Exhibit 1.2
ANTHRACITE CAPITAL, INC.
DOCS(R) Financing Program
4,000,000 Shares of Common Stock,
$0.001 par value
SALES AGENCY AGREEMENT
May 15, 2002
ANTHRACITE CAPITAL, INC.
4,000,000 Shares of Common Stock
(par value $0.001 per share)
SALES AGENCY AGREEMENT
May 15, 2002
Brinson Patrick Securities Corporation
330 Madison Avenue
New York, NY 10017
Ladies and Gentlemen:
Anthracite Capital, Inc., a Maryland corporation that has elected
to be taxed as a real estate investment trust (the "Company") proposes to
issue and sell from time to time through Brinson Patrick Securities
Corporation (the "Agent"), as sales agent, up to 4,000,000 shares (the
"Shares") of its common stock, par value $0.001 per share ("Common Stock"),
less any Shares sold by any additional agent as described herein, on the
terms and conditions described in this Agreement.
1. Sale and Delivery of Securities.
On the basis of the representations, warranties and agreements
herein contained and the other terms and conditions herein set forth, the
Company agrees to issue and sell through the Agent, as sales agent, and the
Agent agrees to use its reasonable efforts to sell, as sales agent for the
Company, the Shares.
The Shares are to be sold on a daily basis or otherwise as shall
be agreed by the Company and the Agent on any day that is a trading day for
the New York Stock Exchange (the "NYSE") (other than a day on which trading
on the NYSE is scheduled to close prior to its regular weekday closing
time) from the date hereof to the earlier of May 15, 2003, and the
termination of this Agreement pursuant to Section 6 hereof. The Company
will designate the maximum amount of Shares to be sold by the Agent daily
as reasonably agreed to by the Agent and in any event not in excess of the
amount available for issuance under the currently effective Registration
Statement (as defined in Section 2(a)). Subject to the terms and conditions
hereof, the Agent shall use its reasonable efforts to sell all of the
designated Shares. The gross sales price of any Shares sold under this
Agreement shall be the market price for shares of the Company's Common
Stock sold on the NYSE at the time of such sale. The compensation to the
Agent for sales of Shares shall be at a fixed commission rate of 2% of the
gross sales price of any Shares sold under this Agreement. The remaining
proceeds, after further deduction for any transaction fees imposed by any
governmental or self-regulatory organization in respect of such sales,
shall constitute the net proceeds to the Company for such Shares (the "Net
Proceeds").
Notwithstanding the foregoing, the Company may instruct the Agent
by telephone (confirmed promptly by telecopy) not to sell Shares if such
sales cannot be effected at or above the price designated by the Company in
any such instruction. Furthermore, the Company shall not authorize the
issuance and sale of, and the Agent shall not be obligated to use its
reasonable efforts to sell, any Shares at a price lower than the minimum
price therefor designated from time to time by the Company's Board of
Directors and provided to the Agent in writing. The Agent hereby agrees not
to make any sales of Shares on behalf of the Company other than by means of
ordinary brokers' transactions between members of the NYSE that qualify for
delivery of a Prospectus to the NYSE in accordance with Rule 153 under the
Securities Act (as defined below). In addition, the Company or the Agent
may, upon notice to the other party hereto by telephone (confirmed promptly
by telecopy), suspend the sale of the Shares.
If either party has reason to believe that the exemptive
provisions set forth in Rule 101(c)(1) of Regulation M ("Regulation M")
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the "Exchange Act") are not satisfied
with respect to the Shares, it shall promptly notify the other party and
sales of Shares under this Agreement shall be suspended until that or other
exemptive provisions have been satisfied to the reasonable satisfaction of
each party. If the Company fails to meet the exemptive requirements set
forth in Rule 101(c)(1) of Regulation M, it shall promptly notify the
Agent. Sales of the Shares by the Company pursuant to the Agreement shall
then cease until such time as the Company is in compliance with such
exemptive provisions. The Company or the Agent may, upon notice to the
other party hereto by telephone (confirmed promptly by telecopy), suspend
the sale of the Shares.
Any suspension or termination effected by either party under this
Agreement shall not affect or impair the parties' respective obligations
with respect to Shares sold hereunder prior to the giving of such notice.
The Agent shall provide written confirmation to the Company
following the close of trading on the NYSE each day in which Shares are
sold under this Agreement setting forth the number of Shares sold on such
day, the Net Proceeds to the Company, and the compensation payable by the
Company to the Agent with respect to such sales.
The Company shall open and maintain a trading account (the
"Trading Account") at a clearing agent designated by the Agent to
facilitate the transactions contemplated by this Agreement. The Net
Proceeds from the sale of the Shares shall be available in the Trading
Account on the third business day (or such other day as is industry
practice for regular-way trading) following each sale of the Shares (each,
a "Closing Date"). The Company shall effect the delivery of the applicable
number of Shares to an account designated by the Agent at The Depository
Trust Company on or before the Closing Date of each sale hereunder. The
Agent's compensation shall be withheld from the sales proceeds on each
Settlement Date and shall be paid to the Agent. If the Company shall
default on its obligation to deliver Shares on any Closing Date, the
Company shall (i) hold the Agent in respect of such sale harmless against
any loss, claim or damage arising from or as a result of such default by
the Company and (ii) pay the Agent any commission to which it would
otherwise be entitled absent such default. If the Agent breaches this
Agreement by failing to deliver Net Proceeds that have been paid by the
purchaser of such Shares on any Closing Date for Shares delivered by the
Company in accordance with this Agreement, the Agent shall (i) hold the
Company harmless against any loss, claim or damage arising from or as a
result of such default by the Agent and (ii) pay the Company interest based
on the effective overnight Federal Funds rate.
On each Closing Date, and on each Filing Date (as defined below),
the Company shall be deemed to have affirmed each representation, warranty,
covenant and other agreement contained in this Agreement. The Company
covenants and agrees with the Agent that on or prior to the second business
day after any date on which the Company shall file a Quarterly Report on
Form 10-Q in respect of any quarter in which sales of Shares of Common
Stock were made by the Agent under this Agreement or by UBS Warburg LLC
("UBS"), under a sales agency agreement, dated as of May 15, 2002 (the "UBS
Sales Agency Agreement"), between the Company and UBS (each such date, a
"Filing Date"), the Company will (i) affirm in writing each representation,
warranty, covenant and other agreement contained in this Agreement, (ii)
file a prospectus supplement (each, a "Prospectus Supplement") with the
Securities and Exchange Commission (the "Commission") under the applicable
paragraph of Rule 424(b) under the Securities Act of 1933, as amended, and
the rules and regulations thereunder (collectively, the "Securities Act"),
which Prospectus Supplement will set forth, with regard to such quarter,
the number of Shares of Common Stock sold through the Agent under this
Agreement and through UBS under the UBS Sales Agency Agreement, the Net
Proceeds to the Company and the compensation paid by the Company with
respect to sales of Shares of Common Stock pursuant to this Agreement and
the UBS Sales Agency Agreement and (iii) deliver such number of copies of
each such Prospectus Supplement to the NYSE as is required by such
exchange. Any obligation of the Agent to use its reasonable efforts to sell
the Shares shall be subject to the continuing accuracy of the
representations and warranties of the Company herein, to the performance by
the Company of its obligations hereunder and to the continuing satisfaction
of the additional covenants and conditions specified in Sections 3 and 5 of
this Agreement.
The Company and the Agent each acknowledge that under the terms
and conditions of the UBS Sales Agency Agreement, the Company has agreed to
issue and sell through UBS, as an additional sales agent, up to 4,000,000
shares of its Common Stock, less any Shares sold by the Agent under this
Agreement, on the terms and conditions described in this Agreement.
2. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with, the Agent
that, as of the date of this Agreement, on each Closing Date and each
Filing Date:
(a) the Company and the transactions contemplated by this
Agreement meet the requirements and conditions for using a registration
statement on Form S-3 under the Securities Act, set forth in the General
Instructions to Form S-3. A registration statement on Form S-3 (File No.
