PURCHASE AGREEMENT among VESTIN REALTY MORTGAGE II, INC., VESTIN II CAPITAL TRUST I and BEAR, STEARNS & CO. INC. Dated as of June 22, 2007
Exhibit
10.9
among
VESTIN
II CAPITAL TRUST I
and
BEAR,
XXXXXXX & CO. INC.
________________
Dated
as
of June 22, 2007
________________
(U.S.
$28,125,000 Trust Preferred Securities)
THIS
PURCHASE AGREEMENT, dated as of June 22, 2007 (this “Purchase
Agreement”), is entered into among Vestin Realty Mortgage II, Inc., a
Maryland corporation (the “Company”), and Vestin
II Capital Trust I, a Delaware statutory trust (the
“Trust”, and together with the Company, the “Sellers”), and
Bear, Xxxxxxx & Co. Inc. or its assignee (together with its successors and
assigns, the “Purchaser”).
WITNESSETH:
WHEREAS,
the Trust proposes to issue and sell to the Purchaser 28,125 Floating Rate
Preferred Securities of the Trust, having a stated liquidation amount of
U.S.
$1,000 per security, bearing a fixed rate of 8.75% per annum through the
interest payment date in July 2012 and a variable rate, reset quarterly,
equal
to LIBOR (as defined in the Indenture (as defined below)) plus 3.50% thereafter
(the “Preferred Securities”);
WHEREAS,
the proceeds from the sale of the Preferred Securities will be combined with
proceeds from the sale by the Trust to the Company of its common securities
(the
“Common Securities”), and will be used by the Trust to purchase
Twenty-Eight Million One Hundred Seventy-One Thousand Eight Hundred Seventy-Five
Dollars (U.S. $28,171,875) in principal amount of the unsecured junior
subordinated notes due 2020 of the Company, bearing a fixed rate of 8.75%
per
annum through the interest payment date in July 2012 and a variable rate,
reset
quarterly, equal to LIBOR plus 3.50% thereafter (the “Junior Subordinated
Notes”);
WHEREAS,
the Preferred Securities and the Common Securities for the Trust will be
issued
pursuant to the Amended and Restated Trust Agreement (the “Trust
Agreement”), dated as of the Closing Date, among the Company, as depositor,
The Bank of New York Trust Company, National Association, a national banking
association (“BONY, N.A.”), as property trustee (in such capacity, the
“Property Trustee”), The Bank of New York (Delaware), a national
banking association, as Delaware trustee (in such capacity, the “Delaware
Trustee”), the Administrative Trustees named therein (in such capacities,
the “Administrative Trustees”) and the holders from time to time of
undivided beneficial interests in the assets of the Trust; and
WHEREAS,
the Junior Subordinated Notes will be issued pursuant to a Junior Subordinated
Indenture, dated as of the Closing Date (the “Indenture”), between the
Company and BONY, N.A., as indenture trustee (in such capacity, the
“Indenture Trustee”).
NOW,
THEREFORE, in consideration of the mutual agreements and subject to the terms
and conditions herein set forth, the parties hereto agree as
follows:
1. Definitions. The
Preferred Securities, the Common Securities and the Junior Subordinated Notes
are collectively referred to herein as the “Securities.” This Purchase
Agreement, the Indenture, the Trust Agreement and the Securities are
collectively referred to herein as the “Operative Documents.” All other
capitalized terms used but not defined in this Purchase Agreement shall have
the
respective meanings ascribed thereto in the Indenture.
2. Purchase
and Sale of the Preferred Securities.
(a) The
Sellers agree to sell to the Purchaser, and the Purchaser agrees to purchase
from the Sellers the Preferred Securities for an aggregate amount (the
“Purchase Price”) equal to Twenty-Eight Million One Hundred Twenty-Five
Thousand Dollars (U.S. $28,125,000). The Purchaser shall be
responsible for the rating agency costs and expenses. The Sellers
shall use the Purchase Price, together with the proceeds from the sale of
the
Common Securities, to purchase the Junior Subordinated Notes.
(b) Delivery
or transfer of, and payment for, the Preferred Securities shall be made at
11:00
a.m. New York time, on June 22, 2007 or such later date (not later than July
22,
2007) as the parties may designate (such date and time of delivery and payment
for the Preferred Securities being herein called the “Closing
Date”). The Preferred Securities shall be transferred and
delivered to the Purchaser in exchange for the payment of the Purchase Price
to
the Sellers made by wire transfer in immediately available funds on the Closing
Date to a U.S. account designated in writing by the Company at least two
Business Days prior to the Closing Date.
(c) Delivery
of the Preferred Securities shall be made at such location, and in such names
and denominations, as the Purchaser shall designate at least two Business
Days
in advance of the Closing Date. The Company and the Trust agree to
have the Preferred Securities available for inspection and review by the
Purchaser in New York, New York, not later than 2:00 p.m. New York time on
the
Business Day prior to the Closing Date. The closing for the purchase
and sale of the Preferred Securities shall occur at the offices of Xxxxxx
Xxxx
Xxxxx Raysman & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
such other place as the parties hereto shall agree.
3. Conditions. The
obligations of the parties under this Purchase Agreement are subject to the
following conditions:
(a) The
representations and warranties contained herein shall be accurate as of the
date
of delivery of the Preferred Securities.
(b) Reserved.
(c) (i)
Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company and the Trust, shall have
delivered an opinion, dated the Closing Date, addressed to the Purchaser
and
BONY, N.A., in substantially the form set out in Annex A-I-A hereto, (ii)
TaxGroup Partners (“TaxGroup”), external tax service
provider for the Company, shall have delivered an opinion, dated the Closing
Date, addressed to the Purchaser and BONY, N.A., in substantially the form
set
out in Annex A-I-B hereto, and (iii) and the Company shall have furnished
to the Purchaser a certificate signed by the Company’s Chief Executive Officer,
President, an Executive Vice President, Chief Financial Officer, Treasurer
or
Assistant Treasurer, dated the Closing Date, addressed to the Purchaser,
in
substantially the form set out in Annex A-II hereto. In
rendering its opinions, Xxxxxxxx & Xxxxxxxx LLP and TaxGroup may rely as to
factual matters upon certificates or other documents furnished by officers,
directors and trustees of the Company and the Trust and by government officials
(provided, however, that copies of any such certificates or documents are
delivered to the Purchaser) and by and upon such other documents as such
counsel
may, in its reasonable opinion, deem appropriate as a basis for the Company
Counsel’s opinion. The Company Counsel may specify the jurisdictions
in which it is admitted to practice and that it is not admitted to practice
in
any other jurisdiction and is not an expert in the law of any other
jurisdiction. Such Company Counsel Opinion shall not state that it is
to be governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section
of
Business Law (1991).
(d) The
Purchaser shall have been furnished the opinion of Xxxxxx Xxxx Xxxxx Raysman
& Xxxxxxx LLP, dated the Closing Date, addressed to the Purchaser and BONY,
N.A., in substantially the form set out in Annex B hereto.
(e) The
Purchaser shall have received the opinion of Xxxxxxxx, Xxxxxx & Finger,
P.A., special Delaware counsel for the Delaware Trustee, dated the Closing
Date,
addressed to the Purchaser, BONY, N.A., the Delaware Trustee and the Company,
in
substantially the form set out in Annex C hereto.
(f) The
Purchaser shall have received the opinion of Xxxxxxxx, Xxxxxx & Finger,
P.A., special Delaware counsel for the Delaware Trustee, dated the Closing
Date,
addressed to the Purchaser and BONY, N.A., in substantially the form set
out in
Annex D hereto.
(g) The
Purchaser shall have received the opinion of Gardere Xxxxx Xxxxxx LLP, special
counsel for the Property Trustee and the Indenture Trustee, dated the Closing
Date, addressed to the Purchaser, in substantially the form set out in Annex
E hereto.
(h) The
Company shall have furnished to the Purchaser a certificate of the Company,
signed by the Chief Executive Officer, President or an Executive Vice President,
and Chief Financial Officer, Treasurer or Assistant Treasurer of the Company,
and the Trust shall have furnished to the Purchaser a certificate of the
Trust,
signed by an Administrative Trustee of the Trust, in each case dated the
Closing
Date, and, in the case of the Company, as to (i) and (ii) below and, in the
case
of the Trust, as to (i) below:
(i) the
representations and warranties in this Purchase Agreement are true and correct
as of the Closing Date with the same effect as if made on the Closing Date,
and
the Company and the Trust have complied with all the agreements and satisfied
all the conditions on either of their part to be performed or satisfied pursuant
to the Operative Documents at or prior to the Closing Date; and
(ii) since
the
date of the Interim Financial Statements (as defined
below), there has been no material adverse change in the condition (financial
or
other), earnings, business or assets of the Company and its subsidiaries,
whether or not arising from transactions occurring in the ordinary course
of
business (a “Material Adverse Change”).
