalf of the Underwriters through the Representatives to the Company
expressly for use in the Registration Statement or the Prospectus (that
information being limited to that described in the last sentence of the first
paragraph of Section 9(b) hereof);
(l) the Preliminary Prospectus was and the Prospectus delivered to
the Underwriters for use in connection with this offering will be identical
to the versions of the Preliminary Prospectus and Prospectus created to be
transmitted to the Commission for filing via the Electronic Data Gathering
Analysis and Retrieval System ("XXXXX"), except to the extent permitted by
Regulation S-T;
(m) each document incorporated by reference or deemed to be
incorporated by reference in the Registration Statement and in the
Prospectus, when each became effective or was filed with the Commission, as
the case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the Securities Act
Regulations and the regulations promulgated under the Exchange Act (the
"Exchange Act Regulations"), and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Registration
Statement and the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the Securities Act
Regulations and the Exchange Act Regulations and will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(n) all legal or governmental proceedings, contracts or documents
which are material and of a character required to be filed as exhibits to the
Registration Statement or to be summarized or described in the Prospectus
have been so filed, summarized or described as required;
(o) there are no actions, suits, proceedings, inquiries or
investigations pending or, to the Company's knowledge, threatened against the
Company or any of the Subsidiaries or any of their respective officers and
directors or to which the properties, assets or rights of any such entity is
subject, at law or in equity, before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority,
arbitration panel or agency which could reasonably be expected to result in a
judgment, decree, award or order having a material adverse effect on the
assets, operations, business or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole, or which could adversely
affect the consummation of the transactions contemplated by this Agreement in
any material respect;
7
(p) the financial statements, including the notes thereto, included
in the Registration Statement and the Prospectus present fairly the financial
position of the Company and the Subsidiaries as of the dates indicated and
the results of operations and changes in financial position and cash flows of
the Company and the Subsidiaries for the periods specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved (except as indicated in the notes thereto); the financial statement
schedules included in the Registration Statement and the Prospectus fairly
present the information shown therein; no other financial statements or
schedules are required by Form S-2 or otherwise to be included in the
Registration Statement or Prospectus;
(q) the Company has filed in a timely manner all reports required to
be filed pursuant to Sections 13, 14, 15(d) of the Exchange Act during the
preceding twelve calendar months and if during such period the Company has
relied on Rule 12b-25(b) under the Exchange Act ("Rule 12b-25(b)") with
respect to a report or a portion of a report, that report or portion of a
report has actually been filed within the time period prescribed by Rule
12b-25(b);
(r) PricewaterhouseCoopers LLP, whose reports on the audited
financial statements of the Company and the Subsidiaries are included as part
of the Registration Statement and Prospectus or are incorporated by reference
therein are and were during the periods covered by their reports independent
public accountants within the meaning of the Securities Act and the
Securities Act Regulations;
(s) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as may be
otherwise stated in the Registration Statement or Prospectus, there has not
been (i) any material adverse change in the assets, operations, business or
condition (financial or otherwise), present or prospective, of the Company
and the Subsidiaries taken as a whole, whether or not arising in the ordinary
course of business, (ii) any transaction, which is material to the Company
and the Subsidiaries taken as a whole, planned or entered into by the Company
or any of the Subsidiaries, (iii) any obligation, contingent or otherwise,
directly or indirectly incurred by the Company or any of the Subsidiaries,
which is material to the Company and the Subsidiaries taken as a whole or
(iv) except in accordance with the Company's ordinary practice as disclosed
in the Registration Statement and the Prospectus, any dividend or
distribution of any kind declared, paid or made with respect to the capital
stock of the Company;
(t) the authorized shares of common stock of the Company conform in
all material respects to the description thereof contained in the Prospectus;
the Company has an authorized, issued and outstanding capitalization as set
forth in the Prospectus under the caption "Capitalization" as of the date
stated in such section; immediately after the Closing Time, _____________
Common Shares will be issued and outstanding (subject to the Underwriters'
option described in Section 1(b) hereof) and no shares of any other class of
capital stock will be issued and outstanding. All of the issued and
outstanding shares of common stock of the Company have been duly authorized
and are validly issued, fully paid and non-assessable, and have been offered,
sold and issued by the Company in compliance with all applicable laws
(including, without limitation, federal and state securities laws); none of
the issued shares of common stock of the Company have been issued in
violation of any preemptive or similar rights
8
granted by the Company; except as disclosed in the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and
no commitment, plan or arrangement to issue, any shares of common stock of
the Company or any security convertible into or exchangeable for shares of
common stock of the Company;
(u) each of the Company, the Subsidiaries, and each of their
respective officers, directors and controlling persons has not taken, and
will not take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(v) neither the Company nor any of its affiliates (i) is required to
register as a "broker" or "dealer" in accordance with the provisions of the
Exchange Act or the Exchange Act Regulations, or (ii) directly, or indirectly
through one or more intermediaries, controls or has any other association
with (within the meaning of Article 1 of the By-laws of the National
Association of Securities Dealers, Inc. (the "NASD")) any member firm of the
NASD;
(w) the Company has not relied upon the Representatives or legal
counsel for the Representatives for any legal, tax or accounting advice in
connection with the offering and sale of the Shares;
(x) any certificate signed by any officer of the Company or any
Subsidiary delivered to the Representatives or to counsel for the
Underwriters pursuant to or in connection with this Agreement shall be deemed
a representation and warranty by the Company to each Underwriter as to the
matters covered thereby;
(y) the Company, the Subsidiaries and, to the Company's knowledge,
Gold Key Venture, a Georgia limited partnership ("Gold Key"), have good and
marketable title in fee simple to all real property and good title to all
personal property owned by them, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances, mortgages and defects,
except such as are disclosed in the Prospectus or the financial statements
thereto or such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of
such property by the Company, the Subsidiaries and Gold Key; and any real
property and buildings held under lease by the Company, any Subsidiary or, to
the Company's knowledge, Gold Key are held under valid, existing and
enforceable leases, with such exceptions, liens, security interests, pledges,
charges, encumbrances, mortgages and defects, as are disclosed in the
Prospectus or are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company, such
Subsidiary or Gold Key; the Company, a Subsidiary or, to the Company's
knowledge, Gold Key has obtained an owner's title insurance policy, from a
title insurance company licensed to issue such policy, on any real property