333-69848) including a prospectus, relating to the Shares, which
incorporates by reference documents which the Company has filed with the
Commission in accordance with the provisions of the Exchange Act, has been
prepared by the Company in conformity with the requirements of the
Securities Act and filed with the Commission and has become effective. Such
registration statement and prospectus may have been amended or supplemented
prior to the date of this Agreement. Any such amendment or supplement was
so prepared and filed, and any such amendment or supplement filed after the
effective date of such registration statement has become effective. No stop
order suspending the effectiveness of the registration statement has been
issued, and no proceeding for that purpose has been instituted or
threatened by the Commission. Such registration statement, as it may have
heretofore been amended, is referred to herein as the "Registration
Statement" and the final form of prospectus included in the Registration
Statement, as amended or supplemented from time to time, is referred to
herein as the "Prospectus." Any reference herein to the Registration
Statement, the Prospectus, or any amendment or supplement thereto shall be
deemed to refer to and include the documents incorporated (or deemed to be
incorporated) by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration
Statement or Prospectus shall be deemed to refer to and include the filings
after the execution hereof of any document with the Commission deemed to be
incorporated by reference therein. As of the close of business on May 14,
2002, securities in the amount of $371,975,600 were available for issuance
pursuant to the Registration Statement, which permits their sale in the
manner contemplated by this Agreement. To the extent that the amount of
Shares of Common Stock registered under the Registration Statement is
otherwise depleted and is at any time insufficient to complete sales of the
Shares as contemplated by this Agreement, the Company shall file a new
registration statement with respect to any additional Shares of Common
Stock necessary to complete such sales of the Shares and shall cause such
registration statement to become effective. After the effectiveness of said
registration statement, all references to "Registration Statement" included
in this Agreement shall be deemed to include such new registration
statement. For purposes of this Agreement, all references to the
Registration Statement or Prospectus or to any amendment or supplement
thereto shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("EDGAR");
(b) each of the Company, each subsidiary of the Company set forth
on Schedule I hereto (each a "Subsidiary" and, collectively, the
"Subsidiaries") and BlackRock Financial Management, Inc. (the "Manager")
has been duly organized or incorporated, as the case may be, and is validly
existing as a limited liability company or corporation, as the case may be,
and in good standing under the laws organized or of its respective
jurisdiction of organization or incorporation with all requisite corporate
power and authority to own, lease and operate its respective properties and
to conduct its respective business as conducted and as proposed to be
conducted as described in the Registration Statement and Prospectus and, in
the case of the Company, to authorize, execute and deliver this Agreement
and to consummate the transactions contemplated hereby;
(c) the Company and the Subsidiaries are duly qualified or
registered to transact business in each jurisdiction in which they conduct
their respective businesses as conducted and as proposed to be conducted as
described in the Registration Statement and the Prospectus and in which the
failure, individually or in the aggregate, to be so qualified or registered
could reasonably be expected to have a material adverse effect on the
assets, operations or condition (financial or otherwise) of the Company and
the Subsidiaries taken as a whole; and the Company and the Subsidiaries are
in good standing in each jurisdiction in which they own or lease real
property or maintain an office or in which the nature or conduct of their
respective businesses as now conducted or proposed to be conducted as
described in the Registration Statement and the Prospectus requires such
qualification, except where the failure to be in good standing could be
reasonably expected to not have a material adverse effect on the assets,
operations, business or condition (financial or otherwise) of the Company
and the Subsidiaries taken as a whole;
(d) the Company and the Subsidiaries are in compliance in all
material respects with all applicable laws, rules, regulations, orders,
decrees and judgments;
(e) neither the Company nor any of the Subsidiaries is in breach
of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of, or default under), its
respective charter or bylaws, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company or any of the Subsidiaries is
a party or by which any of them or their respective properties is bound,
except for such breaches or defaults that could be reasonably expected to
have a material adverse effect on the assets, operations, business or
condition (financial or otherwise) of the Company and the Subsidiaries
taken as a whole, and the issuance, sale and delivery by the Company of the
Shares, the execution, delivery and performance of this Agreement by the
Company, and consummation of the transactions contemplated hereby will not
conflict with, or result in any breach of, or constitute a default under
(nor constitute any event which with notice, lapse of time, or both would
constitute a breach of, or default under), (i) any provision of the charter
or bylaws of the Company, any of the Subsidiaries or the Manager, (ii) any
provision of any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Company, any
of the Subsidiaries or the Manager is a party or by which any of them or
their respective properties may be bound or affected, or (iii) any federal,
state, local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Manager, the Company or any of the Subsidiaries,
except in the case of clause (ii) for such breaches or defaults which,
could be reasonably expected not to have a material adverse effect, with
respect to the Company or the Subsidiary on the assets, operations,
business or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole or result in the creation or imposition of
any material lien, charge, claim or encumbrance upon any property or asset
of the Company or the Subsidiaries or, with respect to the Manager, would
not have a material adverse effect on the ability of the Manager to perform
its obligations under the Management Agreement between the Manager and the
Company dated March 27, 1998, as amended on January 1, 1999, May 5, 2000,
July 1, 2001 and March 25, 2002 (the "Management Agreement");
(f) the Company has full legal right, power and authority to enter
into and perform this Agreement and to consummate the transactions
contemplated herein; this Agreement has been duly authorized, executed and
delivered by the Company and each is a legal, valid and binding agreement
of the Company enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally, and by general principles of
equity, and except to the extent that the indemnification and contribution
provisions of Section 7 hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof;
(g) the Manager has full legal right, power and authority to
perform the Management Agreement and to consummate the transactions
contemplated therein; the Management Agreement has been duly authorized,
executed and delivered by the Manager and constitutes a valid and binding
agreement of the Manager, enforceable in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, and by general
principles of equity;
(h) the issuance and sale of the Shares hereunder have been duly
authorized by the Company; when issued and delivered against payment
therefor as provided in this Agreement, the Shares will be validly issued,
fully paid and non-assessable and the issuance of the Shares will not be
subject to any preemptive or similar rights; except as contemplated herein,
no person or entity holds a right to require or participate in the
registration under the Securities Act of the Shares pursuant to the
Registration Statement; no person or entity has a right of participation or
first refusal with respect to the sale of the Shares by the Company; except
as set forth in the Prospectus, there are no contracts, agreements or
understandings between the Company and any person or entity granting such
person or entity the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement; the form of
certificates evidencing the Shares complies with all applicable legal
requirements and, in all material respects, with all applicable
requirements of the charter and bylaws of the Company and the requirements
of the NYSE;
(i) 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 (i) the execution,
delivery and performance by the Company of this Agreement or the
consummation of the transaction contemplated hereby, (ii) the performance
by the Manager of the Management Agreement or the consummation of the
transactions contemplated thereby, or (iii) the sale and delivery of the
Shares, other than (w) such as have been obtained on or prior to the date
hereof under the Securities Act or the Exchange Act, (x) such approvals as
have been obtained in connection with the approval of the listing of the
Shares on the NYSE, (y) any necessary qualification under the securities or
blue sky laws of the various jurisdictions in which the Shares are being
sold through the Agent, and (z) any approvals required by the National
Association of Securities Dealers, Inc. ("NASD");
(j) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state or local law, regulation or rule,
and has obtained all necessary authorizations, consents and approvals from
other persons required in order to conduct their respective businesses as
described in the Registration Statement and Prospectus, except to the
extent that any failure to have any such licenses, authorizations, consents
or approvals, to make any such filings or to obtain any such
authorizations, consents or approvals could reasonably be expected to not
have, individually or in the aggregate, a material adverse effect on the
assets, operations, business or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole; neither the Company nor any
of the Subsidiaries is in violation of, in default under, or has received
any notice regarding a possible violation, default or revocation of any
such license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or judgment
applicable to the Company or any of the Subsidiaries, the effect of which
could reasonably be expected to be material and adverse to the assets,
operations, business or condition (financial or otherwise) of the Company
and the Subsidiaries taken as a whole; and no such license, authorization,
consent or approval contains a materially burdensome restriction that is
not adequately disclosed in the Registration Statement and the Prospectus;
(k) each part of the Registration Statement, when such part became
or becomes effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each
Closing Date, conformed or will conform in all material respects with the
requirements of the Securities Act; each part of the Registration
Statement, when such part became or becomes effective, did not or will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each
Closing Date, did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; except that the foregoing shall not apply to
statements in or omissions from any such document in reliance upon, and in
conformity with, written information relating to the Agent furnished to the
Company by the Agent, expressly for use in the Registration Statement, the
Prospectus or any amendment or supplement thereto;
(l) the documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, when
they became effective under the Securities Act or were filed with the
Commission under the Exchange Act, as the case may be, conformed in all
material respects with the requirements of the Securities Act or the
Exchange Act and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances, under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable;
(m) any Prospectus in paper format delivered to the Agent for use
in connection with an offering of Shares pursuant to this Agreement will be
identical in all material respects to the version of the Prospectus created
to be transmitted to the Commission for filing via EDGAR, except to the
extent permitted by Regulation S-T;
(n) all legal or governmental proceedings, contracts or documents
that are material and of a character required to be filed as exhibits to
the Registration Statement or to be summarized or described in the
Prospectus have been so filed, summarized or described as required;
(o) there are no actions, suits, proceedings, inquiries or
investigations pending or, to the Company's knowledge, threatened against
the Company or any of the Subsidiaries or any of their respective officers
and directors or to which the properties, assets or rights of any such
entity is subject, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority, arbitral panel or agency which could reasonably be expected to
result in a judgment, decree, award or order having a material adverse
effect on the assets, operations, business or condition (financial or
otherwise) of the Company and the Subsidiaries taken as a whole, or which
could adversely affect the consummation of the transactions contemplated by
