Exhibit 1.1
300,000,000 Shares
of 8.25% Series D Cumulative
Redeemable Preferred Stock
ANTHRACITE CAPITAL, INC.
UNDERWRITING
AGREEMENT
February 7, 2007
BEAR, STEARNS & CO. INC.
As Representative of the
several Underwriters named
in
Schedule I attached hereto (the
“Representative”)
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Ladies/Gentlemen:
Anthracite Capital, Inc., a
corporation organized and existing under the laws of Maryland (the
“Company”), proposes, subject to the terms and
conditions stated in this agreement (this “Agreement”),
to issue and sell to the several underwriters named in Schedule I
hereto (the “Underwriters”) an aggregate of 300,000,000
shares (the “Firm Shares”) of its 8.25% Series D
Cumulative Redeemable Preferred Stock, par value $.001 per share,
liquidation preference $25.00 per share (the “Series D
Preferred Stock”), and, for the sole purpose of covering
over-allotments in connection with the sale of the Firm Shares, at
the option of the Underwriters, up to an additional 450,000 shares
(the “Additional Shares”) of Series D Preferred Stock.
The Firm Shares and any Additional Shares purchased by the
Underwriters are referred to herein as the “Shares.”
Bear, Stearns & Co. Inc. (“Bear Stearns”) is acting
as Representative in connection with the offering and sale of the
Shares contemplated herein (the “Offering”).
The Company and BlackRock Financial
Management, Inc., a corporation organized and existing under the
laws of Delaware and the manager of the Company (the
“Manager”), each confirms as follows its agreements
with the Underwriters.
1.
Representations and Warranties of the Company . The Company
represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A
registration statement on Form S-3 (File No. 333-69848), with
respect to the Shares, including a prospectus, has been prepared by
the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the “Securities Act”), and the
rules and regulations (the “Rules and Regulations”) of
the Securities and Exchange Commission (the
“Commission”), has been filed with the Commission and
has been declared effective. The registration statement and
prospectus may have been amended or supplemented prior to the date
of this Agreement; any such amendment or supplement was prepared
and filed, and any such
amendment filed after the effective
date of such registration statement has been declared effective. No
stop order suspending the effectiveness of the registration
statement has been issued, and no proceeding for that purpose has
been instituted, or to the Company’s knowledge, threatened by
the Commission. A prospectus supplement (the “Prospectus
Supplement”) setting forth the terms of the Offering, sale
and plan of distribution of the Shares and additional information
concerning the Company and its business has been or will be
prepared and, together with the prospectus included in the
registration statement, will be filed pursuant to Rule 424(b) under
the Securities Act on or before the second business day after the
date hereof (or such earlier time as may be required by the Rules
and Regulations).
The registration statement, as it
may have heretofore been amended and at the time it became
effective, is referred to herein as the “Registration
Statement,” and the final form of prospectus included in the
Registration Statement, as supplemented by the Prospectus
Supplement, in the form filed by the Company with the Commission
pursuant to Rule 424(b) under the Securities Act, is referred to
herein as the “Prospectus,” except that if any revised
prospectus or prospectus supplement shall be provided to the
Underwriters by the Company for use in connection with the Offering
which differs from the Prospectus (whether or not such revised
prospectus or prospectus supplement is required to be filed by the
Company pursuant to Rule 424(b) under the Securities Act), the term
“Prospectus” shall refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time
it is first provided to the Underwriters for such use. Copies of
the Registration Statement and the Prospectus, any amendments or
supplements thereto and all documents incorporated by reference
therein that were filed with the Commission on or prior to the date
of this Agreement have been delivered to the Underwriters and their
counsel. Any preliminary prospectus or prospectus subject to
completion included in the Registration Statement or filed with the
Commission pursuant to Rule 424 under the Securities Act is
hereafter called a “Preliminary Prospectus,” and the
Preliminary Prospectus relating to the Shares, as amended or
supplemented immediately prior to the Applicable Time (as defined
below), is referred to herein as the “Pricing
Prospectus.” Any “issuer free writing prospectus”
(as defined in Rule 433 under the Securities Act) relating to the
Shares is identified in Annex IV hereto and is hereafter referred
to as an “Issuer Free Writing Prospectus”; and the
Pricing Prospectus, as supplemented by the Issuer Free Writing
Prospectus attached and listed in Annex IV hereto, taken together,
are hereafter referred to collectively as the “Pricing
Disclosure Package.”