owned by the Company, any Subsidiary or Gold Key, that insures the Company's,
the Subsidiary's or Gold Key's fee or leasehold interest in such real
property, with coverage in an amount at least equal to the fair market value
of such fee or leasehold interest in the real property, or a lender's title
insurance policy insuring the lien of its mortgage securing the real property
with coverage equal to the maximum aggregate principal amount of any
indebtedness held by the Company, a Subsidiary or Gold Key and secured by the
real property;
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(z) to the knowledge of the Company, 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 Advisory
Agreement dated April 9, 1998 between the Company and America First Mortgage
Advisory Corporation, a Maryland corporation (the "Advisor"), by the Advisor;
(aa) to the knowledge of the Company, there are no statutes or
regulations applicable to the Company or any of the Subsidiaries or
certificates, permits or other authorizations from governmental regulatory
officials or bodies required to be obtained or maintained by the Company or
any of the Subsidiaries of a character required to be disclosed in the
Registration Statement or the Prospectus which have not been so disclosed and
properly described therein; all agreements between the Company or any of the
Subsidiaries and third parties expressly referenced in the Prospectus are
legal, valid and binding obligations of the Company or one or more of the
Subsidiaries, enforceable in accordance with their respective terms, except
to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and by general principles of equity;
(bb) no relationship, direct or indirect, exists between or among
the Company or any of the Subsidiaries on the one hand, and the directors,
trustees, officers, shareholders, customers or suppliers of the Company or
any of the Subsidiaries on the other hand, which is required by the
Securities Act to be described in the Registration Statement and the
Prospectus which is not so described;
(cc) the Company and each Subsidiary owns or possesses adequate
license or other rights to use all patents, trademarks, service marks, trade
names, copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how, if any
(collectively "Intangibles"), necessary to entitle the Company and each
Subsidiary to conduct its business as described in the Prospectus, and
neither the Company, nor any Subsidiary, has received notice of infringement
of or conflict with (and knows of no such infringement of or conflict with)
asserted rights of others with respect to any Intangibles which could
materially and adversely affect the assets, operations, business or condition
(financial or otherwise) of the Company or any Subsidiary;
(dd) each of the Company and the Subsidiaries has filed on a timely
basis all necessary federal, state, local and foreign income and franchise
tax returns, if any such returns were required to be filed, through the date
hereof and have paid all taxes shown as due thereon; and no tax deficiency
has been asserted against the Company or any of the Subsidiaries, nor does
the Company or any of the Subsidiaries know of any tax deficiency which is
likely to be asserted against any such entity which, if determined adversely
to any such entity, could materially adversely affect the assets, operations,
business or condition (financial or otherwise) of any such entity,
respectively; all tax liabilities, if any, are adequately provided for on the
respective books of such entities;
(ee) each of the Company and the Subsidiaries maintains insurance
(issued by insurers of recognized financial responsibility) of the types and
in the amounts generally deemed adequate, if any, for their respective
businesses and consistent with insurance coverage maintained by similar
companies in similar businesses, including, but not limited to, insurance
10
covering real and personal property owned or leased by the Company and the
Subsidiaries against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full
force and effect;
(ff) except as otherwise disclosed in the Prospectus, neither the
Company, any of the Subsidiaries nor, to the best of their knowledge, any
former owner of any real property owned by the Company or the Subsidiaries
has authorized or conducted or has knowledge of the generation,
transportation, storage, presence, use, treatment, disposal, release, or
other handling of any hazardous substance, hazardous waste, hazardous
material, hazardous constituent, toxic substance, pollutant, contaminant,
asbestos, radon, polychlorinated biphenyls ("PCBs"), petroleum product or
waste (including crude oil or any fraction thereof), natural gas, liquefied
gas, synthetic gas or other material defined, regulated, controlled or
potentially subject to any remediation requirement under any environmental
law (collectively, "Hazardous Materials"), on, in, under or affecting any
real property currently leased or owned or by any means controlled by the
Company or any of the Subsidiaries, including any real property underlying
any loan held by the Company or the Subsidiaries and any real property owned
by an entity in which the Company or the Subsidiaries own an interest
(collectively, the "Real Property"), except in material compliance with
applicable laws; to the knowledge of the Company, the Real Property, and the
Company's, the Subsidiaries' and the former owners of the Real Property's
operations with respect to the Real Property, are and were in compliance with
all federal, state and local laws, ordinances, rules, regulations and other
governmental requirements relating to pollution, control of chemicals,
management of waste, discharges of materials into the environment, health,
safety, natural resources, and the environment (collectively, "Environmental
Laws"), and the Company and the Subsidiaries are in compliance with, all
licenses, permits, registrations and government authorizations necessary to
operate under all applicable Environmental Laws; except as otherwise
disclosed in the Prospectus, neither the Company nor the Subsidiaries or, to
the knowledge of the Company, any former owner of any of the Real Property
has received any written or oral notice from any governmental entity or any
other person and there is no pending or threatened claim, litigation or any
administrative agency proceeding that: alleges a violation of any
Environmental Laws by the Company or any of the Subsidiaries; or that the
Company or any of the Subsidiaries is a liable party or a potentially
responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, ET SEQ., or any state
superfund law; has resulted in or could result in the attachment of an
environmental lien on any of the Real Property; or alleges that the Company
or any of the Subsidiaries is liable for any contamination of the
environment, contamination of the Real Property, damage to natural resources,
property damage, or personal injury based on their activities or the
activities of their predecessors or third parties (whether at the Real
Property or elsewhere) involving Hazardous Materials, whether arising under
the Environmental Laws, common law principles, or other legal standards;
(gg) neither the Company nor any of the Subsidiaries nor, to the
best of the Company's knowledge, any officer, director or trustee purporting
to act on behalf of the Company or any of the Subsidiaries has at any time;
(i) made any contributions to any candidate for political office, or failed
to disclose fully any such contributions, in violation of law, (ii) made any
payment to any state, federal or foreign governmental officer or official, or
other person charged with similar public or quasi-public duties, other than
payments required or allowed by applicable law, (iii) made any payment
outside the ordinary course of business to any investment officer or loan
11
broker or person charged with similar duties of any entity to which the
Company or any of the Subsidiaries sells or from which the Company or any of
the Subsidiaries buys loans or servicing arrangements for the purpose of
influencing such agent, officer, broker or person to buy loans or servicing
arrangements from or sell loans to the Company or any of the Subsidiaries, or
(iv) engaged in any transactions, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds which have