this Agreement in any material respect;
(p) the financial statements, including the notes thereto,
included in the Registration Statement and the Prospectus present fairly
the financial position of the entity or entities presented therein as of
the dates indicated and the results of operations and changes in financial
position and cash flows of the entity or entities presented therein for the
periods specified; such financial statements have been prepared in
conformity with generally accepted accounting principles as applied in the
United States and on a consistent basis during the periods involved and in
accordance with Regulation S-X promulgated by the Commission; the financial
statement schedules included or incorporated by reference in the
Registration Statement and the Prospectus fairly present the information
required to be shown therein; no other financial statements or schedules
are required by Form S-3 or otherwise to be included in the Registration
Statement or Prospectus; the unaudited pro forma financial information
(including the related notes) included in the Prospectus complies as to
form in all material respects to the applicable accounting requirements of
the Securities Act, and management of the Company believes that the
assumptions underlying the pro forma adjustments are reasonable; such pro
forma adjustments have been properly applied to the historical amounts in
the compilation of the information and such information fairly presents
with respect to the Company and the Subsidiaries, the financial position,
results of operations and other information purported to be shown therein
at the respective dates and for the respective periods specified; no other
pro forma financial information is required to be included in the
Registration Statement;
(q) the Company has filed in a timely manner all reports required
to be filed pursuant to Sections 13, 14, 15(d) of the Exchange Act during
the preceding twelve calendar months and if during such period the Company
has relied on Rule 12b-25(b) under the Exchange Act ("Rule 12b-25(b)") with
respect to a report or a portion of a report, that report or portion of a
report has actually been filed within the time period prescribed by Rule
12b-25(b);
(r) Deloitte & Touche, LLP and any other independent certified
public accountant whose reports on the audited financial statements of the
Company and the Subsidiaries are included as part of the Registration
Statement and Prospectus or are incorporated by reference therein and any
other accounting firm that has certified financial statements and delivered
its reports with respect thereto, are and were during the periods covered
by their reports independent public accountants as required by the
Securities Act;
(s) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as may
be otherwise stated in the Registration Statement or Prospectus, there has
not been (i) any material adverse change in the assets, operations,
business or condition (financial or otherwise), present or prospective, of
the Company and the Subsidiaries taken as a whole, whether or not arising
in the ordinary course of business, (ii) any transaction, which is material
to the Company and the Subsidiaries taken as a whole, planned or entered
into by the Company or any of the Subsidiaries or (iii) any obligation,
contingent or otherwise, directly or indirectly incurred by the Company or
any of the Subsidiaries, which is material to the Company and the
Subsidiaries taken as a whole;
(t) the authorized shares of Common Stock of the Company,
including the Shares conform in all material respects to the description
thereof contained in the Prospectus; the Company has an authorized
capitalization as set forth in the Prospectus; all of the issued and
outstanding shares of Common Stock of the Company have been duly authorized
and are validly issued, fully paid and non-assessable, and have been
offered, sold and issued by the Company in compliance with all applicable
laws (including, without limitation, federal and state securities laws);
none of the issued shares of Common Stock of the Company have been issued
in violation of any preemptive or similar rights granted by the Company;
(u) all of the issued and outstanding membership interests of each
Subsidiary have been duly authorized and are validly issued, fully paid and
non-assessable, and 95% thereof are owned of record and beneficially by the
Company, and have been offered, sold and issued by the Subsidiaries in
compliance with all applicable laws (including, but not limited to, federal
and state securities laws); none of the issued shares of capital stock of
the Subsidiaries have been issued in violation of any preemptive or similar
rights;
(v) Intentionally omitted;
(w) except as disclosed in the Prospectus, there are no
outstanding (i) securities or obligations of the Company or any of its
Subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such Subsidiary, (ii) warrants, rights or options to
subscribe for or purchase from the Company or any such Subsidiary any such
capital stock or any such convertible or exchangeable securities or
obligations, or (iii) obligations of the Company or any such Subsidiary to
issue any shares of capital stock, any such convertible or exchangeable
securities or obligation, or any such warrants, rights or options;
(x) each of the Company, the Subsidiaries, and each of their
respective officers, directors and controlling persons has not taken, and
will not take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(y) the Company (i) is not required to register as a "broker" or
"dealer" in accordance with the provisions of the Exchange Act, and (ii)
directly, or indirectly through one or more intermediaries, does not
control any member firm of NASD;
(z) the Company has not relied upon the Agent or legal counsel for
the Agent for any legal, tax or accounting advice in connection with the
issuance and sale of the Shares;
(aa) any certificate signed by any officer of the Company or any
Subsidiary delivered to the Agent or to counsel for the Agent pursuant to
or in connection with this Agreement shall be deemed a representation and
warranty by the Company to the Agent as to the matters covered thereby;
(bb) there are no statutes or regulations applicable to the
Company or any of the Subsidiaries or certificates, permits or other
authorizations from governmental regulatory officials or bodies required to
be obtained or maintained by the Company or any of the Subsidiaries of a
character required to be disclosed in the Registration Statement or the
Prospectus which have not been so disclosed and properly described therein;
all agreements between the Company or any of the Subsidiaries and third
parties expressly referenced in the Prospectus are legal, valid and binding
obligations of the Company or one or more of the Subsidiaries, enforceable
in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by
general principles of equity;
(cc) no relationship, direct or indirect, exists between or among
the Company or any of the Subsidiaries, on the one hand, and the directors,
officers, shareholders, customers or suppliers of the Company, the
Subsidiaries or the Manager, on the other hand, which is required by the
Securities Act to be described in the Registration Statement and the
Prospectus that is not so described;
(dd) with such exceptions as could not reasonably be expected to
have a material adverse effect on the assets, operations, business or
condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, the Company and the Subsidiaries have good and marketable
title in fee simple to all real property, if any, and good title to all
personal property owned by them, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances, mortgages and defects,
except such as are disclosed in the Prospectus or such as do not materially
and adversely affect the value of such property and do not interfere with
the use made or proposed to be made of such property by the Company and the
Subsidiaries; and any real property and buildings held under lease by the
Company or any Subsidiary are held under valid, existing and enforceable
leases, with such exceptions as are disclosed in the Prospectus or are not
material and do not interfere with the use made or proposed to be made of
such property and buildings by the Company or such Subsidiary;
(ee) the Company and each Subsidiary owns or possesses adequate
license or other rights to use all patents, trademarks, service marks,
trade names, copyrights, software and design licenses, trade secrets,
manufacturing processes, and other intangible property rights
(collectively, "Intangibles") necessary to entitle the Company and each
Subsidiary to conduct its business as described in the Prospectus, and
neither the Company, nor any Subsidiary, has received notice of
infringement of or conflict with (and the Company does not know of any such
infringement of or conflict with) asserted rights of others with respect to
any Intangibles which could materially and adversely affect the business,
prospects, properties, assets, results of operations or condition
(financial or otherwise) of the Company or any Subsidiary;
(ff) the Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences;
(gg) each of the Company and the Subsidiaries have filed on a
timely basis all material federal, state, local and foreign income and
franchise tax returns required to be filed through the date hereof and have
paid all taxes shown as due thereon; and no tax deficiency has been
asserted against any such entity, nor does any such entity know of any tax
deficiency which is likely to be asserted against any such entity which if,
determined adversely to any such entity, could materially adversely affect
the business, prospects, properties, assets, results of operations or
condition (financial or otherwise) of any such entity, respectively; all
material tax liabilities are adequately provided for on the respective
books of such entities;
(hh) neither the Company nor any of the Subsidiaries nor, to the
best of the Company's knowledge, any officer or director purporting to act
on behalf of the Company or any of the Subsidiaries has at any time; (i)
made any contributions to any candidate for political office, or failed to
disclose fully any such contributions, in violation of law, (ii) made any
payment to any state, federal or foreign governmental officer or official,
or other person charged with similar public or quasi-public duties, other
than payments required or allowed by applicable law, (iii) made any payment
outside the ordinary course of business to any investment officer or loan
broker or person charged with similar duties of any entity to which the
Company or any of the Subsidiaries sells or from which the Company or any
of the Subsidiaries buys loans or servicing arrangements for the purpose of
influencing such agent, officer, broker or person to buy loans or servicing
arrangements from or sell loans to the Company or any of the Subsidiaries,
or (iv) engaged in any transactions, maintained any bank account or used
any corporate funds except for transactions, bank accounts and funds which
have been and are reflected in the normally maintained books and records of
the Company and the Subsidiaries;
(ii) except as otherwise disclosed in the Prospectus as amended or
supplemented, there are no material outstanding loans or advances or
material guarantees of indebtedness by the Company or any of the
Subsidiaries to or for the benefit of any of the officers or directors of
the Company or any of the Subsidiaries or any of the members of the
families of any of them;
(jj) neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any agent of the Company or any of the Subsidiaries,
has made any payment of funds of the Company or of any Subsidiary or
received or retained any funds in violation of any law, rule or regulation
or of a character required to be disclosed in the Prospectus;
(kk) neither the Company nor any of the Subsidiaries have any
employees;
(ll) (i) the Company is organized in conformity with the
requirements for qualification as a real estate investment trust ("REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), (ii) the
Company qualified as a REIT for all taxable years prior to 2002, and (iii)
the Company intends to qualify as a REIT for 2002 and subsequent years;
(mm) the Shares have been approved for listing, upon official
notice of issuance, on the NYSE;
(nn) in connection with the DOCS(R) Financing Program established
by this Agreement, the Company has not offered and will not offer shares of
its Common Stock or any other securities convertible into or exchangeable
or exercisable for shares of Common Stock in a manner in violation of the
Securities Act; the Company has not distributed and will not distribute any
offering material in connection with the offer and sale of the Shares,
other than the Prospectus, Registration Statement and other materials
permitted by the Securities Act;
(oo) neither the Company nor any of the Subsidiaries is, or solely
as a result of transactions contemplated hereby and the application of the
proceeds from the sale of the Shares, will become, an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act");
(pp) the Company has not incurred any liability for any finder's
fees or similar payments payable by the Agent in connection with the
transactions herein contemplated; and
(qq) the Company has not entered into any other sales agency
agreements or other similar arrangements with any agent or other
representative in respect of the Shares and the DOCS(R) Financing Program
established by this Agreement, other than the UBS Sales Agency Agreement.