Any reference herein to the
Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), on or before the
effective date of the Registration Statement, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case
may be, and any reference herein to the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any document
filed under the Exchange Act after the effective date of the
Registration Statement, the date of such Preliminary Prospectus or
the date of the Prospectus, as the case may be, which is
incorporated therein by reference.
2
The Company was not an
“ineligible issuer” (as defined in Rule 405 under the
Securities Act) as of the eligibility determination date for
purposes of Rules 164 and 433 under the Securities Act with respect
to the Offering.
All references in this Agreement to
the Registration Statement, any Preliminary Prospectus, any Issuer
Free Writing Prospectus or the Prospectus, or any amendments or
supplements to any of the foregoing, shall be deemed to include any
copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System
(“EDGAR”).
(b) The
Registration Statement complies and the Prospectus and any further
amendments or supplements to the Registration Statement or the
Prospectus will comply in all material respects with the applicable
provisions of the Securities Act and the Rules and Regulations, and
do not and will not, as of the applicable effective date as to the
Registration Statement and as of the applicable filing date as to
the Prospectus and any amendment thereof or supplement thereto,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein not misleading; provided, however,
that this representation and warranty shall not apply to any
information contained in or omitted from the Registration Statement
or the Prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through
Bear Stearns specifically for use therein. The parties hereto agree
that such information provided by or on behalf of any Underwriter
through Bear Stearns consists solely of the material referred to in
Section 18 hereof.
(c) No
order preventing or suspending the use of any Preliminary
Prospectus or any Issuer Free Writing Prospectus has been issued by
the Commission, and each Preliminary Prospectus, at the time of
filing thereof, complied in all material respects with the
applicable provisions of the Securities Act and the Rules and
Regulations, and did 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 light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to
any information contained in or omitted from any Preliminary
Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any
Underwriter through Bear Stearns specifically for use therein. The
parties hereto agree that such information provided by or on behalf
of any Underwriter through Bear Stearns consists solely of the
material referred to in Section 18 hereof.
(d) For
purposes of this Agreement, the “Applicable Time” is
4:30 p.m. (Eastern) on the date of this Agreement. The Pricing
Disclosure Package, as of the Applicable Time, did 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 light of the circumstances under which they
were made, not misleading. Each Issuer Free Writing Prospectus
complies in all material respects with the applicable provisions of
the Securities Act and the Rules and Regulations on the date of
first use, and does not include information that conflicts with the
information contained in the Registration Statement, the Pricing
Prospectus or the Prospectus, and each Issuer Free Writing
Prospectus not listed in Annex IV hereto, as supplemented by and
taken together with the Pricing Disclosure Package, as of the
Applicable
3
Time, did 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 light of the circumstances under which they were made,
not misleading. No representation and warranty is made in this
Section 1(d) with respect to any information contained in or
omitted from the Pricing Disclosure Package or any Issuer Free
Writing Prospectus in reliance upon and in conformity with the
information furnished in writing to the Company by or on behalf of
any Underwriter through Bear Stearns specifically for use therein.
The parties hereto agree that such information provided by or on
behalf of any Underwriter through Bear Stearns consists solely of
the material referred to in Section 18 hereof.
(e) Deloitte
& Touche LLP, which has certified the financial statements and
supporting schedules and information of the Company and its
subsidiaries that are included or incorporated by reference in the
Registration Statement, the Pricing Prospectus and the Prospectus,
is an independent registered public accounting firm with respect to
the Company within the meaning of the Securities Act and the
applicable rules and regulations thereunder adopted by the
Commission and the Public Company Accounting Oversight Board
(United States).