(i) Subsequent
to the execution of this Purchase Agreement, there shall not have been any
change, or any development involving a prospective change, in or affecting
the
condition (financial or other), earnings, business or assets of the Company
and
its subsidiaries, whether or not occurring in the ordinary course of business,
the effect of which is, in the Purchaser’s reasonable judgment, so material and
adverse as to make it impractical or inadvisable to proceed with the purchase
of
the Preferred Securities.
(j) Prior
to
the Closing Date, the Company and the Trust shall have furnished to the
Purchaser and its counsel such further information, certificates and documents
as the Purchaser or its counsel may reasonably request.
If
any of
the conditions specified in this Section 3 shall not have been
fulfilled when and as provided in this Purchase Agreement, or if any of the
opinions, certificates and documents mentioned above or elsewhere in this
Purchase Agreement shall not be reasonably satisfactory in form and substance
to
the Purchaser or its counsel, this Purchase Agreement and all the Purchaser’s
obligations hereunder may be canceled on, or at any time prior to, the Closing
Date by the Purchaser. Reasonable notice of such cancellation shall
be given to the Company and the Trust in writing or by telephone or facsimile
confirmed in writing.
Each
certificate signed by any trustee of the Trust or any officer of the Company
and
delivered to the Purchaser or the Purchaser’s counsel in connection with the
Operative Documents and the transactions contemplated hereby and thereby
shall
be deemed to be a representation and warranty of the Trust and/or the Company,
as the case may be, and not by such trustee or officer in any individual
capacity.
4. Representations
and Warranties of the Company and the
Trust. The Company and the Trust
jointly and severally represent and warrant to, and agree with the Purchaser,
as
follows:
(a) Neither
the Company nor the Trust, nor any of their respective “Affiliates” (as defined
in Rule 501(b) of Regulation D (“Regulation D”) under the Securities
Act (as defined below)), nor any person acting on its or their behalf, has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of any of the Securities under the Securities Act of 1933, as
amended (the “Securities Act”).
(b) Neither
the Company nor the Trust, nor any of their respective Affiliates, nor any
person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D)
in
connection with any offer or sale of any of the Securities.
(c) The
Securities (i) are not and have not been listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of 1934,
as
amended (the “Exchange Act”), or quoted on a U.S. automated
inter-dealer quotation system and (ii) are not of an open-end investment
company, unit investment trust or face-amount certificate company that are,
or
are required to be, registered under Section 8 of the Investment Company
Act of
1940, as amended (the “Investment Company Act”), and the Securities
otherwise satisfy the eligibility requirements of Rule 144A(d)(3) promulgated
pursuant to the Securities Act (“Rule 144A(d)(3)”).
(d) Neither
the Company nor the Trust, nor any of their respective Affiliates, nor any
person acting on its or their behalf, has engaged, or will engage, in any
“directed selling efforts” within the meaning of Regulation S under the
Securities Act with respect to the Securities.
(e) Neither
the Company nor the Trust is, and, immediately following consummation of
the
transactions contemplated hereby and the application of the net proceeds
therefrom, will not be, an “investment company” or an entity “controlled” by an
“investment company,” in each case within the meaning of Section 3(a) of the
Investment Company Act.
(f) Neither
the Company nor the Trust has paid or agreed to pay to any person any
compensation for soliciting another to purchase any of the Securities, except
for the preferred securities commission and/or the sales commission the Company
has agreed to pay to Taberna Securities, LLC (or to the Company’s introducing
agent on behalf of Taberna Securities, LLC) pursuant to the letter agreement
between the Company and Taberna Securities, LLC, dated May
15, 2007.
(g) The
Trust
has been duly created and is validly existing in good standing as a statutory
trust under the Delaware Statutory Trust Act, 12 Del. C. § 3801, et
seq. (the “StatutoryTrust Act”) with all requisite power
and authority to own property and to conduct the business it transacts and
proposes to transact and to enter into and perform its obligations under
the
Operative Documents to which it is a party. The Trust is duly
qualified to transact business as a foreign entity and is in good standing
in
each jurisdiction in which such qualification is necessary, except where
the
failure to so qualify or be in good standing would not have a material adverse
effect on the condition (financial or otherwise), earnings, business,
liabilities or assets (taken as a whole) or business prospects of the Company
and its subsidiaries taken as a whole, whether or not occurring in the ordinary
course of business (a “Material Adverse Effect”). The Trust
is not a party to or otherwise bound by any agreement other than the Operative
Documents. The Trust is and will be, under current law, classified
for federal income tax purposes as a grantor trust and not as an association
or
publicly traded partnership taxable as a corporation.
(h) The
Trust
Agreement has been duly authorized by the Company and, on the Closing Date
specified in Section 2(b) hereof, will have been duly executed and
delivered by the Company and the Administrative Trustees of the Trust, and,
assuming due authorization, execution and delivery by the Property Trustee
and
the Delaware Trustee, will be a legal, valid and binding obligation of the
Company and the Administrative Trustees, enforceable against them in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar
laws
affecting creditors’ rights generally and to general principles of
equity. Each of the Administrative Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to execute
and deliver the Trust Agreement.
(i) The
Indenture has been duly authorized by the Company and, on the Closing Date,
will
have been duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the Indenture Trustee, will be a
legal,
valid and binding obligation of the Company enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar
laws
affecting creditors’ rights generally and to general principles of
equity.
(j) The
Preferred Securities and the Common Securities have been duly authorized
by the
Trust and, when issued and delivered against payment therefor on the Closing
Date in accordance with this Purchase Agreement, in the case of the Preferred
Securities, and in accordance with the Common Securities Subscription Agreement,
in the case of the Common Securities, will be validly issued, fully paid
and
non-assessable and will represent undivided beneficial interests in the assets
of the Trust entitled to the benefits of the Trust Agreement, enforceable
against the Trust in accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally
and to general principles of equity. The issuance of the Securities
is not subject to any preemptive or other similar rights. On the
Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance of any kind (each, a
“Lien”).
(k) The
Junior Subordinated Notes have been duly authorized by the Company and, on
the
Closing Date, will have been duly executed and delivered to the Indenture
Trustee for authentication in accordance with the Indenture and, when
authenticated in the manner provided for in the Indenture and delivered to
the
Trust against payment therefor in accordance with that certain Junior
Subordinated Note Purchase Agreement of even date herewith between the Company
and the Trust (the “Junior Subordinated Note Purchase Agreement”), will
constitute legal, valid and binding obligations of the Company entitled to
the
benefits of the Indenture, enforceable against the Company in accordance
with
their terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general principles of
equity.
(l) This
Purchase Agreement has been duly authorized, executed and delivered by the
Company and the Trust.
(m) Neither
the issue and sale of the Common Securities, the Preferred Securities or
the
Junior Subordinated Notes, nor the purchase of the Junior Subordinated Notes
by
the Trust, nor the execution and delivery of and compliance with the Operative
Documents by the Company or the Trust, nor the consummation of the transactions
contemplated herein or therein, (i) will conflict with or constitute a violation
or breach of the Trust Agreement or the charter or bylaws or similar
organizational documents of the Company or any subsidiary of the Company
or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of
any government, governmental authority, agency or instrumentality or court,
domestic or foreign, having jurisdiction over the Trust or the Company or
any of
their respective subsidiaries or their respective properties or assets
(collectively, the “Governmental Entities”), (ii) will conflict with or
constitute a violation or breach of, or a default or Repayment Event (as
defined
below) under, or result in the creation or imposition of any Lien upon any
property or assets of the Trust, the Company or any of the Company’s
subsidiaries pursuant to any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which (A) the Trust, the
Company
or any of its subsidiaries is a party or by which it or any of them may be
bound, or (B) any of the property or assets of any of them is subject, or
any
judgment, order or decree of any court, Governmental Entity or arbitrator,
except, in the case of this clause (ii), for such conflicts, breaches,
violations, defaults, Repayment Events (as defined below) or Liens which
(X)
would not, singly or in the aggregate, adversely affect the consummation
of the
transactions contemplated by the Operative Documents and (Y) would not, singly
or in the aggregate, have a Material Adverse Effect or (iii) require the
consent, approval, authorization or order of any court or Governmental
Entity. As used herein, a “Repayment Event” means any event
or condition which gives the holder of any note, debenture or other evidence
of
indebtedness (or any person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Trust or the Company or any of their respective subsidiaries prior
to its
scheduled maturity.