3. Covenants of the Company.
The Company hereby covenants and agrees with the Agent:
(a) (i) before amending or supplementing the Registration
Statement or the Prospectus, during any period of time in which a
Prospectus relating to the Shares is required to be delivered under the
Securities Act (other than by a Prospectus Supplement filed pursuant to
Rule 424(b) of the Securities Act in connection with any sales by the Agent
hereunder and by UBS under the UBS Sales Agency Agreement or a Prospectus
Supplement relating solely to the offering of securities other than the
Shares), to furnish to the Agent a copy of each such proposed amendment or
supplement before filing any such amendment or supplement with the
Commission;
(ii) to make no amendment or supplement to the
Registration Statement or the Prospectus (except for required filings under
the Exchange Act) during any period of time in which a Prospectus relating
to the Shares is required to be delivered under the Securities Act (other
than by a Prospectus Supplement filed pursuant to Rule 424(b) of the
Securities Act in connection with any sales by the Agent hereunder and by
UBS under the UBS Sales Agency Agreement or a Prospectus Supplement
relating solely to the offering of securities other than the Shares), which
shall not have been furnished to the Agent with reasonable opportunity to
review and comment thereon or to which the Agent has reasonably objected in
writing;
(iii) to prepare, with respect to any Shares sold by the
Company through the Agent pursuant to this Agreement, a Prospectus
Supplement with respect to such Shares in a form previously approved by the
Agent and to file such supplement pursuant to Rule 424(b) under the
Securities Act not later than the close of business of the Commission on
the applicable Filing Date;
(iv) to disclose in its Quarterly Reports on Form 10-Q
the number of Shares of Common Stock sold through the Agent under this
Agreement and by UBS under the UBS Sales Agency Agreement, the Net Proceeds
to the Company and the compensation paid by the Company with respect to
sales of Shares of Common Stock pursuant to this Agreement and the UBS
Sales Agency Agreement during the relevant quarter.
(v) to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Shares and to advise the Agent of any such
filing, and during such same period to advise the Agent, promptly after the
Company receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or has become effective or any
supplement to the Prospectus or any amended Prospectus has been filed with
the Commission, or the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Prospectus relating to
the Shares, or the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amendment or supplementation of the Registration Statement or
Prospectus or for additional information;
(vi) in the event of the issuance of any such stop order
or of any such order preventing or suspending the use of any such
prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal; and
(vii) to advise the Agent promptly of the receipt of any
comments from or any request by the Commission for amendments or
supplements to the Registration Statement or Prospectus, and to provide to
the Agent a copy of such comments or request;
(b) to furnish such information as may be required and otherwise
to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as the Agent may designate and
to maintain such qualifications in effect as long as requested by the Agent
for the distribution of the Shares, provided that the Company shall not be
required to qualify as a foreign corporation or to consent to the service
of process under the laws of any such state (except service of process with
respect to the offering and sale of the Shares); and to promptly advise the
Agent of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose;
(c) to make available to the Agent, as soon as practicable after
the Registration Statement becomes effective, and thereafter from time to
time to furnish to the Agent, copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the
Registration Statement) in such quantities and at such locations as the
Agent may reasonably request for the purposes contemplated by the
Securities Act, which Prospectus and any amendments or supplements thereto
furnished to the Agent will be materially identical to the version created
to be transmitted to the Commission for filing via EDGAR, except to the
extent permitted by Regulation S-T; and for so long as this agreement is in
effect, the Company will prepare and file promptly, subject to Section 2(a)
hereof, such amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to comply with the requirements of Section
10(a)(3) of the Securities Act;
(d) to furnish to the Agent, for a period commencing on the date
hereof and ending two years from the date of last sale of Shares by the
Company pursuant to this Agreement (i) as soon as available, copies of all
annual, quarterly and current reports or other communications supplied to
holders of shares of Common Stock, (ii) as soon as practicable after the
filing thereof, copies of all reports publicly filed by the Company with
the Commission, the NASD, the NYSE or any securities exchange and (iii) as
soon as available, such other information as the Agent may reasonably
request regarding the Company and its Subsidiaries, including, without
limitation, information to enable the Agent to update from time to time, as
it deems necessary or appropriate, the Agent's due diligence investigation
of the Company and its Subsidiaries;
(e) to advise the Agent promptly during any period of time in
which a Prospectus relating to the Shares is required to be delivered under
the Securities Act (i) of any material change in the Company's assets,
operations, business or condition (financial or otherwise) or (ii) of the
happening of any event which would require the making of any change in the
Prospectus then being used so that the Prospectus would not include any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or (iii) if it is necessary at any time to amend or supplement
the Prospectus to comply with any law or the Agent is otherwise required to
deliver a Prospectus in respect of transactions in the Shares, and, during
such time, promptly to prepare and furnish, at the Company's expense, to
the Agent copies of the proposed amendments or supplements to the
Prospectus before filing any such amendment or supplement with the
Commission, and thereafter promptly to furnish at the Company's own expense
to the Agent, copies in such quantities and at such locations as the Agent
may from time to time reasonably request of an appropriate amendment to the
Registration Statement or supplement to the Prospectus so that the
Prospectus as so amended or supplemented will (i) reflect such change, or
(ii) not, in the light of the circumstances when it is so delivered, be
misleading, or (iii) comply with applicable securities laws;
(f) to furnish promptly to the Agent a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith
and documents incorporated by reference therein) and such number of
conformed copies of the foregoing as the Agent may reasonably request;
(g) to apply the net proceeds of the sale of the Shares
substantially in accordance with its statements under the caption "Use of
Proceeds" in the Prospectus;
(h) to use its best efforts to effect and maintain the listing of
the Shares on the NYSE and to file with the NYSE all documents and notices
required by the NYSE of companies that have securities that are listed on
the NYSE;
(i) not to sell, offer or agree to sell, contract to sell, grant
any option to sell or otherwise dispose of, directly or indirectly, any
shares of Common Stock (other than Shares offered pursuant to the
provisions of this Agreement or the UBS Sales Agency Agreement) or
securities convertible into or exchangeable or exercisable for Common Stock
or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock or
permit the registration under the Securities Act of any shares of Common
Stock during the period from the date of this Agreement through the final
Closing Date under this Agreement without (a) giving the Agent at least
four business days' prior written notice specifying the nature of the
proposed sale and the date of such proposed sale and (b) suspending
activity under this Agreement for such period of time as may reasonably be
determined by agreement of the Company and the Agent; except for the
registration of the Shares pursuant to this Agreement and except for (i)
issuances of Common Stock upon the exercise of outstanding options,
warrants, debentures or conversion of any preferred stock or satisfaction
of any dividends in respect thereof, and (ii) shares of Common Stock sold
pursuant to any employee or director stock option or benefits plan or
dividend reinvestment and stock purchase plan of the Company;
(j) not to, and to use its best efforts to cause its officers,
directors and affiliates not to, prior to the final Closing Date under this
Agreement, take, directly or indirectly prior to termination of this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which could be reasonably likely to cause or
result in, or which could be reasonably likely to in the future to cause or
result in, the stabilization or manipulation of the price of any security
of the Company, to facilitate the sale or resale of any of the Shares;
(k) to maintain, at the Company's expense, a transfer agent and,
if necessary under the jurisdiction of incorporation of the Company, a
registrar (which may be the same entity as the transfer agent) for shares
of its Common Stock;
