Exhibit 99.1
Execution Copy
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CharterMac
(a Delaware statutory trust)
4.40% Cumulative Perpetual Convertible Community Reinvestment Act
Preferred Shares, Series A-1
AGENCY AGREEMENT
Dated: June 3, 2005
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Table of Contents
Page
SECTION 1. Appointment as Agent..........................................................................2
(a) Appointment...................................................................................2
(b) Sale of CRA Preferred Shares..................................................................2
(c) Solicitations as Agent........................................................................2
(d) Reliance......................................................................................3
SECTION 2. Representations and Warranties................................................................3
(a) Representations and Warranties of the Company.................................................3
(i) Due Creation, Good Standing and Due Qualification..................................3
(ii) Subsidiary Due Organization, Good Standing and Due Qualification...................3
(iii) Final Offering Memorandum..........................................................4
(iv) Incorporated Documents.............................................................4
(v) Distribution of Offering Materials by the Company..................................4
(vi) Independent Accountants............................................................4
(vii) Financial Statements...............................................................4
(viii) No Material Adverse Change in Business.............................................4
(ix) Authorization of Agreement.........................................................5
(x) Absence of Defaults and Conflicts..................................................5
(xi) Absence of Employees...............................................................6
(xii) Absence of Proceedings.............................................................6
(xiii) Possession of Licenses and Permits.................................................6
(xiv) Title to Property..................................................................6
(xv) Environmental Laws.................................................................7
(xvi) Absence of Further Requirements....................................................7
(xvii) Investment Company Act.............................................................7
(xviii) Capitalization.....................................................................7
(xix) Preemptive and Similar Rights......................................................8
(xx) Authorization of the CRA Preferred Shares and the Underlying Securities............8
(xxi) Authorization of the Trust Agreement...............................................8
(xxii) Description of Trust Agreement, Securities and Certificates........................9
(xxiii) Limitation of Personal Liability...................................................9
(xxiv) Qualified Investment...............................................................9
(xxv) Similar Offerings..................................................................9
(xxvi) No General Solicitation............................................................9
(xxvii) No Registration Required..........................................................10
(xxviii) Partnership Status................................................................10
(xxix) Maintenance of Controls and Procedures............................................10
(b) Officer's Certificates.......................................................................10
(c) Representations and Warranties of the Placement Agent........................................10
(i) Solicitation of Accredited Investors..............................................10
(ii) Solicitation Materials Furnished or Approved by the Company.......................11
(iii) Placement Agent's Registration and Licenses.......................................11
(iv) Authorization, Execution and Delivery of Agency Agreement.........................11
(v) Accuracy of Subscription Agreement................................................11
SECTION 3. Sale and Delivery of CRA Preferred Shares; Closing...........................................11
(a) Closing Time.................................................................................11
(b) Denominations; Registration..................................................................11
(c) Payment and Delivery.........................................................................12
SECTION 4. Covenants of the Company.....................................................................12
(a) Offering Memorandum..........................................................................12
(b) Notice of Certain Events.....................................................................12
(c) Amendment to Offering Memorandum and Supplements.............................................12
(d) Delivery of Interim Financial Statements.....................................................13
(e) Use of Proceeds..............................................................................13
(f) Qualification of CRA Preferred Shares for Offer and Sale.....................................13
(g) Delivery of Reports and Information..........................................................13
(h) Delivery of Annual Report....................................................................13
(i) Prohibition on Stabilization.................................................................14
(j) Partnership Taxation.........................................................................14
(k) Reservation of Underlying Securities.........................................................14
(l) Maintenance of Common Shares Listing.........................................................14
SECTION 5. Payment of Expenses..........................................................................14
(a) Expenses.....................................................................................14
(b) Termination of Agreement.....................................................................14
SECTION 6. Conditions of Placement Agent's Obligations..................................................14
(a) Opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP.............................................15
(b) Opinion of Goulston & Storrs, P.C............................................................15
(c) Opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP............................................................15
(d) Opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A....................................................15
(e) Opinion of Counsel for Placement Agent.......................................................15
(f) Officers' Certificate........................................................................15
(g) Accountants' Comfort Letter..................................................................16
(h) Bring-down Comfort Letter....................................................................16
(i) Additional Documents.........................................................................16
(j) Termination of Agreement.....................................................................16
SECTION 7. Indemnification and Contribution.............................................................16
(a) Indemnification of the Placement Agent.......................................................16
(b) Indemnification of the Company...............................................................17
(c) Contribution.................................................................................19
SECTION 8. Representations, Warranties and Agreements to Survive Delivery...............................20
SECTION 9. Termination of Agreement.....................................................................20
(a) Termination; General.........................................................................20
(b) Liabilities..................................................................................20
SECTION 10. Notices......................................................................................20
SECTION 11. Parties......................................................................................20
SECTION 12. GOVERNING LAW AND TIME.......................................................................21
SECTION 13. Submission to Jurisdiction...................................................................21
SECTION 14. Successors and Assigns.......................................................................21
SECTION 15. Effect of Headings...........................................................................21
SCHEDULE
Schedule A - Pricing Information
EXHIBITS
Exhibit A - Form of Opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP
Exhibit B - Form of Opinion of Goulston & Storrs, P.C.
Exhibit C - Form of Opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
Exhibit D - Form of Opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A.
CharterMac
(a Delaware statutory trust)
4.40% Cumulative Perpetual Convertible Community Reinvestment Act
Preferred Shares, Series A-1
AGENCY AGREEMENT
June 3, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
CharterMac, a Delaware statutory trust (the "Company"), confirms its
agreement with Meridian Investments, Inc. (the "Placement Agent") with respect
to the issue and sale by the Company of shares of the Company's 4.40% Cumulative
Perpetual Convertible Community Reinvestment Act Preferred Shares, Series A-1
(the "CRA Preferred Shares"). This Agreement provides for the sale of CRA
Preferred Shares by the Company directly to investors whose offer to purchase
CRA Preferred Shares has been solicited by the Placement Agent as an agent of
the Company. Each prospective investor subscribing to purchase CRA Preferred
Shares will be required to deliver a completed purchaser subscription agreement
and qualification statement to the Company through the Placement Agent (a
"Subscription Agreement") in the form provided by the Placement Agent.
The CRA Preferred Shares are to be offered and sold by the Company
without being registered under the Securities Act of 1933, as amended (the "1933
Act"), in reliance upon the exemption afforded by Section 4(2) of the 1933 Act
and Regulation D thereunder. Pursuant to the terms of the CRA Preferred Shares,
investors that acquire CRA Preferred Shares may only resell or otherwise
transfer such CRA Preferred Shares if such CRA Preferred Shares are hereafter
registered under the 1933 Act or if an exemption from the registration
requirements of the 1933 Act is available.
The Company has prepared and delivered to the Placement Agent copies of
the preliminary offering memorandum, dated June 3, 2005 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to the Placement Agent,
before the Closing Time, copies of a final offering memorandum in form and
substance reasonably approved by the Placement Agent (the "Final Offering
Memorandum"), each for use by the Placement Agent in connection with its
solicitation of purchases of, or offering of, the CRA Preferred Shares.
"Offering Memorandum" means, with respect to any date or time referred to in
this Agreement, the most recent offering memorandum (whether a Preliminary
Offering Memorandum or the Final Offering Memorandum, or any amendment or
supplement to any such document reasonably approved by the Placement Agent),
which has been prepared by the Company and delivered to the Placement Agent in
connection with its solicitation of purchases of, or offering of, the CRA
Preferred Shares. The terms "Preliminary Offering Memorandum", "Final Offering
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Memorandum" and "Offering Memorandum" shall include any and all exhibits thereto
and documents incorporated by reference therein.
All references in this Agreement to financial statements and schedules
and other information which is "contained", "included" or "stated", or words of
similar import, in the Offering Memorandum (or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which are incorporated by reference in the Offering
Memorandum.
SECTION 1. Appointment as Agent.
