AMERICA FIRST MORTGAGE INVESTMENTS, INC.
6,500,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
TABLE OF CONTENTS
1. SALE AND PURCHASE.......................................................2
2. PAYMENT AND DELIVERY....................................................3
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................4
4. CERTAIN COVENANTS OF THE COMPANY.......................................13
5. PAYMENT OF EXPENSES....................................................16
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS............................17
7. TERMINATION............................................................24
8. INCREASE IN UNDERWRITERS' COMMITMENTS..................................25
9. INDEMNITY AND CONTRIBUTION BY THE COMPANY AND THE UNDERWRITERS.........26
10. SURVIVAL..............................................................29
11. NOTICES...............................................................29
12. GOVERNING LAW; CONSENT TO JURISDICTION................................29
13. PARTIES IN INTEREST...................................................30
14. COUNTERPARTS..........................................................30
AMERICA FIRST MORTGAGE INVESTMENTS, INC.
6,500,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
January 14, 2002
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ MERCHANT PARTNERS, LLC
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED
as Representatives of the several Underwriters
c/o Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
America First Mortgage Investments, Inc., a Maryland corporation (the
"Company"), confirms its agreement with Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.,
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇ Merchant Partners, LLC and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
Company, Incorporated and each of the other Underwriters listed on SCHEDULE I
hereto (collectively, the "Underwriters"), for whom Friedman, Billings, ▇▇▇▇▇▇ &
Co., Inc., RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇ Merchant Partners, LLC and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Company, Incorporated 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 975,000
Common Shares to cover over-allotments, if any. The 6,500,000 Common Shares to
be purchased by the Underwriters (the "Initial Shares") and all or any part of
the 975,000 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, in accordance with the provisions of the
Securities Act of 1933, as amended (the "Securities Act") and the rules and
regulations thereunder (the "Securities Act
Regulations"), with the Securities and Exchange Commission (the "Commission"), a
registration statement on Form S-3 (No. 333-70082) (the "Registration
Statement") relating to the offering of up to $300,000,000 of its common stock
and/or preferred stock by the Company from time to time pursuant to Rule 415 of
the Securities Act. The Registration Statement, as declared effective on October
5, 2001, contains a prospectus and incorporates by reference documents which the
Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations thereunder (the "Exchange Act Regulations"). The Company has
prepared a prospectus supplement (the "Prospectus Supplement') to the prospectus
included as part of the Registration Statement setting forth the terms of the
offering, sale and plan of distribution of the Shares and additional information
concerning the Company and its business. The Company has furnished to the
Representatives, for use by the underwriters and by dealers, copies of one or
more preliminary prospectuses containing the prospectus included as part of the
Registration Statement, as supplemented by a preliminary Prospectus Supplement
dated January 7, 2002, and including the documents incorporated in such
prospectus by reference (collectively, the "Preliminary Prospectus") relating to
the Shares. Except where the context otherwise requires, the Registration
Statement, as amended when it became effective, including all documents filed as
part thereof or incorporated by reference therein, and including any information
contained in a Prospectus (as defined below) subsequently filed with the
Commission pursuant to Rule 424(b) of the Securities Act Regulations are
collectively herein called the "Registration Statement," and the prospectus,
including all documents incorporated therein by reference, included in the
Registration Statement, as supplemented by the Prospectus Supplement dated
January 14, 2002, in the form filed by the Company with the Commission pursuant
to Rule 424(b) of the Securities Act Regulations on or before the second
business day following the date of this Agreement (or on such other day as the
parties may mutually agree), is herein called the "Prospectus." Any reference
herein to the Registration Statement, the Prospectus, any Preliminary Prospectus
or any amendment or supplement thereto shall be deemed to refer to and include
the documents incorporated by reference therein, and any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the Registration
Statement, the Prospectus or any Preliminary Prospectus shall be deemed to refer
to and include the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein. For purposes of this
Agreement, all references to the Registration Statement, the Prospectus, any
Preliminary Prospectus or to any amendment or supplement thereto shall be deemed
to include any copy filed with the Commission pursuant to its Electronic Data
Gathering Analysis and Retrieval System ("▇▇▇▇▇"), and such copy shall be
identical in content to any Prospectus or Preliminary Prospectus delivered to
the Underwriters for use in connection with the offering of the Shares.