(n) The
Company has been duly and properly incorporated and is validly existing as
a
corporation in good standing under the laws of Maryland, with all requisite
corporate power and authority to own, lease and operate its properties and
conduct the business it transacts and proposes to transact, and is duly
qualified to transact business and is in good standing in each jurisdiction
where the nature of its activities requires such qualification, except where
the
failure of the Company to be so qualified would not, singly or in the aggregate,
have a Material Adverse Effect.
(o) The
Company has no Subsidiaries that are material to its business, financial
condition or earnings other than those Subsidiaries listed in Schedule 1
attached hereto (which Schedule 1 includes each of the Company’s
“significant subsidiaries” as defined in Securities and Exchange Commission
Regulation S-X) (collectively, the “Significant Subsidiaries”). Each
Significant Subsidiary is a corporation, partnership or limited liability
company duly and properly incorporated or organized or formed, as the case
may
be, validly existing and in good standing under the laws of the jurisdiction
in
which it is chartered or organized or formed, with all requisite corporate,
partnership or limited liability company, as the case may be, power and
authority to own, lease and operate its properties and conduct the business
it
transacts and proposes to transact. Each Significant Subsidiary is
duly qualified to transact business as a foreign corporation, partnership
or
limited liability company, as applicable, and is in good standing in each
jurisdiction where the nature of its activities requires such qualification,
except where the failure to be so qualified would not, singly or in the
aggregate, have a Material Adverse Effect. No Significant Subsidiary
of the Company (other than a taxable REIT subsidiary, if any) is currently
prohibited, directly or indirectly, under any agreement or other instrument,
other than as required by applicable law, to which it is a party or is subject,
from paying any dividends to the Company, from making any other distribution
on
such Significant Subsidiary’s capital stock or other Equity Interests, from
repaying to the Company any loans or advances to such Significant Subsidiary
from the Company or from transferring any of such Significant Subsidiary’s
properties or assets to the Company or any other subsidiary of the
Company.
(p) Each
of
the Trust, the Company and each of the Company’s subsidiaries holds all
necessary approvals, authorizations, orders, licenses, consents, registrations,
qualifications, certificates and permits (collectively, the “Governmental
Licenses”) of and from Governmental Entities necessary to conduct its
business as now being conducted, and neither the Trust, the Company nor any
of
the Company’s subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such Government License, except where
the
failure to be so licensed or approved or the receipt of an unfavorable decision,
ruling or finding, would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force
and
effect, except where the invalidity or the failure of such Governmental Licenses
to be in full force and effect, would not, singly or in the aggregate, have
a
Material Adverse Effect; and the Company and its subsidiaries are in compliance
with all applicable laws, rules, regulations, judgments, orders, decrees
and
consents, except where the failure to be in compliance would not, singly
or in
the aggregate, have a Material Adverse Effect.
(q) All
of
the issued and outstanding Equity Interests of the Company and each of its
Subsidiaries are validly issued, fully paid and non-assessable; all of the
issued and outstanding Equity Interests of each Subsidiary of the Company
is
owned by the Company, directly or through Subsidiaries, free and clear of
any
Lien, claim or equitable right; and none of the issued and outstanding Equity
Interests of the Company or any subsidiary was issued in violation of any
preemptive or similar rights arising by operation of law, under the charter
or
by-laws or similar organizational documents of such entity or under any
agreement to which the Company or any of its Subsidiaries is a
party.
(r) Neither
the Company nor any of its subsidiaries is (i) in violation of its respective
charter or by-laws or similar organizational documents or (ii) in default
in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or
other agreement or instrument to which the Company or any such subsidiary
is a
party or by which it or any of them may be bound or to which any of the property
or assets of any of them is subject, except, in the case of clause (ii),
where
such violation or default would not, singly or in the aggregate, have a Material
Adverse Effect.
(s) There
is
no action, suit or proceeding before or by any Governmental Entity, arbitrator
or court, domestic or foreign, now pending or, to the knowledge of the Company
or the Trust after due inquiry, threatened against or affecting the Trust
or the
Company or any of the Company’s subsidiaries, except for (i) the actions listed
on Schedule 2 attached hereto and (ii) such actions, suits or proceedings
that, if adversely determined, would not, singly or in the aggregate, adversely
affect the consummation of the transactions contemplated by the Operative
Documents or have a Material Adverse Effect; and the aggregate of all pending
legal or governmental proceedings to which the Trust or the Company or any
of
its subsidiaries is a party or of which any of their respective properties
or
assets is subject, including ordinary routine litigation incidental to the
business, are not expected to result in a Material Adverse Effect.
(t) The
accountants of the Company who certified the Financial Statements (as defined
below) are independent public accountants of the Company and its subsidiaries
within the meaning of the Securities Act, and the rules and regulations of
the
Securities and Exchange Commission (the “Commission”)
thereunder.
(u) The
audited consolidated financial statements (including the notes thereto) and
schedules of the Company and its consolidated subsidiaries for the fiscal
year
ended December 31, 2006 (the “Financial
Statements”) and the interim unaudited consolidated financial statements of
the Company and its consolidated subsidiaries for the quarter ended March
31,
2007 (the “Interim Financial Statements”) provided to the Purchaser are
the most recent available audited and unaudited consolidated financial
statements of the Company and its consolidated subsidiaries, respectively,
and
fairly present in all material respects, in accordance with U.S. generally
accepted accounting principles (“GAAP”), the financial position of the
Company and its consolidated subsidiaries, and the results of operations
and
changes in financial condition as of the dates and for the periods therein
specified, subject, in the case of Interim Financial Statements, to year-end
adjustments (which are expected to consist solely of normal recurring
adjustments). Such consolidated financial statements and schedules
have been prepared in accordance with GAAP consistently applied throughout
the
periods involved (except as otherwise noted therein).
(v) None
of
the Trust, the Company nor any of its subsidiaries has any material liability,
whether known or unknown, whether asserted or unasserted, whether absolute
or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes (and
there
is no past or present fact, situation, circumstance, condition or other basis
for any present or future action, suit, proceeding, hearing, charge, complaint,
claim or demand against the Company or its subsidiaries that could give rise
to
any such liability), except for (i) liabilities set forth in the Financial
Statements or the Interim Financial Statements (including the Notes to such
Financial Statements and Interim Financial Statements) and (ii) normal
fluctuations in the amount of the liabilities referred to in clause (i)
above occurring in the ordinary course of business of the Trust, the Company
and
all of its subsidiaries since the date of the most recent balance sheet included
in such Financial Statements.
(w) Since
the
respective dates of the Financial Statements and the Interim Financial
Statements, there has not been (A) any Material Adverse Change or (B) any
dividend or distribution of any kind declared, paid or made by the Company
on
any class of its capital stock other than regular dividends on the Company’s
common stock.
(x) The
documents of the Company filed with the Commission in accordance with the
Exchange Act, from and including the commencement of the fiscal year covered
by
the Company’s most recent Annual Report on Form 10-K, at the time they were or
hereafter are filed by the Company with the Commission (collectively, the
“1934 Act Reports”), complied and will comply in all material respects
with the requirements of the Exchange Act and the rules and regulations of
the
Commission thereunder (the “1934 Act Regulations”), and, at the date of
this Purchase Agreement and on the Closing Date, do not and will not include
an
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the statements therein, in the light
of
the circumstances under which they were made, not misleading; and other than
such instruments, agreements, contracts and other documents as are filed
as
exhibits to the Company’s Annual Report on Form 10-K, Quarterly Reports on Form
10-Q or Current Reports on Form 8-K, there are no instruments, agreements,
contracts or documents of a character required to be filed by Item 601 of
Regulation S-K promulgated by the Commission to which the Company or any of
its subsidiaries is a party. The Company is in compliance with all
currently applicable requirements of the Exchange Act that were added by
the
Xxxxxxxx-Xxxxx Act of 2002.
(y) No
labor
dispute with the employees of the Trust, the Company or any of its subsidiaries
exists or, to the knowledge of the executive officers of the Trust or the
Company, is imminent, except those which would not, singly or in the aggregate,
have a Material Adverse Effect.
(z) No
filing
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any Governmental Entity, other than those that
have
been made or obtained, is necessary or required for the performance by the
Trust
or the Company of their respective obligations under the Operative Documents,
as
applicable, or the consummation by the Trust and the Company of the transactions
contemplated by the Operative Documents.