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell CRA Preferred
Shares directly on its own behalf, the Company hereby appoints the Placement
Agent as its non-exclusive agent during the offering period herein specified
(the "Offering Period") for the purpose of finding purchasers of its CRA
Preferred Shares to be offered for its account and risk. The Offering Period
shall commence on June 3, 2005 and shall continue until not later than the close
of business on August 1, 2005 (unless extended to a date that the Placement
Agent and the Company shall mutually agree). The Placement Agent agrees that it
will use its best efforts to solicit offers for the purchase of CRA Preferred
Shares during the Offering Period. The Placement Agent is not authorized to
appoint sub-agents with respect to the CRA Preferred Shares sold through it as
agent. The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of CRA Preferred Shares through the
Placement Agent, as an agent of the Company, commencing at any time for any
period of time or permanently. As soon as practicable after receipt of
instructions from the Company, the Placement Agent will suspend solicitation of
offers for the purchase of CRA Preferred Shares from the Company until such time
as the Company has advised the Placement Agent that such solicitation may be
resumed.
(b) Sale of CRA Preferred Shares. The Company shall not sell or approve
the solicitation of offers for the purchase of CRA Preferred Shares in excess of
the number of shares authorized in its Trust Agreement (as defined herein) and
approved by its Board of Trustees (or a duly authorized committee thereof). The
Placement Agent shall have no responsibility for maintaining records with
respect to the aggregate amount of securities sold, or for otherwise monitoring
the availability of securities for sale.
(c) Solicitations as Agent. The Placement Agent will communicate to the
Company, in writing, each offer for the purchase of CRA Preferred Shares
solicited by it on an agency basis. The Company may accept or reject any offer
for the purchase of CRA Preferred Shares, in whole or in part. The Placement
Agent shall make reasonable efforts to assist the Company in obtaining
performance by each prospective investor whose offer to purchase CRA Preferred
Shares has been solicited by it on an agency basis and accepted by the Company.
The Placement Agent shall not have any liability to the Company in the event
that any such purchase is not consummated for any reason. If the Company shall
default on its obligation to deliver CRA Preferred Shares to any prospective
investor whose offer to purchase CRA Preferred Shares has been solicited by the
Placement Agent on an agency basis and accepted by the Company, the Company
shall (i) hold the Placement Agent harmless against any loss, claim or damage
arising
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from or as a result of such default by the Company and (ii) pay to the Placement
Agent any commission to which it would otherwise be entitled absent such
default.
(d) Reliance. The Company and the Placement Agent agree that any CRA
Preferred Shares the placement of which the Placement Agent arranges as an agent
of the Company shall be placed by the Placement Agent, in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties.
(a) Representations and Warranties of the Company. The Company
represents and warrants to the Placement Agent as of the date hereof, as of the
date of each acceptance by the Company of an offer for the purchase of CRA
Preferred Shares and as of the Closing Time (as defined in Section 3(a) hereof),
and agrees with the Placement Agent, as follows:
(i) Due Creation, Good Standing and Due Qualification. The
Company has been duly created and is validly existing as a statutory
trust in good standing under the laws of the State of Delaware, and
under its trust agreement, as amended (the "Trust Agreement"),
resolutions of the board of trustees of the Company (or a duly
authorized committee thereof) and the Delaware Statutory Trust Act (the
"Trust Act"), has full trust power and authority to own, lease and
operate its properties and conduct its business as described in the
Offering Memorandum and to enter into and perform its obligations
under, or as contemplated under, this Agreement; and the Company is
duly qualified as a statutory trust to transact business as a foreign
entity 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 so to qualify or to be in good standing would not result in a
material adverse change in the financial condition, earnings,
investment portfolio, business affairs or business prospects of the
Company and its Subsidiaries (as defined herein) considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect").
(ii) Subsidiary Due Organization, Good Standing and Due
Qualification. Each of the Company's subsidiaries (the "Subsidiaries")
has been duly created and is validly existing and is in good standing
under the laws of the state of its creation, and under its respective
organizational document and relevant state law, has full power and
authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum; each of the
Subsidiaries is duly qualified to transact business as a foreign entity
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 so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the Final
Offering Memorandum, all of the issued and outstanding equity interests
of each Subsidiary have been duly and validly authorized and issued and
are fully paid and non-assessable interests in the assets of such
Subsidiary that are owned by the Company, directly or through other
Subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; and none of the outstanding
equity interests
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of the Subsidiaries were issued in violation of any preemptive right,
resale right, right of first refusal or other similar right.
(iii) Final Offering Memorandum. The Final Offering Memorandum
will not, at its date of issuance and at the Closing Time, include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided that
this representation and warranty shall not apply to statements in or
omissions from the Final Offering Memorandum made in reliance upon and
in conformity with information furnished to the Company in writing by
the Placement Agent expressly for use in the Final Offering Memorandum.
(iv) Incorporated Documents. The documents incorporated by
reference complied and the documents deemed to be incorporated by
reference in the Offering Memorandum will comply, each at the time they
were or hereafter are filed with the Securities and Exchange Commission
(the "Commission"), in all material respects with the requirements of
the Securities Exchange Act of 1934, as amended (the "1934 Act") and
the rules and regulations of the Commission under the 1934 Act (the
"1934 Act Regulations"), and did not and will not, as applicable,
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(v) Distribution of Offering Materials by the Company. The
Company has not distributed any offering material in connection with
the offering or sale of the CRA Preferred Shares other than the
Subscription Agreement, the Offering Memorandum or any other materials,
if any, permitted by the 1933 Act and approved in writing by the
Placement Agent.
(vi) Independent Accountants. Deloitte & Touche LLP, whose
reports on (i) the consolidated financial statements of the Company and
its Subsidiaries and (ii) internal controls over financial reporting
are filed with the Commission as part of the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2004, are independent
public accountants as required by the 1933 Act and the rules and
regulations of the Commission under the 1933 Act (the "1933 Act
Regulations").
(vii) Financial Statements. The financial statements of the
Company included in the Offering Memorandum, together with the notes
thereto, present fairly the consolidated financial position of the
Company and its Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and
its Subsidiaries for the periods specified therein; and such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved and have been prepared in conformity with the 1933 Act and the
1933 Act Regulations.
(viii) No Material Adverse Change in Business. Subsequent to
the respective dates as of which information is given in the Offering
Memorandum, except as otherwise stated therein, there has not been (i)
any change resulting in a Material Adverse Effect,
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(ii) any transaction which is material to the Company or its
Subsidiaries, except transactions in the ordinary course of business,
(iii) any obligation, direct or contingent, which is material to the
Company and its Subsidiaries taken as a whole, incurred by the Company
or its Subsidiaries, except obligations incurred in the ordinary course
of business, (iv) any change in the beneficial interests in or
outstanding indebtedness of the Company or its Subsidiaries, except
changes in the ordinary course of business or (v) except for regular
quarterly dividends on the beneficial interests in the Company or its
Subsidiaries, in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind
declared, paid or made on the beneficial interests in the Company or
its Subsidiaries; and neither the Company nor its Subsidiaries has any
material contingent obligation which is not disclosed in the Final
Offering Memorandum.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
legal, valid and binding agreement of the Company enforceable in
accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditors' rights generally or by general
principles of equity; it being further understood that no
representation or warranty is being made as to the enforceability of
the indemnification or contribution provisions contained herein.
(x) Absence of Defaults and Conflicts. The Company is not in
violation of its Trust Agreement, none of the Company's Subsidiaries
are in violation of their respective trust agreements or other
organizational documents and neither the Company nor any of its
Subsidiaries are in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of
its 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 any of its
Subsidiaries is subject (collectively, "Agreements and Instruments"),
except for such violations or defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement, and any other agreement or instrument entered into or
issued or to be entered into or issued by the Company in connection
with the transactions contemplated herein or in the Offering
Memorandum, the consummation of the transactions contemplated herein
and in the Offering Memorandum (including the issuance and sale of the
CRA Preferred Shares and the use of the proceeds from the sale of the
CRA Preferred Shares as described in the Final Offering Memorandum
under the caption "Use of Proceeds") and the compliance by the Company
with its obligations hereunder have been duly authorized by all
necessary trust action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or a Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its Subsidiaries pursuant to, the Agreements and Instruments, nor
will such action result in any violation of the provisions of the
Company's Trust Agreement or the respective trust agreement or other
organizational document of any of the Company's Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or
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any of its Subsidiaries or any of their property or assets; it being
understood that the term "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its Subsidiaries.
(xi) Absence of Employees. Other than employees of CharterMac
Mortgage Capital Corp. and Related Capital Company LLC ("Related
Capital"), neither the Company nor its other Subsidiaries has any
employees, although the Company does have officers who are officers
and/or employees of Related Capital as described in the Offering
Memorandum.