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE:
(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 $7.816875, 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
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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 each Underwriter, 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, with respect to each
Underwriter purchasing Option Shares, any additional number of Option Shares
which each 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
written 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
defined in Section 2(a) below). 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 $8.25 per share (the "Public
Offering Price") and to certain dealers selected by you at a price that
represents a concession not in excess of $0.26 per share under the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $0.10 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 Representatives may request upon at least
forty-eight hours' prior written 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 each Underwriter, against payment by or on behalf of each
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 written 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 with respect
thereto. The time and date of such delivery and payment shall be 9:30 a.m.,
New
York City time, on January 18, 2002 or on such other time and date as the
Company and the Representatives may agree upon
3
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
either of the Initial Shares or the 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 written 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 written 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. 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 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 to
consummate the transactions described herein;
(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
4
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 consummation of the transactions
contemplated hereby 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, 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;
(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 participate in the registration under the
Securities Act of the Shares pursuant to the Registration Statement; except for
registration rights granted to certain former shareholders of America First
Mortgage Advisory Corporation, a Maryland corporation ("America First"), in
connection with the consummation of the transactions contemplated in that
certain Agreement and Plan of Merger, dated September 24, 2001, among the
Company, America First and the other parties thereto (the "Merger Agreement"),
no person or entity has a right to require the Company to register any capital
stock of the Company owned by such person or entity under the Securities Act; 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,
5
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 by-laws of the Company and the requirements of the
New York
Stock Exchange;
(g) 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, the consummation of the transactions contemplated
hereby 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 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;
(h) 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 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 written
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;
(i) the Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
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;
(j) the Company and the transactions contemplated by this Agreement
meet the requirements and conditions for using a registration statement on Form
S-3 under the Securities Act, set forth in the General Instructions to Form S-3;
the Preliminary Prospectus and the Registration Statement comply and the
Prospectus and any further amendments or supplements
6
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 not misleading; and the Preliminary Prospectus
does not, and the Prospectus or any amendment or supplement thereto will not, as
of the applicable filing date and at the Closing Time and on each Date of
Delivery (if any), contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the Company makes no warranty or
representation with respect to any statement contained in the Registration
Statement or the Prospectus in reliance upon and in conformity with the
information concerning the Underwriters and furnished in writing by or on behalf
of the Underwriters through the Representatives to the Company expressly for use
in the Registration Statement or the Prospectus (that information being limited
to that described in the last sentence of the first paragraph of Section 9(b)
hereof);
(k) 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 ▇▇▇▇▇, except to the extent permitted by
Regulation S-T;
(l) 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
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;
(m) 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;
(n) 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
7
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;
(o) the financial statements, including the notes thereto, included in
the Registration Statement and the Prospectus or incorporated by reference
therein 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 or incorporated by reference therein fairly present the information
shown therein; no other financial statements or schedules are required by Form
S-3 or otherwise to be included in the Registration Statement or Prospectus or
incorporated by reference therein;
(p) 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);
(q) 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;
(r) subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or Prospectus, there has not been (i) any
material adverse change in the assets, operations, business or condition
(financial or otherwise), present or prospective, of the Company and the
Subsidiaries taken as a whole, whether or not arising in the ordinary course of
business, (ii) any transaction, which is material to the Company and the
Subsidiaries taken as a whole, planned or entered into by the Company or any of
the Subsidiaries, (iii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any of the Subsidiaries, which is material
to the Company and the Subsidiaries taken as a whole or (iv) except in
accordance with 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;
(s) 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
8
"Capitalization" as of the date stated in such section; immediately after the
Closing Time, 34,848,601 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 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;
(t) each of the Company, the Subsidiaries, and each of their respective
officers, directors and controlling persons has not, directly or indirectly, (i)
