AEGIS INVESTMENT TRUST
10,000,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
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December __, 1997
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
EVEREN SECURITIES, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
As Representatives of the Several Underwriters,
c/o Jefferies & Company, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
AEGIS Investment Trust, a Maryland real estate investment trust (the
"Company"), AEGIS Operating Partnership, L.P., a Delaware Limited Partnership
(the "Operating Partnership") and AEGIS Mortgage Corporation, an Oklahoma
corporation ("AMC"), hereby confirm their agreement with you and each of the
other Underwriters named in SCHEDULE I hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 2(b) hereof), for whom you are acting as
Representatives (in such capacity, the "Representatives") with respect to the
purchase by the Underwriters, acting severally and not jointly, of 10,000,000
shares of Common Stock of the Company, $0.01 par value per share (the "Common
Stock") from the Company (said 10,000,000 shares of Common Stock are herein
called the "Underwritten Stock"). The Company proposes to sell to the
Underwriters, acting severally and not jointly, up to 1,500,000 additional
shares of Common Stock (said 1,500,000 shares of Common Stock being herein
called the "Option Stock" and the Option Stock with the Underwritten Stock is
herein collectively called the "Stock"). The Common Stock is more fully
described in the Registration Statement and the Prospectus hereinafter
mentioned.
The Company owns a general partnership interest in the Operating
Partnership and is its sole managing general partner. The Operating
Partnership intends to own and manage a portfolio of mortgage interests and
other investments (the "Properties"). The Operating Partnership also owns
shares of stock in AMC. The Company, the Operating Partnership and AMC are
herein collectively referred to as the "REIT Entities," and all references to
properties or assets of the REIT Entities include, without limitation, the
Properties unless otherwise noted.
The REIT Entities hereby confirm the agreements made with respect to the
purchase of the Stock by the several Underwriters. You represent and warrant
that you have been authorized by each of the other Underwriters to enter into
this Agreement on their behalf and to act for them in the manner herein
provided.
The terms which follow, when used in this Agreement, shall have the
meanings indicated. "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in Section 1(a) below and any preliminary prospectus
included in the Registration Statement on the date that the Registration
Statement becomes effective (the "Effective Date") that omits Rule 430A
Information (as defined below). "Registration Statement" shall mean the
registration statement referred to in Section 1(a) below, including financial
statements, schedules and exhibits, as amended at the Representation Date (as
defined below) or, if not effective at the Representation Date, in the form in
which it shall become effective, or any term sheet filed with the United States
Securities and Exchange Commission (the "Commission") pursuant to Rule 434 of
the rules and regulations (the "Act Regulations") promulgated under the
Securities Act of 1933, as amended (the "Act"), the information deemed to be a
part of the Registration Statement at the time it became effective pursuant to
Rule 430A(b) or Rule 434(d) of the Act Regulations, and, in the event of any
amendment thereto or the filing of any abbreviated registration statement,
pursuant to Rule 462(b) of the Act Regulations relating thereto after the
effective date of such registration statement, shall also mean (from and after
the effectiveness of such amendment or the filing of such abbreviated
registration statement) such registration statement as so amended, together with
any such abbreviated registration statement and, in the event any post-
effective amendment thereto becomes effective prior to the First Closing Date
(as defined in Section 2 hereof), shall also mean such registration statement
as so amended. Such term shall include Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A (as defined
below). The prospectus constituting a part of the Registration Statement
(including the Rule 430A Information), as from time to time amended or
supplemented, is hereinafter referred to as the "Prospectus," except that if
any revised prospectus shall be provided to the Underwriters by the Company
which differs from the prospectus on file at the Commission at the Effective
Date, whether or not such revised prospectus is required to be filed by the
Company pursuant to Rule 424 of the Act Regulations, the term "Prospectus"
shall refer to each such revised prospectus from and after the time it is
first provided to the Underwriters for such use; provided, however, that if
in reliance on Rule 434 of the Act Regulations and with the consent of
Jefferies & Company, Inc., the Company shall have provided to the
Underwriters a term sheet pursuant to Rule 434(b) or (c), as applicable,
prior to the time that a confirmation is sent or given for purposes of
Section 2(10)(a) of the Act, the term Prospectus shall mean the "prospectus
subject to completion" (as defined in Rule 434(g) of the Act Regulations)
last provided to the Underwriters by the Company and circulated by the
Underwriters to all prospective purchasers of the Stock (including the
information deemed to be a part of the Registration Statement at the time it
became effective pursuant to Rule 434(d) of the Act Regulations).
Notwithstanding the foregoing, if any revised prospectus shall be
provided to the Underwriters by the Company for use in connection with the
offering of the Stock that differs from the prospectus referred to in the
immediately preceding sentence (whether or not such revised prospectus is
required to be filed with the Commission pursuant to Rule 424(b) of the Act
Regulations), the term Prospectus shall refer to such revised prospectus from
and after the time it is first provided to the Underwriters for such use.
If, in reliance on Rule 434 of the Act Regulations and with the consent of
Jefferies & Company, Inc., the Company shall have provided to the
Underwriters a term sheet pursuant to Rule 434(b) or (c), as applicable,
prior to the time that a confirmation is sent or given for purposes of
Section 2(10)(a) of the Act, the Prospectus and the term sheet, together,
will not be materially different from the prospectus in the Registration
Statement. "Rule 158," "Rule 424," "Rule 430A" and "Rule 434" refer to such
rules under the Act Regulations. "Rule 430A Information" means information
with respect to the Stock and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective pursuant to Rule
430A.
SECTION 1. REPRESENTATIONS AND WARRANTIES. Each of the REIT Entities,
jointly and severally, represents and warrants to each of the Underwriters as
of the date hereof (such date being referred to as the "Representation
Date"), as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. A Registration Statement
on Form S-11 (File No. 333-35473) with respect to the Stock, including a
prospectus subject to completion, has been prepared by the Company in conformity
with the requirements of the Act and the Act Regulations and has been filed with
the Commission; such amendments to such registration statement, such amended
prospectuses subject to completion and such abbreviated registration statements
pursuant to Rule 462(b) of the Act Regulations as may have been required prior
to the date hereof, have been similarly prepared and filed with the Commission;
and the Company will file such additional amendments to such registration
statement, such amended prospectuses subject to completion and such abbreviated
registration statements as may hereafter be required. Copies of such
registration statement and amendments, of each related Preliminary Prospectus
and of any Rule 434 term sheet and of any abbreviated registration statement
pursuant to Rule 462(b) of the Act Regulations have been delivered to you. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or instituted proceedings for that purpose, and each such
Preliminary Prospectus has conformed in all material respects to the
requirements of the Act and the Act Regulations and, as of its date, has not
included any untrue statement of a material fact or omitted to state a material
fact necessary to make the
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statements therein, in light of the circumstances under which they were made,
not misleading and at the time the Registration Statement became or becomes,
as the case may be, effective and at all times subsequent thereto up to and
on the First Closing Date (hereinafter defined) and on any later date on
which Option Shares are to be purchased, (a) the Registration Statement and
the Prospectus, and any amendments and supplements thereto and any
abbreviated registration statements, contained and will contain all material
information required to be included therein by the Act and the Act
Regulations and will in all material respects conform to the requirements of
the Act and the Act Regulations; (b) the Registration Statement, and any
amendments or supplements thereto, did not and will 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 not misleading;
and (c) the Prospectus, and any amendments and supplements thereto and any
abbreviated registration statements, did not and will not include any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the REIT Entities
make no representations, warranties or agreements as to the information
provided in writing to the Company by or on behalf of the Underwriters
expressly for use in the Registration Statement or the Prospectus, and the
REIT Entities agree that the only information provided in writing by or on
behalf of the Underwriters to the Company expressly for use in the
Registration Statement or the Prospectus is (i) that information in the last
paragraph of text on the cover page of the Prospectus concerning the terms of
the offering by the Underwriters; (ii) the legend concerning over-allotments
and stabilizing on the inside front cover page; (iii) the concession and
reallowance figures appearing in the third paragraph and the information in
paragraphs nine, ten, eleven and twelve under the caption "Underwriting."
(b) SUBSIDIARIES. The Company does not own any interest in or control,
directly or indirectly, any corporation, association, partnership, limited
liability company, joint venture or other entity other than AEGIS Operating
Partnership, L.P., a Delaware limited partnership and AEGIS Mortgage
Corporation, an Oklahoma corporation (referred to herein as the
"Subsidiaries") and none of the Subsidiaries owns any interest in or
controls, directly or indirectly, any corporation, association, partnership,
limited liability, joint venture or other entity.