(xii) Absence of Proceedings. Except as set forth in the
Offering Memorandum, there is no action, suit, claim, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge
of the Company, threatened, against or affecting the Company or any of
its Subsidiaries which, singly or in the aggregate, would result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the property or assets of the Company
or any of its Subsidiaries or the consummation of the transactions
contemplated herein or the performance by the Company of its
obligations hereunder.
(xiii) Possession of Licenses and Permits. The Company and its
Subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the businesses now operated by them; the
Company and its Subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, result in a
Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except where the invalidity of Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not, singly or in the aggregate, result in a
Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would result in a Material Adverse Effect.
(xiv) Title to Property. The Company and its Subsidiaries do
not own any real property nor do they have any leases or subleases with
respect to any real property (except for fourteen office properties
leased by the Company and its Subsidiaries); the Company and its
Subsidiaries have good and marketable title to the investments
described in the Offering Memorandum, in each case, free and clear of
all mortgages, pledges, liens, security interests, claims, restrictions
or encumbrances of any kind except such as (i) are described in the
Final Offering Memorandum or (ii) do not, singly or in the aggregate,
materially affect the value of any such investments; and neither the
Company nor any of its Subsidiaries has any notice of any material
claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any of its Subsidiaries under
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any of such investments, or affecting or questioning the rights of the
Company or any Subsidiary thereof to the continued possession of the
investments.
(xv) Environmental Laws. Except as set forth in the Offering
Memorandum, to the best of the Company's knowledge, except such matters
as would not, singly or in the aggregate, result in a Material Adverse
Effect, (i) none of the properties securing the Company's investments
(the "Securing Properties") is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (ii) the Securing Properties have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(iii) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Securing Properties and
(iv) there are no events or circumstances that might reasonably be
expected to form the basis of an order for clean-up or remediation, or
an action, suit or proceeding by any private party or governmental body
or agency, against or affecting the Securing Properties relating to
Hazardous Materials or Environmental Laws.
(xvi) Absence of Further Requirements. No approval,
authorization, consent or order of or filing with any federal, state or
local governmental or regulatory commission, board, body, authority or
agency is required in connection with the issuance and sale of the CRA
Preferred Shares or the consummation by the Company of the transactions
as contemplated hereby, except such as have been already obtained and
any necessary qualification under the securities or blue sky laws of
the various jurisdictions in which the CRA Preferred Shares are being
offered by the Placement Agent.
(xvii) Investment Company Act. The Company is not, and upon
the issuance and sale of the CRA Preferred Shares as herein
contemplated and the application of the net proceeds therefrom as
described in the Final Offering Memorandum will not be, an "investment
company" or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended
(the "1940 Act").
(xviii) Capitalization. All of the issued and outstanding
beneficial interests in the Company have been duly and validly
authorized and issued and are fully paid and non-assessable interests
in the assets of the Company, have been issued in compliance with all
federal and state securities laws and were not issued in violation of
any preemptive right, resale right, right of first refusal or other
similar right. The CRA Preferred Shares have been duly and validly
authorized for issuance by the Company and, at the time of
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purchase will be duly and validly issued, fully paid and non-assessable
interests in the assets of the Company, issued in compliance with all
federal and state securities laws and will not be issued in violation
of any preemptive right, resale right, right of first refusal or other
similar right.
(xix) Preemptive and Similar Rights. No person has the right,
contractual or otherwise, to cause the Company to issue to it, or
register pursuant to the 1933 Act, any beneficial interests in the
Company upon the issue and sale of the CRA Preferred Shares through the
Placement Agent hereunder, nor does any person have preemptive rights,
resale rights, rights of first refusal or other similar rights to
purchase any of the CRA Preferred Shares other than those rights that
have been expressly waived, fully and unconditionally, prior to the
date hereof; provided that, (i) the Company has previously issued
7,690,691 Series A Convertible Community Reinvestment Act Preferred
Shares (of which 5,553,734 remain outstanding) and 2,590,000
Convertible Community Reinvestment Act Preferred Shares (of which
998,336 remain outstanding), that are collectively convertible into
6,503,609 common shares of beneficial interest, no par value (the
"Common Shares") of the Company; (ii) Charter Mac Capital Company LLC
has issued 16,164,905 special common units (of which 15,044,217 remain
outstanding) that are convertible into 15,044,217 Common Shares on a
one-for-one basis; and (iii) CM Investor LLC has issued 353,273 special
membership units (all of which remain outstanding) that are convertible
into 353,273 Common Shares on a one-for-one basis; provided, further
that, the Company may issue Common Shares upon the exercise of
outstanding options described in the Final Offering Memorandum.
(xx) Authorization of the CRA Preferred Shares and the
Underlying Securities. The CRA Preferred Shares have been duly
authorized for issuance by the Company and, when issued and delivered
to investors against payment therefor as provided hereunder, will be
duly and validly issued, fully paid and non-assessable interests in the
assets of the Company, issued in compliance with all federal and state
securities laws and will not be subject to any preemptive right, resale
right, right of first refusal or other similar rights of any security
holder of the Company. The issuance of the CRA Preferred Shares and
sale thereof to investors will not violate any preemptive right, resale
right, right of first refusal or other similar rights of any security
holder of the Company. Upon conversion of the CRA Preferred Shares into
Common Shares of the Company (the "Underlying Securities"), such CRA
Preferred Shares shall be deemed automatically cancelled and shall
cease to be issued or outstanding. The Underlying Securities issuable
upon conversion have been duly authorized and, when issued upon such
conversion and delivered against surrender of the CRA Preferred Shares,
will be validly issued, fully paid and nonassessable and will not be
subject to any preemptive right, resale right, right of first refusal
or other similar rights of any security holder of the Company.
(xxi) Authorization of the Trust Agreement. The Company's
Trust Agreement, has been duly authorized, executed and delivered by
the Company and constitutes a valid, legal and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except to the extent enforceability may be limited by
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bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditors' rights generally or by general principles
of equity.
(xxii) Description of Trust Agreement, Securities and
Certificates. The Trust Agreement conforms, and the beneficial
interests in the Company, including, upon issuance, the CRA Preferred
Shares and the Underlying Securities, will conform, in all material
respects to the descriptions thereof contained in the Offering
Memorandum; the certificates for the CRA Preferred Shares are in due
and proper form.
(xxiii) Limitation of Personal Liability. The holders of the
CRA Preferred Shares will be entitled to the same limitation of
personal liability as that extended to stockholders of private
corporations for profit organized under the General Corporation Law of
the State of Delaware; provided, however, that pursuant to the terms of
the Subscription Agreement, each investor in CRA Preferred Shares will
indemnify the Company and the Placement Agent against any liability
resulting from any inaccuracy in or breach of any such investor's
representations and warranties contained in such investor's
Subscription Agreement; and provided, further, however, it being
understood that a holder of CRA Preferred Shares may be obligated to
make certain payments provided for in the Trust Agreement and described
in the Final Offering Memorandum.
(xxiv) Qualified Investment. The Company reasonably believes
that, based on the legal opinion of Goulston & Storrs, P.C. and prior
interpretive rulings issued by the Office of the Comptroller of the
Currency, the Office of Thrift Supervision, the Federal Deposit
Insurance Corporation and the Board of Governors of the Federal Reserve
System (collectively, the "CRA Federal Agencies"), assuming a banking
institution has legal authority to make the investment, it is more
likely than not that (i) a banking institution's investment in the CRA
Preferred Shares will receive positive consideration under the
Community Reinvestment Act of 1977, as amended (the "CRA"), and as
affected by the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, enacted on November 12, 1999,
as a "qualified investment", and (ii) the Company's methodology of
initial allocation of CRA credits will be acceptable to the CRA Federal
Agencies.
(xxv) Similar Offerings. None of the Company, its affiliates,
as such term is defined in Rule 501(b) under the 1933 Act (each, an
"Affiliate"), or any person acting on its or any of their behalf, has,
directly or indirectly, solicited any offer to buy, sold or offered to
sell or otherwise negotiated in respect of, or will solicit any offer
to buy, sell or offer to sell or otherwise negotiate in respect of, in
the United States or to any United States citizen or resident, any
security which is or would be integrated with the sale of the CRA
Preferred Shares in a manner that would require the CRA Preferred
Shares to be registered under the 1933 Act.
(xxvi) No General Solicitation. None of the Company, its
Affiliates or any person acting on its or any of their behalf (other
than the Placement Agent, as to whom the Company makes no
representation) has engaged or will engage, in connection with the
offering of the CRA Preferred Shares, in any form of general
solicitation or general advertising within the meaning of Rule 502(c)
under the 1933 Act.