(f) Subsequent
to the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, except as
disclosed or specifically contemplated in the Pricing Prospectus,
(i) the Company has not declared or paid any dividends, or made any
other distribution of any kind, on or in respect of its capital
stock, other than the fourth quarter 2006 cash dividend of $0.29
per share of the Company’s common stock declared on December
12, 2006 and paid on February 1, 2007 in the ordinary course of the
Company’s business and announced publicly by the Company in a
press release on December 12, 2006 and to be set forth in the
Company’s 2006 Annual Report on Form 10-K, (ii) there has not
been any material change in the capital stock or long-term debt of
the Company or any of its subsidiaries listed in Exhibit A hereto
(each, a “Subsidiary” and, collectively, the
“Subsidiaries”), (iii) neither the Company nor any
Subsidiary has sustained any material loss or interference with its
business or properties from fire, explosion, flood, hurricane or
other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding, and (iv)
there has not been any material adverse change or any development
involving a prospective material adverse change, whether or not
arising from transactions in the ordinary course of business, in or
affecting the business, operations, condition (financial or
otherwise), results of operations, properties or prospects of the
Company and its subsidiaries, taken as a whole (a “Material
Adverse Change”). Since the date of the latest balance sheet
included or incorporated by reference in the Registration Statement
and the Pricing Prospectus, neither the Company nor any Subsidiary
has incurred or undertaken any liabilities or obligations, direct
or contingent, which are material to the Company and the
Subsidiaries, taken as a whole, except for liabilities or
obligations which are disclosed in the Pricing
Prospectus.
(g) The
Company has an authorized capitalization as set forth in the
Pricing Prospectus, and all of the issued and outstanding shares of
capital stock of the Company are fully paid and non-assessable and
have been duly and validly authorized and issued, and were not
issued in violation of or subject to any preemptive or similar
right that entitles any person to acquire from the Company or any
Subsidiary any Series D Preferred Stock or any security convertible
into, or exercisable or exchangeable for, Series D Preferred Stock
(any “Relevant
4
Security”), except for such
rights as may have been fully satisfied or waived prior to the
effectiveness of the Registration Statement. All of the issued
shares of capital stock of or other ownership interests in each
Subsidiary have been duly and validly authorized and issued and are
fully paid and (with respect to capital stock only) non-assessable
and (except as set forth in the Pricing Prospectus) are owned
directly or indirectly by the Company free and clear of any lien,
encumbrance, equity or claim (any “Lien”).
(h) The
Shares to be delivered on the Closing Date and the Additional
Closing Date (as hereinafter defined), if any, have been duly and
validly authorized and, when issued and delivered in accordance
with this Agreement, will be duly and validly issued, fully paid
and non-assessable , will have been issued in compliance
with all applicable state and federal securities laws and will not
have been issued in violation of or subject to any preemptive or
similar right that entitles any person to acquire any Relevant
Security from the Company. On or prior to the Closing Date, the
Company will have executed and filed Articles Supplementary (the
“Articles Supplementary”) to the Company’s
Articles of Amendment and Restatement, as amended, establishing the
terms of the Shares with the State Department of Assessments and
Taxation of the State of Maryland.
(i) The
Subsidiaries are the only “significant subsidiaries” of
the Company (as such term is defined in Rule 1-02 of Regulation
S-X). Each of the Company and each Subsidiary has been duly
organized and validly exists as a corporation, partnership, limited
liability company or real estate investment trust in good standing
(to the extent such concept exists) under the laws of its
jurisdiction of organization. The Company and each Subsidiary is
duly qualified to do business and is in good standing (to the
extent such concept exists) as a foreign corporation, partnership,
limited liability company or real estate investment trust in each
jurisdiction in which the character or location of its properties
(owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those
failures to be so qualified or in good standing which (individually
and in the aggregate) could not reasonably be expected to have a
material adverse effect on the business, condition (financial or
otherwise), results of operations, properties or prospects of the
Company and its subsidiaries, taken as a whole (a “Material
Adverse Effect”).