(c) ALL NECESSARY PERMITS, ETC. Each of the Company and the
Subsidiaries has all necessary authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all regulatory or
governmental officials, bodies and tribunals ("Permits") to own or lease its
respective properties and to conduct its businesses as described in the
Registration Statement and Prospectus, and none of the Company nor any of the
Subsidiaries has received any notice or threat of proceedings relating to the
revocation or modification of any such Permits; each of the Company and the
Subsidiaries has fulfilled and performed all of its respective current
obligations with respect to such Permits, and no event has occurred which
allows, or after notice or lapse of time, or both, would allow, revocation or
termination thereof or results in any other material impairment of the rights
of the holder of any such Permit, subject in each case to such qualification
as may be set forth in the Registration Statement and Prospectus; and, except
as described therein, such Permits contain no restrictions that are
materially burdensome to the Company or the Subsidiaries; and each of the
Company and the Subsidiaries is in compliance with all applicable laws,
rules, regulations, orders and consents in all material respects. The
property and businesses of the Company and the Subsidiaries conform in all
material respects to the descriptions thereof contained in the Registration
Statement and the Prospectus.
(d) TITLE TO PROPERTIES. Except as set forth in the Registration
Statement and Prospectus, (i) each of the Company and the Subsidiaries has
good and marketable title to all properties and assets owned by it, including
without limitation, all mortgages, deeds of trust and other security
interests held by or in favor of the Company or the Subsidiaries, in each
case free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest (each of the foregoing, a "Lien") that would
materially affect the value thereof or materially interfere with the use made
or to be made thereof by it; (ii) the agreements to which the Company or any
of the Subsidiaries is a party described in the Registration Statement and
Prospectus are valid agreements, enforceable against (and, to the best of the
Company's and the Subsidiaries' knowledge enforceable by) the Company and the
Subsidiaries (as applicable), except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles and, to the best of the Company's and the
Subsidiaries' knowledge, the other contracting party or parties thereto are
not in material breach or material default under any of such agreements; and
(iii) each of the Company and the Subsidiaries has valid and enforceable
leases for all properties described in the Registration Statement and
Prospectus as leased by it, except as the enforcement thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors, rights generally or by
general equitable principles. Except as otherwise disclosed in the
Registration Statement and Prospectus, each of the Company and the
Subsidiaries owns or leases all such properties as are necessary to its
operations as now conducted or as proposed in the Registration Statement and
Prospectus to be conducted.
(e) COMPANY'S FORMATION AND GOOD STANDING. The Company has been duly
incorporated and is validly existing as a trust in good standing under the
laws of the State of Maryland and has full power and authority
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to own, lease and operate its properties and to conduct the business in
which it is engaged or proposes to engage as described in the Prospectus and
to enter into and perform its obligations under this Agreement. The Company
is duly qualified as a foreign trust to transact business and is in good
standing in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing or the conduct of business,
except where the failure to so qualify or to be in good standing would not
have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and the
Subsidiaries considered as one enterprise, whether or not occurring in the
ordinary course of business (a "Material Adverse Event").
(f) AMC'S INCORPORATION AND GOOD STANDING. AMC has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of its state of incorporation with full power and authority to own,
lease and operate its properties and to conduct the business in which it is
engaged or proposes to engage as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good standing
would not result in a Material Adverse Event. All of the issued and
outstanding shares of capital stock of AMC have been duly authorized and
validly issued, and are fully paid and nonassessable. Except as described in
the Prospectus, all of the shares of capital stock of AMC are owned by the
Company, directly or through Subsidiaries, and are owned free and clear of
any Lien.
(g) OPERATING PARTNERSHIP'S FORMATION AND GOOD STANDING. The Operating
Partnership has been duly formed and is validly existing as a limited
partnership under the laws of the state of its formation with full power and
authority to own, lease and operate its properties and to conduct the
business in which it is engaged or proposes to engage as described in the
Prospectus and is duly qualified as a foreign partnership to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
or to be in good standing would not result in a Material Adverse Event. All
of the partnership interests in the Operating Partnership ("OP Units") have
been duly authorized and validly issued. All of the OP Units which will be
owned by the Company at the time of the Closing, directly or through
Subsidiaries, will have been validly issued and all required capital
contributions with respect thereto will have been made. Except as described
in the Prospectus, at the time of the Closing, all of the OP Units will be
owned by the Company, directly or through Subsidiaries, and will be owned
free and clear of all Liens. At the time of the Closing, the Company will be
the sole general partner of the Operating Partnership.
(h) UNDERWRITING AGREEMENT. The Company and the Subsidiaries have full
legal right, power and authority to enter into this Agreement and perform the
transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company and each of the Subsidiaries and is a
valid and binding agreement on the part of the Company and the Subsidiaries,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement
hereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles; the performance of this
Agreement, the issue and sale of the Stock and the consummation of any other
matters herein contemplated will not result in a material breach or violation
of any of the terms and provisions of, or constitute a default under, (i) any
bond, debenture, note or other evidence of indebtedness, or under any lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture
or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which it or any of the Subsidiaries or their
respective properties may be bound; (ii) the Declaration of Trust or bylaws
of the Company, or the certificate of limited partnership or partnership
agreement of the Operating Partnership (the "OP Partnership Agreement") or
the Articles of Incorporation or bylaws of AMC; or (iii) any law, statute,
order, rule, regulation, writ, injunction, judgment or decree applicable to
the Company or any of the Subsidiaries or their respective properties of any
court, government or governmental agency or body, domestic or foreign. No
consent, approval, authorization or order of or qualification with any court,
government or governmental agency or body, domestic or foreign, with the
ability to bind or restrict the Company or the Subsidiaries or their
respective properties, is required for the execution and delivery of this
Agreement and the consummation by the Company or the Subsidiaries of the
transactions herein contemplated, except such as may be required under the
Act and state securities laws, all of which requirements have been satisfied
in all material respects.
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(i) CONTRIBUTION TRANSACTION. The issuance of OP Units to the Company and
the limited partners of the Operating Partnership as described in the Prospectus
(the "Contribution Transaction") has been duly authorized and, when paid for in
accordance with the OP Partnership Agreement, such OP Units will be validly
issued in accordance with the OP Partnership Agreement. The issuance, sale and
delivery of the OP Units in the Contribution Transaction constitute transactions
exempt from registration under Section 4(2) of the Act and such OP Units will
have been offered and sold in compliance with all federal and applicable state
securities laws.
(j) OPERATING PARTNERSHIP. At the time of the Closing, the OP
Partnership Agreement, as amended as of the date of this Agreement, will be
duly and validly authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery thereof by the other
partners of the Operating Partnership, the OP Partnership Agreement, as so
amended, will be a valid and legally binding agreement of the Operating
Partnership and enforceable against the Operating Partnership in accordance
with its terms. As of the First Closing Date, the Operating Partnership will
be organized in conformity with the requirements for qualification and
taxation as a partnership under the Code, and its method of operation will at
all times have enabled, and its proposed method of operation will enable the
Operating Partnership to qualify as a partnership under the Code. The
execution, delivery and performance of the OP Partnership Agreement will not
contravene any provision of applicable law or the Declaration of Trust or
bylaws of the Company, the certificate of limited partnership of the
Operating Partnership, the Articles of Incorporation or bylaws of AMC or any
agreement or other instrument binding upon the REIT Entities that is material
to the REIT Entities, taken as a whole, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over any of the
REIT Entities and no consent, approval, authorization or order of or
qualification with any governmental body or agency will be required for the
performance by the Operating Partnership of its obligations under the OP
Partnership Agreement, as so amended.
(k) INTELLECTUAL PROPERTY RIGHTS. Each of the Company and the
Subsidiaries owns or possesses adequate rights to use all patents, patent
applications, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names, copyrights and other similar rights including,
without limitation, rights to the name "Aegis Mortgage Corporation," which
are reasonably necessary to conduct its businesses as described in the
Registration Statement and Prospectus; the expiration of any patents, patent
rights, trade secrets, trademarks, service marks, trade names or copyrights
will not result in a Material Adverse Event; each of the Company and the
Subsidiaries has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of the Company or such
Subsidiaries by others with respect to any patent, patent applications,
patent rights, inventions, trade secrets, know-how, trademarks, service
marks, trade names or copyrights; and each of the Company and the
Subsidiaries has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of others with respect to
any patent, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names or copyrights which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, might result in
a Material Adverse Event.
(l) CAPITAL STOCK OF THE COMPANY. All outstanding shares of capital
stock of the Company (i) have been duly authorized and validly issued and are
fully paid and nonassessable; and (ii) have been issued in compliance with
all federal and state securities laws. No further approval or authorization
of any shareholder, the Board of Trustees of the Company or others is
required for the issuance and sale or transfer of the Stock hereunder;
(m) RIGHTS AFFECTING STOCK. (i) Except for the units of limited
partnership interest ("Units") to be issued to the current owners of AMC in
connection with the contribution of their common stock in AMC to AEGIS
Operating Partnership, L.P. (the "Contribution Transaction") there are no
outstanding securities convertible into or exchangeable for, and no
outstanding options, warrants or other rights to purchase, any shares of the
capital stock of the Company or the Subsidiaries, nor any agreements or
commitments to issue any of the same; (ii) except for the Units to be issued
to the current owners of AMC in the Contribution Transaction, there are no
registration rights, preemptive rights or other rights to subscribe for or to
purchase the securities of the Company or the Subsidiaries that have not been
complied with or expressly waived prior to the date hereof, or any contracts
or commitments to issue or sell shares of its capital stock or any such
options, rights, convertible securities or obligations; (iii) except for the
Company's ownership limit of 9.8% of the number of outstanding shares of
Common Stock and 9.8% of any class or series of preferred stock, there are no
restrictions upon the voting or transfer of any capital stock pursuant to the
Company's Declaration of Trust or bylaws or any of the Subsidiaries' charter,
bylaws, partnership agreement or
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any agreement or other instrument to which the Company or any of the
Subsidiaries is a party; and (iv) the Stock, when issued and delivered
against payment therefor in accordance with the terms of this Agreement, will
be duly and validly issued, fully paid and nonassessable, and will be sold
free and clear of all Liens.