(aa) Each
of
the Trust, the Company and each subsidiary of the Company has good and
marketable title to all of its respective real and personal properties, in
each
case free and clear of all Liens and defects, except for those that would
not,
singly or in the aggregate, have a Material Adverse Effect; and all of the
leases and subleases under which the Trust, the Company or any subsidiary
of the
Company holds properties are in full force and effect, except where the failure
of such leases and subleases to be in full force and effect would not, singly
or
in the aggregate, have a Material Adverse Effect, and none of the Trust,
the
Company or any subsidiary of the Company has any notice of any claim of any
sort
that has been asserted by anyone adverse to the rights of the Trust, the
Company
or any subsidiary of the Company under any such leases or subleases, or
affecting or questioning the rights of such entity to the continued possession
of the leased or subleased premises under any such lease or sublease, except
for
such claims that would not, singly or in the aggregate, have a Material Adverse
Effect. Except as set forth on Schedule 3, there are no
participation agreements in existence or currently contemplated between the
Company and other lenders.
(bb) Reserved.
(cc) Commencing
with its taxable year ended December 31, 2006, the Company has been, and
upon
the completion of the transactions contemplated hereby, the Company will
continue to be, organized and operated in conformity with the requirements
for
qualification and taxation as a real estate investment trust (a “REIT”)
under sections 856 through 860 of the Internal Revenue Code of 1986, as amended
(the “Code”), and the Company’s proposed method of operation will
enable it to continue to meet the requirements for qualification and taxation
as
a REIT under the Code, and no actions have been taken (or not taken which
are
required to be taken) which would cause such qualification to be
lost. The Company expects to continue to be organized and to operate
in a manner so as to qualify as a REIT in the taxable year ending December
31,
2007 and succeeding taxable years.
(dd) The
Company and each of the Significant Subsidiaries have timely and duly filed
all
Tax Returns (as defined below) required to be filed by them, and all such
Tax
Returns are true, correct and complete in all material respects. The
Company and each of the Significant Subsidiaries have timely and duly paid
in
full all material Taxes (as defined below) required to be paid by them (whether
or not such amounts are shown as due on any Tax Return). There are no
federal, state, or other Tax audits or deficiency assessments proposed or
pending with respect to the Company or any of the Significant Subsidiaries,
and
no such audits or assessments are threatened. As used herein, the
terms “Tax” or “Taxes” mean (i) all federal, state, local, and
foreign taxes, and other assessments of a similar nature (whether imposed
directly or through withholding), including any interest, additions to tax,
or
penalties applicable thereto, imposed by any Governmental Entity, and (ii)
all
liabilities in respect of such amounts arising as a result of being a member
of
any affiliated, consolidated, combined, unitary or similar group, as a successor
to another person or by contract. As used herein, the term “Tax
Returns” means all federal, state, local, and foreign Tax returns,
declarations, statements, reports, schedules, forms, and information returns
and
any amendments thereto filed or required to be filed with any Governmental
Entity.
(ee) The
Trust
is not, or will not be within ninety (90) days of the date hereof, subject
to
more than a de minimis amount of other taxes, duties or other
governmental charges. To the knowledge of the Company, there are no
rulemaking or similar proceedings before the U.S. Internal Revenue Service
or
comparable federal, state, local or foreign government bodies which involve
or
affect the Company or any subsidiary, which, if the subject of an action
unfavorable to the Company or any subsidiary, could result in a Material
Adverse
Effect on the Company and the Significant Subsidiaries, taken as a
whole.
(ff) The
books, records and accounts of the Company and its subsidiaries accurately
and
fairly reflect, in reasonable detail, the transactions in, and dispositions
of,
the assets of, and the results of operations of, the Company and its
subsidiaries. The Company and each of its subsidiaries maintains a system
of
internal accounting controls sufficient to provide reasonable assurances
that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(gg) The
Company and the Significant Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts
in
all material respects as are customary in the businesses in which they are
engaged or propose to engage after giving effect to the transactions
contemplated hereby including but not limited to, real or personal property
owned or leased against theft, damage, destruction, act of vandalism and
all
other risks customarily insured against. All policies of insurance and fidelity
or surety bonds insuring the Company or any of the Significant Subsidiaries
or
the Company’s or Significant Subsidiaries’ respective businesses, assets,
employees, officers and directors are in full force and effect. The Company
and
each of the subsidiaries are in compliance with the terms of such policies
and
instruments in all material respects. Neither the Company nor any Significant
Subsidiary has reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a
cost that would not have a Material Adverse Effect. Within the past twelve
months, neither the Company nor any Significant Subsidiary has been denied
any
insurance coverage which it has sought or for which it has
applied. Except as set forth on Schedule 4, there is no
pending action, suit, proceeding or dispute between the Company and any insurer
of the Company.
(hh) None
of
the Company, any of its subsidiaries or any person acting on behalf of the
Company or any of its subsidiaries including, without limitation, any director,
officer, agent or employee of the Company or any of its subsidiaries has,
directly or indirectly, while acting on behalf of the Company or any of its
subsidiaries (i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity;
(ii)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; (iii) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or (iv) made any other unlawful payment.
(ii) The
information provided by the Company and the Trust pursuant to this Purchase
Agreement and the transactions contemplated hereby does not, as of the date
hereof, and will not as of the Closing Date, contain any untrue statement
of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(jj) Except
as
would not, individually or in the aggregate, result in a Material Adverse
Effect, to the Company’s knowledge, (i) the Company and its subsidiaries have
been and are in compliance with applicable Environmental Laws (as defined
below), (ii) none of the Company, any of its subsidiaries or, to the best
of the
Company’s knowledge, any other owners of any of the real properties currently or
previously owned, leased or operated by the Company or any of its subsidiaries
(collectively, the “Properties”) at any time or any other party, has at
any time released (as such term is defined in CERCLA (as defined below))
or
otherwise disposed of Hazardous Materials (as defined below) on, to, in,
under
or from the Properties, (iii) neither the Company nor any of its subsidiaries
has used nor intends to use the Properties or any subsequently acquired
properties, other than in compliance with applicable Environmental Laws,
(iv)
neither the Company nor any of its subsidiaries has received any notice of,
or
has any knowledge of any occurrence or circumstance which, with notice or
passage of time or both, would give rise to a claim under or pursuant to
any
Environmental Law with respect to the Properties, or their respective assets
or
arising out of the conduct of the Company or its subsidiaries, (v) none of
the
Properties are included or, to the best of the Company’s knowledge, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA by the
United States Environmental Protection Agency or, to the best of the Company’s
knowledge, proposed for inclusion on any similar list or inventory issued
pursuant to any other Environmental Law or issued by any other Governmental
Entity, (vi) none of the Company, any of its subsidiaries or agents or, to
the
best of the Company’s knowledge, any other person or entity for whose conduct
any of them is or may be held responsible, has generated, manufactured, refined,
transported, treated, stored, handled, disposed, transferred, produced or
processed any Hazardous Material at any of the Properties, except in compliance
with all applicable Environmental Laws, and has not transported or arranged
for
the transport of any Hazardous Material from the Properties to another property,
except in compliance with all applicable Environmental Laws, (vii) no lien
has
been imposed on the Properties by any Governmental Entity in connection with
the
presence on or off such Property of any Hazardous Material or with respect
to an
Environmental Law, and (viii) none of the Company, any of its subsidiaries
or,
to the best of the Company’s knowledge, any other person or entity for whose
conduct any of them is or may be held responsible, has entered into or been
subject to any consent decree, compliance order, or administrative order
in
connection with an Environmental Law with respect to the Properties or any
facilities or improvements or any operations or activities thereon.
(kk) As
used
herein, “Hazardous Materials” shall include, without limitation, any
flammable materials, explosives, radioactive materials, hazardous materials,
hazardous substances, hazardous wastes, toxic substances or related materials,
asbestos, petroleum, petroleum products and any hazardous material as defined
by
any federal, state or local environmental law, statute, ordinance, rule or
regulation, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
§§ 9601-9675 (“CERCLA”), the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. §§ 5101-5127, the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. §§ 6901-6992k, the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001-11050, the
Toxic Substances Control Act, 15 U.S.C. §§ 2601-2692, the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136-136y, the Clean
Air Act, 42 U.S.C. §§ 7401-7642, the Clean Water Act (Federal Water
Pollution Control Act), 33 U.S.C. §§ 1251-1387, the Safe Drinking Water
Act, 42 U.S.C. §§ 300f-300j-26, and the Occupational Safety and Health Act,
29 U.S.C. §§ 651-678, and any analogous state laws, as any of the above may
be amended from time to time and in the regulations promulgated pursuant
to each
of the foregoing (including environmental statutes and laws not specifically
defined herein) (individually, an “Environmental Law” and collectively,
the “Environmental Laws”) or by any Governmental Entity.