been and are reflected in the normally maintained books and records of the
Company and the Subsidiaries;
(hh) except as otherwise disclosed in the Prospectus, there are no
material outstanding loans or advances or material guarantees of indebtedness
by the Company or any of the Subsidiaries to or for the benefit of any of the
officers or directors of the Company or any of the Subsidiaries or any of the
members of the families of any of them;
(ii) neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any of the
Subsidiaries, has made any payment of funds of the Company or of any
Subsidiary or received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the Prospectus;
(jj) the Company is organized and operates in conformity with the
requirements for qualification as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"), and the Company's
proposed method of operation will enable it to meet the requirements for
taxation as a real estate investment trust under the Code;
(kk) the Shares have been approved for listing, upon official notice
of issuance, on the New York Stock Exchange;
(ll) in connection with this offering, the Company has not offered
and will not offer its Common Shares or any other securities convertible into
or exchangeable or exercisable for Common Shares in a manner in violation of
the Securities Act or the Securities Act Regulations; the Company has not
distributed and will not distribute any Prospectus or other offering material
in connection with the offer and sale of the Shares, except as contemplated
herein;
(mm) to the best knowledge of the Company, each of the properties
comprising the Real Property is in compliance with all presently applicable
provisions of the Americans with Disabilities Act, except for any failures to
comply which would not, singly or in the aggregate, result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and the Subsidiaries, taken
as a whole;
(nn) neither the Company nor any of the Subsidiaries is, or solely
as a result of transactions contemplated hereby and the application of the
proceeds from the sale of the Shares, will become an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act");
(oo) the Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions herein
contemplated; and
(pp) to the Company's knowledge, no general labor problem exists or
is imminent with the employees of the Company or any of its Subsidiaries.
4. CERTAIN COVENANTS OF THE COMPANY: The Company hereby covenants
with each Underwriter:
12
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities
or blue sky laws of such states as the Representatives may designate and to
maintain such qualifications in effect as long as required for the
distribution of the Shares, provided that the Company shall not be required
to qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except service of process with respect to
the offering and sale of the Shares);
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the
Company will endeavor to cause such post-effective amendment to become
effective as soon as possible and will advise the Representatives promptly
and, if requested by the Representatives, will confirm such advice in
writing, when such post-effective amendment has become effective;
(c) to prepare the Prospectus in a form approved by the Underwriters
and file such Prospectus with the Commission pursuant to Rule 424(b) within
the time period prescribed by law, on the day following the execution and
delivery of this Agreement and to furnish promptly (and with respect to the
initial delivery of such Prospectus, not later than 10:00 a.m. (New York City
time) on the day following the execution and delivery of this Agreement) to
the Underwriters as many copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration Statement)
as the Underwriters may reasonably request for the purposes contemplated by
the Securities Act Regulations, which Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
version created to be transmitted to the Commission for filing via XXXXX,
except to the extent permitted by Regulation S-T;
(d) to advise the Representatives promptly and (if requested by the
Representatives) to confirm such advice in writing, when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective under the Securities Act Regulations;
(e) to advise the Representatives immediately, confirming such
advice in writing, of (i) the receipt of any comments from, or any request
by, the Commission for amendments or supplements to the Registration
Statement or Prospectus or for additional information with respect thereto,
or (ii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, or of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any
of such purposes and, if the Commission or any other government agency or
authority should issue any such order, to make every reasonable effort to
obtain the lifting or removal of such order as soon as possible; to advise
the Representatives promptly of any proposal to amend or supplement the
Registration Statement or Prospectus and to file no such amendment or
supplement to which the Representatives shall reasonably object in writing;
(f) to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the
13
Company or the Representatives, be required by the Securities Act or
requested by the Commission;
(g) prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Securities Act Regulations, to furnish a copy
thereof to the Representatives and counsel for the Underwriters and obtain
the consent of the Representatives to the filing;
(h) to furnish to the Underwriters for a period of five years from
the date of this Agreement (i) as soon as available, copies of all annual,
quarterly and current reports or other communications supplied to holders of
Common Shares, (ii) as soon as practicable after the filing thereof, copies
of all reports filed by the Company with the Commission, the NASD or any
securities exchange and (iii) such other publicly available information as
the Underwriters may reasonably request regarding the Company and its
Subsidiaries;
(i) to advise the Underwriters promptly during any period of time in
which a Prospectus relating to the Shares is required to be delivered under
the Securities Act Regulations (i) of any material change in the Company's
assets, operations, business or condition (financial or otherwise) or (ii) of
the happening of any event which would require the making of any change in
the Prospectus then being used so that the Prospectus would not include any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and,
during such time, to prepare and furnish, at the Company's expense, to the
Underwriters promptly such amendments or supplements to the Prospectus as may
be necessary to reflect any such change;
(j) to furnish promptly to the Representatives a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith)
and such number of conformed copies of the foregoing as the Underwriters may
reasonably request;
(k) to furnish to the Underwriters, not less than two business days
before filing with the Commission, subsequent to the effective date of the
Prospectus and during any period of time in which a prospectus relating to
the Shares is required to be delivered under the Securities Act Regulations,
a copy of any document proposed to be filed with the Commission pursuant to
Section 13, 14, or 15(d) of the Exchange Act;
(l) to apply the net proceeds of the sale of the Shares
substantially in accordance with its statements under the caption "Use of
Proceeds" in the Prospectus;
(m) to make generally available to its security holders as soon as
practicable, but in any event not later than the end of the fiscal quarter
first occurring after the first anniversary of the effective date of the
Registration Statement, an earnings statement complying with the provisions
of Section 11(a) of the Securities Act (in form, at the option of the
Company, complying with the provisions of Rule 158 of the Securities Act
Regulations) covering a period of 12 months beginning on the effective date
of the Registration Statement;
14
(n) to use its best efforts to effect and maintain the listing of
the Shares on the New York Stock Exchange and to file with the New York Stock
Exchange all documents and notices required by the New York Stock Exchange of
companies that have securities that are listed on the New York Stock Exchange;
(o) except in the ordinary course of business in connection with (x)