(n) CAPITALIZATION. The authorized and outstanding capital stock of
the Company is as set forth in the Registration Statement and the Prospectus
under the caption "Capitalization" and conforms to the statements relating
thereto contained in the Registration Statement and the Prospectus (and such
statements correctly state the substance of the instruments defining the
capitalization of the Company); and the description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the options or
other rights granted and exercised thereunder, set forth in the Registration
Statement and the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(o) FINANCIAL STATEMENTS. KPMG Peat Marwick LLP (i) has reviewed the
balance sheet of the Company, together with the related schedules and notes
as of September 30, 1997; (ii) has examined the financial statements of AMC,
together with the related schedules and notes for each of the years in the
three (3) year period ended December 31, 1996; and (iii) has performed the
procedures set out in Statement on Accounting Standards No. 71 ("SAS 71") for
a review of the interim financial information for each of the nine (9) month
periods ended September 30, 1996 and 1997, filed with the Commission as a
part of the Registration Statement and included in the Prospectus; KPMG Peat
Marwick LLP are independent accountants within the meaning of the Act and the
Act Regulations; the audited financial statements of the Company and AMC,
together with the related schedules and notes, and the unaudited financial
information, forming part of the Registration Statement and Prospectus,
fairly present the financial position and the results of operations of the
Company and AMC, at the respective dates and for the respective periods to
which they apply; and all audited financial statements of the Company and
AMC, together with the related schedules and notes, and the unaudited
financial information, filed with the Commission as part of the Registration
Statement, have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
except as may be otherwise stated therein. The selected financial and
statistical data included in the Registration Statement and the Prospectus
present fairly the information shown therein and have been compiled on a
basis consistent with the audited financial statements presented therein. No
other financial statements or schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus under
the captions "Selected Financial Data," and "Capitalization" fairly present
the information set forth therein on a basis consistent with that of the
audited financial statements contained in the Registration Statement. The
financial statements of the Company and AMC and the related notes thereto
included in the Prospectus and in the Registration Statement present fairly
the information contained therein, have been prepared in accordance with the
Commission's rules and guidelines, and have been properly presented on the
bases described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(p) INTERNAL ACCOUNTING CONTROLS. Each of the Company and the
Subsidiaries maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles 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.
(q) INDUSTRY AND MARKET DATA. The statistical, industry and
market-related data included in the Registration Statement and the Prospectus
is reliable and accurate in all material respects.
(r) INSURANCE. Each of the Company and the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses.
Such insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company, the
Subsidiaries and their businesses. Neither the Company nor the Subsidiaries
has received written notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be made
in order to continue such insurance. All such insurance is outstanding and
duly in force on the date hereof. Except as otherwise disclosed in the
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Prospectus, each of the Company and its Subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in
such amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for their businesses including, but
not limited to, policies covering the Company and its Subsidiaries against
business interruptions and policies covering real and personal property owned
or leased by the Company and its Subsidiaries against theft, damage,
destruction, acts of vandalism and earthquakes. The Company has no reason to
believe that it or any Subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Effect. Neither of the Company nor any
Subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.
(s) INVESTMENT COMPANY ACT. The Company and its Subsidiaries have
been advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the "Investment Company Act"). Neither the Company nor
any of the Subsidiaries is, and after application of the proceeds from the
sale of the Stock will be, an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act,
and the rules and regulations promulgated thereunder. The Company and each
Subsidiary will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(t) REIT STATUS. As of the First Closing Date, the Company will be
organized in conformity with the requirements for qualification and taxation
as a real estate investment trust ("REIT") under the Internal Revenue Code of
1986, as amended (the "Code"), and its method of operation has at all times
enabled, and its proposed method of operation will enable, the Company to
qualify as a REIT under the Code. The Company does not know of any event or
condition which would cause, or is likely to cause, the Company to fail to
qualify as a REIT at any time.
(u) COMPLIANCE WITH APPLICABLE LAWS, AGREEMENTS, AND INSTRUMENTS.
Neither of the Company nor any of the Subsidiaries is (i) in violation of its
respective Declaration of Trust, bylaws, partnership agreement or of any law,
ordinance, administrative or governmental rule or regulation applicable to
the Company or the Subsidiaries or of any franchise, license, permit,
judgment or any decree of any court or governmental agency or body having
jurisdiction over the Company or the Subsidiaries; or (ii) in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease, bond, debenture, bank loan, credit agreement or other agreement,
instrument or evidence of indebtedness to which the Company or the
Subsidiaries is a party or by which any of them may be bound, or to which any
of the property or assets of the Company or the Subsidiaries is subject.
(v) PENDING OR THREATENED LITIGATION. There is not any pending or, to
the best of the Company's knowledge, any threatened action, suit, claim or
proceeding against the Company, any of the Subsidiaries or any of their
respective officers or directors (and which are related to the Company or
such Subsidiaries) or any of the respective properties, assets or rights of
the Company or any of the Subsidiaries before any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of the Subsidiaries or over their respective officers or
properties or otherwise which (a) might result in a Material Adverse Event,
except as disclosed in the Registration Statement; (b) might prevent
consummation of the transactions contemplated hereby; or (c) is required to
be disclosed in the Registration Statement or Prospectus and is not so
disclosed; and there are no agreements, contracts, leases or documents of the
Company or any of the Subsidiaries of a character required to be described or
referred to in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement by the Act or the Rules and Regulations
which have not been accurately described in the Registration Statement or
Prospectus or filed as exhibits to the Registration Statement.
(w) NO MATERIAL ADVERSE EVENTS. Subsequent to the respective dates as
of which information is given in the Registration Statement and Prospectus,
there has not been (i) a Material Adverse Event; (ii) any transaction that is
material to the Company and the Subsidiaries considered as one enterprise,
except transactions entered into in the ordinary course of business; (iii)
any obligation, direct or contingent, that is material to the Company and the
Subsidiaries considered as one enterprise, incurred by the Company or the
Subsidiaries, except obligations incurred in the ordinary course of business;
(iv) any change in the capital stock or outstanding indebtedness of the
Company
7
or any of the Subsidiaries that is material to the Company and the
Subsidiaries considered as one enterprise; (v) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company or any
of the Subsidiaries; or (vi) any loss or damage (whether or not insured) to
the property of the Company or any of the Subsidiaries which has been
sustained or will have been sustained which would result in a Material
Adverse Event.
(x) NO TRANSACTIONS OUTSIDE THE ORDINARY COURSE OF BUSINESS. Except
as disclosed in the Registration Statement and the Prospectus (or any
amendment or supplement thereto or in any abbreviated Registration
Statement), subsequent to the respective dates as of which such information
is given in the Registration Statement and the Prospectus (or any amendment
or supplement thereto or in any abbreviated Registration Statement), neither
the Company nor any of the Subsidiaries has issued any securities, or
incurred any material liability or obligations, direct or contingent, or
entered into any transaction not in the ordinary course of business, or
entered into any transaction with an affiliate (as the term "affiliate" is
defined in Rule 405 promulgated by the Commission pursuant to the Act) of the
Company or the Subsidiaries which would otherwise be required to be disclosed
in the Registration Statement or the Prospectus, declared or paid any
dividend on its stock, or made any other distribution to any of its
shareholders except as disclosed in the Registration Statement or the
Prospectus, and there has not been any material change in the capital stock
or other equity, or material increase in the short-term debt or long-term
debt, of the Company or the Subsidiaries or any development involving or
which may reasonably be expected to result in a Material Adverse Event.
(y) UNLAWFUL PAYMENTS. To the Company's or any Subsidiaries'
knowledge, neither the Company nor any of the Subsidiaries nor any trustee,
director, partner, officer, employee or agent of the Company or any of the
Subsidiaries has made any payment of funds of the Company or the Subsidiaries
in violation of any law or rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Registration Statement or the Prospectus. Neither the Company, nor any of
its subsidiaries, nor any director or officer has, at any time during the
last five (5) years, (i) made any unlawful contribution to any candidate for
foreign office or failed to disclose fully any contribution in violation of
law; or (ii) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof.