5. Representations
and Warranties of the Purchaser. The
Purchaser represents and warrants to, and agrees with, the Company and the
Trust
as follows:
(a) The
Purchaser is aware that the Preferred Securities have not been and will not
be
registered under the Securities Act and may not be offered or sold within
the
United States or to “U.S. persons” (as defined in Regulation S under the
Securities Act) except in accordance with Rule 903 of Regulation S under
the
Securities Act or pursuant to an exemption from the registration requirements
of
the Securities Act.
(b) The
Purchaser is an “accredited investor,” as such term is defined in Rule 501(a) of
Regulation D under the Securities Act.
(c) Neither
the Purchaser, nor any of the Purchaser’s Affiliates, nor any person acting on
the Purchaser’s or any Purchaser’s Affiliate’s behalf has engaged, or will
engage, in any form of “general solicitation or general advertising” (within the
meaning of Regulation D under the Securities Act) in connection with any
offer
or sale of the Preferred Securities.
(d) The
Purchaser understands and acknowledges that (i) no public market exists for
any
of the Preferred Securities and that it is unlikely that a public market
will
ever exist for the Securities, (ii) the Purchaser is purchasing the Preferred
Securities for its own account, for investment and not with a view to, or
for
offer or sale in connection with, any distribution thereof in violation of
the
Securities Act or other applicable securities laws, subject to any requirement
of law that the disposition of its property be at all times within its control
and subject to its ability to resell such Preferred Securities pursuant to
an
effective registration statement under the Securities Act or pursuant to
an
exemption therefrom or in a transaction not subject thereto, and the Purchaser
agrees to the legends and transfer restrictions applicable to the Preferred
Securities contained in the Indenture, and (iii) the Purchaser has had the
opportunity to ask questions of, and receive answers and request additional
information from, the Company and is aware that it may be required to bear
the
economic risk of an investment in the Preferred Securities.
(e) The
Purchaser is duly formed, validly existing and in good standing under the
laws
of the jurisdiction in which it is organized with all requisite power and
authority to execute, deliver and perform the Operative Documents to which
it is
a party, to make the representations and warranties specified herein and
therein
and to consummate the transactions contemplated herein.
(f) This
Purchase Agreement has been duly authorized, executed and delivered by the
Purchaser and no filing with, or authorization, approval, consent, license,
order registration, qualification or decree of, any governmental body, agency
or
court having jurisdiction over the Purchaser, other than those that have
been
made or obtained, is necessary or required for the performance by the Purchaser
of its obligations under this Purchase Agreement or to consummate the
transactions contemplated herein.
(g) The
Purchaser is a “Qualified Purchaser” as such term is defined in Section 2(a)(51)
of the Investment Company Act.
6. Covenants
and Agreements of the Company and the
Trust. The Company and the Trust
jointly and severally agree with the Purchaser as follows:
(a) During
the period from the date of this Agreement to the Closing Date, the Company
and
the Trust shall use their commercially reasonable efforts and take all action
necessary or appropriate to cause their representations and warranties contained
in Section 4 hereof to be true as of the Closing Date, after giving
effect to the transactions contemplated by this Purchase Agreement, as if
made
on and as of the Closing Date.
(b) The
Company and the Trust will arrange for the qualification of the Preferred
Securities for sale under the laws of such states in the United States as
the
Purchaser may designate and will maintain such qualifications in effect so
long
as required for the sale of the Preferred Securities to the Purchaser;
provided, that neither the Company nor the Trust will be required to
file a general consent to service of process in any such state. The
Company or the Trust, as the case may be, will promptly advise the Purchaser
of
the receipt by the Company or the Trust, as the case may be, of any notification
with respect to the suspension of the qualification of the Preferred Securities
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(c) Neither
the Company nor the Trust will, nor will either of them permit any of its
Affiliates to, nor will either of them permit any person acting on its or
their
behalf (other than the Purchaser) to, resell any Securities that have been
acquired by any of them, except in compliance with applicable law.
(d) Neither
the Company nor the Trust will, nor will either of them permit any of their
Affiliates or any person acting on their behalf to, engage in any “directed
selling efforts” within the meaning of Regulation S under the Securities Act
with respect to the Securities.
(e) Neither
the Company nor the Trust will, nor will either of them permit any of their
Affiliates or any person acting on their behalf to, directly or indirectly,
make
offers or sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of any of the Securities
under
the Securities Act.
(f) Neither
the Company nor the Trust will, nor will either of them permit any of its
Affiliates or any person acting on their behalf to, engage in any form of
“general solicitation or general advertising” (within the meaning of Regulation
D) in connection with any offer or sale of any of the Securities.
(g) So
long
as any of the Securities are outstanding, (i) the Securities shall not be
listed
on a national securities exchange registered under Section 6 of the Exchange
Act
or quoted in a U.S. automated inter-dealer quotation system and (ii) neither
the
Company nor the Trust shall be an open-end investment company, unit investment
trust or face-amount certificate company that is, or is required to be,
registered under Section 8 of the Investment Company Act, and, the Securities
shall otherwise satisfy the eligibility requirements of Rule
144A(d)(3).
(h) Reserved.
(i) Each
of
the Company and the Trust will, during any period in which it is not subject
to
and in compliance with Section 13 or 15(d) of the Exchange Act, or it is
not
exempt from such reporting requirements pursuant to and in compliance with
Rule
12g3-2(b) under the Exchange Act, provide to each holder of the Preferred
Securities and to each prospective purchaser (as designated by such holder)
of
the Preferred Securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4) under
the
Securities Act. This covenant is intended to be for the benefit of
the Purchaser, the holders of the Securities, and the prospective purchasers
designated by the Purchaser and such holders, from time to time, of the
Securities.
(j) Neither
the Company nor the Trust will, until one hundred eighty (180) days following
the Closing Date, without the Purchaser’s prior written consent, offer, sell,
contract to sell, grant any option to purchase or otherwise dispose of, directly
or indirectly, (i) any Preferred Securities or other securities substantially
similar to the Preferred Securities other than as contemplated by this Purchase
Agreement or (ii) any other securities convertible into, or exercisable or
exchangeable for, any Preferred Securities or other securities substantially
similar to the Preferred Securities.
(k) The
Company will use its reasonable efforts to meet the requirements to qualify
as a
REIT under sections 856 through 860 of the Code, effective for the taxable
year
ending December 31, 2007 and succeeding taxable years.
(l) Except
to
comply with the requirements of applicable law, neither the Company nor the
Trust will identify any of the Indemnified Parties (as defined below) in
a press
release or any other public statement without the prior written consent of
such
Indemnified Party.
(m) The
Purchaser is granted the right under the Indenture and the Trust Agreement
to
request the substitution of new notes for all or a portion of the Junior
Subordinated Notes held by the Trust. The Trust is required under the
terms of the Indenture and the Trust Agreement to accept such newly issued
notes
(the “Replacement Notes”) from the Company and surrender a like amount
of Junior Subordinated Notes to the Company. The Replacement Notes
shall bear terms identical to the Junior Subordinated Notes with the sole
exception of interest payment dates (and corresponding redemption date and
maturity date), which will be specified by the Purchaser. In no event
will the interest payment dates (and corresponding redemption date and maturity
date) on the Replacement Notes vary by more than sixty (60) calendar days
from
the original interest payment dates (and corresponding redemption date and
maturity date) under the Junior Subordinated Notes. Each of the
Company and the Trust acknowledges and agrees that, to the extent of the
principal amount of the Replacement Notes issued to the Trust under the
Indenture, the Purchaser (and each successor to Purchaser’s interest in the
Preferred Securities) will require the Trust to issue a new series of Preferred
Securities having a principal amount related to the principal amount of the
Replacement Notes (the “Replacement Securities”) to designated holders
of Preferred Securities, provided that any such Replacement Securities, and
any
distributions from the Trust to the holders of Replacement Securities, must
relate solely to the Trust’s interest in the Replacement Notes and in no event
will the Preferred Securities, other than the Replacement Securities, share
in
the returns from any Replacement Notes. The Replacement Securities
shall have payment dates (and corresponding redemption date and maturity
date)
that relate to the Replacement Notes. Each of the Company and the
Trust agrees to cooperate with all reasonable requests of the Purchaser in
connection with any of the foregoing, provided that no action requested of
the
Company or the Trust in connection with such cooperation shall materially
increase the obligations or materially decrease the rights of the Company
pursuant to such documents. The Purchaser shall pay the Sellers’
reasonable expenses incurred in fulfilling their obligations pursuant to
this
paragraph.