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(xxvii) No Registration Required. Subject to compliance by the
Placement Agent with the representations and warranties set forth in
Section 2(c) hereof, it is not necessary in connection with the offer,
sale and delivery of the CRA Preferred Shares to the investors in the
manner contemplated by this Agreement and the Offering Memorandum to
register the CRA Preferred Shares under the 1933 Act.
(xxviii) Partnership Status. The Company has been and is
properly treated as a partnership, and not as a publicly traded
partnership taxable as a corporation or as an association taxable as a
corporation for federal income tax purposes, and the holders of the CRA
Preferred Shares will be treated as partners for U.S. federal income
tax purposes.
(xxix) Maintenance of Controls and Procedures. The Company has
established and maintains "disclosure controls and procedures" (as such
term is defined in Rules 13a-15 and 15d-15 under the ▇▇▇▇ ▇▇▇) that (A)
are designed to ensure that material information relating to the
Company, including its Subsidiaries, is made known to the Company's
Chief Executive Officer and its Chief Financial Officer by others
within those entities, particularly during the periods in which the
filings made by the Company with the Commission which it may make under
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act are being prepared
and (B) have been evaluated for effectiveness as of the end of the
Company's most recent quarterly report on Form 10-Q filed with the
Commission. The Company's accountants and the audit committee of the
board of trustees of the Company have been advised of (x) any
significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize, and report financial data and (y) any fraud,
whether or not material, that involves management or other employees
who have a role in the Company's internal controls. Any material
weaknesses in internal controls have been identified for the Company's
accountants. Since the date of the most recent evaluation of such
disclosure controls and procedures, the Company has taken steps with
regards to significant deficiencies and material weaknesses, including
(i) steps to remediate errors in tax accounting, (ii) strengthening the
Company's due diligence procedures relating to acquisitions and (iii)
strengthening the Company's analytical procedures relating to the
preparation and review of consolidation eliminations.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its Subsidiaries delivered to the Placement Agent or to
counsel for the Placement Agent shall be deemed a representation and warranty by
the Company to the Placement Agent as to the matters covered thereby.
(c) Representations and Warranties of the Placement Agent. The
Placement Agent represents and warrants to the Company as of the date hereof, as
of the date of each acceptance by the Company of an offer for the purchase of
CRA Preferred Shares and as of the Closing Time (as defined herein), and agrees
with the Company, as follows:
(i) Solicitation of Accredited Investors. The Placement Agent
will make offers to sell the CRA Preferred Shares to, or solicit offers
to buy the CRA Preferred Shares from, or otherwise negotiate in respect
thereof with, only persons who (i) the
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Placement Agent reasonably believes are "accredited investors" (as
defined in Regulation D of the 1933 Act).
(ii) Solicitation Materials Furnished or Approved by the
Company. In offering the CRA Preferred Shares for sale, the Placement
Agent will not offer any CRA Preferred Shares for sale, or solicit any
offers to buy any CRA Preferred Shares, or otherwise negotiate with any
person in respect of CRA Preferred Shares, on the basis of any
communications or documents relating to the CRA Preferred Shares or any
investment therein, other than Subscription Agreement, the Offering
Memorandum and information otherwise furnished to the Placement Agent
by or on behalf of the Company, or any other document that, prior to
such use, has been specifically approved for such use by the Company
and counsel for the Company.
(iii) Placement Agent's Registration and Licenses. The
Placement Agent is registered or licensed to do business as a
broker-dealer in each jurisdiction in which it will offer CRA Preferred
Shares.
(iv) Authorization, Execution and Delivery of Agency
Agreement. This Agency Agreement has been duly and validly authorized,
executed and delivered by the Placement Agent.
(v) Accuracy of Subscription Agreement. The Placement Agent
shall not forward any Subscription Agreement to the Company for
acceptance if the Placement Agent has reason to believe that any
information contained in or any representation and warranty made in
such Subscription Agreement by the prospective investor submitting such
Subscription Agreement is inaccurate or untrue in a material respect,
and the Placement Agent shall cooperate with the Company in soliciting
from the prospective investor such information as the Company
reasonably requests to verify the representations and warranties
contained in such Subscription Agreement.
SECTION 3. Sale and Delivery of CRA Preferred Shares; Closing.
(a) Closing Time. If the Company determines to accept an offer to
purchase CRA Preferred Shares from a prospective investor, whose offer to
purchase CRA Preferred Shares has been solicited by the Placement Agent, the
Company shall notify the Placement Agent of such determination and set the date
on which the CRA Preferred Share's distribution rate shall be determined (the
"Pricing"), in which event, the Company and the Placement Agent shall arrange
for a closing to be held at the office of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be
agreed upon by the Placement Agent and the Company, at 9:00 a.m. on July 28,
2005, or at such other time and date as may be agreed upon by the Company and
the Placement Agent, but in no event later than August 1, 2005 (the "Closing
Time"). Offers to purchase CRA Preferred Shares shall be deemed to have been
accepted by the Company only upon issuance of CRA Preferred Shares pursuant to
Section 3(c) hereof at the Closing Time.
(b) Denominations; Registration. Certificates for the CRA Preferred
Shares shall be in such denominations and registered in such names as the
Placement Agent may request on
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behalf of each investor in writing at least two full business days before the
Closing Time. The certificates representing the CRA Preferred Shares shall be
made available for examination and packaging by the Placement Agent in the City
of New York not later than 10:00 A.M. on the last business day prior to the
Closing Time.
(c) Payment and Delivery. At the Closing Time, the Company shall issue
CRA Preferred Shares to each investor against payment to the Company either (i)
by release of immediately available funds previously escrowed by the investor
with Bank of America, N.A. or (ii) at the election of the Company, by wire
transfer in immediately available funds by the investor, in either case, of the
purchase price per CRA Preferred Share set forth in the Final Offering
Memorandum to be purchased by such investor. At the Closing Time, the Company,
as compensation for the Placement Agent's services, will pay or cause to have
paid to the Placement Agent, a placement agent's commission of $1.50 per CRA
Preferred Share as specified in Schedule A hereto.
SECTION 4. Covenants of the Company. The Company covenants and agrees
with the Placement Agent as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will
furnish to the Placement Agent, without charge, such number of copies of the
Preliminary Offering Memorandum, the Final Offering Memorandum and any
amendments and supplements thereto and documents incorporated by reference
therein as the Placement Agent may reasonably request.
(b) Notice of Certain Events. The Company will advise the Placement
Agent promptly and will confirm such advice in writing (if requested by the
Placement Agent), of (x) any filing made by the Company of information relating
to the offering of the CRA Preferred Shares with any securities exchange or any
other regulatory body in the United States or any other jurisdiction, and (y)
prior to the completion of the placement of the CRA Preferred Share by the
Placement Agent, any Material Adverse Effect which (i) makes any statement in
the Offering Memorandum false or misleading or (ii) is not disclosed in the
Offering Memorandum. In such event or if during such time any event shall occur
as a result of which it is necessary, in the reasonable opinion of any of the
Company, its counsel, the Placement Agent or counsel for the Placement Agent, to
amend or supplement the Offering Memorandum in order that the Offering
Memorandum not include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein not misleading
in light of the circumstances then existing, the Company will forthwith amend or
supplement the Offering Memorandum by preparing and furnishing promptly, at the
Company's expense, to the Placement Agent an amendment or amendments of, or a
supplement or supplements to, the Offering Memorandum (in form and substance
reasonably satisfactory to the Placement Agent) so that, as so amended or
supplemented, the Offering Memorandum will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time it is
delivered to an investor, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The Company will
advise the Placement Agent promptly of any proposal to amend or supplement the
Offering
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Memorandum and will not effect such amendment or supplement without the consent
of the Placement Agent. Neither the consent of the Placement Agent nor the
Placement Agent's delivery of any such amendment or supplement shall constitute
a waiver of any of the conditions set forth in Section 6 hereof.
(d) Delivery of Interim Financial Statements. The Company will, to the
extent unavailable on open-access public filing retrieval systems, furnish to
the Placement Agent as early as practicable prior to the Closing Time, but not
later than two New York business days prior thereto, a copy of the latest
available unaudited interim consolidated financial statements, if any, of the
Company and its subsidiaries which have been read by the Company's independent
certified public accountants.