(z) LABOR DISPUTES. There is (i) no unfair labor practice complaint
pending or, to the best knowledge of the Company or any of the Subsidiaries,
threatened against the Company or any of the Subsidiaries before the National
Labor Relations Board or any state or local labor relations board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Company
or the Subsidiaries, or, to the best knowledge of the Company or any of the
Subsidiaries, threatened against any of them; (ii) no strike, labor dispute,
slowdown or stoppage pending against the Company or the Subsidiaries, or, to
the best knowledge of the Company or any of the Subsidiaries, threatened
against the Company or any of the Subsidiaries; and (iii) to the best
knowledge of the Company or any of the Subsidiaries, no union representation
question existing with respect to the employees of the Company or the
Subsidiaries and, to the best knowledge of the Company or any of the
Subsidiaries, no union organizing activities are taking place, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, singly or
in the aggregate) such as could not reasonably be expected to result in a
Material Adverse Event.
(aa) TAX LAW COMPLIANCE. The Company and the Subsidiaries have timely
filed all necessary federal, state and foreign income and franchise tax returns
and have paid all taxes required to be paid by any of them and, if due and
payable, any related or similar assessments, fine or penalty levied against any
of them, and there is no tax deficiency that has been or, to the best of the
Company's or any of the Subsidiaries' knowledge, might be asserted against the
Company or any of the Subsidiaries that might result in a Material Adverse
Event; and all tax liabilities are adequately provided for on the books of the
Company and the Subsidiaries.
(bb) ENVIRONMENTAL VIOLATIONS OR CLAIMS. Neither the Company nor any
of the Subsidiaries is in Violation (as defined below) of any federal, state,
local or foreign laws or regulations relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata), including,
without limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances,
8
hazardous substances, petroleum or petroleum products ("Materials of
Environmental Concern"), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern (collectively, "Environmental
Laws"), which Violation could be reasonably expected to result in a Material
Adverse Event. As used herein, "Violation" includes, but is not limited to,
noncompliance with any permit or other governmental authorization required
under applicable Environmental Laws and noncompliance with the terms and
conditions of any such permit or authorization. In addition, (a) neither the
Company nor any of the Subsidiaries has received any communication, whether
from a governmental authority, citizens' group, employee or otherwise,
alleging that the Company or any of the Subsidiaries is not in full
compliance with any Environmental Laws or permit or authorization required
under applicable Environmental Laws where such failure to comply may be
reasonably expected to result in a Material Adverse Event; and (b) there are
no circumstances that may be reasonably anticipated to prevent or interfere
with such full compliance in the future. There is no claim, action, cause of
action, investigation or written notice by any person or entity alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries or penalties) arising
out of, based on or resulting from (i) the presence, or release into the
environment, of any Material of Environmental Concern at any location owned
or operated by the Company or any of the Subsidiaries; or (ii) circumstances
forming the basis of any Violation, or alleged violation, of any
Environmental Law (collectively, "Environmental Claims") pending or
threatened against the Company or any of the Subsidiaries or against any
person or entity whose liability for any Environmental Claim the Company or
any of the Subsidiaries has retained or assumed either contractually or by
operation of law which liability or violation could be reasonably expected to
result in a Material Adverse Event. There are no past or present actions,
activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that could form the basis of any
Environmental Claim against the Company or the Subsidiaries, or against any
person or entity whose liability for any Environmental Claim the Company or
any of the Subsidiaries has retained or assumed, either contractually or by
operation of law, which claim could be reasonably expected to result in a
Material Adverse Event.
(cc) PERIODIC REVIEW OF COSTS OF ENVIRONMENTAL COMPLIANCE. Prior to
originating any commercial mortgage or foreclosing or taking a deed in lieu
with respect to any property, the Company conducts a review of the effect of
Environmental Laws on such property and the operations conducted thereon, in
the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up or compliance with Environmental Laws or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis of
such review and the amount of its established reserves, the Company has
reasonably concluded that to date such associated costs and liabilities with
respect to any such properties would not, individually or in the aggregate,
result in a Material Adverse Effect.
(dd) NO PRICE STABILIZATION OR MANIPULATION. The Company, its
Subsidiaries, its trustees, directors, officers, partners, employees and
agents have not taken and will not take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Stock. Additionally, the
Company, its Subsidiaries, its trustees, directors, partners, officers,
employees or agents have not distributed and will not distribute without your
prior written consent prior to the later of (a) the First Closing Date, or
any date on which Option Stock is to be purchased, as the case may be, and
(b) completion of the distribution of the Stock, any offering material in
connection with the offering and sale of the Stock other than any Preliminary
Prospectuses, the Prospectus, the Registration Statement and other materials,
if any, permitted by the Act.
(ee) EXCHANGE LISTING. The Stock is duly authorized for listing,
subject to official notice of issuance, on the New York Stock Exchange, Inc.
(herein called "NYSE").
(ff) RELATED PARTY TRANSACTIONS. There are no outstanding loans,
advances (except normal advances for business expenses in the ordinary course
of business) or guarantees of indebtedness by the Company or its Subsidiaries
to or for the benefit of any of the trustees, partners, officers or directors
of the Company or its Subsidiaries or any of the members of the families of
any of them, except as disclosed in the Registration Statement and the
Prospectus. There are no business relationships or related party transactions
involving the Company or any
9
Subsidiary or any other person required to be described in the
Registration Statement which have not been described as required.
(gg) LOCK-UP AGREEMENT. The Company will use its best efforts to
cause the persons listed on SCHEDULE III attached hereto to agree that,
without the prior written consent of ▇▇▇▇▇▇▇▇▇ & Company, Inc., he, she or it
will not, without the prior written consent of ▇▇▇▇▇▇▇▇▇ & Company, Inc.,
during the period ending two (2) years, or one (1) year, as applicable, after
the date of the Prospectus, (1) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option to contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock,
or (2) enter into any swap or similar agreement that transfers, in whole or
in part, the economic risk of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The
foregoing provisions shall not apply to (A) the Common Stock to be sold to
the Underwriters pursuant to this agreement; (B) options granted by the
Company to purchase Common Stock granted under its option plans described in
the Registration Statement; (C) for some persons, any pledge of Common Stock
in connection with borrowings that, in the aggregate, do not exceed 50% of
the value of the Common Stock at the time of any such borrowing and the
maturity of which shall be no earlier than one year from and after the date
of the Prospectus; and (D) transfers, without consideration, of the Common
Stock or any securities convertible into, or exercisable or exchangeable for
Common Stock to family members or to one or more trusts established for the
benefit of one or more family members are permitted at any time, provided
that the transferee execute and deliver to ▇▇▇▇▇▇▇▇▇ & Company, Inc., an
agreement whereby the transferee agrees to be bound by all of the foregoing
terms and provisions.
In addition, such holder will agree that, without the prior written
consent of ▇▇▇▇▇▇▇▇▇ & Company, Inc. on behalf of the Underwriters, it will
not, from the date hereof through the period ending two (2) years after the
date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable for Common Stock. For purposes of this
Section 3 and subparagraph (a)(ii) of Section 5, a holder shall be deemed to
beneficially own shares of Common Stock that are issuable upon the exercise
of options, warrants or other rights to acquire Common Stock on or before one
(1) year following the First Closing Date.
(hh) DOING BUSINESS WITH CUBA. Each of the Company and the
Subsidiaries has complied with and will be in compliance with the provisions
of that certain Florida act relating to doing business with Cuba, codified as
Section 517.075 of the Florida statutes, and the rules and regulations
promulgated thereunder or is exempt therefrom.
(ii) ERISA COMPLIANCE. The Company and its Subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or maintained
by the Company, its Subsidiaries or their "ERISA Affiliates" (as defined
below) are in compliance in all material respects with ERISA. "ERISA
Affiliate" means, with respect to the Company or a Subsidiary, any member of
any group of organizations described in Sections 414(b),(c),(m) or (o) of the
Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such
Subsidiary is a member. No "reportable event" (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any "employee
benefit plan" established or maintained by the Company, its Subsidiaries or
any of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, its Subsidiaries or any of their ERISA Affiliates,
if such "employee benefit plan" were terminated, would have any "amount of
unfunded benefit liabilities" (as defined under ERISA). Neither the Company,
its Subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "employee benefit plan" or (ii)
Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, its Subsidiaries or any of their
ERISA Affiliates that is intended to be qualified under Section 401(a) of the
Code is so qualified and nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification.
10
(ii) MATERIAL CONTRACTS. There are no contracts or other documents
required to be described in the Registration Statement or to be filed as
exhibits to the Registration Statement by the Securities Act which have not
been described or filed as required. Neither the Company nor any of its
Subsidiaries is subject to any collective bargaining agreements.
(kk) VALID SECURITY INTERESTS. With respect to each loan secured by
real estate or personal property in which AMC is the lender, AMC holds a
valid, perfected priority security interest in the applicable real or
personal property and the loan documents executed by or in favor of AMC in
connection with each such loan are valid and enforceable in accordance with
their respective terms.