the granting of options pursuant to the Company's 1997 Employee Stock Option
Plan (not to exceed ________ options) and (y) the payment in stock to
directors of the Company of a portion of their annual directors fees, to
refrain during a period of 180 days from the date of the Prospectus, without
the prior written consent of the Representatives, from (i) offering,
pledging, selling, contracting to sell, selling any option or contract to
purchase, purchasing any option or contract to sell, granting any option for
the sale of, or otherwise disposing of or transferring, directly or
indirectly, any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares, or filing any registration
statement under the Securities Act with respect to any of the foregoing or
(ii) entering into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or such other securities, in cash or otherwise; the
foregoing sentence shall not apply to (A) the Shares to be sold hereunder, or
(B) any Common Shares issued by the Company upon the exercise of an option
outstanding on the date hereof or upon the exercise of any option granted in
the ordinary course of business as provided herein;
(p) the Company will maintain a transfer agent and, if necessary
under the jurisdiction of formation of the Company, a registrar (which may be
the same entity as the transfer agent) for its Common Shares;
(q) the Company will use its best efforts to meet the requirements
to qualify as a real estate investment trust under the Code;
(r) the Company will comply with all of the provisions of any
undertakings in the Registration Statement;
(s) the Company and the Subsidiaries will conduct their affairs in
such a manner so as to ensure that neither the Company nor any Subsidiary
will be an "investment company" or an entity "controlled" by an investment
company within the meaning of the 1940 Act;
(t) if at any time during the 30-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in the
Representatives' reasonable opinion the market price of the Common Shares has
been or is likely to be materially affected (regardless of whether such
rumor, publication or event necessitates a supplement to or amendment of the
Prospectus) and after written notice from the Representatives advising the
Company to the effect set forth above, to forthwith prepare, consult with the
Representatives concerning the substance of, and disseminate a press release
or other public statement, reasonably satisfactory to the Representatives,
responding to or commenting on such rumor, publication or event; and
15
(u) to maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
5. PAYMENT OF EXPENSES:
(a) The Company agrees to pay all costs and expenses incident to the
performance of the Company's obligations under this Agreement whether or not
the transactions contemplated hereunder are consummated or this Agreement
terminated, including, but not limited to, all fees and expenses of and
filing with the Commission and the NASD; all Blue Sky fees and expenses,
including filing fees and disbursements of the Representatives' Blue Sky
counsel (but excluding the fees of such counsel), fees and disbursements of
counsel and accountants for the Company, and printing costs, including costs
of printing the prospectus, and any amendments thereto; all underwriting
documents, Blue Sky Memoranda, a reasonable quantity of prospectuses
requested by the Representatives, and the Company's road show costs and
expenses.
(b) If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Company shall be unable to perform its obligations
under this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the transactions contemplated herein.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS: The obligations of
the Underwriters hereunder are subject to (i) the accuracy of the
representations and warranties on the part of the Company in all material
respects on the date hereof and at the Closing Time and on each Date of
Delivery, (ii) the performance by the Company of its obligations hereunder in
all material respects, and (iii) the following further conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become effective not later than 5:30
p.m., New York City time, on the date hereof, or at such later date and time
as shall be consented to in writing by you.
(b) The Company shall furnish to the Underwriters at the Closing
Time and on each Date of Delivery an opinion of Xxxxx Xxxx LLP, counsel for
the Company, addressed to the Underwriters and dated the Closing Time and
each Date of Delivery and in form satisfactory to Winston & Xxxxxx, counsel
for the Underwriters, stating that:
16
(i) the authorized shares of common stock of the Company
conform as to legal matters to the description thereof contained in the
Prospectus and meet the requirements of Form S-2 under the Securities
Act; the Company has an authorized capitalization as set forth in the
Prospectus under the caption "Capitalization" as of the date stated in
such section; the outstanding shares of common stock or capital stock,
as the case may be, of the Company and the Subsidiaries have been duly
and validly authorized and issued and are fully paid and
non-assessable; all of the authorized and validly issued shares of
capital stock of or interests in the Subsidiaries, as the case may be,
are directly or indirectly owned of record and beneficially by the
Company; except as disclosed in the Prospectus, there are no authorized
and validly issued (A) securities or obligations of the Company or any
of the Subsidiaries convertible into or exchangeable for any shares of
common stock of the Company or any capital stock or interests in any
such Subsidiary or (B) warrants, rights or options to subscribe for or
purchase from the Company or any such Subsidiary any such shares of
common stock, capital stock, interests or any such convertible or
exchangeable securities or obligations; except as set forth in the
Prospectus or contemplated by this Agreement, there are no outstanding
obligations of the Company or any such Subsidiary to issue any shares
of common stock, capital stock or interests, any such convertible or
exchangeable securities or obligation, or any such warrants, rights or
options;
(ii) the Company and the Subsidiaries each has been duly
formed or incorporated, as the case may be, and is validly existing and
in good standing under the laws of its respective jurisdiction of
formation or incorporation with the requisite power and authority to
own its respective properties and to conduct its respective business as
described in the Registration Statement and Prospectus and, in the case
of the Company, to execute and deliver this Agreement, and the Other
Transaction Documents and to consummate the transactions described in
each such agreement;
(iii) the Company and the Subsidiaries are duly qualified in
or registered by and are in good standing in each jurisdiction
specifically referred to in the Registration Statement and Prospectus
as jurisdictions in which property securing loans proposed to be made
or acquired by the Company is located and in which the failure,
individually or in the aggregate, to be so qualified could reasonably
be expected to have a material adverse effect on the assets,
operations, business or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole; to such counsel's
knowledge, other than the Subsidiaries, as disclosed in the Prospectus,
Gold Key and J.H.C. Corp., a Nebraska corporation, the Company does not
own, directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any
limited liability company, partnership, joint venture or other
association;
(iv) to such counsel's knowledge, the Company and the
Subsidiaries are in compliance in all material respects with all
applicable laws, rules, regulations and orders;
(v) to such counsel's knowledge, except as disclosed on the
Registration Statement and the Prospectus, neither the Company nor any
of its Subsidiaries is in material breach of, or in material default
under (nor has any event occurred which with notice, lapse of time, or
both would constitute a material breach of, or material default
17
under) its respective charter, by-laws, certificate of limited
liability company, agreement of limited liability company, certificate
of limited partnership or partnership agreement, as the case may be,
or in the performance or observation of any obligation, agreement,