(e) Use of Proceeds. The Company will apply the net proceeds from the
sale of the CRA Preferred Shares in the manner set forth in the Offering
Memorandum under "Use of Proceeds".
(f) Qualification of CRA Preferred Shares for Offer and Sale. The
Company will furnish such information as may be required and otherwise cooperate
with the Placement Agent in taking any required actions to qualify, on the
Company's behalf, the CRA Preferred Shares for offering and sale under the
securities or blue sky laws of such states as the Placement Agent may designate
(other than actions required to qualify the Placement Agent to offer the CRA
Preferred Shares in such states) and to maintain such qualifications in effect
so long as required for the distribution of the CRA Preferred Shares; provided
that, the Company shall not be required to qualify as a foreign corporation or
to consent to the service of process under the laws of any such state (except
service of process with respect to the offering and sale of the CRA Preferred
Shares); and to promptly advise the Placement Agent of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the CRA Preferred Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(g) Delivery of Reports and Information. Upon request and to the extent
unavailable on open-access public filing retrieval systems, the Company will
furnish to the Placement Agent for a period of five years from the date of this
Agreement (i) copies of any reports or other communications which the Company
shall send to holders of the CRA Preferred Shares and copies of any reports or
other communications which the Company shall send to its common shareholders or
shall from time to time publish or publicly disseminate, (ii) copies of all
annual, quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, (iii) copies of documents or reports filed with any national
securities exchange on which any class of securities of the Company is listed,
and (iv) such other information as the Placement Agent may reasonably request
regarding the Company or its Subsidiaries, in each case as soon as such
communication, document or information becomes available.
(h) Delivery of Annual Report. The Company will furnish to its
shareholders as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, shareholders' equity
and of cash flow of the Company for such fiscal year), accompanied by a copy of
the certificate or report thereon of a nationally recognized independent
certified public accountant.
-13-
(i) Prohibition on Stabilization. The Company will not at any time,
directly or indirectly, take any action intended, or which might reasonably be
expected, to cause or result in, or which will constitute, stabilization of the
price of the Common Shares to facilitate the sale or resale of the CRA Preferred
Shares.
(j) Partnership Taxation. The Company will use its best efforts to
continue to operate its business so as to properly be treated as a partnership,
and not as a publicly traded partnership taxable as a corporation or as an
association taxable as a corporation, for federal income tax purposes and at
least 90% of its gross income each taxable year will be qualifying income for
purposes of Section 7704(c) of the Internal Revenue Code of 1986, as amended
(i.e., less than 10% of its gross income will be derived from a financial
business, an insurance business, or acting as a dealer), throughout the life of
the Company.
(k) Reservation of Underlying Securities. The Company will reserve and
keep available at all times, free of preemptive rights, resale rights, rights of
first refusal or other similar rights, a sufficient number of Underlying
Securities to satisfy its obligations upon conversion of the CRA Preferred
Shares.
(l) Maintenance of Common Shares Listing. The Company will use its best
efforts to maintain the listing of all of the Common Shares on the American
Stock Exchange or such other national securities exchange or national quotation
system as authorized by the board of trustees.
SECTION 5. Payment of Expenses.
(a) Expenses. The Company will pay all costs, expenses, fees and taxes
(other than transfer taxes and fees and disbursements of counsel for the
Placement Agent except as set forth under Section 5(b) hereof and governmental
filing fees in (v) below) incident to the performance of its obligations under
this Agreement, including (i) the preparation, printing, delivery to the
Placement Agent and any filing of the Offering Memorandum (including financial
statements and any schedules or exhibits and any document incorporated therein
by reference) and of each amendment or supplement thereto, (ii) the printing and
delivery to the Placement Agent of this Agreement, and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the CRA Preferred Shares, (iii) the preparation, issuance and
delivery of the certificates for the CRA Preferred Shares to the investors in
CRA Preferred Shares, including any stamp or other duties payable upon the sale,
issuance and delivery of the CRA Preferred Shares to the investors, as well as
the Underlying Securities, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors and (v) the qualification of the CRA
Preferred Shares under securities laws in accordance with the provisions of
Section 4(f) hereof.
(b) Termination of Agreement. If this Agreement is terminated by the
Placement Agent in accordance with the provisions of Section 6(j) hereof, the
Company shall reimburse the Placement Agent for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Placement Agent.
SECTION 6. Conditions of Placement Agent's Obligations. On the date
hereof and at the Closing Time the obligations of the Placement Agent hereunder
are subject to the accuracy of
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the representations and warranties of the Company contained in Section 2 hereof
or in certificates of any managing trustee or officer of the Company or any of
its Subsidiaries delivered pursuant to the provisions hereof, to the performance
by the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP. At the Closing
Time the Placement Agent shall have received the favorable opinion, dated as of
the Closing Time, of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, in form and
substance reasonably satisfactory to counsel for the Placement Agent, to the
effect set forth in Exhibit A hereto.
(b) Opinion of Goulston & Storrs, P.C. At the Closing Time the
Placement Agent shall have received the favorable opinion, dated as of the
Closing Time, of Goulston & Storrs, P.C., in form and substance reasonably
satisfactory to counsel for the Placement Agent, to the effect set forth in
Exhibit B hereto.
(c) Opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP. At the Closing Time the
Placement Agent shall have received the favorable opinion, dated as of the
Closing Time, of ▇▇▇▇▇▇▇▇▇ Traurig, LLP, in form and substance reasonably
satisfactory to counsel for the Placement Agent, to the effect set forth in
Exhibit C hereto.
(d) Opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A. At the Closing Time the
Placement Agent shall have received the favorable opinion, dated as of the
Closing Time, of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., in form and substance
reasonably satisfactory to counsel for the Placement Agent, to the effect set
forth in Exhibit D hereto.
(e) Opinion of Counsel for Placement Agent. At the Closing Time the
Placement Agent shall have received the favorable opinion, dated as of the
Closing Time, of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Placement
Agent, in form and substance reasonably satisfactory to the Placement Agent. In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York and the
federal law of the United States, upon the opinions of counsel reasonably
satisfactory to the Placement Agent. Such counsel may also state that, insofar
as such opinion involves factual matters, it has relied, to the extent they deem
proper, upon certificates of officers of the Company and its Subsidiaries and
certificates of public officials.
(f) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any Material Adverse Effect
with respect to the Company and its Subsidiaries considered as one enterprise
and no transaction which is material and adverse to the Company shall have been
entered into by the Company or any of its Subsidiaries, and the Placement Agent
shall have received a certificate of a managing trustee and the chief financial
officer of the Company, dated as of the Closing Time, to the effect that (i)
there has been no Material Adverse Effect and no transaction which is material
and adverse to the Company has been entered into by the Company or any of its
Subsidiaries, (ii) the representations and warranties in Section 2(a) hereof are
true and correct with the same force and effect as though expressly made at and
as of the Closing Time, and (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Time.
-15-
(g) Accountants' Comfort Letter. The Placement Agent shall have
received from Deloitte & Touche LLP a letter dated as of the date of the Final
Offering Memorandum, in form and substance satisfactory to the Placement Agent,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to an underwriter with respect to the financial
statements and certain financial information contained in the Offering
Memorandum.
(h) Bring-down Comfort Letter. At the Closing Time, the Placement Agent
shall have received from Deloitte & Touche LLP a letter, dated as of the Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section 6, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Time.
(i) Additional Documents. At the Closing Time, counsel for the
Placement Agent shall have been furnished with such documents, certificates and
opinions as such counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of the CRA Preferred Shares as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained.
Furthermore, at the Closing Time, counsel for the Placement Agent shall have
been furnished with such documents, certificates and opinions as such counsel
may reasonably require for the purpose of enabling such counsel to render a
disclosure letter in respect of the Final Offering Memorandum; and all
proceedings taken by the Company in connection with the issuance and sale of the
CRA Preferred Shares as herein contemplated shall be reasonably satisfactory in
form and substance to the Placement Agent and counsel for the Placement Agent.
(j) Termination of Agreement. If any condition specified in this
Section 6 shall not have been fulfilled when and as required to be fulfilled
through no fault of the Placement Agent, this Agreement may be terminated by the
Placement Agent by notice to the Company at any time at or prior to the Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 5 hereof and except that Sections 7 and 8
hereof shall survive any such termination and remain in full force and effect.
SECTION 7. Indemnification and Contribution.
(a) Indemnification of the Placement Agent. The Company agrees to
indemnify, defend and hold harmless the Placement Agent, its directors and
officers, and any person who controls the Placement Agent within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, and the successors and
assigns of all of the foregoing persons from and against any loss, damage,
expense, liability or claim (including the reasonable cost of investigation)
which, jointly or severally, the Placement Agent or any such person may incur
under the 1933 Act, the 1934 Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Memorandum or the Final Offering Memorandum (or any
amendment or supplement thereto), or arises out of or is based upon any omission
or alleged omission to state a material fact required to be stated in any
Preliminary Offering Memorandum or the Final Offering Memorandum (or any
amendment or supplement thereto) or necessary to make the statements made
therein not misleading, or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such information
required to be
-16-
stated in any such Preliminary Offering Memorandum or the Final Offering
Memorandum (or any amendment or supplement thereto) or necessary to make such
information not misleading.
If any action, suit or proceeding (together, a "Proceeding") is brought
against the Placement Agent or any such person in respect of which indemnity may
be sought against the Company pursuant to the foregoing paragraph, the Placement
Agent or such person shall promptly notify the Company in writing of the
institution of such Proceeding and the Company shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to the Placement Agent or any such person
or otherwise. The Placement Agent or such person shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Placement Agent or of such person unless
the employment of such counsel shall have been authorized in writing by the
Company in connection with the defense of such Proceeding or the Company shall
not have, within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from, additional to or in
conflict with those available to the Company (in which case the Company shall
not have the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Company and paid as incurred (it being understood,
however, that the Company shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company shall not
be liable for any settlement of any Proceeding effected without its written
consent but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless the Placement Agent and any such person
from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding and does
not include an admission of fault, culpability or a failure to act, by or on
behalf of such indemnified party.
(b) Indemnification of the Company. The Placement Agent agrees to
indemnify, defend and hold harmless the Company and any person who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, and the successors and assigns of all of the foregoing persons from
and against any loss, damage, expense, liability or
-17-
claim (including the reasonable cost of investigation) which, jointly or
severally, the Company or any such person may incur under the 1933 Act, the 1934
Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of the Placement Agent to the
Company expressly for use with reference to the Placement Agent in the Offering
Memorandum, or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information required to be
stated in the Offering Memorandum or necessary to make such information not
misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against the Placement Agent pursuant to
the foregoing paragraph, the Company or such person shall promptly notify the
Placement Agent in writing of the institution of such Proceeding and the
Placement Agent shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify the Placement Agent shall not relieve the Placement Agent from any
liability which the Placement Agent may have to the Company or any such person
or otherwise. The Company or such person shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of the Company or of such person unless the employment of such
counsel shall have been authorized in writing by the Placement Agent in
connection with the defense of such Proceeding or the Placement Agent shall not
have, within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to or in conflict
with those available to the Placement Agent (in which case the Placement Agent
shall not have the right to direct the defense of such Proceeding on behalf of
the indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Placement Agent and paid as incurred (it being understood,
however, that the Placement Agent shall not be liable for the expenses of more
than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). The
Placement Agent shall not be liable for any settlement of any Proceeding
effected without its written consent but if settled with the written consent of
the Placement Agent, the Placement Agent agrees to indemnify and hold harmless
the Company and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an
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unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(c) Contribution. If the indemnification provided for in this Section 7
is unavailable to an indemnified party under subsections (a) and (b) of this
Section 7 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Placement
Agent on the other hand from the offering of the CRA Preferred Shares 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 Company on
the one hand and of the Placement Agent on the other in connection with the
statements or omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Placement
Agent on the other shall be deemed to be in the same respective proportions as
the total proceeds from the offering (net of the Placement Agent's commissions
but before deducting expenses) received by the Company and the total placement
commission received by the Placement Agent, bear to the aggregate offering price
of the CRA Preferred Shares. The relative fault of the Company on the one hand
and of the Placement Agent on the other shall be determined by reference to,
among other things, whether the untrue statement or alleged untrue statement of
a material fact or omission or alleged omission relates to information supplied
by the Company or by the Placement Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to defend or
defending any Proceeding.
The Company and the Placement Agent agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in this subsection (c) above.
Notwithstanding the provisions of this Section 7, the Placement Agent shall not
be required to contribute any amount in excess of the amount by which the total
price at which the CRA Preferred Shares distributed to investors were offered to
investors exceeds the amount of any damages which the Placement Agent has
otherwise been required to pay by reason of such untrue statement or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this Section 7
and the covenants, warranties and representations of the Company contained in
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of the Placement Agent, its directors or
officers or any person (including each director or officer of
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such person) who controls the Placement Agent within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, or by or on behalf of the Company
or any person who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, and shall survive any termination of
this Agreement or the issuance and delivery of the CRA Preferred Shares. The
Company and the Placement Agent agree to promptly notify each other of the
commencement of any Proceeding against it and, in the case of the Company,
against any of the Company's officers or trustees in connection with the
issuance and sale of the CRA Preferred Shares or in connection with the Offering
Memorandum.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
Subsidiaries submitted pursuant hereto shall survive delivery of the CRA
Preferred Shares to the investors.
SECTION 9. Termination of Agreement.
(a) Termination; General. This Agreement may be terminated for any
reason, at any time by either the Company or the Placement Agent upon the giving
of prior written notice of such termination to the other party hereto.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any party to any other
party except that (i) the Placement Agent shall be entitled to any commissions
earned in accordance with Section 3(c) hereof (but only if the Placement Agent
has otherwise fulfilled all of its obligations pursuant to this Agreement and
the failure to earn such commission was due to a default by the Company to issue
CRA Preferred Shares against payment therefor in accordance with the terms of
this Agreement) and (ii) the provisions of Section 5 hereof, the indemnity and
contribution agreements set forth in Section 7 hereof, and the provisions of
Sections 8, 11 and 12 hereof shall remain in effect.
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 Placement
Agent shall be directed to the Placement Agent at: Meridian Investments, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention
▇▇▇▇ B0; and notices to the Company shall be directed to it at: CharterMac, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of the President.
SECTION 11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Placement Agent and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Placement Agent and the Company and their respective successors and other
parties entitled to indemnification under Sections 7(a) and 7(b) hereof and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Placement Agent and the Company and their
respective successors, and said parties entitled to indemnification under
Sections 7(a) and 7(b) hereof and their heirs and legal representatives, and for
the benefit of no
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other person, firm or corporation. No investor in the CRA Preferred Shares
through the Placement Agent shall be deemed to be a successor by reason merely
of such purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT AND ANY CLAIM,
COUNTERCLAIM OR DISPUTE OF ANY KIND OR NATURE WHATSOEVER ARISING OUT OF OR IN
ANY WAY RELATING TO THIS AGREEMENT ("CLAIM"), DIRECTLY OR INDIRECTLY, SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND
CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY PROVISIONS
RELATING TO CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 13. Submission to Jurisdiction. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
parties hereto consent to the jurisdiction of such courts and personal service
with respect thereto. The parties hereto consent to personal jurisdiction,
service and venue in any court in which any Claim arising out of or in any way
relating to this Agreement is brought by any third party against you or any
indemnified party. You and the Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its common shareholders and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The parties hereto agree that a final
judgment in any such action, proceeding or counterclaim brought in any such
court shall be conclusive and binding upon the parties and may be enforced in
any other courts in the jurisdiction of which the parties is or may be subject,
by suit upon such judgment.
SECTION 14. Successors and Assigns. This Agreement shall be binding
upon the Placement Agent and the Company and their successors and assigns and
any successor or assign of any substantial portion of the Company's and any of
the Placement Agent's respective businesses and/or assets.
SECTION 15. Effect of Headings. The Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
[SIGNATURE PAGE FOLLOWS]
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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 Placement Agent and the Company in accordance with its terms.
Very truly yours,
CHARTERMAC
By:
------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERIDIAN INVESTMENTS, INC.
By: _______________________________
Name: ▇▇▇▇ ▇. B0
Title: President
SCHEDULE A
CharterMac
[*] Shares
4.40% Cumulative Perpetual Convertible Community Reinvestment Act
Preferred Shares, Series A-1
1. The distribution rate of the CRA Preferred Shares will be set at the
close of business on the date that is six business days prior to the Closing
Date and will equal the yield on 10-year AAA rated tax-exempt municipal general
obligation bonds as reported by Municipal Market Data, plus 0.80%.
2. The Placement Agent's commission shall equal $1.50 per CRA Preferred
Share.