(j) Each
of the Company and each Subsidiary has all requisite power and
authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses, filings and
permits (collectively, the “Consents”) of, with and
from all courts and regulatory or governmental agencies and bodies
to own, lease and operate its properties and conduct its business
as it is now being conducted and as disclosed in the Registration
Statement and the Pricing Prospectus, and each such Consent is
valid and in full force and effect, except in each case as could
not reasonably be expected to have a Material Adverse Effect. No
such Consent contains a materially burdensome restriction that is
not adequately disclosed in the Pricing Prospectus and the
Prospectus.
(k) This
Agreement has been duly and validly authorized, executed and
delivered by the Company.
(l) The
amended and restated investment advisory agreement (the
“Management Agreement”), dated as of March 11, 2004, as
amended by the Amendment and
5
Extension thereto dated as of March
31, 2005, as further amended by the Second Amendment and Extension
thereto dated as of March 31, 2006, between the Company and the
Manager, has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the
Company enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting enforcement of creditors’ rights or by general
equitable principles.
(m) The
issue and sale of the Shares, the performance by the Company of its
obligations under this Agreement and the consummation of the
transactions herein contemplated do not and will not (i) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any Lien upon any
property or assets of the Company or any Subsidiary pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other
agreement, instrument, franchise, license or permit to which the
Company or any Subsidiary is a party or by which the Company or any
Subsidiary or their respective properties or assets may be bound
and which is material to the business of the Company and its
subsidiaries taken as a whole, except as would not have a Material
Adverse Effect, (ii) violate or conflict with any provision of the
certificate or articles of incorporation, by-laws, certificate of
formation, limited liability company agreement, partnership
agreement or other organizational documents of the Company or any
Subsidiary, or (iii) violate or conflict with any statute, rule or
regulation of any court or regulatory or governmental agency or
body having jurisdiction over the Company or any Subsidiary or any
of their properties.
(n) No
Consent of, with or from any court or regulatory or governmental
agency or body having jurisdiction over the Company or any
Subsidiary or any of their properties is required for the
execution, delivery and performance of this Agreement or
consummation of the transactions contemplated by this Agreement,
except the registration under the Securities Act of the Shares and
such consents as may be required under state securities or blue sky
laws or the by-laws and rules of the National Association of
Securities Dealers, Inc. (the “NASD”) in connection
with the purchase and distribution of the Shares by the
Underwriters.
(o) Except
as disclosed in the Pricing Prospectus and the Prospectus, there is
no legal or governmental proceeding to which the Company or any
Subsidiary is a party or of which any property of the Company or
any Subsidiary is the subject which, individually or in the
aggregate, if determined adversely to the Company or any
Subsidiary, could reasonably be expected to have a Material Adverse
Effect; to the Company’s knowledge, no such proceeding is
threatened or contemplated.
(p) The
financial statements, including the notes thereto, incorporated by
reference in the Registration Statement, the Pricing Prospectus and
the Prospectus present fairly, in all material respects, the
financial position as of the dates indicated and the cash flows and
results of operations for the periods specified of the Company and
its consolidated subsidiaries; except as otherwise stated in the
Registration Statement, the Pricing Prospectus and the Prospectus,
said financial statements have been prepared in conformity with
United States generally accepted accounting principles applied on a
consistent basis throughout the periods involved; and the
supporting schedules (if any) included or incorporated by reference
in the
6
Registration Statement, the Pricing
Prospectus and the Prospectus present fairly, in all material
respects, the information required to be stated therein.
(q) There
are no pro forma or as adjusted financial statements that are
required to be included in the Registration Statement, the Pricing
Prospectus and the Prospectus in accordance with Regulation S-X
under the Rules and Regulations.