covenant, or condition contained in any license, indenture, mortgage,
deed of trust, loan or credit agreement or any other agreement or
instrument to which the Company or any of the Subsidiaries is a party
or by which any of them or their respective properties may be bound or
affected, except such breaches or defaults which would not have a
material adverse effect on the assets, operations, business or
condition (financial or otherwise) of the Company and the Subsidiaries
taken as a whole;
(vi) the execution, delivery and performance of this Agreement
and the Other Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated under this Agreement or
the Other Transaction Documents, as the case may be, do not and will
not conflict with, or result in any breach of, or constitute a default
under (nor constitute any event which with notice, lapse of time, or
both would constitute a breach of or default under), (i) any provisions
of the charter, by-laws, certificate of limited liability company,
agreement of limited liability company, certificate of limited
partnership or partnership agreement, as the case may be, of the
Company or any Subsidiary, (ii) to such counsel's knowledge, any
provision of any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Company
or any Subsidiary is a party or by which any of them or their
respective properties may be bound or affected, or (iii) to such
counsel's knowledge, any law or regulation or any decree, judgment or
order applicable to the Company or any Subsidiary (other than State and
foreign securities or blue sky laws and the rules and regulations of
the NASD, as to which counsel need express no opinion, or the federal
securities laws, as to which counsel need express only that nothing has
come to its attention to lead it to believe that such a violation has
or will occur), except in the case of clauses (ii) and (iii) for such
conflicts, breaches or defaults, laws, regulations, decrees, judgments
or orders, which individually or in the aggregate could not be
reasonably expected to have a material adverse effect on the assets,
operations, business or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole; or, result in the
creation or imposition of any lien, encumbrance, or to such counsel's
knowledge, charge or claim upon any property or assets of the Company
or the Subsidiaries;
(vii) the Company has full legal right, power and authority to
enter into and perform this Agreement and to consummate the
transactions contemplated herein; this Agreement has been duly
authorized, executed and delivered by the Company and is a legal, valid
and binding agreement of the Company enforceable in accordance with its
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and by general principles of equity, and except that
enforceability of the indemnification and contribution provisions set
forth in Section 9 hereof may be limited by the federal or state
securities laws of the United States or public policy underlying such
laws;
(viii) the Other Transaction Documents, if any, have been duly
authorized, executed, and delivered by the Company and are legal, valid
and binding agreements of
18
the Company enforceable in accordance with their terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally, and by general
principles of equity;
(ix) no approval, authorization, consent or order of or filing
with any federal or state governmental or regulatory commission, board,
body, authority or agency is required in connection with the execution,
delivery and performance of this Agreement and the Other Transaction
Documents or the consummation of the transactions contemplated hereby
and thereby by the Company, or the sale and delivery of the Shares by
the Company as contemplated hereby other than such as have been
obtained or made under the Securities Act or the Exchange Act and such
approvals as have been obtained in connection with the listing of the
Shares on the New York Stock Exchange and except that such counsel need
express no opinion as to any necessary qualification under the state
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters or any approval of the
underwriting terms and arrangements by the NASD;
(x) to such counsel's knowledge, each of the Company and the
Subsidiaries has all necessary licenses, authorizations, consents and
approvals and has made all necessary filings required under any
federal, state or local law, regulation or rule, and has obtained all
necessary authorizations, consents and approvals from other persons,
required to conduct their respective businesses, as described in the
Registration Statement and the Prospectus, except to the extent that
any failure to have any such authorizations, consents or approvals
would not, individually or in the aggregate, have a material adverse
effect on the assets, operations, business or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole; to
such counsel's knowledge, neither the Company nor any of the
Subsidiaries is in violation of, in default under, or has received any
notice regarding a possible violation, default or revocation of any
such license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or decree, order or judgment
applicable to the Company or any of the Subsidiaries, the effect of
which could be material and adverse to the assets, operations, business
or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole; and no such license, authorization,
consent or approval contains a materially burdensome restriction that
is not adequately disclosed in the Registration Statement and the
Prospectus;
(xi) the Shares have been duly authorized and, when the Shares
have been issued and duly delivered against payment therefor as
contemplated by this Agreement, the Shares will be validly issued,
fully paid and nonassessable, and, except for any action that may have
been taken by the holder thereof, free and clear of any pledge, lien,
encumbrance, security interest, or other claim;
(xii) the issuance and sale of the Shares by the Company is
not subject to preemptive or other similar rights arising by operation
of law, under the charter or by-laws of the Company under any agreement
known to such counsel to which the Company or any of the Subsidiaries
is a party or, to such counsel's knowledge, otherwise;
19
(xiii) to such counsel's knowledge, there are no persons with
registration or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act;
(xiv) the form of certificate used to evidence the Shares
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and
bylaws of the Company and the requirements of the New York Stock
Exchange;
(xv) the Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and, to such counsel's knowledge, no proceedings with respect
thereto have been commenced or threatened;
(xvi) as of the effective date of the Registration Statement,
the Registration Statement and the Prospectus (except as to the
financial statements and other financial and statistical data contained
therein, as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the
Securities Act and the Securities Act Regulations;
(xvii) the statements under the captions "Our Company," "Risk
Factors," "Market Price and Dividends on our Common Stock,"
"Description of Securities," and "Certain Federal Income Tax
Considerations," in the Registration Statement and the Prospectus,
insofar as such statements constitute a summary of the legal matters
referred to therein, constitute accurate summaries thereof in all
material respects;
(xviii) the Shares have been approved for listing on the New
York Stock Exchange;
(xix) to such counsel's knowledge, there are no actions, suits
or proceedings, inquiries, or investigations pending or threatened
against the Company or any of the Subsidiaries or any of their
respective officers and directors or to which the properties, assets or
rights of any such entity are subject, at law or in equity, before or
by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority, arbitration panel or agency that
are required to be described in the Prospectus but are not so
described;
(xx) to such counsel's knowledge, there are no contracts or
documents of a character that are required to be filed as exhibits to
the Registration Statement or to be described or summarized in the
Prospectus which have not been so filed, summarized or described; to
such counsel's knowledge, all agreements between the Company or any of