7. Payment
of Expenses. The Company, as depositor
of the Trust, agrees to pay all costs and expenses incident to the performance
of the obligations of the Company and the Trust under this Purchase Agreement,
whether or not the transactions contemplated herein are consummated or this
Purchase Agreement is terminated, including all costs and expenses incident
to
(i) the authorization, issuance, sale and delivery of the Preferred Securities
and any taxes payable in connection therewith; (ii) the fees and expenses
of qualifying the Preferred Securities under the securities laws of the several
jurisdictions as provided in Section 6(b); (iii) the fees and
expenses of the counsel, the accountants and any other experts or advisors
retained by the Company or the Trust; (iv) the fees and all reasonable expenses
of the Property Trustee, the Delaware Trustee, the Indenture Trustee and
any
other trustee or paying agent appointed under the Operative Documents, including
the fees and disbursements of counsel for such trustees, which fees shall
not
exceed a $2,000 acceptance fee, $3,500 for the fees and expenses of Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel retained by the Delaware
Trustee in connection with the Closing, and $4,000 in
administrative fees annually; (v) $50,000 for the fees and expenses of Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx, LLP, special counsel retained by Taberna
Capital Management, LLC; and (vi) a due diligence fee in an amount equal
to
$12,500 payable to Taberna Securities, LLC.
If
the
sale of the Preferred Securities provided for in this Purchase Agreement
is not
consummated because any condition set forth in Section 3 hereof to be
satisfied by either the Company or the Trust is not satisfied, because this
Purchase Agreement is terminated pursuant to Section 9 or because of any
failure, refusal or inability on the part of the Company or the Trust to
perform
all obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by reason of a default by the Purchaser, the
Company will reimburse the Purchaser upon demand for all reasonable
out-of-pocket expenses (including the fees and expenses of each of the
Purchaser’s counsel specified in subparagraphs (iv) and (v) of the immediately
preceding paragraph) that shall have been incurred by the Purchaser in
connection with the proposed purchase and sale of the Preferred
Securities. The Company shall not in any event be liable to the
Purchaser for the loss of anticipated profits from the transactions contemplated
by this Purchase Agreement.
8. Indemnification. (a) The
Sellers
agree, jointly and severally, to indemnify and hold harmless the Purchaser,
the
Purchaser’s affiliates, Taberna Capital Management, LLC, Taberna Securities,
LLC, and their respective affiliates and successors and assigns (collectively,
the “Indemnified Parties”) each person, if any, who controls any of the
Indemnified Parties within the meaning of the Securities Act or the Exchange
Act, and the Indemnified Parties’ respective directors, officers, employees and
agents against any losses, claims, damages or liabilities, joint or several,
to
which the Indemnified Parties may become subject, under the Securities Act,
the
Exchange Act or other federal or state statutory law or regulation, at common
law or the law of any other jurisdiction, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based
upon third-party claims relating to (i) any untrue statement or alleged untrue
statement of a material fact contained in any information provided by the
Company, (ii) any omission or alleged omission to state any material fact
required to be stated or necessary to make the statements contained in any
information provided by the Company and the Trust, in light of the circumstances
under which they were made, not misleading, or (iii) the breach or alleged
breach of any representation, warranty or agreement of either Seller contained
herein; provided, that neither the Company nor the Trust shall be
liable to the Indemnified Parties in any such case to the extent that any
such
loss, claim, damages or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from
any of such documents in reliance upon and in conformity with written
information furnished to the Company or to the Trust, as the case may be,
by
such Indemnified Party specifically for use therein. Sellers agree,
jointly and severally, to reimburse the Indemnified Parties for any legal
or
other expenses reasonably incurred by the Indemnified Parties in connection
with
investigating or defending any such loss, claim, damage or liability or
action. This indemnity agreement will be in addition to any liability
that any of the Sellers may otherwise have.
(b) The
Company agrees to indemnify the Trust against all loss, liability, claim,
damage
and expense whatsoever due from the Trust under paragraph (a)
above. The Company, as indemnitor, shall have authority over and
control the defense of all such indemnified matters.
(c) Promptly
after receipt by an Indemnified Party under this Section 8 of notice
of the commencement of any action, such Indemnified Party will, if a claim
in
respect thereof is to be made against the indemnifying party under this
Section 8, promptly notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve the indemnifying party from liability under this
Section 8 unless and to the extent that such failure results in the
forfeiture by the indemnifying party of material rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any
obligations to any Indemnified Party other than the indemnification obligation
provided above. The Sellers shall be entitled to appoint counsel to
represent the Indemnified Party in any action for which indemnification is
sought, which counsel shall be reasonably acceptable to the Indemnified
Party. Notwithstanding the foregoing, the Indemnified Party shall
have the right to employ its own counsel in any action for which indemnification
is sought, but the fees and expenses of such counsel shall be at the expense
of
such Indemnified Party unless (x) the employment of such counsel shall have
been
authorized in writing by the indemnifying party in connection with the defense
of such action, (y) the indemnifying party shall not have employed counsel
to
have charge of the defense of such action within a reasonable time after
notice
of commencement of the action or (z) such Indemnified Party shall have
reasonably concluded that there may be defenses available to it that are
different from or additional to those available to the indemnifying party
(in
which case the indemnifying party shall not have the right to direct the
defense
of such action on behalf of the Indemnified Party), in any of which events
such
fees and expenses shall be borne by the indemnifying party. An
indemnifying party may participate at its own expense in the defense of any
such
action; provided, that counsel to the indemnifying party shall not
(except with the consent of the Indemnified Party) also be counsel to the
Indemnified Party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any
local
counsel) separate from their own counsel for all Indemnified Parties in
connection with any one action or separate but similar or related actions
in the
same jurisdiction arising out of the same general allegations or circumstances,
unless representation of both parties by the same counsel would be inappropriate
due to an actual or potential conflict (based upon the advice of outside
counsel
to the Indemnified Party). An indemnifying party will not, without
the prior written consent of the Indemnified Parties, settle or compromise
or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may
be
sought hereunder (whether or not the Indemnified Parties are actual or potential
parties to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising out of such claim, action, suit or
proceeding.
9. Termination;
Representations and Indemnities to
Survive. This Purchase Agreement shall
be subject to termination in the absolute discretion of the Purchaser, by
notice
given to the Company and the Trust prior to delivery of and payment for the
Preferred Securities, if prior to such time (i) a downgrading shall have
occurred in the rating accorded the Company’s debt securities or preferred stock
by any “nationally recognized statistical rating organization,” as that term is
used by the Commission in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act,
or
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of the Company’s debt
securities or preferred stock, (ii) the Trust shall be unable to sell and
deliver to the Purchaser at least $28,125,000 stated liquidation value of
Preferred Securities, (iii) a suspension or material limitation in trading
in
securities generally shall have occurred on the New York Stock Exchange,
(iv) a
suspension or material limitation in trading in any of the Company’s securities
shall have occurred on the exchange or quotation system upon which the Company’
securities are traded, if any, (v) a general moratorium on commercial
business activities shall have been declared either by federal or Maryland,
Nevada or New York authorities or (vi) there shall have occurred any
outbreak or escalation of hostilities, or declaration by the United States
of a
national emergency or war or other calamity or crisis the effect of which
on
financial markets is such as to make it, in the Purchaser’s judgment,
impracticable or inadvisable to proceed with the offering or delivery of
the
Preferred Securities. The respective agreements, representations,
warranties, indemnities and other statements of the Company and the Trust
or
their respective officers or trustees and of the Purchaser set forth in or
made
pursuant to this Purchase Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Purchaser, the
Company or the Trust or any of the their respective officers, directors,
trustees or controlling persons, and will survive delivery of and payment
for
the Preferred Securities. The provisions of Sections 7 and
8 shall survive the termination or cancellation of this Purchase
Agreement.
10. Amendments. This
Purchase Agreement may not be modified, amended, altered or supplemented,
except
upon the execution and delivery of a written agreement by each of the parties
hereto.
11. Notices. All
communications hereunder will be in writing and effective only on receipt,
and,
if sent to the Purchaser, will be mailed, delivered by hand or courier or
sent
by facsimile and confirmed to the Purchaser c/o Taberna Capital Management,
LLC,
000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx
X. Xxxxxx, Facsimile: (000) 000-0000; with a copy to Xxxxxx Xxxx Xxxxx
Raysman & Xxxxxxx, LLP, Attention: Xxxxx Xxxxxx, Esq.,
Facsimile: (000) 000-0000 or other address as the
Purchaser shall designate for such purpose in a notice to the Company and
the
Trust; and if sent to the Company or the Trust, will be mailed, delivered
by
hand or courier or sent by facsimile and confirmed to it at Vestin Realty
Mortgage II, Inc., 0000 Xxxx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000, Attention:
Xxxxxxx X. Xxxxxxx, Chief Executive Officer, Facsimile: (000) 000-0000; with
a
copy to Xxxxxxxx & Xxxxxxxx LLP, Attention: Xxxxxx
Xxxx, Esq., Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Facsimile: (000) 000-0000.