(l) to use its best efforts to continue to qualify as a REIT under
the Code;
(m) to comply with all provisions of any undertakings in the
Registration Statement;
(n) to conduct its affairs in such a manner so as to ensure that
neither the Company nor any Subsidiary will be an "investment company" or
an entity subject to regulation as an investment company within the meaning
of the 1940 Act;
(o) to maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(p) to use its best efforts to satisfy, or cause to be satisfied,
the conditions set forth in Section 5 hereof on or in respect of each
Closing Date hereunder;
(q) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Securities Act;
(r) the Company will timely file such reports pursuant to the
Exchange Act as necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the Securities Act;
(s) to furnish to its stockholders within 120 days after the end
of each fiscal year, for so long as the Company shall not be required to
file annual and periodic reports with the Commission under the Exchange
Act, audited financial statements (including a balance sheet and statements
of income, stockholders' equity and of cash flow of the Company for such
fiscal year), accompanied by a copy of the certificate or report thereon of
nationally recognized independent certified public accountants;
(t) to furnish to the Agent, before filing with the Commission
subsequent to the effective date of the Registration Statement and for so
long as a prospectus is required to be delivered in connection with the
offering or delivery of the Shares, a copy of any document proposed to be
filed pursuant to Section 13, 14 or 15(d) of the Exchange Act;
(u) each time that (i) the Registration Statement or the
Prospectus shall be amended or supplemented (other than a Prospectus
Supplement filed pursuant to Rule 424(b) under the Securities Act in
connection with any sales by the Agent hereunder and by UBS under the UBS
Sales Agency Agreement or a Prospectus Supplement relating solely to the
offering of securities other than the Shares) or (ii) there is filed with
the Commission any document incorporated by reference into the Prospectus
(other than a Current Report on Form 8-K, unless the Agent shall otherwise
reasonably request), to furnish or cause to be furnished forthwith to the
Agent a certificate dated the date of filing with the Commission of such
amendment, supplement or incorporation by reference, as the case may be, in
form satisfactory to the Agent, to the effect that the statements contained
in the certificate referred to in Section 5(i) hereof which was last
furnished to the Agent are true and correct at the time of such amendment,
supplement, or, as the case may be, as though made at and as of such time
(except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such time ) or,
in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in Section 5(i), modified as necessary to relate to
the Registration Statement and the Prospectus as amended and supplemented
to the time of delivery of such certificate;
(v) each time that (i) the Registration Statement or the
Prospectus shall be amended or supplemented (other than a Prospectus
Supplement filed pursuant to Rule 424(b) under the Securities Act in
connection with any sales by the Agent hereunder and by UBS under the UBS
Sales Agency Agreement or a Prospectus Supplement relating solely to the
offering of securities other than the Shares) or (ii) there is filed with
the Commission any document incorporated by reference into the Prospectus
(other than a Current Report on Form 8-K, unless the Agent shall otherwise
reasonably request), to furnish or cause to be furnished forthwith to the
Agent and to counsel to the Agent a written opinion of Skadden, Arps,
Slate, Meagher & Flom LLP, special counsel for the Company, or other
counsel satisfactory to the Agent, dated the date of filing with the
Commission of such amendment, supplement or incorporation by reference, as
the case may be, in form and substance satisfactory to the Agent, to the
effect that the Agent may rely on the opinion of such counsel referred to
in Section 5(a) hereof which was last furnished to the Agent to the same
extent as though it were dated the date of such letter authorizing reliance
(except that the statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended or supplemented
to such date) or, in lieu of such opinion, an opinion of the same tenor as
the opinion referred to in Section 5(a), but modified as necessary to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion;
(w) each time that (i) the Registration Statement or the
Prospectus shall be amended or supplemented (other than a Prospectus
Supplement filed pursuant to Rule 424(b) under the Securities Act in
connection with any sales by the Agent hereunder and by UBS under the UBS
Sales Agency Agreement or a Prospectus Supplement relating solely to the
offering of securities other than the Shares) or (ii) there is filed with
the Commission any document incorporated by reference into the Prospectus
(other than a Current Report on Form 8-K, unless the Agent shall otherwise
reasonably request), to furnish or cause to be furnished forthwith to the
Agent and to counsel to the Agent a written opinion of Miles & Stockbridge,
P.C., special counsel for the Company, or other counsel satisfactory to the
Agent, dated the date of filing with the Commission of such amendment,
supplement or incorporation by reference, as the case may be, in form and
substance satisfactory to the Agent, to the effect that the Agent may rely
on the opinion of such counsel referred to in Section 5(b) hereof which was
last furnished to the Agent to the same extent as though it were dated the
date of such letter authorizing reliance (except that the statements in
such last opinion shall be deemed to relate to the Registration Statement
and the Prospectus as amended or supplemented to such date) or, in lieu of
such opinion, an opinion of the same tenor as the opinion referred to in
Section 5(b), but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of
delivery of such opinion;
(x) each time that the Registration Statement or the Prospectus is
amended or supplemented to include additional amended financial information
or there is filed with the Commission any document incorporated by
reference into the Prospectus which contains financial information, to
cause the independent certified public accountants who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement, to furnish
forthwith to the Agent a letter, dated the date of filing with the
Commission of such amendment, supplement or incorporation by reference, as
the case may be, or, subject to the provisions of the last clause of this
Section 3(x), a date as soon thereafter as possible but in no event later
than five days thereafter, in form satisfactory to the Agent, of the same
tenor as the letter referred to in Section 5(c), but modified to relate to
the Registration Statement and the Prospectus, as amended and supplemented
to the date of such letter, with such changes as may be necessary to
reflect changes in the financial statements and other information derived
from the accounting records of the Company, to the extent such financial
statements and other information are available as of a date not more than
five business days prior to the date of such letter; provided, however,
that, with respect to any financial information or other matter, such
letter may reconfirm as true and correct at such date as though made at and
as of such date, rather than repeat, statements with respect to such
financial information or other matter made in the letter referred to in
Section 5(c) hereof which was last furnished to the Agent; provided
further, however, that if at any time such letter has not been delivered to
the Agent in accordance with the provisions of this Section 3(x), the Agent
shall have no obligation to sell Shares hereunder until such letter has
been delivered.
(y) to advise the Agent immediately after the Company shall have
received notice or obtained knowledge of any information or fact that would
make any opinion, certificate, letter or other document provided to the
Agent pursuant to Section 5 hereof undeliverable if it were to be delivered
at such time;
(z) to consent to the Agent trading in the Company's Common Stock
for its own account on the same side of the market and at the same time as
the Company's sales pursuant to this Agreement;
(aa) to offer to any person who has agreed to purchase Shares from
the Company as the result of an offer to purchase solicited by the Agent
the right to refuse to purchase and pay for such Shares if, on the related
Closing Date, any condition set forth in Section 5(f), 5(k) or 5(l) hereof
shall not have been satisfied;
(bb) not to enter into any other sales agency agreement or other
similar arrangements with any agent or other representative in respect of
the Shares or the DOCS(R) Financing Program established in connection with
this Agreement, other than the UBS Sales Agency Agreement;
(cc) not to sell through the Agent under this Agreement and
through UBS under the UBS Sales Agency Agreement combined, shares of its
Common Stock in excess of 4,000,000; and
(dd) to sell shares of its Common Stock through UBS under the UBS
Sales Agency Agreement only in transactions that meet the requirements and
conditions for using the Registration Statement on Form S-3 under the
Securities Act, set forth in the General Instructions to Form S-3, and on
terms and conditions otherwise substantially similar to the terms and
conditions described in this Agreement.