taken, and will not take 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; or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Shares or (B) paid or agreed to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company;
(u) 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;
(v) 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;
(w) 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;
(x) 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
9
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;
(y) 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;
(z) 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;
(aa) 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;
(bb) 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
10
entity, respectively; all tax liabilities, if any, are adequately provided for
on the respective books of such entities;
(cc) each of the Company and the Subsidiaries maintains insurance
(issued by insurers of recognized financial responsibility) of the types and in
the amounts generally deemed adequate, if any, for their respective businesses
and consistent with insurance coverage maintained by similar companies in
similar businesses, including, but not limited to, insurance covering real and
personal property owned or leased by the Company and the Subsidiaries against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect;
(dd) except as otherwise disclosed in the Prospectus, neither the
Company nor any of 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 and the Subsidiaries'
operations with respect to the Real Property, are 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 material 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 has received any
written or oral notice from any governmental entity or any other person and
there is no pending or threatened claim, litigation or any administrative agency
proceeding that: alleges a violation of any Environmental Laws by the Company or
any of the Subsidiaries; or that the Company or any of the Subsidiaries is a
liable party or a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601, ET
SEQ., or any state superfund law; has resulted in or could result in the
attachment of an environmental lien on any of the Real Property; or alleges that
the Company or any of the Subsidiaries is liable for any contamination of the
environment, contamination of the Real Property, damage to natural resources,
property damage, or personal injury based on their activities or the activities
of their predecessors or third parties (whether at the Real Property or
elsewhere) involving Hazardous Materials, whether arising under the
Environmental Laws, common law principles, or other legal standards;
(ee) 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,
11
or failed to disclose fully any such contributions, in violation of law, (ii)
made any payment to any state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or allowed by applicable law, (iii) made any
payment outside the ordinary course of business to any investment officer or
loan broker or person charged with similar duties of any entity to which the
Company or any of the Subsidiaries sells or from which the Company or any of the
Subsidiaries buys loans or servicing arrangements for the purpose of influencing
such agent, officer, broker or person to buy loans or servicing arrangements
from or sell loans to the Company or any of the Subsidiaries, or (iv) engaged in
any transactions, maintained any bank account or used any corporate funds except
for transactions, bank accounts and funds which have been and are reflected in
the normally maintained books and records of the Company and the Subsidiaries;
(ff) 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;
(gg) 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;
(hh) the Company is organized and operates in conformity with the
requirements for qualification as a real estate investment trust (a "REIT")
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 qualification and taxation as a REIT under the Code;
(ii) the Shares have been approved for listing, upon official notice of
issuance, on the
New York Stock Exchange;
(jj) 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;
(kk) to the 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;
(ll) 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");
12
(mm) the Company has not incurred any liability for any finder's fees
or similar payments in connection with the transactions herein contemplated
except as may otherwise exist with respect to the Underwriters pursuant to this
Agreement; and
(nn) 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:
(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 ▇▇▇▇▇, 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 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
13
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 Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(g) to furnish to the Underwriters for a period of five years from the
date of this Agreement (i) as soon as available, copies of all annual, quarterly
and current reports or other communications supplied to holders of Common
Shares, (ii) as soon as practicable after the filing thereof, copies of all
reports filed by the Company with the Commission, the NASD or any securities
exchange and (iii) such other publicly available information as the Underwriters
may reasonably request regarding the Company and its Subsidiaries;
(h) to advise the Underwriters promptly during any period of time in
which a Prospectus relating to the Shares is required to be delivered under the
Securities Act Regulations (i) of any material change in the Company's assets,
operations, business or condition (financial or otherwise) or (ii) of the
happening of any event which would require the making of any change in the
Prospectus then being used so that the Prospectus would not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and, during such time,
to prepare and furnish, at the Company's expense, to the Underwriters promptly
such amendments or supplements to the Prospectus as may be necessary to reflect
any such change;
(i) to furnish promptly to the Representatives such number of conformed
copies of the Registration Statement, as initially filed with the Commission,
and of all amendments or supplements thereto (including all exhibits filed
therewith) as the Underwriters may reasonably request;
(j) to furnish to the Underwriters, not less than two business days
before filing with the Commission, subsequent to the effective date of the
Prospectus and during 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;
(k) to apply the net proceeds of the sale of the Shares substantially
in accordance with its statements under the caption "Use of Proceeds" in the
Prospectus;
(l) to make generally available to its security holders as soon as
practicable, but in any event not later than the end of the fiscal quarter first
occurring after the first anniversary of the date upon which the Prospectus
Supplement is filed pursuant to Rule 424(b) under the
14
Securities Act Regulation, 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 date upon which the Prospectus
Supplement is filed pursuant to Rule 424(b) under the Securities Act Regulation;
(m) 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;
(n) except in the ordinary course of business in connection with (w)
the granting of options pursuant to the Company's 1997 Employee Stock Option
Plan (not to exceed 400,000 options), (x) the payment in stock to directors of
the Company of a portion of their annual or other directors fees, (y) the filing
of any registration statement, including any amendment thereto, pursuant to the
registration rights granted to certain shareholders in accordance with the
Merger Agreement, and (z) the filing of any registration statement, including
any amendment thereto, relating to any dividend reinvestment and/or stock
purchase plan to be instituted by the Company ("DRSPP"), to refrain during a
period of 90 days from the date of this Agreement, without the prior written
consent of the Representatives, from (i) offering, 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, (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 or (C) any Common Shares issued by the Company
pursuant to any DRSPP;
(o) 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;
(p) the Company will use its best efforts to continue to meet the
requirements to qualify as a real estate investment trust under the Code;
(q) the Company will comply with all of the provisions of any
undertakings in the Registration Statement;
(r) 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;
15
(s) if at any time during the 30-day period after the execution of this
Agreement, 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, in compliance with the
Securities Act, the Securities Act Regulations and other applicable laws and
reasonably satisfactory to the Representatives, responding to or commenting on
such rumor, publication or event; and
(t) 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 expenses in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any Preliminary and Supplemental Blue Sky Memoranda in connection
therewith (excluding the fees and disbursements of counsel for the Underwriters
in connection with such registration or qualification and memoranda relating
thereto which are addressed in Section 5(b)), 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, a
reasonable quantity of Prospectuses requested by the Representatives, and the
Company's road show costs and expenses.
(b) In addition to the foregoing, whether or not the transactions
contemplated hereunder are consummated or this Agreement terminated (it being
understood by the parties that the Company shall have no such obligation in the
case of a termination of this Agreement by the Representatives pursuant to
Section 8 hereof), the Company agrees to reimburse the Representatives for such
other reasonable and actual out of pocket expenses incurred by the
Representatives in connection with the performance of their obligations
hereunder, including the fees and disbursements of the Representatives' outside
legal counsel; provided, however, that the Company shall have no obligation to
reimburse the Representatives and the Underwriters pursuant to this Section 5(b)
and Section 5(c) for any expenses in excess of a total of $40,000 in the
aggregate.
16
(c) 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; provided, however, that the Company shall
have no obligation to reimburse the Representatives and the Underwriters
pursuant to this Section 5(c) and Section 5(b) for any out-of-pocket expenses in
excess of a total of $40,000 in the aggregate.
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 ▇▇▇▇▇ ▇▇▇▇ 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 & ▇▇▇▇▇▇, counsel for the
Underwriters, stating that:
(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-3 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,
17
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 to consummate
the transactions described herein;
(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 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
by the Company and the consummation by the Company of the transactions
contemplated under this Agreement 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
18
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, to such counsel's
knowledge, result in the creation or imposition of any lien,
encumbrance, 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) 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 or the
consummation of the transactions contemplated hereby 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;
(ix) 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
19
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;
(x) 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;
(xi) 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 or 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;
(xii) to such counsel's knowledge, except as otherwise
described in the Prospectus, 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;
(xiii) 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;
(xiv) 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;
(xv) 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;
(xvi) the statements under the captions "America First
Mortgage Investments, Inc.," "Additional Risk Factors," "Risk Factors,"
"Market Price and Dividends on our Common Stock," "Description of
Securities," and "Certain Federal Income Tax
20
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;
(xvii) the Shares have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance;
(xviii) 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;
(xix) 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;
(xx) 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;
(xxi) 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
(xxii) 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.
21
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
(xv) and (xvi) 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 ▇▇▇▇▇ ▇▇▇▇ 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 & ▇▇▇▇▇▇, 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;
(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 & ▇▇▇▇▇▇, dated the
Closing Time or such Date of
22
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
(ii) no transaction which is material and unfavorable to the Company shall have
been entered into by the Company or any of the Subsidiaries, in each case, which
makes it, in the judgment of the Representatives, impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
(i) At the Closing Time, the Shares shall have been approved for
listing on the New York Stock Exchange, subject to official notice of issuance.
(j) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(k) The Representatives shall have received letters (each, a "Lock-up
Agreement") from each person listed on SCHEDULE III hereto, in form and
substance satisfactory to the Representatives, confirming that for a period of
90 days after the date of this Agreement, such persons will not directly or
indirectly (i) offer, pledge to secure any obligation due on or within 90 days
after the date of this Agreement, 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(k) to the
same extent as such stockholder delivering a letter hereunder), directly or
indirectly, any Common Shares owned or hereafter acquired by such persons (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
23
sole discretion of the Representatives. Notwithstanding the foregoing sentence,
each of the persons listed on SCHEDULE III shall be permitted to exercise any
outstanding options granted to any such person pursuant to the Company's 1997
Employee Stock Option Plan; provided, that, any Common Shares received upon the
exercise of any such option (other than any Common Shares surrendered to the
Company pursuant to a cashless exercise of such option) shall be subject to this
Section 6(k).
(l) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters a certificate of two principal executive officers 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) and (i) have been met and are true and correct as
of such date.
(m) The Company shall have furnished to the Underwriters such other
documents and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Prospectus, the representations,
warranties and statements of the Company contained herein, and the performance
by the Company of its covenants contained herein, and the fulfillment of any
conditions contained herein, as of the Closing Time or any Date of Delivery as
the Underwriters may reasonably request.
(n) All filings with the Commission required by Rule 424 under the
Securities Act shall have been made within the applicable time period prescribed
for such filing by such Rule.
(o) The Company shall perform such of its obligations under this
Agreement are to be performed by the terms hereof and thereof at or before the
Closing Time or the relevant Date of Delivery.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the delivery to the Representatives on the Date of
Delivery of such documents as the Representatives may reasonably request with
respect to the good standing of the Company, the due authorization and issuance
of the Option Shares and other matters related to the issuance of the Option
Shares.
7. TERMINATION: The obligations of the several Underwriters hereunder
shall be subject to termination in the absolute discretion of the
Representatives, at any time prior to the Closing Time or any Date of Delivery,
(i) if any of the conditions specified in Section 6 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, or (ii) if
there has been since the respective dates as of which information is given in
the Prospectus, 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
24
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.
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.
25
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 any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Company) or
in a Prospectus (the term Prospectus for the purpose of this Section 9 being
deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus
as amended or supplemented by the Company), or arises out of or is based upon
any omission or alleged omission to state a material fact required to be stated
in either such Registration Statement or Prospectus or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, except insofar as any such loss, expense, liability,
damage or claim arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained in
and in conformity with information furnished in writing by the Underwriters
through the Representatives to the Company 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.
26
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
out-of-pocket 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) 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 (i) concessions to dealers
in connection with the sale of Shares and (ii) stabilizing and the beneficial
ownership of Shares by the Underwriters, and entities associated with the
Underwriters, 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(j) and this Section 9.
27
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 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.
28
(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, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered to the Company at the offices of the Company at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
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 New York state court sitting in New
York, New York, 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.
29
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.
[signature pages follow]
30
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.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: President and Chief Executive Officer
Accepted and agreed to as of the date first above written:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ MERCHANT PARTNERS, LLC
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED
BY: FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
/s/ ▇▇▇▇▇ ▇. Kleebatt
-------------------------------------------
By: ▇▇▇▇▇ ▇. Kleebatt
Its: Managing Director
For themselves and as Representatives
of the other Underwriters named on
Schedule I hereto.
SCHEDULE I
Number of Initial
Underwriter Shares to be Purchased
----------- ----------------------
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc................. 2,600,000
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc................................. 1,430,000
▇▇▇▇▇▇ Merchant Partners, LLC......................... 1,235,000
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated.............. 1,235,000
---------
TOTAL 6,500,000
SCHEDULE II
Subsidiaries of the Company
▇▇▇▇▇▇ ▇▇▇▇▇ Limited Partnership, a Maryland limited partnership
PF One Corporation, a Nebraska corporation
▇▇▇▇▇▇▇ 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
Persons Subject to Lock-Up Agreements
NAME SHARES
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 323,099
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 215,849
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 169,453