12. Successors
and Assigns. This Purchase Agreement
will inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Nothing expressed or
mentioned in this Purchase Agreement is intended or shall be construed to
give
any person other than the parties hereto and the affiliates, directors,
officers, employees, agents and controlling persons referred to in Section
8 hereof and their successors, assigns, heirs and legal representatives,
any
right or obligation hereunder. None of the rights or obligations of
the Company or the Trust under this Purchase Agreement may be assigned, whether
by operation of law or otherwise, without the Purchaser’s prior written
consent. The rights and obligations of the Purchaser under this
Purchase Agreement may be assigned by the Purchaser without the Company’s or the
Trust’s consent; provided that the assignee assumes the obligations of the
Purchaser under this Purchase Agreement.
13. Applicable
Law. THIS PURCHASE AGREEMENT WILL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE
OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
14. Submission
To Jurisdiction. ANY LEGAL ACTION OR
PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT
OF
THIS PURCHASE AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE
STATE
OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE
BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS PURCHASE AGREEMENT,
EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF
APPEALS
THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
PURCHASE AGREEMENT.
15. Counterparts
and Facsimile. This Purchase Agreement
may be executed by any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same
instrument. This Purchase Agreement may be executed by any one or
more of the parties hereto by facsimile.
16. Entire
Agreement. This Purchase Agreement and the documents
referred to herein constitute the entire agreement among the parties pertaining
to the subject matter hereof and no party shall be liable or bound to any
other
party in any manner by any warranties, representations or covenants except
as
specifically set forth herein or therein.
[Signature
Page Follows]
IN
WITNESS WHEREOF, this Purchase Agreement has been entered into as of the
date
first written above.
By:
Name:
Title:
Vestin
II Capital Trust
I
By:
Name:
Title:
Bear,
Xxxxxxx & Co.
Inc.
By:
Name:
Title:
SCHEDULE
1
List
of Significant Subsidiaries
SCHEDULE
2
Litigation
Matters
Vestin
Realty Mortgage II
VRM
II is
a defendant in an action filed in 2006 in Superior Court for San Diego County,
California. (Genton v. Vestin Realty Mortgage II, Inc., et
al.) The action is a purported class action on behalf of all members
of Vestin Fund II who did not vote in favor of the conversion of Vestin Fund
II
into a REIT by means of a merger with VRM II. The action alleges
among other things breach of contract and elder abuse. Plaintiffs
allege that they should have been afforded appraisal rights in connection
with
the merger with VRM II. The action is in the pleading
stage.
VRM
II is
a defendant in an action filed in 2006 by 88 separate plaintiffs in the District
Court for Xxxxx County, Nevada. (Klaas et al. v. Vestin Mortgage,
Inc. et al.) The plaintiffs allege, among other things, that the
defendants breached contractual obligations and fiduciary duties and made
false
and misleading statements in connection with the merger of Vestin Fund II
into
VRM II. The plaintiffs allege that they should have been provided
appraisal rights in connection with such merger. The action is in the
pleading stage.
VRM
II is
a plaintiff and cross-defendant in an action filed in state court in Hawaii
in
2006. In the action, VRM II alleges that the State of Hawaii illegally blocked
the lenders' right to foreclose upon and take title to collateral securing
a
defaulted loan (Rightstar) by inappropriately attaching conditions to the
licenses needed to operate the mortuaries and cemeteries constituting the
collateral. The State of Hawaii counter-sued, alleging that VRM II
and its affiliates improperly influenced the Rightstar trustees to invest
in VRM
II. The case is in early stages of motion practice and
discovery.
Vestin
Realty Mortgage I
VRM
I is
a defendant in an action filed in 2007 in Superior Court for San Diego County,
California (Xxxxxxx et al. v. Vestin Realty Mortgage I, Inc., et
al.) The action is a purported class action on behalf of all members
of Vestin Fund I who did not vote in favor of the conversion of Vestin Fund
I
into a REIT by means of a merger with VRM I. The action alleges among
other things breach of contract and elder abuse. Plaintiffs allege
that they should have been afforded appraisal rights in connection with the
merger of Vestin Fund I with VRM I. The action is in the pleading
stage.
VRM
I is
a defendant in an action filed in 2007 by 25 separate plaintiffs in the District
Court for Xxxxx County, Nevada. (Spectrum Capital LLC, et al. v.
Vestin Mortgage, Inc., et al.) The plaintiffs allege, among other
things, that the defendants breached contractual obligations and fiduciary
dutites and made false and misleading statements in connection with the merger
of Vestin Fund I into VRM I. The plaintiffs allege that they should
have been provided appraisal rights in connection with such
merger. The action is in the pleading stage.
VRM
I is
a plaintiff in an action filed in Hawaii in 2006. In the action, VRM
I alleges that the State of Hawaii illegally blocked the lenders' right to
foreclose upon and take title to collateral securing a defaulted loan
(Rightstar) by inappropriately attaching conditions to the licenses needed
to
operate the mortuaries and cemeteries constituting the
collateral. The State of Hawaii filed a counter-suit against certain
plaintiffs, but not against VRM I. The action is in early stages of
motion practice and discovery.
VRM
I is
a defendant in an amended complaint filed in state court in Nevada by Desert
Land LLC alleging improper transfers of $1.6 Million to VRM I with an intent
to
defraud Desert Land. The complaint is substantially the same as a
matter brought by Desert Land in federal court which was dismissed by the
Ninth
Circuit Court of Appeals.
SCHEDULE
3
Participation
Agreements
As
of the
date of this Purchase Agreement, the Company may potentially enter into (i)
a
participation agreement with the Royal Bank America in the amount of
approximately U.S. $30,000,000; (ii) a revolving line of credit with Flagstar
Bank in the amount of approximately U.S. $30,000,000 and (iii) a participation
agreement or other financing arrangement with Temecula Valley Bank, the amount
of which is still under negotiation.
SCHEDULE
4
Disputes
with Insurers
There
is
a pending dispute with respect to coverage of costs of defense in a matter
that
has been resolved between the Company and a particular insurance
company. While a demand letter for approximately U.S. $200,000 was
sent to such insurance company on behalf of the Company in April 2007, no
formal
litigation regarding such dispute has been filed as of the date of this Purchase
Agreement.
ANNEX
A-I-A
[Form
of opinion to be furnished by Xxxxxxxx & Xxxxxxxx LLP]
A-I-
ANNEX
A-I-B
[Form
REIT opinion to be provided by TaxGroup]
A-I-
REIT
BACK-UP
OFFICER’S CERTIFICATE
[Form
to be provided by TaxGroup]
A-I-
ANNEX
A-II
Pursuant
to Section 3(c) of the Purchase Agreement, the Company shall provide an
Officers’ Certificate, to the effect that:
[Form
of Officers’ Certificate to be provided by the
Company]
A-II-
ANNEX
B
Pursuant
to Section 3(d) of the Purchase Agreement, Xxxxxx Xxxx Xxxxx Raysman &
Xxxxxxx, LLP shall deliver an opinion to the effect that:
(i) the
Trust
will be classified for U.S. federal income tax purposes as a grantor trust
and
not as an association or a publicly traded partnership taxable as a corporation;
and
(ii) for
U.S.
federal income tax purposes, the Junior Subordinated Notes will constitute
indebtedness of the Company.
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the federal laws of the United States and (B) rely as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.