(ll) TITLE INSURANCE. Title insurance in favor of AMC and in sufficient
amounts is in force with respect to each of the real properties owned by AMC
and/or in which AMC holds a mortgage, deed of trust or other interests as
security for a loan to the owner thereof.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) THE UNDERWRITTEN STOCK. The Company agrees to issue and sell the
Underwritten Stock to the several Underwriters upon the terms herein set
forth. On the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Underwriters agree, severally and not jointly, to purchase from the
Company the respective number of shares of Underwritten Stock set forth
opposite their names on Schedule 1. The purchase price per share of
Underwritten Stock to be paid by the several Underwriters to the Company
shall be $[___] per Share. The initial public offering price per share for
the Underwritten Stock shall be $[_____].
(b) THE FIRST CLOSING DATE. Delivery of the Underwritten Stock to be
purchased by the Underwriters and payment therefor shall be made at the
offices of [▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇] (or such other place as
may be agreed to by the Company and the Representatives) at 9:30 a.m. New
York City time, on [___], or such other time and date not later than 1:30
p.m. New York City time, on [___] as the Representatives shall designate by
notice to the Company (the time and date of such closing are called the
"First Closing Date"). The Company hereby acknowledges that circumstances
under which the Representatives may provide notice to postpone the First
Closing Date as originally scheduled include, but are in no way limited to,
any determination by the Company or the Representatives to recirculate to the
public copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 9.
(c) THE OPTION STOCK; THE SECOND CLOSING DATE. In addition, on the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally
and not jointly, up to an aggregate of 1,500,000 shares of Option Stock from
the Company at the purchase price per Share to be paid by the Underwriters
for the Underwritten Stock. The option granted hereunder is for use by the
Underwriters solely in covering any over-allotments in connection with the
sale and distribution of the Underwritten Stock. The option granted
hereunder may be exercised at any time upon notice by the Representatives to
the Company, which notice may be given at any time within 30 days from the
date of this Agreement. Such notice shall set forth (i) the aggregate number
of shares of Option Stock as to which the Underwriters are exercising the
option, (ii) the names and denominations in which the shares of Option Stock
are to be registered and (iii) the time, date and place at which such shares
of Option Stock will be delivered (which time and date may be simultaneous
with, but not earlier than, the First Closing Date; and in such case the term
"First Closing Date" shall refer to the time and date of delivery of the
Underwritten Stock and the Option Stock). Such time and date of delivery, if
subsequent to the First Closing Date, is called the "Second Closing Date" and
shall be determined by the Representatives and, unless the Company otherwise
consents, shall not be earlier than two nor later than seven full business
days after delivery of such notice of exercise. If any shares of Option Stock
are to be purchased, each Underwriter agrees, severally and not jointly, to
purchase the number of shares of Option Stock (subject to such adjustments to
eliminate fractional Shares as the Representatives may determine) that bears
the same proportion to the total number of shares of Option Stock to be
purchased as the number of shares of Underwritten Stock set forth on Schedule
1 opposite the name of
11
such Underwriter bears to the total number of shares of Option Stock. The
Representatives may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.
(d) PUBLIC OFFERING OF THE STOCK. The Representatives hereby advise
the Company that the Underwriters intend to offer for sale to the public, as
described in the Prospectus, their respective portions of the Stock as soon
after this Agreement has been executed and the Registration Statement has
been declared effective as the Representatives, in their sole judgment, has
determined is advisable and practicable.
(e) PAYMENT FOR THE STOCK. Payment for the Stock shall be made at the
First Closing Date (and, if applicable, at the Second Closing Date) by wire
transfer of immediately available funds to the order of the Company or to such
account as the Company may designate.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Underwritten Stock and any Option Stock the Underwriters have agreed to
purchase.
(f) DELIVERY OF THE STOCK.
(i) The Company shall deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters certificates
for the Underwritten Stock at the First Closing Date, against the
irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. The Company shall also deliver,
or cause to be delivered, to the Representatives for the accounts of the
several Underwriters, certificates for the Option Stock the Underwriters
have agreed to purchase at the First Closing Date or the Second Closing
Date, as the case may be, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase
price therefor. The certificates for the Stock shall be in definitive form
and registered in such names and denominations as the Representatives shall
have requested at least two full business days prior to the First Closing
Date (or the Second Closing Date, as the case may be) and shall be made
available for inspection not later than 1:00 p.m. New York City time on the
business day preceding the First Closing Date (or the Second Closing Date,
as the case may be) at such location as the Representatives may designate.
(ii) Notwithstanding the terms of the preceding subsection 2(f)(i) or
elsewhere in this Agreement that contemplate physical certificates for the
Stock, upon the Company's request but only with the consent of the
Representatives the Stock may be issued without certificates and
constructive delivery of such uncertificated Stock to the Underwriter may
be accomplished through the FAST system of The Depository Trust Company by
the Company causing the transfer agent and registrar of the Stock, on the
applicable First Closing Date, to issue one or more Depository Trust
Company Book Entry Positions, representing in the aggregate the number of
shares of Stock to be delivered to the Representatives on such First
Closing Date, to such account or accounts as shall be specified by the
Representatives in an instruction letter or other communication to the
Company or such transfer agent.
(g) TIME OF THE ESSENCE. Time shall be of the essence, and delivery
at the time and in the manner specified in this Agreement is a further
condition to the obligations of the Underwriters.
(h) DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later than 12:00
p.m. on the second business day following the date the Stock is released by
the Underwriters for sale to the public, the Company shall deliver or cause
to be delivered copies of the Prospectus in such quantities and at such
places as the Representatives shall request.
SECTION 3. COVENANTS OF THE COMPANY. Each of the REIT Entities, jointly
and severally, covenant with each underwriter as follows:
(a) SECURITIES ACT COMPLIANCE. The Company will use its best efforts to
cause the Registration Statement, if not effective at the Representation
Date, and any amendment thereof, to become effective as promptly
12
as possible after the filing thereof. The Company will not file any
amendment to the Registration Statement or amendment or supplement to the
Prospectus, any Rule 434 Act Regulation term sheet or any 462(b) Act
Regulation abbreviated Registration Statement, to which the Representatives
shall reasonably object in writing after a reasonable opportunity to review
such amendment or supplement. Subject to the foregoing sentences in this
Section 3(a), if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus or supplement to the
Prospectus is otherwise required under Rule 424(b), the Company will cause
the Prospectus to be completed, or such supplement thereto to be filed with
the Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence reasonably satisfactory to
the Representatives of such timely filing. The Company promptly will advise
the Representatives (i) when the Registration Statement, if not effective at
the Representation Date, and any amendment thereto, shall have become
effective; (ii) when the Prospectus, and any supplement thereto, shall have
been filed (if required) with the Commission pursuant to Rule 424(b); (iii)
when any amendment to the Registration Statement shall have been filed or
become effective; (iv) of any request by the Commission for any amendment of
or supplement to the Registration Statement or any Prospectus or for any
additional information; (v) of the receipt by the Company of any notification
of, or if the Company otherwise has knowledge of, the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose; and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Stock for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS. If, at any time
when a prospectus relating to the Stock is required to be delivered under the
Act, any event occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein in the light
of the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or amend or supplement
the Prospectus to comply with the Act or the Act Regulations, the Company
promptly will prepare and file with the Commission, subject to the second
sentence of Section 3(a)(i), an amendment or supplement which will correct
such statement or omission or effect such compliance.
(c) USE OF PROSPECTUS. The Company consents to the use of the
Prospectus in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which Stock is offered by
the Underwriters and by all dealers to whom Stock may be sold, both in
connection with the offering and sale of the Stock and for such period of
time thereafter as the Prospectus is required by the Act to be delivered in
connection with the sales by any Underwriter or dealer. The Company will
comply with all requirements imposed upon it by the Act, as now and hereafter
amended, so far as necessary to permit the continuance of sales of or dealing
in the Stock in accordance with the provisions hereof and of the Prospectus.
(d) EARNINGS STATEMENT. Not later than the 45th day following the end
of the fourth fiscal quarter first occurring after the "effective date" (as
defined in Rule 158 under the Act) of the Registration Statement (the
"Effective Date"), the Company will mail and make generally available to its
security holders a consolidated earnings statement covering a period of at
least twelve (12) months beginning with the first full calendar quarter
following the Effective Date which shall satisfy the provisions of Section
11(a) of the Act and Rule 158 thereunder and shall advise you in writing when
such statement has been made so available.
(e) DELIVERY OF REGISTRATION STATEMENT, AMENDMENTS AND SUPPLEMENTS. The
Company will furnish to the Representatives, without charge, one signed copy of
the Registration Statement (including exhibits thereto) and, so long as delivery
of a prospectus by the Underwriters or a dealer may be required by the Act, as
many copies of each Preliminary Prospectus and the Prospectus and all amendments
and supplements thereto as the Representatives may request.