4. Payment of Expenses.
The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, agrees to pay
all reasonable costs, expenses, fees and taxes incident to the performance
of its obligations hereunder, including, but not limited to, such costs,
expenses, fees and taxes in connection with (i) the preparation and filing
of the Registration Statement, the Prospectus, each Prospectus Supplement
filed by the Company in connection with any sales of the Shares of Common
Stock by the Agent under this Agreement and by UBS under the UBS Sales
Agency Agreement, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Agent (including
costs of mailing and shipment), (ii) the registration, issue, sale and
delivery of the Shares, (iii) the producing, word processing and/or
printing of this Agreement, any power of attorney and any closing documents
(including compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Agent (including costs of
mailing and shipment), (iv) the qualification of the Shares for offering
and sale under state laws and the determination of their eligibility for
investment under state law as aforesaid (including the reasonable legal
fees and filing fees and other disbursements of counsel for the Agent) and
the printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Agent, (v) the listing of the Shares on the NYSE
and any registration thereof under the Exchange Act, (vi) any filing for
review of the public offering of the Shares by the NASD (including the
legal fees and other disbursements of counsel for the Agent in connection
with any such filing) and (vii) the reasonable fees and disbursements of
the Company's counsel and accountants. In addition to any fees that may be
payable to the Agent under this Agreement, the Company will promptly, upon
request of the Agent, reimburse the Agent for the reasonable fees and
disbursements of the Agent's legal counsel incurred in connection with the
establishment of the DOCS(R) Financing Program established by this
Agreement.
5. Conditions to the Agent's Obligations.
The obligations of the Agent to sell the Shares hereunder are
subject to (i) the accuracy of the representations and warranties on the
part of the Company in all material respects on the date hereof, any
applicable date referred to in Section 3(u) and as of each Closing Date,
(ii) the performance by the Company of its obligations hereunder in all
material respects and (iii) the following further conditions:
(a) The Agent shall have received prior to the initial
commencement of sales of Shares hereunder and at every other date specified
in Section 3(v) hereof, an opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, special counsel for the Company, or other counsel satisfactory to the
Agent, addressed to the Agent, dated as of such dates and in form and
substance satisfactory to the Agent, opining as to the matters set forth in
Exhibit A hereto.
(b) The Agent shall have received prior to the initial
commencement of sales of Shares hereunder and at every other date specified
in Section 3(w) hereof, an opinion of Miles & Stockbridge, P.C., special
counsel for the Company, or other counsel satisfactory to the Agent,
addressed to the Agent, dated as of such dates and in form and substance
satisfactory to the Agent, covering matters of Maryland law and opining as
to the matters set forth in Exhibit B hereto.
(c) The Agent shall have received from the independent certified
public accountants who have certified the financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement, prior to the initial commencement of sales of
Shares hereunder and at every other date specified in Section 3(x) hereof,
letters, addressed to the Agent, dated as of such dates and in form and
substance satisfactory to the Agent.
(d) The Company shall have furnished prior to the initial
commencement of sales of Shares hereunder evidence reasonably satisfactory
to the Agent and their counsel that the Registration Statement shall have
become effective.
(e) No amendment or supplement to the Registration Statement or
Prospectus, including documents incorporated by reference therein, shall
have been filed to which the Agent shall have objected in writing.
(f) Prior to the initial commencement of sales of Shares hereunder
and as of each Closing Date, (i) no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto, and
no order directed at any document incorporated by reference therein and no
order preventing or suspending the use of any Prospectus has been issued by
the Commission, and no suspension of the qualification of the Shares for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes, has occurred; (ii) the
Registration Statement and all amendments thereto shall not contain an
untrue statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, not
misleading; and (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they are made, not misleading.
(g) Prior to the initial commencement of sales of Shares hereunder
and as of each Closing Date, the NASD shall not have raised any objections
with respect to the fairness and reasonableness of the sales agency terms
and arrangements.
(h) Prior to the initial commencement of sales of Shares hereunder
and as of each Closing Date, the Shares shall have been approved for
listing on the NYSE.
(i) Prior to the initial commencement of sales of Shares hereunder
and as of each Filing Date, and each other date referred to in Section 3(u)
hereof, the Company shall have delivered to the Agent a certificate of two
principal executive officers of the Company certifying to the matters set
forth in Exhibit C.
(j) Prior to the initial commencement of sales of Shares hereunder
and on each Filing Date, the Manager shall have furnished the Agent such
documents and certificates as of the date of this Agreement as the Agent
may reasonably request, including the certificate attached as Exhibit D
hereto.
(k) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed shall have been made within the
applicable time period prescribed for such filing by such Rule.
(l) Between the time of execution of this Agreement and any
Closing Date there shall not have occurred any downgrading, or any notice
or announcement shall have been given or made of (i) any intended or
potential downgrading or (ii) any review or possible change that does not
indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company or any Subsidiary by any "nationally recognized
statistical rating organization", as that term is defined in Rule 436(g)(2)
under the Securities Act.
(m) The Company shall perform such of its obligations under this
Agreement as are to be performed by the terms hereof at or before the time
required for such performance and each Closing Date.
6. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective when the parties hereto
have executed and delivered this Agreement.
(b) The Company shall have the right, by giving notice as
hereinafter specified, to terminate this Agreement in its sole discretion
at any time. Any such termination shall be without liability of any party
to any other party except that (i) if Shares have been sold though the
Agent for the Company, then Section 3(d), (r) and (s) shall remain in full
force and effect notwithstanding such termination, (ii) with respect to any
pending sale through the Agent for the Company, the obligations of the
Company, including in respect of any commission owed the Agent, shall
remain in full force and effect notwithstanding such termination and (iii)
the provisions of Sections 4, 7 and 8 hereof shall remain in full force and
effect notwithstanding such termination.
(c) The Agent shall have the right, by giving notice as
hereinafter specified, to terminate this Agreement in its sole discretion
at any time. Any such termination shall be without liability of any party
to any other party except (i) with respect to any pending sale through the
Agent for the Company, the obligations of the Agent, including, without
limitation, the Net Proceeds to the Company, shall remain in full force and
effect notwithstanding such termination and (ii) that the provisions of
Sections 4, 7 and 8 hereof shall remain in full force and effect
notwithstanding such termination.
(d) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 6(b) or (c) above or otherwise by mutual
agreement of the parties; provided that any such termination by mutual
agreement shall in all cases be deemed to provide that Sections 4, 7 and 8
hereof shall remain in full force and effect.
(e) Any termination of this Agreement shall be effective on the
date specified in such notice of termination; provided that such
termination shall not be effective until the close of business on the date
of receipt of such by the Agent or the Company, as the case may be.
If such termination shall occur prior to the Closing Date for any
sale of Shares, such Shares shall settle in accordance with the provisions
of the second to last paragraph of Section 1 hereof.
7. Indemnity and Contribution by the Company and the Agent.
(a) The Company agrees to indemnify, defend and hold harmless the
Agent, its partners, directors and officers and any person who controls the
Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and the successors and assigns of all the foregoing
persons from and against any loss, expense, liability, damage or claim
(including the reasonable cost of investigation) which, jointly or
severally, the Agent or any such person may incur under the Securities Act,
the Exchange Act, the common law or otherwise, insofar as such loss,
expense, liability, damage or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or in the Registration Statement as amended
by any post-effective amendment thereof by the Company) or in a Prospectus
(the term Prospectus for the purpose of this Section 7 being deemed to
include any Prospectus Supplement, the Prospectus and the Prospectus as
amended or supplemented by the Company), or arises out of or is based upon
any omission or alleged omission to state a material fact required to be
stated in either such Registration Statement or Prospectus or necessary to
make the statements made therein, not misleading, except insofar as any
such loss, expense, liability, damage or claim arises out of or is based
upon any untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in and in conformity with
information furnished in writing by you to the Company expressly for use
with reference to the Agent in such Registration Statement or such
Prospectus, provided, however, that the indemnity agreement contained in
this Section 7(a) with respect to the Prospectus shall not inure to the
benefit of the Agent (or to the benefit of any person controlling the
Agent) with respect to any person asserting any such loss, expense,
liability, damage or claim which is the subject thereof if the Prospectus
or any supplement thereto prepared with the consent of the Agent and
furnished to the Agent a reasonable time prior to the furnishing of written
confirmation of the sale of Shares to such person corrected any such
alleged untrue statement or omission and if the Agent failed to send or
give a copy of the Prospectus or supplement thereto to such person at or
prior to the written confirmation of the sale of Shares to such person,
unless the failure is the result of noncompliance by the Company with
paragraph (e) of Section 3 hereof.