(r) The
statistical, industry-related and market-related data included or
incorporated by reference in the Registration Statement, the
Pricing Prospectus and the Prospectus are based on or derived from
sources which the Company reasonably and in good faith believes are
reliable and accurate, and such data agree with the sources from
which they are derived.
(s) On
or prior to the Closing Date, the Series D Preferred Stock will be
registered pursuant to Section 12(b) of the Exchange Act. The
shares of Series D Preferred Stock will have been approved for
listing on the New York Stock Exchange (the “NYSE”),
and the Company has taken no action designed to terminate, or
likely to have the effect of terminating, the registration of the
Series D Preferred Stock under the Exchange Act or designed to
de-list, or likely to have the effect of de-listing, the Series D
Preferred Stock from the NYSE, nor has the Company received any
notification that the Commission or the NYSE is contemplating
terminating such registration or listing.
(t) No
relationship, direct or indirect, exists between or among any of
the Company or any affiliate of the Company, on the one hand, and
any director, officer, stockholder, customer or supplier of the
Company or any affiliate of the Company, on the other hand, which
is required by the Securities Act, the Exchange Act, and the Rules
and Regulations to be described in the Registration Statement, the
Pricing Prospectus or the Prospectus which is not so described or
is not described as required. There are no outstanding loans,
advances (except normal advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the
Company to or for the benefit of any of the officers or directors
of the Company or any of their respective family members, except as
disclosed in the Registration Statement, the Pricing Prospectus and
the Prospectus.
(u) The
Company maintains a system of internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the
Exchange Act) that complies with the requirements of the Exchange
Act and has been designed by the Company’s principal
executive officer and principal financial officer, or under their
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles. The Company’s internal
control over financial reporting is effective and the Company is
not aware of any material weaknesses in its internal control over
financial reporting. Since the date of the latest audited financial
statements included or incorporated by reference in the
Registration Statement, the Pricing Prospectus and the Prospectus,
there has been no change in the Company’s internal control
over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s
internal control over financial reporting.
7
(v) The
Company maintains disclosure controls and procedures (as such term
is defined in Rule 13a-15(e) under the Exchange Act) that comply
with the requirements of the Exchange Act; such disclosure controls
and procedures have been designed to ensure that material
information relating to the Company and its subsidiaries is made
known to the Company’s principal executive officer and
principal financial officer by others within those entities; and
such disclosure controls and procedures are effective to perform
the functions for which they were established.
(w) Except
as otherwise already covered by another representation or warranty
by the Company in this Agreement, there is and has been no failure
on the part of the Company to comply with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith applicable to the Company,
including, without limitation, Section 402 related to loans and
Sections 302 and 906 related to certifications.
(x) Neither
the Company nor any of its subsidiaries has taken, directly or
indirectly, any action which constitutes or is designed to cause or
result in, or which could reasonably be expected to constitute,
cause or result in, the stabilization or manipulation of the price
of any security to facilitate the sale or resale of the
Shares.
(y) The
Company has not, prior to the date hereof, made any offer or sale
of any securities which would be “integrated” (within
the meaning of the Securities Act and the rules and regulations
thereunder) with the offer and sale of the Shares pursuant to the
Registration Statement.
(z) The
statements set forth in the Pricing Prospectus and the Prospectus
under the caption “Description of Series D Preferred
Stock,” insofar as it purports to constitute a summary of the
terms of the Series D Preferred Stock, under the caption
“Additional Federal Income Tax Considerations,” insofar
as it purports to describe the provisions of the laws referred to
therein, and under the caption “Underwriting,” insofar
as it purports to describe the provisions of this Agreement, are
accurate, complete and fair in all material respects.
(aa) The
Company is subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act and files periodic reports with the
Commission, and the conditions for use of Form S-3 to register the
Shares under the Securities Act have been satisfied. The documents
incorporated or deemed to be incorporated by reference in the
Pricing Prospectus and the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply
in all material respects with the requirements of the Exchange Act
and the Rules and Regulations and, when read together with the
other information in the Pricing Prospectus or the Prospectus, as
applicable, do not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not
misleading.