3. On or after July 28, 2008, the CRA Preferred Shares will be
convertible into Underlying Securities at the option of the holders thereof at
any time at an initial conversion rate of 1.807664 common shares for each CRA
Preferred Share, which is equivalent to an initial conversion price of $27.66
per common share. The conversion rate and price will be subject to adjustment as
described in the Final Offering Memorandum under "Our CRA Preferred
Shares--Conversion Price Adjustments".
Sch. A-1
Exhibit A
FORM OF OPINION OF
PAUL, HASTINGS, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
TO BE DELIVERED PURSUANT TO
SECTION 6(a)
(i) All of the issued and outstanding beneficial interests in the Company,
including the CRA Preferred Shares, have been issued in compliance with
all United States Federal securities laws, and to our knowledge, the
CRA Preferred Shares are free of contractual preemptive rights, resale
rights, rights of first refusal and similar rights.
(ii) Based solely on a review of the Foreign Good Standing Certificates, we
confirm that the Company and the Subsidiaries listed on Exhibit A
hereto are in good standing as a foreign statutory trust, corporation
or limited liability company, as applicable, to transact business as a
foreign entity and are in good standing in each jurisdiction identified
on Exhibit A hereto, as of the respective dates of the Foreign Good
Standing Certificates.
(iii) No person has the right, pursuant to the terms of any contract,
agreement or other instrument described in the Final Offering
Memorandum or filed as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 2004 (the "Annual Report")
(except for the Trust Agreement and Bylaws as to which we express no
opinion), to cause the Company to issue to it, or register pursuant to
the Securities Act of 1933, as amended (the "1933 Act"), any beneficial
interests in the Company upon the issue and sale of the CRA Preferred
Shares to purchasers solicited by the Placement Agent pursuant to the
Agency Agreement; provided that, (i) the Company has previously issued
7,690,691 Series A Convertible Community Reinvestment Act Preferred
Shares (of which 5,553,734 remain outstanding) and 2,590,000
Convertible Community Reinvestment Act Preferred Shares (of which
998,336 remain outstanding), that are collectively convertible into
6,503,609 common shares of beneficial interest, no par value (the
"Common Shares") of the Company; (ii) Charter Mac Capital Company LLC
has issued 16,164,905 special common units (of which 15,044,217 remain
outstanding) that are convertible into 15,044,217 Common Shares on a
one-for-one basis; and (iii) CM Investor LLC has issued 353,273 special
membership units (all of which remain outstanding) that are convertible
into 353,273 Common Shares on a one-for-one basis; provided, further
that, the Company may issue Common Shares upon the exercise of
outstanding options described in the Final Offering Memorandum.
(iv) The Agency Agreement has been duly executed and delivered by the
Company.
(v) The statements set forth in the Final Offering Memorandum under the
caption "Summary-The Offering", "Our Company- General", "Our
Company-Our Outstanding Equity", "Our Company-Our Trust Agreement and
Bylaws", "Our CRA Preferred Shares" and "Our Common Shares", insofar as
they purport to constitute summaries of legal matters, agreements,
documents or proceedings referred to therein, fairly summarize the
legal matters, agreements, documents or proceedings described therein
in all material respects.
Exhibit A-1
(vi) No consent, approval, authorization or order of or filing with any
United States Federal or State of New York governmental authority or to
our knowledge, any State of New York or United States Federal court is
required for the Company's execution and delivery of the Agency
Agreement and the issuance of the CRA Preferred Shares, other than (a)
those that have already been obtained, and (b) any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the CRA Preferred Shares are being offered by
the Placement Agent, as to which we express no opinion.
(vii) To our knowledge, there are no actions, suits, claims, investigations
or proceedings pending or threatened to which the Company or any of the
Subsidiaries is or would be a party or to which any of their respective
properties is or would be subject at law or in equity, before or by any
United States Federal, state, local or regulatory commission, board,
body, authority or agency, which are required to be described in the
Final Offering Memorandum but are not so described.
(viii) To our knowledge, there are no contracts, licenses, agreements, leases
or documents or legal or governmental proceedings of a character which
are required to be summarized or described in the Final Offering
Memorandum (assuming for the purposes of this opinion paragraph 8 that
the Final Offering Memorandum was a Registration Statement on Form
S-11) or filed as an exhibit to the Annual Report which are not so
summarized, described or filed as applicable.
(ix) The Annual Report at the time it was filed with the Securities and
Exchange Commission (the "Commission") (other than the financial
statements, notes and schedules thereto and other information of a
financial or accounting nature included or incorporated by reference
therein, as to which we express no opinion) appear on its face to
comply as to form in all material respects with the applicable rules
and requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(x) The documents included and incorporated by reference in the Final
Offering Memorandum (other than the financial statements, notes and
schedules thereto and other information of a financial or accounting
nature included or incorporated by reference therein, as to which we
express no opinion) when they were filed with the Commission appears on
their face to comply as to form in all material respects with the
applicable rules and requirements of the Exchange Act.
(xi) The execution and delivery of the Agency Agreement by the Company and
the issuance and delivery of the CRA Preferred Shares by the Company in
accordance therewith do not (a) constitute a breach by the Company of,
or constitute a default by the Company under, any of the agreements (
the "Material Agreements") described in the Final Offering Memorandum,
or filed as an exhibit to the Annual Report (except for the Trust
Agreement and Bylaws as to which we express no opinion) other than such
breach or default by the Company as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(b) cause the Company to violate any United States Federal or State of
New York law, regulation or rule applicable to the Company; or (c)
cause the Company to violate any decree, judgment or order of any
United States Federal or State of New York court or governmental
instrumentality to which the Company or the Subsidiaries are a named
party and which is known to us.
Exhibit A-2
(xii) The Company has been since its creation in October 1997 and is properly
treated as a partnership for United States Federal income tax purposes.
We have reviewed the information set forth in the Annual Report under
"Risk Factors--Risks related to application of tax laws" and the
information set forth in the Final Offering memorandum under
"Summary--Our Company--Tax Matters", "Summary--The Offering--Tax
Matters", "Our Company--Tax Matters", "Our Company--Tax-exempt
Financing" "Our CRA Preferred Shares--Tax Matters", and "Federal Income
Tax Considerations", to the extent such information constitutes matters
of law, summaries of legal matters, the Trust Agreement, legal
proceedings, or legal conclusions (excluding in each case, financial
data), and found such information to be correct in all material
respects and the opinions expressed in the Final Offering Memorandum
are confirmed subject to the assumptions, qualification, limitations,
representation and covenants described therein and set forth herein.
(xiii) It is not necessary in connection with the sale of the CRA Preferred
Shares by the Company to the investors in the manner contemplated by
the Agency Agreement to register the CRA Preferred Shares or the
Underlying Securities under the 1933 Act.
(xiv) The Company is not, and solely as a result of the consummation of the
transactions contemplated by the Final Offering Memorandum and the
Agency Agreement, will not become, an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in
the 1940 Act.
In connection with the preparation of the Final Offering Memorandum, we
have participated in conferences with trustees, officers and other
representatives of the Company, representatives of Deloitte & Touche, LLP and
representatives of the Placement Agent and counsel for the Placement Agent at
which the contents of the Final Offering Memorandum were discussed and, although
we have not independently verified and are not passing upon and do not assume
responsibility, explicitly or implicitly, for the accuracy, completeness or
fairness of the statements contained in the Final Offering Memorandum (except as
to the extent stated, but only to the extent expressly stated, in paragraphs 5
and 12 set forth above), on the basis of the foregoing, relying as to
materiality to a certain extent on the representations to the extent we deemed
appropriate of officers and other representatives of the Company and the
Subsidiaries, no fact has come to our attention which leads us to believe that
the Final Offering Memorandum, at the date of such Final Offering Memorandum or
at the date hereof contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that we express no
view with respect to the financial statements, notes and schedules thereto and
other information of a financial or accounting nature included in the Final
Offering Memorandum).
Exhibit A-3
Exhibit B
FORM OF OPINION OF
GOULSTON & STORRS, P.C.
TO BE DELIVERED PURSUANT TO
SECTION 6(b)
The statements in the Final Offering Memorandum under the captions
"Summary--Our Company--Investing in Our CRA Preferred Shares", "Summary--The
Offering--CRA Credits", "Summary--The Offering--Allocation of CRA Credits",
"Summary--Community Reinvestment Act", "Risk Factors--Replacement or
reallocation of CRA Credits may not be recognized by the CRA Federal Agencies",
"Our CRA Preferred Shares--CRA Shareholders' Rights with Respect to CRA Credit
Allocations", "Our CRA Preferred Shares--Allocations with Respect to this CRA
Preferred Share Offering", and "Community Reinvestment Act" (excluding in each
case any financial data), to the extent such statements constitute matters of
law, summaries of legal matters, legal proceedings, or legal conclusions, are
correct in all material respects.