B-
ANNEX
C
Pursuant
to Section 3(e) of the Purchase Agreement, Xxxxxxxx, Xxxxxx & Finger, P.A.,
special Delaware counsel for the Delaware Trustee, shall deliver an opinion
to
the effect that:
(i) the
Trust
has been duly created and is validly existing in good standing as a statutory
trust under the Delaware Statutory Trust Act, and all filings required under
the
laws of the State of Delaware with respect to the creation and valid existence
of the Trust as a statutory trust have been made;
(ii) under
the
Delaware Statutory Trust Act and the Trust Agreement, the Trust has the trust
power and authority (A) to own property and conduct its business, all as
described in the Trust Agreement, (B) to execute and deliver, and to perform
its
obligations under, each of the Purchase Agreement, the Common Securities
Subscription Agreement, the Junior Subordinated Note Purchase Agreement and
the
Preferred Securities and the Common Securities and (C) to purchase and hold
the
Junior Subordinated Notes;
(iii) under
the
Delaware Statutory Trust Act, the certificate attached to the Trust Agreement
as
Exhibit C is an appropriate form of certificate to evidence
ownership of the Preferred Securities; the Preferred Securities have been
duly
authorized by the Trust Agreement and, when issued and delivered against
payment
of the consideration as set forth in the Purchase Agreement, the Preferred
Securities will be validly issued and (subject to the qualifications set
forth
in this paragraph) fully paid and nonassessable and will represent undivided
beneficial interests in the assets of the Trust; the holders of the Preferred
Securities will be entitled to the benefits of the Trust Agreement and, as
beneficial owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware; and
such
counsel may note that the holders of the Preferred Securities may be obligated,
pursuant to the Trust Agreement, to (A) provide indemnity and/or security
in
connection with and pay taxes or governmental charges arising from transfers
or
exchanges of Preferred Securities certificates and the issuance of replacement
Preferred Securities certificates and (B) provide security or indemnity in
connection with requests of or directions to the Property Trustee to exercise
its rights and remedies under the Trust Agreement;
(iv) the
Common Securities have been duly authorized by the Trust Agreement and, when
issued and delivered by the Trust to the Company against payment therefor
as
described in the Trust Agreement and the Common Securities Subscription
Agreement, will be validly issued and fully paid and will represent undivided
beneficial interests in the assets of the Trust entitled to the benefits
of the
Trust Agreement;
(v) under
the
Delaware Statutory Trust Act and the Trust Agreement, the issuance of the
Preferred Securities and the Common Securities is not subject to preemptive
or
other similar rights;
(vi) under
the
Delaware Statutory Trust Act and the Trust Agreement, the execution and delivery
by the Trust of the Purchase Agreement, the Common Securities Subscription
Agreement and the Junior Subordinated Note Purchase Agreement, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary trust action on the part of the Trust;
(vii) the
Trust
Agreement constitutes a legal, valid and binding obligation of the Company
and
the Trustees, and is enforceable against the Company and the Trustees, in
accordance with its terms, subject, as to enforcement, to the effect upon
the
Trust Agreement of (i) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance or transfer and other
similar
laws relating to or affecting the rights and remedies of creditors generally,
(ii) principles of equity, including applicable law relating to fiduciary
duties
(regardless of whether considered and applied in a proceeding in equity or
at
law), and (iii) the effect of applicable public policy on the enforceability
of
provisions relating to indemnification or contribution;
(viii) the
issuance and sale by the Trust of the Preferred Securities and the Common
Securities, the purchase by the Trust of the Junior Subordinated Notes, the
execution, delivery and performance by the Trust of the Purchase Agreement,
the
Common Securities Subscription Agreement and the Junior Subordinated Note
Purchase Agreement, the consummation by the Trust of the transactions
contemplated by the Purchase Agreement and compliance by the Trust with its
obligations thereunder do not violate (i) any of the provisions of the
Certificate of Trust or the Amended and Restated Trust Agreement or (ii)
any
applicable Delaware law, rule or regulation;
(ix) no
filing
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any Delaware court or Delaware Governmental Entity
or Delaware agency is necessary or required solely in connection with the
issuance and sale by the Trust of the Common Securities or the Preferred
Securities, the purchase by the Trust of the Junior Subordinated Notes, the
execution, delivery and performance by the Trust of the Purchase Agreement,
the
Common Securities Subscription Agreement and the Junior Subordinated Note
Purchase Agreement, the consummation by the Trust of the transactions
contemplated by the Purchase Agreement and compliance by the Trust with its
obligations thereunder; and
(x) the
holders of the Preferred Securities (other than those holders who reside
or are
domiciled in the State of Delaware) will have no liability for income taxes
imposed by the State of Delaware solely as a result of their participation
in
the Trust and the Trust will not be liable for any income tax imposed by
the
State of Delaware.
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware, (B) rely as to matters of
fact, to the extent deemed proper, on certificates of responsible officers
of
the Company and public officials and (C) take customary assumptions and
exceptions as to enforceability and other matters.
C-
ANNEX
D
Pursuant
to Section 3(f) of the Purchase Agreement, Xxxxxxxx, Xxxxxx & Finger, P.A.,
counsel for the Delaware Trustee, shall deliver an opinion to the effect
that:
(i) The
Bank
of New York (Delaware) (the “Delaware Trustee”) is duly
incorporated and validly existing as a banking corporation
under the laws of the State of Delaware;
(ii) The
Delaware Trustee has the corporate power and authority to execute, deliver
and
perform its obligations under, and has taken all necessary corporate action
to
authorize the execution, delivery and performance of, the Trust Agreement
and to
consummate the transactions contemplated thereby;
(iii) The
Trust
Agreement has been duly authorized, executed and delivered by the Delaware
Trustee and constitutes a legal, valid and binding obligation of the Delaware
Trustee, and is enforceable against the Delaware Trustee, in accordance with
its
terms subject, as to enforcement, to the effect upon the Trust Agreement
of (i)
applicable bankruptcy, insolvency, reorganization, moratorium, receivership,
fraudulent conveyance or transfer and similar laws relating to or affecting
the
rights and remedies of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions relating to
indemnification or contribution;
(iv) The
execution, delivery and performance by the Delaware Trustee of the Trust
Agreement do not conflict with or result in a violation of (A) the articles
of
association or by-laws of the Delaware Trustee or (B) any
law or regulation of the State of Delaware or the United States of America
governing the trust powers of the Delaware Trustee or, to our knowledge,
without
independent investigation, of any indenture, mortgage, bank credit agreement,
note or bond purchase agreement, long-term lease, license or other agreement
or
instrument to which the Delaware Trustee is a party or by which it is bound
or,
to our knowledge, without independent investigation, of any judgment or order
applicable to the Delaware Trustee; and
(v) No
approval, authorization or other action by, or filing with, any governmental
authority of the State of Delaware or the United States of America governing
the
trust powers of the Delaware Trustee is required in connection with the
execution and delivery by the Delaware Trustee of the
Trust Agreement or the performance by the Delaware Trustee of its obligations
thereunder, except for the filing of the Certificate of Trust with the Secretary
of State of the State of Delaware, which Certificate of Trust has been filed
with the Secretary of State of the State of Delaware.
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and the federal laws of the
United States governing the trust powers of the Delaware Trustee,
(B) rely as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company and public officials
and (C)
take customary assumptions and exceptions.
D-
Pursuant
to Section 3(g) of the Purchase Agreement, Gardere Xxxxx Xxxxxx LLP, special
counsel for the Property Trustee and the Indenture Trustee, shall deliver
an
opinion to the effect that:
(i) The
Bank
of New York Trust Company, National Association (the “Bank”) is a national
banking association with trust powers, duly and validly existing under the
laws
of the United States of America, with corporate power and authority to execute,
deliver and perform its obligations under the Indenture and to authenticate
and
deliver the Securities, and is duly eligible and qualified to act as Trustee
under the Indenture pursuant to Section 6.1 thereof and as
Property Trustee under the Trust Agreement pursuant to Section 8.2
thereof. (The Indenture and the Trust Agreement are each, an
“Agreement” and together, the “Agreements”).
(ii) Each
Agreement has been duly authorized, executed and delivered by the Bank and
constitutes the valid and binding obligation of the Bank, enforceable against
it
in accordance with its terms except (A) as may be limited by bankruptcy,
fraudulent conveyance, fraudulent transfer, insolvency, reorganization,
liquidation, receivership, moratorium or other similar laws now or hereafter
in
effect relating to creditors’ rights generally, and by general equitable
principles, regardless of whether considered in a proceeding in equity or
at law
and (B) that the remedy of specific performance and injunctive and other
forms
of equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(iii) Neither
the execution or delivery by the Bank of the Agreements, the authentication
and
delivery of the Preferred Securities (as defined in the Trust Agreement)
and
junior subordinated notes (issued under the Indenture, and together with
the
Preferred Securities, the “Securities”) by the Trustee pursuant to the terms of
the Agreements, nor the performance by the Bank of its obligations under
the
Agreements (A) requires the consent or approval of, the giving of notice
to or
the registration or filing with, any governmental authority or agency under
any
existing law of the United States of America governing the banking or trust
powers of the Bank or (B) violates or conflicts with the Articles of Association
or By-laws of the Bank or any law or regulation of the State of New York
or the
United States of America governing the banking or trust powers of the
Bank.
(iv) The
Securities have been authenticated and delivered by a duly authorized officer
of
the Bank.
In
rendering such opinions, such
counsel may (A) state that its opinion is limited to the laws of the State
of
New York and the laws of the United States of America, (B) rely as to matters
of
fact, to the extent deemed proper, on certificates of responsible officers
of
The Bank of New York Trust Company, National Association, the Company and
public
officials, and (C) make customary assumptions and exceptions as to
enforceability and other matters.
E-
E-