(bb) The
Company is not, and after giving effect to application of the net
proceeds of the Offering as described in the Registration
Statement, the Pricing Prospectus and the Prospectus will not be,
an “investment company” under the Investment Company
Act of 1940, as amended (the “Investment Company
Act”).
8
(cc) Except
as disclosed in the Registration Statement, the Pricing Prospectus
and the Prospectus, there are no contracts, agreements or
understandings between the Company and any person that would give
rise to a valid claim against the Company for a brokerage
commission, finder’s fee or other like payment in connection
with the transactions contemplated by this Agreement.
(dd) The
Company and the Subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of any
and all Liens except such as are described in the Pricing
Prospectus and the Prospectus or such as would not have,
individually or in the aggregate, a Material Adverse Effect; and
any real property and buildings held under lease or sublease by the
Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material to, and do not materially interfere with, the use made and
proposed to be made of such property and buildings by the Company
and the Subsidiaries. Neither the Company nor any Subsidiary has
received any notice of any claim adverse to its ownership of any
real or personal property or of any claim against the continued
possession of any real property, whether owned or held under lease
or sublease by the Company or any Subsidiary.
(ee) The
Company and each Subsidiary (i) owns or possesses the right to use
all patents, trademarks, service marks, domain names, trade names,
trademark registrations, service mark registrations, copyrights,
licenses and know-how and other intellectual property (including
trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures,
“Intellectual Property”) necessary for the conduct of
their respective businesses as presently conducted and as described
in the Registration Statement, the Pricing Prospectus and the
Prospectus, except where the failure to own or possess such right
would not in the aggregate have a Material Adverse Effect, and (ii)
have no reason to believe that the conduct of their respective
businesses does or will conflict with, and have not received any
notice of any claim of conflict with, any such right of others,
which claim, if the subject of an unfavorable decision, ruling or
judgment, could in the aggregate reasonably be expected to result
in a Material Adverse Effect. To the Company’s knowledge, all
material technical information developed by and belonging to the
Company or any Subsidiary which has not been patented has been kept
confidential.
(ff) The
Company and each Subsidiary have accurately prepared in all
material respects and timely filed all federal, state, foreign and
other tax returns that are required to be filed by it and have paid
or made provision for the payment of all taxes, assessments,
governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which the Company
or any Subsidiary is obligated to withhold from amounts owing to
employees, creditors and third parties, with respect to the periods
covered by such tax returns (whether or not such amounts are shown
as due on any tax return), except, in all cases, for any such
amounts that the Company is contesting in good faith and except in
any case in which the failure to so prepare, file or pay would not
in the aggregate have a Material Adverse Effect. No deficiency
assessment with respect to a proposed adjustment of the
Company’s or any Subsidiary’s federal, state, local or
foreign taxes is pending or, to the Company’s knowledge,
threatened, which could reasonably be expected in the aggregate to
have a Material Adverse Effect. There is no tax lien, whether
imposed by any federal, state, foreign or other taxing
9
authority, outstanding against the
assets, properties or business of the Company or any Subsidiary,
except for any such liens that would not, individually or in the
aggregate, have a Material Adverse Effect.
(gg) 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.
|
|
(hh)
|
Neither the Company nor any of the
Subsidiaries has any employees.
|
(ii) Neither
the Company nor any Subsidiary (i) is in violation of its
certificate or articles of incorporation, by-laws, certificate of
formation, limited liability company agreement, partnership
agreement or other organizational documents, (ii) is in default
under, and no event has occurred which, with notice or lapse of
time or both, would constitute a default under or result in the
creation or imposition of any Lien upon any property or assets of
the Company or any Subsidiary pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
property or assets is subject, or (iii) is in violation of any
statute, rule or regulation of any court or regulatory or
governmental agency or body having jurisdiction over the Company or
any of the Subsidiaries or any of their properties or assets,
except (in the case of clauses (ii) and (iii) above) for violations
or defaults that could not (individually or in the aggregate)
reasonably be expected to have a Material Adverse
Effect.
(jj) There
are no contracts or other documents which are required to be
described in the Pricing Prospectus and the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act or by
the Rules and Regulations which have not been so described or
filed. All of the contracts to which any of the Company or the
Subsidiaries is a party and which are material to the business and
operations of the Company and the Subsidiaries, taken as a whole,
(i) have been duly authorized, executed and delivered by such
entity, constitute valid and binding obligations of such entity and
are enforceable against such entity in accordance with the terms
thereof, except as such enforcement may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium or similar other
laws affecting creditors’ rights generally and (B) general
equity principles and limitations on the availability of equitable
relief, or (ii) in the case of any contract to be executed on or
before the Closing Date, will on the Closing Date be duly
authorized, executed and delivered by the Company and/or a
Subsidiary, and constitute valid and binding agreements of such
entity enforceable against each entity in accordance
with
10
the terms thereof, except as such
enforcement may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or similar other laws affecting
creditors’ rights generally and (B) general equity principles
and limitations on the availability of equitable relief.
(kk) The
Company has complied with the requirements of Rule 433 under the
Securities Act with respect to each Issuer Free Writing Prospectus
including, without limitation, all prospectus delivery, filing,
record retention and legending requirements applicable to any such
Issuer Free Writing Prospectus. The Company has not (i) distributed
any offering material in connection with the Offering other than
the Pricing Prospectus, the Prospectus and any Issuer Free Writing
Prospectus set forth in Annex IV hereto, or (ii) filed, referred
to, approved, used or authorized the use of any “free writing
prospectus” as defined in Rule 405 under the Securities Act
with respect to the Offering or the Shares, except for any Issuer
Free Writing Prospectus set forth in Annex IV hereto.
(ll) Commencing
with its taxable year ended December 31, 1998, the Company has
been, and upon the sale of the Shares, the Company will continue to
be organized and operated in conformity with the requirements for
qualification and taxation as a real estate investment trust (a
“REIT”) under the Internal Revenue Code of 1986, as
amended (the “Code”), and the Company’s proposed
method of operation as described in the Prospectus will enable it
to continue to meet the requirements for qualification and taxation
as a REIT under the Code, and no actions have been taken (or not
taken which are required to be taken) which, in of themselves,
would cause such qualification to be lost.
(mm) Commencing with its
taxable year ended December 31, 2001, Carbon Capital, Inc., a
corporation organized and existing under the laws of the State of
Maryland, has operated in such a manner as to qualify to be taxed
as a REIT under the Code.
(nn) The
Company and the Subsidiaries are in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental Laws”), (ii) have
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses, and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, individually or in the aggregate, have a
Material Adverse Effect on the Company and the Subsidiaries taken
as a whole.
(oo) There
are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating
expenditures required for clean up, closure of properties or
compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties) which would, individually
or in the aggregate, have a Material Adverse Effect.
(pp) Each
of the mortgages, deeds of trust or other security agreements
executed and/or delivered by or to the Company or the Subsidiaries,
as applicable, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time,
(i)
11
is accurate, correct and complete
and enforceable in accordance with its terms, subject to principles
of equity and bankruptcy, insolvency, moratorium and other laws
generally applicable to creditors’ rights and the enforcement
of debtors’ obligations and (ii) duly and properly executed
by the Company or the Subsidiaries. The Company is not aware of any
facts that would impair the validity or value of any of such
mortgages, deeds of trust or other security agreements and such
mortgages, deeds of trust or other security agreements are not the
subject of any breach, default or event, that with the passage of
time or the giving of notice or both, would result in such a breach
or default.
2.
Representations and Warranties of the Manager . The Manager
represents and warrants to, and agrees with, each of the
Underwriters that:
(a) The
information in the section “About the Manager”
regarding the Manager in the Pricing Prospectus and the Prospectus
is true and correct in all material respects.
(b)