the Subsidiaries, respectively, and third parties expressly referenced
in the Prospectus are legal, valid and binding obligations of the
Company or the Subsidiaries, as the case may be, enforceable in
accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general principles of
equity;
20
(xxi) the Company is organized in conformity with the
requirements for qualification as a real estate investment trust
pursuant to Sections 856 through 860 of the Code, and the Company's
proposed method of operation will enable it to meet the requirements
for qualification and taxation as a real estate investment trust under
the Code;
(xxii) neither the Company nor any of the Subsidiaries is, or
solely as a result of the transactions contemplated hereby and the
application of the proceeds from the sale of the Shares as described in
the Registration Statement and the Prospectus under the caption "Use of
Proceeds," will become an "investment company" or a company
"controlled" by an "investment company" within the meaning of the 1940
Act; and
(xxiii) to such counsel's knowledge, each of the Company and
the Subsidiaries has filed on a timely basis all necessary federal,
state, local and foreign income and franchise tax returns through the
date hereof, if any such returns are required to be filed, and have
paid all taxes shown as due thereon; and no tax deficiency has been
asserted against any such entity, nor does any such entity know of any
tax deficiency which is likely to be asserted against any such entity
which, if determined adversely to any such entity, could have a
material adverse effect on the assets, operations, business or
condition (financial or otherwise) of any such entity, respectively.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
independent public accountants of the Company and Underwriters at which the
contents of the Registration Statement and Prospectus were discussed and,
although such counsel is not passing upon and does not assume responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus (except as and to the extent stated in
subparagraphs (xvii) and (xviii) above), nothing has caused them to believe
that the Registration Statement, the Preliminary Prospectus or the
Prospectus, as of their respective effective or issue dates and as of the
date of such counsel's opinion, contained or contains any untrue statement of
a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading (it being
understood that, in each case, such counsel need express no view with respect
to the financial statements and other financial and statistical data included
in the Registration Statement, Preliminary Prospectus or Prospectus).
(c) The Company shall furnish to the Underwriters at the Closing
Time and on each Date of Delivery an opinion of Xxxxx Xxxx LLP, counsel for
the Company, addressed to the Underwriters and dated the Closing Time and
each Date of Delivery and in form satisfactory to Winston & Xxxxxx, counsel
for the Underwriters, stating that, as a matter of Maryland law:
(i) the statements under the caption "Description of
Securities," in the Registration Statement and the Prospectus, insofar
as such statements constitute matters of Maryland corporate law or
Maryland real estate investment trust law, have been reviewed by such
counsel and are a fair summary of such matters;
21
(ii) the Company has an authorized capitalization as set forth
in the Prospectus under the caption "Capitalization;" the outstanding
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(iii) the Company has been duly incorporated and is validly
existing and in good standing under the laws of the state of Maryland
with the requisite corporate power and authority to own its properties
and to conduct its business as described in the Registration Statement
and the Prospectus and to execute, deliver and perform this Agreement
and to consummate the transactions described herein; and
(iv) this Agreement has been duly authorized, executed and
delivered by the Company.
(d) The Representatives shall have received from PricewaterhouseCoopers
LLP letters dated, respectively, as of the date of this Agreement, the Closing
Time and each Date of Delivery, as the case may be, addressed to the
Representatives as representatives of the Underwriters and in form and substance
satisfactory to the Representatives.
(e) The Underwriters shall have received at the Closing Time and on
each Date of Delivery the favorable opinion of Winston & Xxxxxx, dated the
Closing Time or such Date of Delivery, addressed to the Representatives and in
form and substance satisfactory to the Representatives.
(f) No amendment or supplement to the Registration Statement or
Prospectus shall have been filed to which the Underwriters shall have objected
in writing.
(g) Prior to the Closing Time and each Date of Delivery (i) no stop
order suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus has
been issued by the Commission, and no suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes, has occurred; and (ii)
the Registration Statement and the Prospectus shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h) Between the time of execution of this Agreement and the Closing
Time or the relevant Date of Delivery (i) no material and unfavorable change in
the assets, results of operations, business, or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole shall occur or
become known (whether or not arising in the ordinary course of business) or that
makes it, in the judgment of the Representatives, impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, or (ii) no
transaction which is material and unfavorable to the Company shall have been
entered into by the Company or any of the Subsidiaries.
(i) At the Closing Time, the Other Transaction Documents shall have
been entered into and delivered by all required parties.
22
(j) At the Closing Time, the Shares shall have been approved for
listing on the New York Stock Exchange.
(k) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(l) The Representatives shall have received letters (each, a
"Lock-up Agreement") from each person listed on SCHEDULE IV hereto, in form
and substance satisfactory to the Representatives, confirming that for a
period of 120 days after the Closing Time, such persons will not directly or
indirectly (i) offer, pledge to secure any obligation due on or within 120
days after the Closing Time, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option for the sale of, or otherwise dispose of or transfer (other than a
disposition or transfer pursuant to which the acquiror or transferee is
subject to the restrictions on disposition and transfer set forth in this
Section 6(l) to the same extent as such stockholder delivering a letter
hereunder), directly or indirectly, any Common Shares (other than by
participating as selling stockholders in a registered offering of Common
Shares offered by the Company with the consent of the Representatives) or any
securities convertible into or exercisable or exchangeable for Common Shares
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or such other securities, in cash or otherwise,
without the prior written consent of the Representatives, which consent may
be withheld at the sole discretion of the Representatives.
(m) The Company will, at the Closing Time and on each Date of
Delivery, deliver to the Underwriters a certificate of two principal
executive officers to the effect that, to each of such officer's knowledge,
the representations and warranties of the Company set forth in this Agreement
and the conditions set forth in paragraphs (g), (h), (i) and (j) have been
met and are true and correct as of such date.
(n) The Company shall have furnished to the Underwriters such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus, the
representations, warranties and statements of the Company contained herein,
and the performance by the Company of its covenants contained herein, and the
fulfillment of any conditions contained herein, as of the Closing Time or any
Date of Delivery as the Underwriters may reasonably request.
(o) All filings with the Commission required by Rule 424 under the
Securities Act shall have been made within the applicable time period
prescribed for such filing by such Rule.
(p) The Company shall perform such of its obligations under this
Agreement are to be performed by the terms hereof and thereof at or before
the Closing Time or the relevant Date of Delivery.
The several obligations of the Underwriters to purchase Option
Shares hereunder are subject to the delivery to the Representatives on the
Date of Delivery of such documents as the Representatives may reasonably
request with respect to the good standing of the Company, the
23
due authorization and issuance of the Option Shares and other matters related
to the issuance of the Option Shares.
7. TERMINATION: The obligations of the several Underwriters
hereunder shall be subject to termination in the absolute discretion of the
Representatives, at any time prior to the Closing Time or any Date of
Delivery, (i) if any of the conditions specified in Section 6 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, or
(ii) if there has been since the respective dates as of which information is
given in the Registration Statement, any material adverse change, or any
development involving a prospective material adverse change, in or affecting
the assets, operations, business or condition (financial or otherwise) of the
Company, whether or not arising in the ordinary course of business, or (iii)
if there has occurred outbreak or escalation of hostilities or other national
or international calamity or crisis or change in economic, political or other
conditions the effect of which on the financial markets of the United States
is such as to make it, in the judgment of the Representatives, impracticable
to market or deliver the Shares or enforce contracts for the sale of the
Shares, or (iv) if trading in any securities of the Company has been
suspended by the Commission or by the NASD or if trading generally on the New
York Stock Exchange, the American Stock Exchange or in the Nasdaq
over-the-counter market has been suspended (including automatic halt in
trading pursuant to market-decline triggers other than those in which solely
program trading is temporarily halted), or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been
fixed, or maximum ranges for prices for securities have been required, by
such exchange or the NASD or by order of the Commission or any other
governmental authority, or (v) if there has been any downgrading in the
rating of any of the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act), or (vi) any federal or
state statute, regulation, rule or order of any court or other governmental
authority has been enacted, published, decreed or otherwise promulgated which
in the reasonable opinion of the Representatives has a material adverse
affect or will have a material adverse affect on the assets, operations,
business or condition (financial or otherwise) of the Company, or (vii) any
action has been taken by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in the reasonable opinion of
the Representatives has a material adverse effect on the securities markets
in the United States, or (viii) in the case of any of the events specified in
clauses (i) through (vii), such event, singly or together with any other such
events, makes it, in the judgment of the Representatives, impracticable to
market or deliver the Shares on the terms and in the manner contemplated in
the Prospectus.
If the Representatives elect to terminate this Agreement as provided
in this Section 7, the Company and the Underwriters shall be notified
promptly by telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by
this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply in all material respects with any of the
terms of this Agreement, the Company shall not be under any obligation or
liability under this Agreement (except to the extent provided in Sections 5
and 9 hereof) and the Underwriters shall be under no obligation or liability
to the Company under this Agreement (except to the extent provided in Section
9 hereof) or to one another hereunder.
24
8. INCREASE IN UNDERWRITERS' COMMITMENTS: If any Underwriter shall
default at the Closing Time or on a Date of Delivery in its obligation to
take up and pay for the Shares to be purchased by it under this Agreement on
such date, the Representatives shall have the right, within 36 hours after
such default, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Shares which such Underwriter shall have agreed but failed to
take up and pay for (the "Defaulted Shares"). Absent the completion of such
arrangements within such 36 hour period, (i) if the total number of Defaulted
Shares does not exceed 10% of the total number of Shares to be purchased on
such date, each non-defaulting Underwriter shall take up and pay for (in
addition to the number of Shares which it is otherwise obligated to purchase
on such date pursuant to this Agreement) the portion of the total number of
Shares agreed to be purchased by the defaulting Underwriter on such date in
the proportion that its underwriting obligations hereunder bears to the
underwriting obligations of all non-defaulting Underwriters; and (ii) if the
total number of Defaulted Shares exceeds 10% of such total, the
Representatives may terminate this Agreement by notice to the Company,
without liability to any non-defaulting Underwriter.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it
will not sell any Shares hereunder on such date unless all of the Shares to
be purchased on such date are purchased on such date by the Underwriters (or
by substituted Underwriters selected by the Representatives with the approval
of the Company or selected by the Company with the approval of the
Representatives).
If a new Underwriter or Underwriters are substituted for a
defaulting Underwriter in accordance with the foregoing provision, the
Company or the non-defaulting Underwriters shall have the right to postpone
the Closing Time or the relevant Date of Delivery for a period not exceeding
five business days in order that any necessary changes in the Registration
Statement and Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with the like effect
as if such substituted Underwriter had originally been named in this
Agreement.
9. INDEMNITY AND CONTRIBUTION BY THE COMPANY AND THE
UNDERWRITERS:
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or controlling person may incur under the Securities Act, the
Exchange Act or otherwise, insofar as such loss, expense, liability, damage
or claim arises out of or is based upon (i) any breach of any representation,
warranty or covenant of the Company contained herein or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus (the term
Prospectus for the purpose of this Section 9 being deemed to include any
Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), or arises out of or is based upon any omission
or alleged omission to state a material fact required to be stated in either
such
25
Registration Statement or Prospectus or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as any such loss, expense, liability, damage or
claim arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in and
in conformity with information furnished in writing by the Underwriters
through the Representatives to the Company expressly for use in such
Registration Statement or such Prospectus, PROVIDED, HOWEVER, that the
indemnity agreement contained in this subsection (a) with respect to the
Preliminary Prospectus or the Prospectus shall not inure to the benefit of an
Underwriter (or to the benefit of any person controlling such Underwriter)
with respect to any person asserting any such loss, expense, liability,
damage or claim which is the subject thereof if the Prospectus or any
supplement thereto prepared with the consent of the Representatives and
furnished to the Underwriters prior to the Closing Time corrected any such
alleged untrue statement or omission and if such Underwriter failed to send
or give a copy of the Prospectus or supplement thereto to such person at or
prior to the written confirmation of the sale of Shares to such person,
unless such failure resulted from noncompliance by the Company with Section
4(a) of this Agreement.
If any action is brought against an Underwriter or controlling
person in respect of which indemnity may be sought against the Company
pursuant to the preceding paragraph, such Underwriter shall promptly notify
the Company in writing of the institution of such action and the Company
shall assume the defense of such action, including the employment of counsel
and payment of expenses, PROVIDED, HOWEVER, that any failure or delay to so
notify the Company will not relieve the Company of any obligation hereunder,
except to the extent that its ability to defend is actually impaired by such
failure or delay. Such Underwriter or controlling person shall have the right
to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action or the Company shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Company and which counsel to the
Underwriter believes may present a conflict for counsel representing the
Company and the Underwriter (in which case the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party
or parties), in any of which events such fees and expenses shall be borne by
the Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate firm
of attorneys for the Underwriters or controlling persons in any one action or
series of related actions in the same jurisdiction representing the
indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Company shall not be liable
for any settlement of any such claim or action effected without the its
written consent.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify, defend and hold harmless the Company, the Subsidiaries, their
trustees and directors, the officers that signed the Registration Statement
and any person who controls the Company or any Subsidiary within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation)
26
which, jointly or severally, the Company or any such person may incur under
the Securities Act, the Exchange Act or otherwise, insofar as such loss,
expense, liability, damage or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by such Underwriter through
the Representatives to the Company expressly for use in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated either in the
Registration Statement or Prospectus or necessary to make such information,
in the light of the circumstances under which made, not misleading. The
statements set forth under the caption "Underwriting" regarding stabilizing
and the beneficial ownership of Shares by Friedman, Billings, Xxxxxx & Co.,
Inc. ("FBR"), and entities associated with FBR, in the Preliminary Prospectus
and the Prospectus (to the extent such statements relate to the Underwriters)
constitute the only information furnished by or on behalf of any Underwriter
through the Representatives to the Company for purposes of Section 3(k) and
this Section 9.
If any action is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Company or such person shall promptly notify the
Representatives in writing of the institution of such action and the
Representatives, on behalf of the Underwriters, shall assume the defense of
such action, including the employment of counsel and payment of expenses. The
Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense
of the Company or such person unless the employment of such counsel shall
have been authorized in writing by the Representatives in connection with the
defense of such action or the Representatives shall not have employed counsel
to have charge of the defense of such action within a reasonable time or such
indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which
are different from or additional to those available to the Underwriters (in
which case the Representatives shall not have the right to direct the defense
of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by such Underwriter and
paid as incurred (it being understood, however, that the Underwriters shall
not be liable for the expenses of more than one separate firm of attorneys in
any one action or series of related actions in the same jurisdiction
representing the indemnified parties who are parties to such action).
Anything in this paragraph to the contrary notwithstanding, no Underwriter
shall be liable for any settlement of any such claim or action effected
without the written consent of the Representatives.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, expenses, liabilities, damages or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, expenses,
liabilities, damages or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company 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
27
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, expenses, liabilities, damages or claims, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company bear to the underwriting discounts and
commissions received by the Underwriters. The relative fault of the 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, claims, damages and liabilities referred
to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any claim or action.
(d) The Company, on the one hand, and the Underwriters, on the
other, agree that it would not be just and equitable if contribution pursuant
to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to in subsection (c)(i) and, if applicable (ii),
above. Notwithstanding the provisions of this Section 9, no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts
and commissions applicable to the Shares purchased by such Underwriter. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and not
joint.
10. SURVIVAL: The indemnity and contribution agreements contained in
Section 9 and the covenants, warranties and representations of the Company
and the Subsidiaries contained in Sections 3, 4 and 5 of this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Underwriter, or any person who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, or by or on behalf of the Company, the Subsidiaries, their trustees or
directors and officers or any person who controls the Company, any Subsidiary
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the sale
and delivery of the Shares. The Company and each Underwriter agree promptly
to notify the others of the commencement of any litigation or proceeding
against it and, in the case of the Company, against any of the Company's
officers and directors, in connection with the sale and delivery of the
Shares, or in connection with the Registration Statement or Prospectus.
11. NOTICES: Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if
to the Underwriters, shall be sufficient in all respects if delivered to
Friedman, Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Syndicate Department; if to the Company, shall be
28
sufficient in all respects if delivered to the Company at the offices of the
Company at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
12. GOVERNING LAW; CONSENT TO JURISDICTION; HEADINGS: THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The parties
hereto agree to be subject to, and hereby irrevocably submit to, the
nonexclusive jurisdiction of any United States federal or Virginia state
court sitting in Alexandria, Virginia, in respect of any suit, action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated herein, and irrevocably agree that all claims in respect of any
such suit, action or proceeding may be heard and determined in any such
court. Each of the parties hereto irrevocably waives, to the fullest extent
permitted by applicable law, any objection to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that
any such suit, action or proceeding has been brought in an inconvenient
forum. The section headings in this Agreement have been inserted as a matter
of convenience of reference and are not a part of this Agreement.
13. PARTIES IN INTEREST: The Agreement herein set forth has been and
is made solely for the benefit of the Underwriters, the Company and the
controlling persons, directors and officers referred to in Sections 9 and 10
hereof, and their respective successors, assigns, executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters)
shall acquire or have any right under or by virtue of this Agreement.
14. COUNTERPARTS: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this Agreement shall constitute a binding
agreement among the Company and the Underwriters.
Very truly yours,
AMERICA FIRST MORTGAGE
INVESTMENTS, INC.
---------------------------------
By:
Its:
29
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
[NAME OF CO-MANAGER]
BY: FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
------------------------------------
By: ______________________
Its: Managing Director
For themselves and as Representatives
of the other Underwriters named on
Schedule I hereto.
30
SCHEDULE I
NUMBER OF INITIAL
UNDERWRITER SHARES TO BE PURCHASED
----------- ----------------------
Friedman, Billings, Xxxxxx & Co., Inc.
[Others]
Total
SCHEDULE II
Subsidiaries of the Company
Xxxxxx Xxxxx Limited Partnership, a Maryland limited partnership
PF One Corporation, a Nebraska corporation
Xxxxxxx Place, LLC, a Georgia limited liability company
Retirement Centers Corporation, a Delaware corporation
Greenhouse Holdings, LLC, a Nebraska limited liability company
Morrowood Associates, Ltd., a Georgia limited partnership
Harmony Bay Associates, Ltd., a Georgia limited partnership
SCHEDULE III
Other Transaction Documents
None.
SCHEDULE IV
Persons Subject to Lock-Up Agreements
NAME SHARES
Xxxxxxx Xxxxxxxxx ______
Xxxx Xxxxxxxx ______
Xxxxxxx X. Xxxxx ______
Xxxxxx Xxxxxxxxx ______