If any action, suit or proceeding (each, a "Proceeding") is
brought against the Agent or any such person in respect of which indemnity
may be sought against the Company pursuant to the preceding paragraph, the
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 any failure or delay to so notify the
Company will not relieve the Company of any obligation hereunder. The 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 Agent or 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 employed counsel
to have charge of the defense of such Proceeding within a reasonable time
or such indemnified party or parties shall have reasonably concluded (based
on the advice of counsel) that there may be defenses available to it or
them which are different from, additional to or in conflict with those
available to the Company or which counsel to the Agent believes may present
a conflict for counsel representing the Company and the Agent (in which
case the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Company and paid as
incurred (it being understood, however, that the Company shall not be
liable for the expenses of more than one separate firm of attorneys in any
one Proceeding or series of related Proceedings in the same jurisdiction
(other than local counsel in such jurisdiction) representing the
indemnified parties who are parties to such Proceeding). Anything in this
paragraph to the contrary notwithstanding, the Company shall not be liable
for any settlement of any such 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 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 before 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) The Agent agrees to indemnify, defend and hold harmless the
Company, its partners, directors and officers, the officers that signed the
Registration Statement and any person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act and the successors and assigns of all the foregoing persons from and
against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company
or any such person may incur under the Securities Act, the Exchange Act,
the common law or otherwise, but only insofar as such loss, expense,
liability, damage or claim arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by the Agent to the
Company expressly for use in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof
by the Company) or in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with
such information required to be stated either in the Registration Statement
or Prospectus or necessary to make such information not misleading or (ii)
the sale by the Agent of any Shares that does not permit prospectus
delivery pursuant to Rule 153 of the Securities Act. The liability of the
Agent under this paragraph shall not exceed the proceeds of Shares sold by
the Agent hereunder that are the subject of the dispute or claim. If the
Agent breaches this Agreement by (i) failing to adhere to the Company's
written instructions as to the maximum number of Shares to be sold (per
day, per week, etc.) or (ii) instructs the Company's transfer agent to
issue fewer or more Shares than were sold by the Agent, the Agent shall
hold the Company harmless against any loss, expense, liability, damage or
claim (including the reasonable cost of investigation) arising from or as a
result of such default by the Agent; provided however that the Agent shall
be entitled to rely on the instructions of the Company, without further
inquiry, and provided further that the Agent shall not be liable for any
failure by the Company's transfer agent to adhere to the Company's or the
Agent's instructions.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against the Agent
pursuant to the foregoing paragraph, the Company or such person shall
promptly notify the Agent in writing of the institution of such Proceeding
and the Agent, shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of expenses, provided, however, that the omission to so notify the
Agent shall not relieve the Agent from any liability which the 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 such person unless the employment of such counsel shall have
been authorized in writing by the Agent in connection with the defense of
such Proceeding or the Agent shall not have employed counsel to have charge
of the defense of such action within a reasonable time or such indemnified
party or parties shall have reasonably concluded (based on the advice of
counsel) that there may be defenses available to it or them which are
different from, additional to or in conflict with those available to the
Agent (in which case the Agent shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties but
the Agent may employ counsel and participate in the defense thereof by the
fees and expenses of such counsel shall be at the expense of the Agent), in
any of which events such fees and expenses shall be borne by the Agent and
paid as incurred (it being understood, however, that the Agent shall not be
liable for the expenses of more than one separate firm of attorneys in any
one Proceeding or series of related Proceedings in the same jurisdiction
(other than local counsel or such jurisdiction) representing the
indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Agent shall not be liable
for any settlement of any such claim or action effected without the written
consent of the Agent but if settled with the written consent of the Agent,
the 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 any 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 before 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 an indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liabilities or claims that are the
subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsections (a) and (b) of this Section 7 in respect of any losses,
expenses, liabilities, damages or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, expenses, liabilities, damages or claims
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Agent on the other hand
from the offering of the Shares or (ii) if (but only if) the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
on the one hand and of the Agent on the other in connection with the
statements or omissions which resulted in such losses, expenses,
liabilities, damages or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Agent on the other hand shall be deemed to be in the same
proportion as the total proceeds from the offering (before deducting
expenses) received by the Company and the total compensation (before
deducting expenses) received by the Agent from the sale of Shares on behalf
of the Company. The relative fault of the Company on the one hand and of
the 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 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, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred
by such party in connection with investigating, preparing to defend or
defending any Proceeding.
(d) The Company and the 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 which does not take
account of the equitable considerations referred to in subsection (c)(i)
and, if applicable (ii), above. Notwithstanding the provisions of this
Section 7, the Agent shall not be required to contribute any amount in
excess of the commissions received by it under this Agreement, or any
amount in excess of the amount by which the total actual sales price at
which Shares sold by the Agent exceeds the amount of any damages that the
Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
8. Survival.
The indemnity and contribution agreements contained in 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 Agent, its directors or officers,
or any person who controls the Agent within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, or by or on behalf of
the Company, its directors and officers or any person who controls the
Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, and shall survive any termination of this Agreement
or the sale and delivery of the Shares. The Company and the Agent agree
promptly to 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
and directors, in connection with the sale and delivery of the Shares, or
in connection with the Registration Statement or Prospectus.
9. Notices.
All notices hereunder shall be in writing and delivered by hand,
overnight courier, mail or facsimile, and if to the Agent, shall be
sufficient in all respects if delivered to Brinson Patrick Securities
Corporation, 330 Madison Avenue, 9th Floor, New York, New York 10017,
facsimile number (212) 453-5555, Attention: Corporate Finance, and if to
the Company, shall be sufficient in all respects if delivered or sent to
the Company at the offices of the Company at 40 East 52nd Street, New York,
NY 10022, Attention: Richard Shea.
10. Governing Law; Consent to Jurisdiction; Headings.
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. 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 Company consents to the
jurisdiction of such courts and personal service with respect thereto. The
Company hereby consents 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 the Agent or any
indemnified party. The Agent and the Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and
affiliates) waive 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 Company agrees that a
final judgment in any such action, proceeding or counterclaim brought in
any such court shall be conclusive and binding upon the Company and may be
enforced in any other courts in the jurisdiction of which the Company is or
may be subject, by suit upon such judgment.
The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
11. Parties in Interest.
The Agreement herein set forth has been and is made solely for the
benefit of the Agent, the Company and the controlling persons, directors
and officers referred to in Section 7 hereof, and their respective
successors, assigns, executors and administrators. No other person,
partnership, association or corporation shall acquire or have any right
under or by virtue of this Agreement.
12. Counterparts and Facsimile Signatures.
This Agreement may be signed by the parties in counterparts which
together shall constitute one and the same agreement among the parties. A
facsimile signature shall constitute an original signature for all
purposes.
13. Intentionally omitted.
If the foregoing correctly sets forth the understanding between
the Company and the Agent, please so indicate in the space provided below
for the purpose, whereupon this Agreement shall constitute a binding
agreement between the Company and the Agent.
Very truly yours,
ANTHRACITE CAPITAL, INC.
By: /s/ Robert L. Friedberg
-------------------------------
Name: Robert L. Friedberg
Title: Secretary
Accepted and agreed to as
of the date first above written:
BRINSON PATRICK SECURITIES CORPORATION
By: /s/ Todd Wyche
----------------------
Name: Todd Wyche
Title: Managing Director
Schedule I
Subsidiaries of the Company
Anthracite Funding, LLC
Anthracite Funding ML, LLC
Exhibit A
Opinion of Counsel for the Company
(i) The Company is authorized to do business as a foreign
corporation under the laws of the State of New York.
(ii) Anthracite Funding, LLC has been duly formed and is in good
standing under the laws of the State of Delaware.
(iii) Anthracite Funding ML, LLC has been duly formed and is in
good standing under the laws of the State of Delaware.
(iv) The execution and delivery by the Company of the Sales Agency
Agreement and the performance by the Company of its obligations thereunder,
the compliance by the Company with the provisions thereof, and the
consummation by the Company of the transactions contemplated thereby, do
not (A) constitute a violation of or a default under any Applicable
Contract, (B) result in the creation of any lien or encumbrance upon any of
the property of the Company pursuant to any Applicable Contract (except
that with respect to the foregoing clauses (A) and (B), we do not express
an opinion as to any covenant, restriction or provision of any Applicable
Contract with respect to financial ratios or tests or any aspect of the
financial condition or results of operations of the Company), or (C)
contravene any provision of any Applicable Law or any Applicable Order.