Exhibit B-1
Exhibit C
FORM OF OPINION OF
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
TO BE DELIVERED PURSUANT TO
SECTION 6(c)
The discussion set forth in the Company's Annual Report filed with the
Commission on Form 10-K for the year ended December 31, 2004, under the heading
"Risk Factors--5. Risks related to application of tax laws--The taxability of
our income depends upon the application of tax laws that could be challenged",
to the extent it pertains to matters of law or legal conclusions with respect
thereto is accurate in all material respects, as of the date hereof, under the
Internal Revenue Code of 1986, as amended, the regulation thereunder, published
administrative rulings and judicial decisions published on or prior to the date
of this opinion. Nothing has come to our attention since the filing of the
Company's Annual Report on Form 10-K for the year ended December 31, 2004, or is
set forth in the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2005, that would lead us to believe that the above referenced risk
factor, to the extent it pertains to matters of law or legal conclusions,
contains an untrue or incorrect statement of law or legal conclusion.
Exhibit C-1
Exhibit D
FORM OF OPINION OF
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & FINGER, P.A.
TO BE DELIVERED PURSUANT TO
SECTION 6(d)
(i) The Company has been duly created and is validly existing
as a statutory trust in good standing under the laws of the State of
Delaware, and under its trust agreement, as amended (the "Trust
Agreement"), resolutions of the board of trustees of the Company and
the Delaware Statutory Trust Act (the "Trust Act"), has full trust
power and authority to own, lease and operate its properties and to
conduct its business as described in the Final Offering Memorandum and
to enter into and perform its obligations under, and contemplated by,
the Agency Agreement.
(ii) The common shares in the Company issued prior to the date
hereof have been duly authorized for issuance by the Trust Agreement
and resolutions of the board of trustees of the Company (the "Common
Share Resolutions"), and are validly issued, fully paid and, subject to
the qualifications set forth in this paragraph (ii), nonassesable
undivided beneficial interests in the assets of the Company. The
certificates for the CRA Preferred Shares being issued on the date of
the opinion are in due and proper form and comply with any statutory
requirements under the Trust Act, and the Trust Agreement and bylaws of
the Company (the "Bylaws"). Each holder of such common shares in the
Company, in its capacity as a beneficial owner of the Company, is
entitled to the same limitation of personal liability as that extended
to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that a holder
of such common shares in the Company may be obligated to make certain
payments provided for in the Trust Agreement. Under the Trust
Agreement, the Common Share Resolutions and the Trust Act, the issuance
of such common shares in the Company was not subject to preemptive or
other similar rights.
(iii) The CRA Preferred Shares have been duly authorized for
issuance by the Trust Agreement and resolutions of the board of
trustees of the Company relating to the CRA Preferred Shares (the "CRA
Resolutions"), and, when issued and executed in accordance with the
Trust Agreement, the Bylaws and the CRA Resolutions, and when delivered
against payment therefor in accordance with the Agency Agreement will
be fully paid and, subject to the qualifications set forth in this
paragraph (iii), nonassessable undivided beneficial interests in the
assets of the Company. Each holder of CRA Preferred Shares, in its
capacity as a beneficial owner of the Company, will be entitled to the
same limitation of personal liability as that extended to stockholders
of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that a holder of CRA
Preferred Shares may be obligated to make certain payments provided for
in the Trust Agreement. Under the Trust Agreement, the CRA Resolutions
and the Trust Act, the issuance of the CRA Preferred Shares is not
subject to preemptive or other similar rights.
Exhibit D-1
(iv) The common shares of the Company issuable upon conversion
of the CRA Preferred Shares (the "Underlying Securities") have been
duly authorized by the Trust Agreement the CRA Resolutions and, when
issued, executed, countersigned and registered upon such conversion in
accordance with the Trust Agreement, the CRA Resolutions and the
Bylaws, will be validly issued, fully paid and, subject to the
qualifications set forth in this paragraph (iv), nonassessable
undivided beneficial interests in the assets of the Company. Each
holder of the Underlying Securities, in its capacity as a beneficial
owner of the Company, will be entitled to the same limitation of
personal liability as that extended to stockholders of private
corporations for profit organized under the General Corporation Law of
the State of Delaware. We note that a holder of Underlying Securities
may be obligated to make certain payments provided for in the Trust
Agreement. Under the Trust Agreement, the CRA Resolutions and the Trust
Act, the issuance of the Underlying Securities will not be subject to
any preemptive or other similar rights. Under the Trust Agreement, the
Company is authorized to issue 100,000,000 Shares (as defined in the
Trust Agreement).
(v) Each of Charter MAC Equity Issuer Trust, CM Holding Trust,
Charter MAC Origination Trust I, and Charter MAC Owner Trust I (the
"Trust Subsidiaries") has been duly created and is validly existing in
good standing as a statutory trust under the laws of the State of
Delaware, and under its respective trust agreement and relevant
resolutions, if any, and the Trust Act, has full power and authority to
own, lease and operate its properties and to conduct its business as
described in the Final Offering Memorandum.
(vi) All of the issued and outstanding equity interests of
each Trust Subsidiary that are referenced in such opinion have been
duly authorized for issuance by such Trust Subsidiary's relevant trust
agreement and relevant resolutions, if any, and are validly issued,
fully paid and, subject to the limited qualifications set forth in such
opinion, nonassessable undivided beneficial interests in the assets of
such Trust Subsidiary. Each holder of any such equity interests in a
Trust Subsidiary, in its capacity as a beneficial owner of such Trust
Subsidiary, will be entitled to the same limitation of personal
liability as that extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware. We note that a holder of any such equity securities in a
Trust Subsidiary may be obligated to make certain payments provided for
in such Trust Subsidiary's trust agreement. Under each Trust
Subsidiary's relevant trust agreement, bylaws and resolutions, if any,
and the Trust Act, the issuance of any such equity interests in such
Trust Subsidiary was not subject to any preemptive or other similar
rights.
(vii) Under the Trust Agreement, the CRA Resolutions and the
Trust Act, the Agency Agreement has been duly authorized by all
requisite trust action on the part of the Company.
(viii) The Trust Agreement constitutes a valid, legal and
binding agreement of the trustees of the Company, and is enforceable
against the trustees of the Company, in accordance with its terms.
Exhibit D-2
(ix) After due inquiry on [?], 2005, limited to, and solely to
the extent disclosed thereupon, court dockets for active cases of the
Court of Chancery of the State of Delaware in and for New Castle
County, Delaware, of the Superior Court of the State of Delaware in and
for New Castle County, Delaware, and of the United States District
Court sitting in the State of Delaware, we are not aware of any legal
or governmental proceeding pending against the Company.
(x) The issuance, sale and delivery by the Company of the CRA
Preferred Shares, the execution, delivery and performance of the Agency
Agreement by the Company and the consummation of the transactions
contemplated in the Agency Agreement and the Final Offering Memorandum
(including the use of the proceeds from the sale of the CRA Preferred
Shares as described in the Final Offering Memorandum under the caption
"Use of Proceeds") and the compliance by the Company with its
respective obligations under the Agency Agreement and the CRA Preferred
Shares do not and will not, whether with or without the giving of
notice or lapse of time or both, violate (a) the Trust Agreement or the
Bylaws or (b) any applicable Delaware statute or regulation.
(xi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any Delaware
court or Delaware governmental authority or Delaware agency is
necessary or required (a) for the performance by the Company of its
obligations under the Agency Agreement, (b) in connection with the
offering, issuance or sale of the CRA Preferred Shares, or (c) for the
consummation of the transactions contemplated by the Agency Agreement,
except such as have been already obtained or as contemplated in the
Final Offering Memorandum.
(xii) We have reviewed the statements made in the Final
Offering Memorandum under the caption "Our Company" and, insofar as it
contains statements of Delaware law, such statements are fairly
presented.
In rendering such opinion, such counsel may rely, to the extent they deem
proper, as to matters of fact (but not as to legal conclusions) on certificates
of responsible officers or trustees of the Company or Trust Subsidiaries or of
public officials.
Exhibit D-3