(f) USE OF PROCEEDS. The Company will apply the net proceeds from the
sale of the Stock to be sold hereunder in accordance with the description set
forth in the "Use of Proceeds" section of the Prospectus.
13
(g) BLUE SKY COMPLIANCE. The Company will cooperate with the
Representatives and its counsel in connection with endeavoring to obtain and
maintain the qualification or registration, or exemption from qualification,
of the Stock for offer and sale under the applicable securities or Blue Sky
laws of such states and other jurisdictions of the United States as the
Representatives may designate and shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long
as required for the distribution of the Stock. Notwithstanding anything to
the contrary, in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to taxation or general service of process in
any jurisdiction where it is not now so subject. The Company will advise the
Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Stock for offering,
sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any
order suspending such qualification, registration or exemption, the Company
shall use its best efforts to obtain the withdrawal thereof at the earliest
possible moment.
(h) PERIODIC REPORTING OBLIGATIONS. The Company, during the period
when the Prospectus is required to be delivered under the Act or the Exchange
Act, will file all documents required to be filed with the Commission and the
NYSE pursuant to the Exchange Act within the time periods required by the
Exchange Act and the Exchange Act Regulations.
(i) FUTURE REPORTS TO THE REPRESENTATIVES. During a period of five (5)
years commencing with the date hereof, the Company will furnish to the
Representatives, and to each Underwriter who may so request in writing,
copies of all periodic and special reports furnished to shareholders of the
Company and of all information, documents and reports filed with Commission
pursuant to the Act or the Securities Exchange Act of 1934, as amended
(herein called the "Exchange Act").
(j) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. The Company
agrees that it will not, without the prior written consent of ▇▇▇▇▇▇▇▇▇ &
Company, Inc., during the period ending 180 days after the date of the
Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option to contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii)
enter into any swap or similar agreement that transfers, in whole or in part,
the economic risk of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing provisions shall not apply to (A) the Common Stock to be sold to
the Underwriters pursuant to this Agreement; and (B) options granted by the
Company to purchase Common Stock granted under its option plans described in
the Registration Statement. For purposes of this paragraph a sale, offer, or
other disposition shall be deemed to include any sale to an institution which
can, following such sale, sell Common Stock in reliance on Rule 144A.
(k) REIT STATUS. The Company shall operate so as to qualify as a REIT
in accordance with the requirements of Sections 856-860 of the Tax Code, and
shall not revoke its election to be taxed as a REIT unless revoked by a
shareholder vote in accordance with the Company's Declaration of Trust and
Bylaws.
(l) PRESS RELEASES. If at any time during the 90-day period after the
Registration Statement becomes effective any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
opinion the market price for the Stock 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), the Company will, after
written notice from you advising the Company to the effect set forth above,
consult with you regarding the need to disseminate a press release or other
public statement responding to or commenting on such rumor, publication or
event.
(m) UNCERTIFICATED STOCK. In the event that any portion of the Stock is
issued without certificates pursuant to section 2-210 of the Maryland General
Corporation Law (the "MGCL") and as may be permitted under Section 2(f) above,
at the time of issue of such Stock the Company shall send, or cause to be sent,
to the shareholder a written statement of the information required on
certificates by section 2-211 of the MGCL, and shall otherwise maintain full
compliance with sections 2-210 and 2-211 of the MGCL.
14
(n) CONTINUING INCLUSION ON THE NYSE. The Company will use its
reasonable best efforts to continue the inclusion of the Stock on the NYSE
and will use its reasonable best efforts to comply in all material respects
with all of the rules and regulations thereof applicable to the Company and
the trading of such securities.
(o) ACCOUNTING AND TAX ADVICE. The Company will engage and retain a
"Big 4" Accounting Firm as its qualified accountants and such tax experts at
such accounting firm with experience in advising REITs as are reasonably
acceptable to the Representatives for a period of not less than two years
beginning on the First Closing Date to assist the Company in developing and
maintaining appropriate accounting systems and testing procedures and to
conduct quarterly compliance reviews designed to determine compliance with
the REIT provisions of the Tax Code and the maintenance of Company's exempt
status under the Investment Company Act. Any written reports of such
compliance reviews shall be made available to the Representatives.
(p) INVESTMENT ADVISORS ACT. The Company will not, and will not permit
any of its Subsidiaries to, engage in any activity which would cause or
require such entity to register as an investment advisor under the Investment
Advisors Act of 1940. Without limiting the generality of the foregoing, the
Company will not, and will not permit any Subsidiary to, (i) render
investment advice to more than fifteen clients, (ii) hold itself out
generally to the public as an investment advisor, or (iii) act as an
investment advisor to any investment company that is registered under the
Investment Company Act.
(q) SEC COMPLIANCE PROGRAM AND ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ COMPLIANCE POLICY.
Promptly after the First Closing Date, the Company shall adopt and implement
(i) a compliance program, reasonably acceptable to counsel for the
Underwriters, to ensure compliance with the reporting requirements under the
Exchange Act and the securities laws generally and (ii) an ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
compliance policy, reasonably acceptable to counsel for the Underwriters, to
govern their employees' and directors' trading in securities of the Company
and all Company affiliates in accordance with federal law and all applicable
state blue sky laws.
▇▇▇▇▇▇▇▇▇ & Company, Inc., on behalf of the several Underwriters, may, in
its sole discretion, waive in writing the performance by the Company of any one
or more of the foregoing covenants or extend the time for their performance.
SECTION 4. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereby are consummated or this Agreement becomes effective or is
terminated, the Company, the Operating Partnership and AMC, jointly and
severally, agree to pay and will pay (directly or by reimbursement), and will
be responsible for, all costs, fees and expenses incident to the performance
of the obligations of the Company the Operating Partnership and AMC under
this Agreement, including but not limited to costs, fees and expenses related
to the following, if incurred, (a) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto; (b)
the printing and/or copying of this Agreement; (c) the preparation, issuance
and delivery of the Stock to the Underwriters, including capital duties,
stamp duties and transfer taxes, if any, payable upon issuance of any of the
Stock or the sale of the Stock to the Underwriters; (d) the fees and
disbursements of the Company's counsel and accountants; (e) the qualification
of the Stock under state securities laws, including filing fees and the fees
and disbursements of counsel for the Representatives in connection therewith
and in connection with the preparation of any Blue Sky survey and any
supplemental Blue Sky survey; (f) the printing and delivery to the
Underwriters of copies of the Registration Statement as originally filed and
of each amendment thereto, of the Preliminary Prospectus and of the
Prospectus and of any amendments or supplements thereto; (g) the printing
and/or copying and delivery to the Underwriters of copies of the Blue Sky
survey and any supplemental Blue Sky survey; (h) the fees and expenses
incurred in connection with the listing of the stock on any national
securities exchange or Nasdaq; and (i) the fees payable to the National
Association of Securities Dealers, Inc. ("NASD") and the fees and
disbursements of counsel for the Representatives in connection with any NASD
filings or communications.
If this Agreement is terminated by the Representatives in accordance with
the provisions of Sections 5 or 8 hereof, or if the sale to the Underwriters of
the Stock or the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or to comply with any provision hereof, the Company shall reimburse the
Representatives and the other Underwriters upon demand for all
15
of their reasonable out-of-pocket expenses, including but not limited to the
reasonable fees and disbursements of their counsel, printing expenses, travel
expenses, facsimile, telephone, postage and related expenses.
SECTION 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligation
of the Underwriters to purchase the Stock hereunder is subject to the
continued accuracy of the representations and warranties of the REIT Entities
contained herein as of the date hereof and as of the First Closing Date (and,
if applicable, as of the Second Closing Date), to the accuracy of the
statements of the Company made in any certificate or certificates pursuant to
the provisions hereof as of the date hereof and as of the First Closing Date
(and, if applicable, as of the Second Closing Date), to the performance by
the Company of its obligations hereunder, and to the following further
conditions:
(a) REGISTRATION STATEMENT EFFECTIVENESS. The Registration Statement
shall have become effective not later than 5:30 P.M. New York City time on
the date hereof, or at such later date as may be approved by the
Representatives and the Company and shall remain effective at the First
Closing Date and at the Second Closing Date. No stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
Act or proceedings therefor initiated or, to the knowledge of the Company or
the Representatives, threatened by the Commission and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
the satisfaction of Underwriters' Counsel.
(b) LEGAL PROCEEDINGS. All corporate proceedings and other legal
matters in connection with this Agreement, the form of Registration Statement
and the Prospectus, and the registration, authorization, issue, sale and
delivery of the Stock, shall have been reasonably satisfactory to
Underwriters' Counsel, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable them
to pass upon the matters referred to in this Section.
(c) NO MATERIAL ADVERSE EVENT. Subsequent to the execution and
delivery of this Agreement, and prior to the First Closing Date or Second
Closing Date, as applicable, there shall not have been a Material Adverse
Event, which, in your sole judgment, is material and adverse and that makes
it, in your sole judgment, impracticable or inadvisable to proceed with the
public offering of the Stock as contemplated by the Prospectus.
(d) OPINION OF COUNSEL FOR THE COMPANY. The Company shall have
furnished to the Representatives the opinion of Hunton & ▇▇▇▇▇▇▇▇, counsel to
the Company, addressed to the Underwriters and dated as of the First Closing
Date, substantially in the form attached hereto as SCHEDULE III, with such
changes as may be reasonably requested by the Representatives, and if Option
Stock is purchased at any date after the First Closing Date, an additional
opinion from Hunton & ▇▇▇▇▇▇▇▇, addressed to the Underwriters and dated the
Second Closing Date, confirming that the statements expressed as of the First
Closing Date in such opinion remain valid as of the Second Closing Date.
(e) OPINION OF SPECIAL MARYLAND COUNSEL. On the First Closing Date
and the Second Closing Date, if applicable, the Representatives shall have
received the favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, special
Maryland counsel for the Company, addressed to the Underwriters and dated as
of the First Closing Date and, if applicable, the Second Closing Date, the
form of which is attached as Schedule IV.
(f) OPINION OF COUNSEL FOR THE UNDERWRITERS. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Underwriters, shall have furnished to the Underwriters an
opinion with respect to such matters as may be reasonably requested by the
Representatives, dated as of the First Closing Date, and if Option Stock is
purchased at any date after the First Closing Date, an additional opinion
addressed to the Underwriters and dated the Second Closing Date confirming
that the statements expressed as of the First Closing Date in such opinion
remain valid as of the Second Closing Date.
(g) OFFICERS' CERTIFICATES. The Company shall furnish the
Representatives a certificate of the Company, the Operating Partnership and
AMC, signed by the President and the Chief Financial Officer of the Company
and AMC, dated the First Closing Date (and, if applicable, the Second Closing
Date), certifying as to such
16
matters as the Representatives shall have reasonably requested, including
without limitation the matters to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplement or amendment to the Prospectus and this Agreement
and that, to their knowledge:
(i) the representations and warranties of the REIT Entities contained
in this Agreement are true and correct on and as of the First Closing Date,
and, if applicable, on and as of the Second Closing Date; and the Company,
the Operating Partnership and AMC have each complied with all the
agreements and satisfied all the conditions under this Agreement on its
part to be performed or satisfied at or prior to the First Closing Date
(and, if applicable, at or prior to the Second Closing Date);
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the knowledge of the Company, threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus, there has been no Material Adverse Event.
(h) ACCOUNTANTS' COMFORT LETTER. At the Effective Date, the
Representation Date and at the First Closing Date (and, if applicable, at the
Second Closing Date), KPMG Peat Marwick, LLP shall have furnished to the
Underwriters a letter or letters, dated respectively as of the Effective
Date, the Representation Date and the First Closing Date (and, if applicable,
the Second Closing Date), in form and substance reasonably satisfactory to
the Underwriters, covering the time periods and relating to the procedures
referred to in Section 1(o) hereof and containing statements and information
of the type customarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain other
information contained in the Registration Statement and the Prospectus (and
the Representatives shall have received such additional conformed copies of
such accountants' letter as Representative's counsel shall reasonably
request).
(i) EXCHANGE LISTING. Prior to the First Closing Date, the Stock
shall have been duly authorized for listing on the NYSE upon official notice
of issuance.
(j) LOCK-UP AGREEMENTS. On or prior to the First Closing Date, you
shall have received from all of the persons and entities set forth on
SCHEDULE II attached hereto, executed lock-up agreements.
If any condition specified in this Section 5 shall not have been
fulfilled in all material respects when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by written notice to the
REIT Entities at or prior to the First Closing Date. All the agreements,
opinions, certificates and letters mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only
if ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Underwriters, shall be satisfied that
they comply in form and scope.
SECTION 6. INDEMNIFICATION AND CONTRIBUTION.
(a) Each of the REIT Entities agree, jointly and severally, to
indemnify, defend and hold harmless each Underwriter and its affiliates and
their respective officers, shareholders, counsel, agents, employees,
directors and any person who controls each Underwriter or any of their
respective affiliates within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and the respective officers, shareholders, counsel,
agents, employees and directors of such persons (each Underwriter and each
such other person or entity being referred to herein as an "Indemnified
Person"), to the fullest extent lawful from and against any loss, expense,
liability or claim (including the reasonable cost of investigating such
claim) which, jointly or severally, the Indemnified Persons may incur under
the Act, the Exchange Act or otherwise, as such expenses are incurred,
insofar as such loss, expense, liability or claim (i) 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) or in a
Prospectus (including any Preliminary Prospectus); (ii) 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 in the Registration
Statement as amended by any post-effective amendment thereof) or such
Prospectus
17
(including any Preliminary Prospectus) or necessary to make the statements
made therein not misleading, except insofar as any such loss, expense,
liability or claim arises out of or is based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein
or omitted therefrom in reliance upon and in conformity with the information
provided in writing to the Company by or on behalf of the Underwriters,
expressly for use in the Registration Statement or the Prospectus, and the
REIT Entities agree that the only such information provided in writing by or
on behalf of the Underwriters, expressly for use in the Registration
Statement or the Prospectus, is (x) that information in the last paragraph of
text on the cover page of the Prospectus concerning the terms of the offering
by the Underwriters; (y) the legend concerning over-allotments and
stabilizing on the inside front cover page; and (z) the concession and
reallowance figures appearing in the third paragraph and the information in
paragraphs nine, ten, eleven and twelve under the caption "Underwriting;" or
(iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Stock or
the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that the
REIT Entities shall not be liable under this clause (iii) to the extent that
it is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct).
Notwithstanding anything to the contrary, the indemnity agreement contained
in this Section 6(a) with respect to any Preliminary Prospectus or amended
Preliminary Prospectus shall not inure to the benefit of the Indemnified
Person from whom the person asserting any such loss, expense, liability or
claim purchased the Stock which is the subject thereof, if the Prospectus
corrected any such alleged untrue statement or omission and if such
Underwriter failed to send or give a copy of the Prospectus to such person at
or prior to the written confirmation of the sale of Stock to such person,
provided that the Company has delivered the Prospectus to the Underwriters in
sufficient quantity not less than one full business day prior to the sale to
the person asserting such claim. The foregoing indemnity agreement shall be
in addition to any liability which the REIT Entities may otherwise have.
If any action or proceeding (including any government investigation) is
brought or asserted against any Underwriter or their respective officers,
shareholders, employees, directors or any person who controls any of the
Underwriters (as described above) in respect of which indemnity may be sought
against the REIT Entities pursuant to this Section 6(a), such Underwriter
shall promptly notify the REIT Entities in writing of the institution of such
action (provided, that the failure to give such notice shall not relieve the
REIT Entities of any liability which it may have pursuant to this Agreement,
unless it shall have been determined by a court of competent jurisdiction by
final judgment that such failure has resulted in the forfeiture of
substantive rights or defenses by the indemnifying party) and the REIT
Entities shall assume the defense of such action, including the employment of
counsel and payment of reasonable expenses. Such Underwriter or such
officer, shareholder, employee, director or person who controls the
Underwriter (as described) shall have the right to employ its or their own
counsel in any such case and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Underwriter
or of such persons unless: (i) the REIT Entities shall have failed to assume
the defense of such action or proceeding or the REIT Entities shall have
failed to employ counsel reasonably satisfactory to the Underwriter in any
such action; or (ii) such Indemnified Party or parties shall have been
advised by counsel that there may be one or more defenses available to it or
them that are different from or additional to those available to the REIT
Entities (in which case, if such indemnified party or parties notifies the
REIT Entities in writing that it elects to employ separate counsel at the
expense of the REIT Entities, the REIT Entities shall not have the right to
assume 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,
jointly and severally, by the REIT Entities and paid as incurred; provided,
that the REIT Entities shall be responsible for the fees and expenses of only
one counsel for all Indemnified Parties hereunder. Anything in this
paragraph to the contrary notwithstanding, the REIT Entities shall not be
liable for any settlement of any such claim or action effected without its
prior written consent, which consent shall not be unreasonably withheld.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the REIT Entities and the Company's trustees, directors, officers,
shareholders, counsel, agents and employees and any person who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any loss, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
the REIT Entities or any such person may incur under the Act, the Exchange
Act or otherwise, as such expenses are incurred insofar as such loss,
expense, liability or claim arises out of or is based upon any untrue
18
statement or omission or alleged untrue statement or omission which has been
made in or omitted from the Registration Statement (or in the Registration
Statement as amended by any posteffective amendment thereof) or in the
Prospectus (including any Preliminary Prospectus) in reliance upon and in
conformity with the information relating to the Underwriters furnished in
writing by or on behalf of the Underwriters to the Company. The REIT
Entities agree that the only information provided in writing by or on behalf
of the Underwriters to the Company, expressly for use in the Registration
Statement or the Prospectus, is (i) that information in the last paragraph of
text on the cover page of the Prospectus concerning the terms of the offering
by the Underwriters; (ii) the legend concerning over-allotments and
stabilizing on the inside front cover page; and (iii) the concession and
reallowance figures appearing in the third paragraph and the information in
paragraphs nine, ten, eleven and twelve under the caption "Underwriting".
If any action is brought against the Company, the Operating Partnership,
AMC or any person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company, the Operating
Partnership, AMC or such person shall promptly notify such Underwriter in
writing of the institution of such action (provided, that the failure to give
such notice shall not relieve such Underwriter of any liability which it may
have pursuant to this Agreement, unless it shall have been determined by a
court of competent jurisdiction by final judgment that such failure has
resulted in the forfeiture of substantive rights or defenses by the
indemnifying party) and the Underwriters shall assume the defense of such
action, including the employment of counsel and payment of reasonable
expenses. The REIT Entities or such person shall have the right to employ
its or their own counsel in any such case and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the REIT Entities or such person unless: (i) such Underwriters shall have
failed to assume the defense of the action or shall have failed to employ
counsel reasonably satisfactory to the Company, or (ii) such indemnified
party or parties shall have been advised by counsel that there may be one or
more defenses available to it or them that are different from or additional
to those available to such Underwriters (in which case, if such indemnified
party or parties notifies the Underwriters in writing that it elects to
employ separate counsel at the expense of the Underwriters, such Underwriters
shall not have the right to assume the defense of such action on and expenses
shall be borne by the Underwriters and paid as incurred; provided, that the
Underwriters shall be responsible for the fees and expenses of only one
counsel for all indemnified parties. Anything in this paragraph to the
contrary notwithstanding, the Underwriters shall not be liable for any
settlement of any such claim or action effected without the written consent
of such Underwriter, which consent shall not be unreasonably withheld.
(c) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party under subsection (a) or (b) of this Section 6 in respect
of any losses, damages, expenses, liabilities or claims referred to therein,
then the indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the REIT Entities, on the one hand, and each Underwriter, on the
other hand, from the offering of the Stock or (ii) 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 REIT Entities, on the one hand, and
each Underwriter, on the other hand, in connection with the statements or
omissions which resulted in such losses, expenses, liabilities or claims, as
well as any other relevant equitable considerations. The relative benefits
received by the REIT Entities, on the one hand, and each Underwriter, on the
other hand, 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 total underwriting
discounts and commissions received under the Agreement by each Underwriter. The
relative fault of the Company, the Operating Partnership and AMC, on the one
hand, and of each Underwriter, on the other hand, 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 REIT Entities or by such Underwriter 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, expenses, liabilities and claims referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any claim
or action.
(d) The REIT Entities and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 6 were determined
by pro rata allocation or by any other method of allocation
19
that does not take account of the equitable considerations referred to in
Section 6(c) above. Notwithstanding the provisions of this Section 6, each
Underwriter shall not be required to contribute any amount in excess of the
underwriting discounts and commissions received by it. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in this Section
6 shall remain in full force and effect irrespective of any investigation
made by or on behalf of the Underwriters, or any of their officers,
employees, directors, shareholders, counsel, agents or any person who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, by or on behalf of the REIT Entities, the
Company's directors, officers, counsel, agents, employees or any person who
controls the Company, within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and shall survive any termination of this Agreement
or the issuance and delivery of the Stock. The REIT Entities 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 its respective officers and directors in connection with the issuance
and sale of the Stock, or in connection with the Registration Statement or
Prospectus.
SECTION 7. SURVIVAL. All representations, warranties, indemnities and
agreements contained in this Agreement, or contained in certificates of
officers of the Company and AMC submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made
by or on behalf of the several Underwriters or any of their respective
officers, employees, directors, shareholders or person who controls any
Underwriter, or by or on behalf of the REIT Entities and shall survive
delivery of the Stock to and payment for the Stock by the several
Underwriters and any termination of this Agreement.
SECTION 8. TERMINATION OF AGREEMENT.
(a) The Representatives shall have the right to terminate this
Agreement by giving notice as hereinafter specified in Section 10 hereof at
any time at or prior to the First Closing Date or on or prior to any later
date(s) on which Option Stock may be purchased, as the case may be, (i) if
the Company shall have failed, refused or been unable to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled is not
fulfilled, including, without limitation, any change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and the Subsidiaries considered as one enterprise
from that set forth in the Registration Statement or Prospectus, which, in
your sole judgment, is material and adverse, or (ii) if additional material
governmental restrictions, not in force and effect on the date hereof, shall
have been imposed upon trading in securities generally or minimum or maximum
prices shall have been generally established on the New York Stock Exchange
or on the American Stock Exchange or in the over the counter market by the
NASD, or trading in securities generally shall have been suspended on either
such exchange or in the over the counter market by the NASD, or if a banking
moratorium shall have been declared by federal or New York authorities, or
(iii) if the Company or one of the Subsidiaries shall have sustained a loss
by strike, fire, flood, earthquake, accident or other calamity of such
character as to interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have
been insured, or (iv) if there shall have been a material adverse change in
the general political or economic conditions or financial markets as in your
reasonable judgment makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Stock, or (v) if there shall have been an
outbreak or escalation of hostilities or of any other insurrection or armed
conflict or the declaration by the United States of a national emergency
which, in the reasonable opinion of the Representatives, makes it
impracticable or inadvisable to proceed with the public offering of the Stock
as contemplated by the Prospectus.
(b) If this Agreement is terminated pursuant to this Section or any
other provision of this Agreement, such termination shall be without
liability of any party to any other party except as provided in Sections 4
and 6.
SECTION 9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at the First Closing Date (or the Second
Closing Date) to purchase the shares of Underwritten Stock or Option Stock,
as the case may be, which it or they are obligated to purchase under this
Agreement (the
20
"Defaulted Stock"), the Representatives shall have the right, within 24 hours
thereafter, 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 Defaulted Stock in such amounts as may be agreed upon and upon
the terms herein set forth. if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) If the number of shares of Defaulted Stock does not exceed 10% of
the total number of shares of Stock to be purchased on such date by all
Underwriters, the non-defaulting Underwriters shall be obligated to purchase
the full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) If the number of shares of Defaulted Stock exceeds 10% of the
total number of shares of Stock to be purchased on such date by all
Underwriters, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the REIT Entities.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, the Representatives and the Company shall have the right to
postpone the First Closing Date for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
SECTION 10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Representatives shall be directed to ▇▇▇▇▇▇▇▇▇ & Company, Inc., ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention ▇▇▇▇ ▇. ▇▇▇▇▇, Esq. Notices to
the Company and to the Operating Partnership shall be directed to ▇▇▇▇▇ ▇.
Day, AEGIS Investment Trust, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇; with a copy to Hunton & ▇▇▇▇▇▇▇▇, Riverfront Plaza East Tower,
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Esq.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company, the Operating Partnership,
AMC and their respective executors, administrators, assigns, successors and
legal Representatives. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to provide any person, firm or corporation,
other than the Underwriters, the Company, the Operating Partnership, AMC and
their respective successors and legal Representatives and the controlling
persons and officers, employees, directors and shareholders referred to in
Sections 6 and 7 and their respective heirs and legal Representatives, any
legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein or therein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company, the Operating
Partnership, AMC and their respective successors and legal Representatives,
and said controlling persons, shareholders, officers and directors and their
respective heirs and legal Representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Stock from the Underwriters
shall be deemed to be a successor or assign by reason merely of such purchase.
SECTION 12. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State.
SECTION 13. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written
or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may
be executed in two or more counterparts, each one of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement may not be amended or modified
unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party
whom the condition is meant to benefit. The Section headings herein are for
the convenience of the parties
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only and shall not affect the construction or interpretation of this
Agreement. In this Agreement unless the context otherwise requires, (i)
singular words shall connote the plural number as well as the singular and
vice versa, and the masculine shall include the feminine and the neuter, and
(ii) all references to particular articles, sections, subsections, clauses or
exhibits are references to articles, sections, subsections, clauses or
exhibits of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification and contribution provisions of Section 6, and is fully
informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Section 6 hereto fairly allocate the
risks in light of the ability of the parties to investigate the REIT
Entities, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto),
as required by the Act and the Exchange Act.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its
terms.
Very truly yours,
AEGIS INVESTMENT TRUST, a Maryland trust
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇. Day
Title: Managing Director
AEGIS OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: AEGIS INVESTMENT TRUST,
----------------------------------------
a Maryland trust,
its sole general partner
By:
------------------------------------
▇▇▇▇▇ ▇. Day
Managing Director
AEGIS MORTGAGE CORPORATION,
an Oklahoma corporation
By:
----------------------------------------
Name : ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
CONFIRMED AND ACCEPTED, as of the date first above written:
▇▇▇▇▇▇▇▇ & COMPANY, INC.
EVEREN SECURITIES, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
By: ▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
By:
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Managing Director-
For themselves and as Representatives of the other Underwriters named in this
Agreement
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