(v) The Company is not and solely giving effect to the application
of the proceeds as described under the caption "Use of Proceeds" in the
Prospectus will not be required to be registered as an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended.
(vi) The Registration Statement, at the time it became effective,
and the Prospectus, as of the date of the Prospectus Supplement, excluding
the documents incorporated by reference therein (the "Incorporated
Documents"), appeared on their face to be appropriately responsive in all
material respects to the requirements of the Securities Act and the rules
of and regulations promulgated thereunder, except that in each case we do
not express any opinion as to the financial statements and schedules and
other financial or statistical data included or incorporated by reference
therein or excluded therefrom, or the exhibits thereto, and, we do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained or incorporated by reference in the Registration
Statement or the Prospectus.
(vii) No Government Approval, which has not been obtained or taken
and is not in full force and effect, is required to authorize, or is
required in connection with, the execution or delivery of the Sales Agency
Agreement by the Company or the consummation by the Company of the
transactions contemplated thereby.
(viii) None of the actions, suits or proceedings, inquiries, or
investigations pending or threatened against the Company, Anthracite
Funding ML, LLC or Anthracite Funding LLC, which are listed on Exhibit __,
and identified to us by the Company, Anthracite Funding ML, LLC and
Anthracite Funding, LLC as all of the actions, suits or proceedings,
inquiries, or investigations pending or threatened against the Company,
Anthracite Funding ML, LLC and Anthracite Funding LLC or to which the
properties, assets or rights of any such entity are subject, at law or in
equity, before any federal state, local or foreign governmental or
regulatory commission board, body, authority, arbitral panel or agency are
required to be described in the Prospectus but are not so described.
(ix) Provided that the Company makes all elections and conforms
with the procedural steps required for qualification and taxation as a real
estate investment trust ("REIT"), beginning with its taxable year ending
December 31, 2000, the Company has been organized in conformity with the
requirements for qualification as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), and the Company's proposed method of
operation will enable it to meet the requirements for qualification and
taxation as a REIT under the Code. Insofar as the descriptions of the law
contained in the Registration Statement under the caption "Federal Income
Tax Consequences" purports to describe the federal income tax consequences
to a holder of shares of Common Stock, the descriptions fairly summarize
such consequences in all material respects. The Company's qualification and
taxation as a REIT depends upon its ability to meet through actual annual
operating results, certain requirements including requirements relating to
distribution levels and diversity of stock ownership, and the various
qualification tests imposed under the Code, the results of which will not
be reviewed by us. Accordingly, no assurance can be given that the actual
results of the Company's operation for any one taxable year will enable the
Company to satisfy the requirements for qualification and taxation as a
REIT under the Code.
In addition, we have participated in conferences with officers and
other representatives of the Company and the Manager, counsel for the
Company, representatives of the independent accountants of the Company and
you at which the contents of the Registration Statement and the Prospectus
and related matters were discussed. We did not participate in the
preparation of the Incorporated Documents but have, however, reviewed such
documents and discussed the business and affairs of the Company with
officers and other representatives of the Company. Although we are not
passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and have made no independent check or
verification thereof, on the basis of the foregoing (except to the extent
expressly stated in paragraph __ above), no facts have come to our
attention that have led us to believe that the Registration Statement, at
the time it became effective, contained an untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as of the date of the Prospectus Supplement and as of the date
hereof, contained or contains an untrue statement of a material fact or
omitted or omits 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, except that we express no opinion or belief with
respect to the financial statements, schedules and other financial data
included therein or incorporated by reference or excluded therefrom or the
exhibits to the Registration Statement.
Definitions:
"Applicable Contracts" means those agreements or instruments
identified on Exhibit __ hereto.
"Applicable Laws" mean the General Corporation law of the State of
Delaware and those laws, rules and regulations of the State of New York and
the federal laws of the United States of America, in each case, which, in
our experience, are normally applicable to transactions of the type
contemplated by the Sales Agency Agreement (other than the United States
federal securities laws, state and foreign securities or blue sky laws,
antifraud laws and the rules and regulations of the National Association of
Securities Dealers, Inc.), without our having made any special
investigation as to the applicability of any specific law, rule or
regulation, and which are not the subject of a specific opinion herein
referring expressly to a particular law or laws.
"Applicable Orders" means those judgments, orders or decrees of
Governmental Authorities identified on Exhibit __ hereto.
"Governmental Authorities" means any court, regulatory body,
administrative agency or governmental body of the State of New York or the
United States of America having jurisdiction over the Company under
Applicable Laws.
"Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, qualification or registration
with, any Governmental Authorities required to be made or obtained by the
Company pursuant to Applicable Laws, other than any consent, approval,
license, authorization, validation, filing, qualification or registration
which may have become applicable as a result of the involvement of any
other party (other than the Company) in the transactions contemplated by
the Sales Agency Agreement or because of such parties' legal or regulatory
status or because of any other facts specifically pertaining to such
parties.
Exhibit B
Opinion of Maryland Counsel for the Company
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Maryland
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement, and to enter into the Sales Agency Agreement and consummate the
transactions contemplated in the Prospectus.
(ii) The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained in
the Registration Statement and Prospectus, and the holders of the Shares
will not be subject to personal liability by reason of being such holders;
and the Shares have been duly and validly authorized by the Company for
offer, sale, issuance and delivery pursuant to the Sales Agency Agreement
and, when issued and delivered against payment therefor as provided herein
will be duly and validly issued and fully paid and non-assessable.
(iii) The Sales Agency Agreement has been duly authorized,
executed and delivered by the Company.
(iv) The execution, delivery and performance of the Sales Agency
Agreement, the issuance and sale of the Shares and the consummation of the
transactions contemplated hereby will not conflict with, or result in any
breach of or constitute a default under (nor constitute any event which
with notice, lapse of time, or both would result in any breach of, or
constitute a default under), any provisions of the charter or by-laws of
the Company or under any Maryland statue to our knowledge, any order or any
decree, judgment or order of a Maryland court applicable to the Company
except that we express no opinion as to (a) the securities or blue sky laws
of any jurisdiction or (b) the provisions relating to indemnification.
(v) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Shares and under the caption "Underwriting",
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in all
material respects.
(vi) To our knowledge and except as otherwise provided below, the
Company has all necessary licenses, authorizations, consents and approvals
and has made all necessary filings required under any Maryland state or
local law required to conduct its business, as such is described in the
Registration Statement, except to the extent that any failure to have any
such authorizations, consents or approvals would not, individually or in
the aggregate, have a material adverse effect on the assets, operations,
business or condition (financial or otherwise) of the Company.
Exhibit C
[Date]
Officers' Certificate
1. The representations and warranties of the Company in the Sales
Agency Agreement, dated May __, 2002 (the "Sales Agency Agreement"),
between Anthracite Capital, Inc. and Brinson Patrick Securities
Corporation, are true and correct as of the date hereof as though made on
and as of this date.
2. The Company has performed all obligations and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agency Agreement at or prior to the date hereof.
3. The Company's Registration Statement (File No. 333-69848) under
the Securities Act of 1933 has become effective; no stop order suspending
the effectiveness of such Registration Statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Securities and Exchange Commission; and all requests for additional
information on the part of the Securities and Exchange Commission have been
complied with.
4. Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change, or any development involving a prospective
material adverse change, in the business, properties or assets described or
referred to in the Registration Statement, or the results of operations,
condition (financial or otherwise), business or operations of the Company
and the Subsidiaries taken as a whole, (ii) any transaction which is
material to the Company or the Subsidiaries, except transactions in the
ordinary course of business, (iii) any obligation, direct or contingent,
which is material to the Company and the Subsidiaries taken as a whole,
incurred by the Company or the Subsidiaries, except obligations incurred in
the ordinary course of business, or (iv) any material change in the capital
stock or outstanding indebtedness of the Company or the Subsidiaries; and
neither the Company nor the Subsidiaries has any material contingent
obligation which is not disclosed in the Registration Statement.
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
Exhibit D
[Date]
Manager's Representation Letter
The representations and warranties made on behalf of the BlackRock
Financial Management, Inc. in the Sales Agency Agreement dated May __,
2002, between Anthracite Capital, Inc. and Brinson Patrick Securities
Corporation, are true and correct as of the date hereof as though made on
and as of this date.
By:____________________________
Name:
Title: