SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 2, 1999
ANTHRACITE CAPITAL, INC.
(Exact name of Registrant as Specified in Charter)
Maryland 001-13937 13-397-8906
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
345 Park Avenue, New York, NY 10154
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 409-3333
N/A
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
The Company announced on December 2, 1999 the purchase by RECP
II Anthracite, LLC, a wholly-owned subsidiary of DLJ Real
Estate Capital Partners II, L.P. of 1,200,000 shares of its
10.5% Series A Senior Cumulative Convertible Redeemable
Preferred Stock for an aggregate purchase price of $30 million.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
99.1 Articles Supplementary of Anthracite Capital, Inc.,
dated December 2, 1999.
99.2 Securities Purchase Agreement by and among the Company
and RECP II Anthracite, LLC, dated December 2, 1999.
99.3 Registration Rights Agreement by and among the Company
and RECP II Anthracite, LLC, dated December 2, 1999.
99.4 Press Release issued by the Company, dated December 2,
1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ANTHRACITE CAPITAL, INC.
By: /s/ Richard M. Shea
---------------------------
Name: Richard M. Shea
Title: Chief Operating Officer and
Chief Financial Officer
Dated: December 14, 1999
EXHIBIT INDEX
Designation Description
99.1 Articles Supplementary of Anthracite Capital, Inc.,
dated December 2, 1999.
99.2 Securities Purchase Agreement by and among the Company
and RECP II Anthracite, LLC, dated December 2, 1999.
99.3 Registration Rights Agreement by and among the Company
and RECP II Anthracite, LLC, dated December 2, 1999.
99.4 Press Release issued by the Company, dated December 2,
1999.
Exhibit 99.1
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ARTICLES SUPPLEMENTARY
OF
ANTHRACITE CAPITAL, INC.
Anthracite Capital, Inc., a Maryland corporation (the "Corporation"),
certifies as follows:
FIRST: Under the authority set forth in Article FIFTH of the
charter of the Corporation, as heretofore amended (which, as
hereinafter amended or restated from time to time is, together with
the Articles Supplementary, herein called the "Articles"), the Board
of Directors of the Corporation on September 16, 1999, by resolution
duly designated and classified 1,200,000 of the authorized, but
unissued shares of the preferred stock, par value $.001 per share, of
the Corporation as the "10.5% Series A Senior Cumulative Convertible
Redeemable Preferred Stock" (the "Convertible Preferred Stock") and
has authorized the issuance and sale of such shares.
SECOND: The preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and
other provisions of shares of Convertible Preferred Stock shall be
included as part of Article FIFTH of the Articles and are as follows:
1. Designation: A series of Preferred Shares, designated as "10.5%
Series A Senior Cumulative Convertible Redeemable Preferred Stock," is
hereby established. The number of shares constituting such series shall be
1,200,000.
2. Voting Rights. Subject to Section 18, the holders of shares of
the Convertible Preferred Stock shall be entitled to vote as a single class
with the holders of Common Stock (defined below) on all matters submitted
to a vote of the holders of Common Stock, and shall be entitled to such
number of votes per share on each matter submitted to a vote of the holders
of Common Stock as shall equal the number of whole shares of Common Stock
into which such shares of the Convertible Preferred Stock are convertible
as of the record date for the determination of stockholders entitled to
vote.
3. Dividends.
(a) From the date of original issuance of Convertible Preferred
Stock (the "Issue Date"), the holders of the outstanding shares of
Convertible Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available
therefor, dividends payable in cash on each share of Convertible Preferred
Stock in an amount per annum equal to $2.625, of which an amount equal to
$.65625 will be payable quarterly. Dividends shall be cumulative, whether
or not declared, on a daily basis from the Issue Date and shall be payable
quarterly in arrears on each of January 5, April 5, July 5 and October 5
(each a "Dividend Payment Date"). The first Dividend Payment Date after
the Issue Date with respect to the quarter ended December 31, 1999 shall be
January 5, 2000 and the dividend payment on such date shall be $.21875 per
share. If dividends are payable on a date that is not a business day,
payment will be made on the next business day (and without any interest or
other payment in respect of such delay). The amount of the dividends
payable for any period less than a calendar quarter will be computed on the
basis of a 360-day year of 12 30-day months, based on the actual number of
days elapsed. All unpaid dividends will compound on a quarterly basis at a
rate of 10.5% per annum. Such dividends shall commence to accrue on each
share of Convertible Preferred Stock from the date of issuance, whether or
not authorized by the Board of Directors, and whether or not there are
profits, surplus or other funds of the Corporation legally available for
the payment of dividends, and such dividends shall continue to accrue
thereon until all amounts payable upon liquidation or redemption of the
Convertible Preferred Stock are paid in full in cash or upon the conversion
of the Convertible Preferred Stock into Common Stock as provided in Section
5. If the dividends in respect of any previous or current quarter shall
not have been paid, at the rate provided herein, or a sum sufficient for
the payment thereof shall not have been set aside for payment, any and all
arrearages in the payment thereof shall be paid in full before (i) any
dividends or other distributions shall be declared and set aside for
payment in respect of any class or series of capital stock of the
Corporation that ranks junior to or on a parity with (subject to the last
clause of this Section 3(a)) the Convertible Preferred Stock with respect
to the right to receive dividends or distributions from the Corporation
(including, without limitation, the Common Stock) or (ii) any class or
series of capital stock of the Corporation that ranks junior to or on a
parity with the Convertible Preferred Stock with respect to the right to
receive dividends or distributions from the Corporation or upon liquidation
is redeemed, repurchased or otherwise acquired in whole or in part by the
Corporation for any consideration (or any moneys are paid to or made
available for a sinking fund for the redemption of any such capital stock),
unless at the same time or prior thereto all accrued but unpaid dividends
on any then-outstanding shares of Convertible Preferred Stock for all
previous quarters and for the current quarter shall be declared, set aside
and paid in full to the holders thereof; provided, that if the Corporation
pays less than the total amount of dividends then accrued with respect to
the Convertible Preferred Stock and any class or series of capital stock of
the Corporation that ranks on a parity with the Convertible Preferred
Stock, such payment shall be made ratably among the shares of Convertible
Preferred Stock and all classes or series of capital stock of the
Corporation that rank on a parity with the Convertible Preferred Stock in
such manner so that the amount of distributions paid per share on such
shares shall in all cases bear to each other the same ratio that accrued
but unpaid distributions per share on such shares (which shall not include
any accumulation in respect of unpaid distributions for prior distribution
periods if such shares do not have cumulative distribution rights) bear to
each other.
(b) Any distribution payment made on shares of Convertible
Preferred Stock shall first be credited against the earliest accrued but
unpaid distribution due with respect to shares of Convertible Preferred
Stock which remains payable.
4. Liquidation of the Corporation.
(a) Liquidation Preference. Upon any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, the
holders of the shares of Convertible Preferred Stock shall be entitled to
receive, before any distribution or payment is made on any shares of any
class or series of the capital stock of the Corporation ranking junior to
the Convertible Preferred Stock with respect to the right to receive
distributions upon the liquidation, dissolution or winding up of the
Corporation (including, without limitation, the Common Stock), a per share
amount equal to the sum of (i) $27.75 (the "Liquidation Preference"), and
(ii) an amount equal to the amount of all accrued but unpaid dividends
thereon and unpaid interest, computed up to the date that payment thereof
is made available. In the event that there are not sufficient assets
available to permit payment in full of the Liquidation Preference and all
accrued but unpaid dividends thereon and unpaid interest, then such
remaining assets shall be distributed ratably to the holders of shares of
the Convertible Preferred Stock in proportion to the number of shares held
by each such holder. In the event that, upon any such voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, the
available assets of the Corporation are insufficient to pay the amount of
the liquidation distributions on all outstanding shares of Convertible
Preferred Stock and the corresponding amounts payable on all shares of
capital stock ranking on a parity with the Convertible Preferred Stock with
respect to distributions upon liquidation, dissolution or winding up, the
holders of shares of Convertible Preferred Stock and capital stock ranking
on a parity with the Convertible Preferred Stock with respect to
distributions upon such event of liquidation, shall share ratably in any
such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.
Except as provided in the immediately preceding sentence, unless and until
the Liquidation Preference and such accrued but unpaid dividends and unpaid
interest has been paid in full to the holders of shares of the Convertible
Preferred Stock, no dividends or distributions will be made to the holders
of the Common Stock or any other stock of the Corporation ranking junior to
or on a parity with the Convertible Preferred Stock as to liquidations and
no payments shall be made (or monies put aside) to redeem, repurchase or
otherwise acquire, with respect to any sinking fund by the Corporation, any
class or series of capital stock of the Corporation. The liquidation
preference of the outstanding Convertible Preferred Stock will not be added
to the liabilities of the Corporation for purposes of determining whether
under Maryland law, a distribution by dividend, redemption or otherwise,
may be made to stockholders of the Corporation whose preferential rights
upon liquidation, dissolution or winding up of the affairs of the
Corporation, either voluntarily or involuntarily, are junior to those of
holders of Convertible Preferred Stock.
(b) Notice of Liquidation. The Corporation shall provide each
holder of record of shares of the Convertible Preferred Stock with written
notice of any proposed liquidation, dissolution or winding up of the
Corporation, which notice shall set forth the amount of the Liquidation
Preference and all accrued but unpaid dividends thereon and unpaid interest
per share and the date on which payments of the Liquidation Preference and
all accrued but unpaid dividends thereon and unpaid interest shall be
payable, not less than 20 days prior to the payment date stated therein,
such notice to be addressed to each such holder at its address as shown by
the records of the Corporation.
5. Conversions.
(a) Automatic Conversion. Beginning on the third anniversary of
the Issue Date, each outstanding share of the Convertible Preferred Stock
shall be converted automatically, without any action on the part of the
holder thereof or the Corporation, and whether or not any of the
certificates for such shares are surrendered to the Corporation,
immediately upon the occurrence of the Automatic Conversion Event, into the
number of shares of Common Stock into which such share of the Convertible
Preferred Stock could have been converted as of the date of the Automatic
Conversion Event pursuant to Section 5(b). Upon the occurrence of an
Automatic Conversion Event, the holders of shares of the Convertible
Preferred Stock shall be obligated to surrender to the Corporation the
certificates evidencing such shares at the principal office of the
Corporation (or at such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the holders of the
Convertible Preferred Stock). The Corporation shall then issue and deliver
to each such holder a certificate or certificates for the number of shares
of the Common Stock into which the shares of the Convertible Preferred
Stock so surrendered were convertible on the date of the Automatic
Conversion Event.
(b) Right to Convert. Subject to the adjustments contemplated
by Section 6 hereof, shares of the Convertible Preferred Stock may be
converted, in whole or in part, at any time after the issuance thereof
until the close of business on the last Trading Day (defined below) prior
to the date fixed for redemption of such shares or the liquidation,
dissolution or winding up of the Corporation, by the holder thereof,
without the payment of any additional consideration, in the form of shares
of fully paid and nonassessable shares of Common Stock. For purposes
hereof, the "Conversion Price" per share shall be equal to $7.35 per share,
subject to adjustment from time to time in accordance with the provisions
of Section 6. Each share of Convertible Preferred Stock shall be
convertible into the number of shares of Common Stock determined by
dividing $25.00 by the Conversion Price (initially equivalent to a
conversion ratio of 3.4014 shares of Common Stock for each Convertible
Preferred Share). Upon conversion, any accrued and unpaid dividends and
interest shall be payable in the form of either shares of Common Stock
(valued at the Closing Prices of the Common Stock on the business day prior
to the date of conversion) or cash as the Corporation may decide.
(c) Exercise of Right to Convert. The right to convert the
shares of the Convertible Preferred Stock into shares of the Common Stock
set forth in Section 5(b) above shall be exercised by the holder of
Convertible Preferred Stock only by surrendering to the Corporation for
that purpose the certificate or certificates representing the shares to be
converted at its principal office (or at such other office or agency of the
Corporation as the Corporation may designate by notice in writing to the
holders of the Convertible Preferred Stock) at any time during its usual
business hours, accompanied by written notice to the Corporation stating
that the holder elects to convert all or a stated number of shares of the
Convertible Preferred Stock into shares of the Common Stock and identifying
the name or names (with address and social security or taxpayer
identification number) in which the certificate or certificates for shares
of the Common Stock issuable upon such conversion shall be issued and the
address at which such certificate or certificates should be delivered
(each, a "Conversion Notice").
(d) Issuance of Certificates. As promptly as practicable after
the receipt by the Corporation of a Conversion Notice but in no event later
than five (5) business days thereafter, and the surrender of the
certificate or certificates for the share or shares of Convertible
Preferred Stock to be converted, the Corporation shall issue and deliver,
or cause to be issued and delivered, to the holder at the address specified
in the Conversion Notice, (i) a certificate or certificates evidencing the
number of duly authorized and issued, fully paid and nonassessable shares
of the Common Stock to which the holder of shares of the Convertible
Preferred Stock so converted shall be entitled and (ii) if less than the
full number of shares of the Convertible Preferred Stock evidenced by the
surrendered certificate or certificates are to be converted, a new
certificate or certificates, for the number of shares of the Convertible
Preferred Stock evidenced by such surrendered certificate or certificates
less the number of shares of the Convertible Preferred Stock converted into
shares of the Common Stock of the Corporation.
(e) Effect of Conversion.
(1) Any conversion of shares of the Convertible Preferred
Stock made pursuant to Section 5(b) shall be deemed to have been made at
the close of business on the date the Corporation receives the certificate
or certificates evidencing the shares of the Convertible Preferred Stock
being converted and the Conversion Notice, and the rights of the holder
thereof with respect to the shares of the Convertible Preferred Stock being
converted shall cease, except that the holder thereof shall thereafter have
and retain (i) the right to receive shares of the Common Stock (and
certificates therefor) in respect of the converted shares of the
Convertible Preferred Stock in accordance with Section 5(d), and (ii) the
right to vote such shares of the Convertible Preferred Stock in connection
with any matters submitted to a vote of the stockholders or to receive
distributions with respect to such shares of Convertible Preferred Stock,
in either case as to which the applicable record date established by the
Board of Directors for determining stockholders entitled to vote on such
matter or entitled to receive distributions, as the case may be, shall
occur prior to the date on which such holder shall have delivered the
Conversion Notice to the Corporation and surrendered to the Corporation the
certificate or certificates evidencing the shares of the Convertible
Preferred Stock to be converted. The Person or Persons entitled to receive
the shares of the Common Stock upon the conversion of the shares of the
Convertible Preferred Stock shall be treated for all purposes as having
become the record holder of such shares of the Common Stock as of the close
of business on the date such shares are converted.
(2) Upon the conversion of any shares of the Convertible
Preferred Stock into shares of the Common Stock of the Corporation, each
share of the Common Stock issued upon the conversion thereof shall be duly
authorized, fully paid and non-assessable.
(f) No Fractional Shares. No fractional shares or scrip
representing fractional shares shall be issued upon conversion of any
shares of the Convertible Preferred Stock into Common Stock. If any
fractional share of the Common Stock would be issuable upon the conversion
of any share or shares of the Convertible Preferred Stock but for the
provisions of the first sentence of this Section 5(f), the Corporation, in
lieu of delivering such fractional share, shall pay to the holder of the
shares of the Convertible Preferred Stock surrendered for conversion an
amount in cash equal to the Current Market Price (as defined below) of such
fractional share.
(g) Notwithstanding any other provision hereof, if a conversion
of shares of Convertible Preferred Stock is to be made in connection with a
redemption of such shares, a Change of Control, or the liquidation,
dissolution or winding up of the Corporation, such conversion may, at the
election of any holder tendering Convertible Preferred Stock for
conversion, be conditioned upon the consummation of such event, in which
case such conversion shall not be deemed to be effective until the
satisfaction of such conditions.
6. Adjustments to the Conversion Price.
(a) Issuance of Additional Shares. Except as otherwise provided
in Section 6(h), if the Corporation shall issue or sell any shares of the
Common Stock without consideration or for consideration per share less than
the Current Market Price, then, and in each such event, the Conversion
Price shall be adjusted, effective as of the close of business on the date
of such issuance or sale, to an amount determined by multiplying the
Conversion Price in effect immediately prior to such issuance or sale, by
the following fraction:
X + Y
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X + Z
Where:
"X" equals the sum of (i) the number of shares of Common
Stock issued and outstanding immediately prior to such
issuance or sale, (ii) the number of shares of Common
Stock issuable upon conversion of any shares of the
Convertible Preferred Stock and any other class or
series of convertible securities of the Corporation
issued and outstanding immediately prior to such
issuance or sale and (iii) the number of shares of
Common Stock issuable upon the exercise of any options
or warrants to purchase shares of the Common Stock or
securities convertible into or exchangeable for shares
of the Common Stock, or other securities that are
convertible into or exchangeable for shares of the
Common Stock, issued and outstanding immediately prior
to such issuance or sale (collectively, the "Common
Stock Equivalents");
"Y" equals the number of shares of Common Stock which the
aggregate consideration received by the Corporation for
the total number of shares of the Common Stock issued
without consideration or for consideration per share
less than the Current Market Price would purchase at
the Current Market Price in effect immediately prior to
such issuance or sale; and
"Z" equals the number of additional shares of Common Stock
issued or deemed issued by the Corporation without
consideration or for consideration per share less than
the Current Market Price.
For the purpose of any computation of the Current Market Price
per share of Common Stock, the "Current Market Price" per share of Common
Stock on any date in question shall be deemed to be the average of the
daily Closing Prices for the five Trading Days ending the earlier of the
day in question and, if applicable, the day before the "ex" date with
respect to the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "ex" date means the first date on
which the Common Stock trades regular way on the New York Stock Exchange
(the "NYSE") or on such successor securities exchange as the Common Stock
may be listed or in the relevant market from which the Closing Prices were
obtained without the right to receive such issuance or distribution.
"Closing Price" of any share of Common Stock on any day shall
mean the last reported sale price regular way on such day or, in case no
such sale takes place on such day, the average of the reported closing bid
and asked prices regular way of such common stock, in each case on the NYSE
Composite Tape or, if the Common Stock is not listed or admitted to trading
on such exchange, on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or, if not listed or
admitted to trading on any national securities exchange, the average of the
closing bid and asked prices as furnished by any NYSE member firm selected
from time to time by the Board of Directors of the Corporation for that
purpose or, if not so available in such manner, as otherwise determined in
good faith by the Board of Directors.
"Trading Day" shall mean a day on which securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
(b) Issuance of Options or Convertible Securities, Etc. For
purposes of Section 6(a), in case at any time the Corporation shall in any
manner grant, issue or sell (whether directly or by assumption in a merger
or otherwise) any (i) warrants or other rights to subscribe for or to
purchase, or any options for the purchase of (such warrants, rights or
options hereinafter being referred to as "Options"), any shares of the
Common Stock or any stock or other securities convertible into or
exchangeable for shares of the Common Stock (such convertible or
exchangeable stock or securities being hereinafter referred to as
"Convertible Securities"), or (ii) any Convertible Securities, whether or
not such Options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the Net Aggregate Consideration
Per Share to be received by the Corporation for the shares of the Common
Stock issuable upon exercise thereof or the exchange or conversion thereof
shall be less than the Current Market Price in effect immediately prior to
the time of the granting, issuance or sale of such Options or Convertible
Securities, then the total maximum number of shares of Common Stock
issuable upon (x) the exercise of such Options or upon conversion or
exchange of the total maximum amount of such Convertible Securities
issuable upon the exercise of such options or (y) the conversion or
exchange of all such Convertible Securities, shall be deemed to have been
issued, as of the date of granting, issuance or sale of such Options or
Convertible Securities, for such Net Aggregate Consideration Per Share. No
adjustment to the Conversion Price shall be made upon the actual issuance
of shares of the Common Stock upon (A) the exercise of any Options or upon
the issuance of Convertible Securities upon exercise of any Options (or
upon the actual issuance of any shares of the Common Stock upon conversion
or exchange of Convertible Securities) or (B) conversion or exchange of
such Convertible Securities if an adjustment shall have been made upon the
issuance of any such Options or Convertible Securities.
(c) Net Aggregate Consideration Per Share. For purposes of
Section 6(b), the "Net Aggregate Consideration Per Share" with respect to
any Options or Convertible Securities shall mean the amount which is equal
to the total amount of consideration, if any, received by the Corporation
for the issuance of such Options or Convertible Securities, plus the
minimum amount of consideration, if any, payable to the Corporation upon
exercise (plus, in the case of Options to subscribe for or acquire
Convertible Securities, the minimum aggregate of additional consideration,
if any, payable to the Corporation upon the issuance of such Convertible
Securities or upon the conversion or exchange thereof) or upon the
conversion or exchange of the Convertible Securities divided by the
aggregate number of shares of the Common Stock that would be issuable upon
(i) the exercise of such Options or upon the conversion or exchange of such
Convertible Securities issuable upon exercise of such Options or (ii)
conversion or exchange of such Convertible Securities.
(d) Consideration for Stock. In cases where any shares of
Common Stock, Options or Convertible Securities shall be issued or sold by
the Corporation for cash, the consideration received therefor shall be
deemed to be the amount received by the Corporation therefor, net of any
expenses incurred or any underwriting commissions or concessions paid or
allowed by the Corporation in connection therewith. In cases where any
shares of Common Stock, Options or Convertible Securities shall be issued
or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Corporation shall be deemed
to be the fair value of such consideration as determined in good faith by
the Board of Directors of the Corporation, net of deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed by
the Corporation in connection therewith. In case any Options shall be
issued in connection with the issue and sale of other securities of the
Corporation, together comprising one integral transaction in which no
specific consideration is allocated to such Options by the parties thereto,
such Options shall be deemed to have been issued for such consideration as
determined in good faith by the Board of Directors of the Corporation.
(e) Change in Option Price or Conversion Rate. Upon the
happening of any of the following events, namely, if the purchase price
provided for in any Option referred to in Section 5(b), the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in Section 5(b) or (d), or the rate at
which such Convertible Securities are convertible into or exchangeable for
Common Stock shall change at any time (including, but not limited to,
changes under or by reason of provisions designed to protect against
dilution), the Conversion Price in effect for the Convertible Preferred
Stock at the time of such event shall forthwith be readjusted to the
Conversion Price which would have been in effect at such time had such
Options or Convertible Securities still outstanding provided for such
changed purchase price, additional consideration or conversion rate, as the
case may be, at the time initially granted, issued or sold, but only if as
a result of such adjustment the Conversion Price then in effect hereunder
is thereby reduced; and on the expiration of any such Option or the
termination of any such right to convert or exchange such Convertible
Securities, the Conversion Price then in effect hereunder shall forthwith
be increased to the Conversion Price which would have been in effect at the
time of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such expiration
or termination, never been issued.
(f) Record Date. In case the Corporation shall take a record of
the holders of its Common Stock for the purpose of entitling them (i) to
receive a dividend or other distribution payable in Common Stock, Options
or Convertible Securities or (ii) to subscribe for or purchase Common
Stock, Options or Convertible Securities, then such record date shall be
deemed (but only to the extent that one of the preceding events actually
occurs) to be the date of the issue or sale of the shares of Common Stock
deemed to have been issued or sold upon the declaration of such dividend or
the making of such other distribution or the date of the granting of such
right of subscription or purchase, as the case may be.
(g) Certain Issuances of Stock Excepted. Anything contained
herein to the contrary notwithstanding, the Corporation shall not be
required to make any adjustment to the Conversion Price in the case of (i)
the conversion of shares of Convertible Preferred Stock into shares of
Common Stock, (ii) the issuance of shares of the Common Stock in connection
with the Automatic Conversion Event, (iii) the issuance to employees of the
Manager of options to purchase up to 500,000 shares of the Common Stock
pursuant to the Corporation's compensatory stock option plans approved by
the Board of Directors at a price not less than 95% of Current Market
Price, or the issuance of shares of the Common Stock upon the exercise of
any of such options or (iv) issuances pursuant to the Corporation's
Dividend Reinvest and Stock Purchase Plan.
(h) Calculation of Adjustments to Conversion Price. The
calculation by the Board of Directors of the Corporation of any adjustment
to the Conversion Price, made in good faith and in accordance with the
foregoing provisions of this Section 6, shall be final and binding on all
stockholders of the Corporation.
(i) Extraordinary Common Stock Events. In the event that the
Corporation shall (i) issue additional shares of the Common Stock or
Convertible Securities as a dividend or other distribution on outstanding
shares of the Common Stock, (ii) subdivide outstanding shares of the Common
Stock into a greater number of shares of the Common Stock, or (iii) combine
outstanding shares of the Common Stock into a smaller number of shares of
the Common Stock, then, and in each such event, the Conversion Price shall,
simultaneously with the happening of each such event, be adjusted by
multiplying the Conversion Price then in effect by a fraction, the
numerator of which shall be the number of shares of the Common Stock
outstanding immediately prior to such event and the denominator of which
shall be the number of shares of the Common Stock outstanding immediately
after such event.
7. Other Adjustments.
(a) In the event the Corporation shall make or declare, or fix a
record date for the determination of holders of shares of the Common Stock
entitled to receive, a dividend or other distribution payable in securities
of the Corporation other than shares of the Common Stock or in assets
(excluding cash dividends or distributions), then and in each such event,
adequate provision shall be made so that holders of shares of the
Convertible Preferred Stock shall be entitled to receive upon conversion
thereof, in addition to the number of shares of the Common Stock receivable
upon conversion thereof, an amount per share of Convertible Preferred Stock
equal to (i) the aggregate amount of capital stock, securities or other
assets, as the case may be, that would have been received per share of the
Common Stock by holders of the Convertible Preferred Stock had their shares
of Convertible Preferred Stock been converted into shares of the Common
Stock on the record date established by the Board of Directors of the
Corporation for determining stockholders entitled to receive such dividend
or distribution multiplied by (ii) the number of shares of the Common Stock
into which each share of the Convertible Preferred Stock could have been
converted on such record date. No adjustments or provision for adjustments
shall be made to the Conversion Price as a result of any of the events
described in this Section 7(a).
(b) If the shares of the Common Stock issuable upon the
conversion of the shares of the Convertible Preferred Stock shall be
changed into the same or a different number of shares of any other class or
classes or series of capital stock of the Corporation, whether by
recapitalization, reclassification or otherwise, then, and in each such
event, adequate provisions shall be made such that the holder of each share
of the Convertible Preferred Stock shall have the right thereafter to
convert such share into the kind and amount of shares of capital stock and
other securities and property receivable upon such reorganization,
reclassification or other change by holders of the number of shares of the
Common Stock into which such share of the Convertible Preferred Stock could
have been converted immediately prior to such recapitalization,
reclassification or other change. No adjustments or provision for
adjustments shall be made with respect to the Conversion Price as a result
of any of the events described in this Section 7(b).
(c) Except as otherwise provided in this Section 7(c), if, at
any time or from time to time, the Corporation shall be a party to a merger
or consolidation of the Corporation with or into another Person, a share
exchange involving the Corporation or shall sell, lease, exchange or
transfer all or substantially all of the property or assets of the
Corporation to any other Person, then, as a condition to the consummation
of such transaction, adequate provision shall be made so that each holder
of shares of the Convertible Preferred Stock shall thereafter be entitled
to receive, per share of Convertible Preferred Stock, upon conversion of
the shares of the Convertible Preferred Stock, (i) the number of shares of
capital stock or other securities or property of the Corporation, or of the
successor corporation, resulting from such merger, consolidation, share
exchange or sale, lease, exchange or transfer, that would have been
received per share of Common Stock by holders of shares of the Convertible
Preferred Stock had their shares of Convertible Preferred Stock been
converted into shares of the Common Stock immediately prior to the
consummation of such transaction multiplied by (ii) the number of shares of
the Common Stock into which each share of the Convertible Preferred Stock
could have been converted immediately prior to the consummation of such
transaction. No adjustments or provision for adjustments shall be made
with respect to the Conversion Price as a result of any of the events
described in this Section 7(c).
8. Reports of Adjustments. Upon any adjustment of the Conversion
Price or the number of shares of Common Stock into which the Convertible
Preferred Stock shall be convertible, or upon the occurrence of any other
event requiring adjustments pursuant to Section 7 hereof, then and in each
such case, the Corporation shall give written notice thereof to each holder
of shares of the Convertible Preferred Stock, by first class mail, postage
prepaid, addressed to each such holder at the address of such holder as
shown on the books of the Corporation, which notice shall state the
adjusted Conversion Price or the adjusted number of shares of Common Stock
into which the Convertible Preferred Stock shall be convertible (or which
shall describe the new stock, securities, cash or other property receivable
by such holder upon conversion of the Convertible Preferred Stock), as
applicable, resulting from such adjustment and setting forth in reasonable
detail the facts requiring such adjustment and the method upon which such
adjustment was made, and the effective date of such adjustment.
9. Notices. Whenever (i) the Corporation shall declare any dividend
upon the shares of its capital stock payable in cash or stock or other
securities or make any other distribution to the holders of shares of its
capital stock, (ii) the Corporation shall offer for subscription to the
holders of the shares of its capital stock any additional shares of stock
of any class or other rights, (iii) there shall be any capital
reorganization or reclassification of the capital stock of the Corporation,
or a consolidation or merger of the Corporation with or into, or a sale of
all or substantially all its assets to, another entity or entities, or (iv)
there shall be a liquidation, dissolution or winding up of the Corporation,
then, in each such event, the Corporation shall give, by first class mail,
postage prepaid, addressed to each holder of shares of the Convertible
Preferred Stock at the address of such holder as shown on the books of the
Corporation, at least 20 business days prior to the date hereinafter
specified, a notice stating (i) in the case of any dividend or distribution
referred to in clause (i) above, the date on which the books of the
Corporation shall close or a record shall be taken for determining
stockholders entitled to receive such dividend or distribution, (ii) in the
case of any reorganization, reclassification, consolidation, merger, share
exchange, sale or liquidation, dissolution or winding up of the
Corporation, the date on which the books of the Corporation shall close or
a record shall be taken for determining stockholders entitled to vote upon
such transaction and the date, if any is to be fixed, on which the holders
of shares of the Common Stock shall be entitled to exchange such shares for
securities or other property in connection with any such transaction.
10. Stock to be Reserved. The Corporation will at all times reserve
and keep available out of its authorized Common Stock, free from preemptive
rights, solely for the purpose of issuance upon the conversion of the
shares of the Convertible Preferred Stock as herein provided, such number
of shares of the Common Stock as shall then be issuable upon the conversion
of all outstanding shares of the Convertible Preferred Stock.
11. No Reissuance of Converted Shares. Each share of the Convertible
Preferred Stock converted by the holder thereof into shares of the Common
Stock as provided herein shall be canceled and retired and shall not be
reissued.
12. Issue Tax. The issuance of certificates for shares of Common
Stock upon conversion of the Convertible Preferred Stock shall be made
without charge to the holders thereof of any issuance or other tax in
respect thereof or other cost incurred by the Corporation in connection
with such conversion and the related issuance of shares of Common Stock;
provided, however, that the Corporation shall not be required to pay any
tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
holder of the Convertible Preferred Stock which is being converted.
13. Closing of Books. The Corporation will at no time close its
transfer books against the transfer of any shares of the Convertible
Preferred Stock or of any shares of the Common Stock issued or issuable
upon the conversion of the shares of the Convertible Preferred Stock in any
manner which interferes with the timely conversion of the shares of the
Convertible Preferred Stock, except as may otherwise be required to comply
with applicable securities laws.
14. Optional Redemption By the Company.
(a) At any time after the third anniversary of the Issue Date,
in accordance with the notice procedures set forth below, the Corporation
shall have the right, at its sole option and election, to redeem all but
not less than all outstanding shares of Convertible Preferred Stock held by
each holder thereof at a redemption price per share payable in cash equal
to the Liquidation Preference together with accrued but unpaid dividends
thereon and unpaid interest to the date fixed for redemption, provided,
that the average Closing Price per share of the Common Stock for the 90
days immediately prior to the date of such notice is at least 150% of the
applicable Conversion Price on the date of such notice.
(b) Notice of any redemption pursuant to this Section shall be
sent by or on behalf of the Corporation not less than 10 nor more than 60
business days prior to the date specified for redemption in such notice, by
first class mail, postage prepaid, to all holders of record of the
Convertible Preferred Stock at their last addresses as they shall appear on
the books of the Corporation; provided, however, that no failure to give
such notice or any defect therein or in the mailing thereof shall affect
the validity of the proceedings for the redemption of any shares of
Convertible Preferred Stock except as to the holder to whom the Corporation
has failed to give notice or except as to the holder to whom notice was
defective. In addition to any information required by law, such notice
shall state: (i) the redemption date, (ii) the redemption price, (iii) the
place or places where certificates for such shares are to be surrendered
for payment of the redemption price and (iv) that dividends on the shares
to be redeemed will cease to accumulate on the redemption date. Subject to
Section 4(b), upon the mailing of any such notice of redemption, the
Corporation shall become obligated to redeem at the time of redemption
specified thereon all shares called for redemption.
(c) If notice has been mailed in accordance with Section 14(b)
above and provided that the Corporation pays, or sets aside for payment,
the applicable redemption price, on or before the redemption date specified
in such notice, then, from and after the redemption date, dividends on the
shares of the Convertible Preferred Stock so called for redemption shall
cease to accumulate, and said shares shall no longer be deemed to be
outstanding and shall not have the status of shares of Convertible
Preferred Stock, and all rights of the holders thereof as stockholders of
the Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender, in accordance with said
notice, of the certificates for any shares so redeemed (properly endorsed
or assigned for transfer, if the Corporation shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at
the redemption price.
15. Optional Redemption by the Holders.
(a) On the seventh anniversary of the Issue Date and at any time
thereafter, each holder shall have the right to cause the Corporation to
redeem all of its shares of Convertible Preferred Stock then outstanding,
at a redemption price per share payable in cash equal to the Liquidation
Preference, plus accrued but unpaid dividends thereon and unpaid interest
to the date fixed for redemption. To effect such redemption, a redeeming
holder shall notify the Corporation in writing of its election to exercise
its redemption right; provided, that a redeeming holder may only send a
redeeming notice on the date which is five months prior to the seventh
anniversary of the Issue Date or at any time thereafter. Upon receipt of
such notice, the Corporation shall promptly notify the remaining holders of
Convertible Preferred Stock and shall set the applicable redemption date,
which redemption date shall be no later than five months following the
Corporation's receipt of such notice. If notice has been mailed and
provided that the Corporation pays, or sets aside for payment, the
applicable redemption price, on or before the redemption date as set by the
Corporation, then, from and after the redemption date, dividends on the
shares of the Convertible Preferred Stock so called for redemption shall
cease to accumulate, and said shares shall no longer be deemed to be
outstanding and shall not have the status of shares of Convertible
Preferred Stock, and all rights of the holders thereof as stockholders of
the Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender, in accordance with said
notice, of the certificates for any shares so redeemed (properly endorsed
or assigned for transfer, if the Corporation shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at
the redemption price. Holders electing to have their shares redeemed
pursuant to this Section 15(a) will be required to surrender the
certificate or certificates representing such shares to the Corporation at
the principal office of the Corporation prior to the close of business on
the third business day prior to the date of such redemption.
(b) Upon the occurrence of a Change of Control, each holder will
have the right to require that the Corporation purchase for cash all or a
portion of such holder's Convertible Preferred Stock at a purchase price
equal to the Liquidation Preference, plus accrued but unpaid dividends
thereon and unpaid interest to the date of purchase. As soon as
practicable following the earlier of the date the Corporation obtains
actual knowledge that a Change of Control has occurred or will occur
(subject to the Corporation's duties to maintain the confidentiality of a
prospective Change of Control), the Corporation must send, by first class
mail, a notice to each holder of Convertible Preferred Stock with all
relevant information concerning such Change of Control, which notice shall
govern the terms of the purchase of such shares. Such notice shall state,
among other things, the purchase date, which must be no later than the
earlier of ten (10) business days from the date such notice is mailed or
the date of the consummation of a prospective Change of Control, other than
as may be required by law. Such notice shall be mailed by first class
mail, postage prepaid, to all holders of record of the Convertible
Preferred Stock at their last addresses as they shall appear on the books
of the Corporation; provided, however, that no failure to give such notice
or any defect therein or in the mailing thereof shall affect the validity
of the proceedings for repurchase of any shares of Convertible Preferred
Stock except as to the holder to whom the Corporation has failed to give
notice or except as to the holder to whom notice was defective. Each
holder who wishes to exercise its right of redemption pursuant to this
Section 15(b) shall notify the Corporation in writing of its exercise to
later than ten (10) business days after receipt of notice from the
Corporation. Holders electing to have shares of Convertible Preferred
Stock purchased pursuant to this Section 15(b) will be required to
surrender the certificate or certificates representing such shares of
Convertible Preferred Stock to the Corporation at the address specified in
the Corporation's notice prior to the close of business on the purchase
date. The Corporation will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934 and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Convertible Preferred Stock
upon the occurrence of a Change of Control. To the extent that the
provisions of any securities laws or regulations conflict with this Section
15(b), the Corporation shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under
this Section 15(b) by virtue thereof. Any notice by holders of Convertible
Preferred Stock electing redemption pursuant to this Section 15(b) can be
conditioned upon the occurrence of the Change of Control.
(c) If the funds of the Corporation legally available for
redemption of Convertible Preferred Stock pursuant to Sections 15(a), 15(b)
or 18(c) are insufficient to redeem the total number of outstanding shares
of Convertible Preferred Stock entitled to redemption, the Corporation
shall redeem only such number of shares of Convertible Preferred Stock as
may be allowed out of funds legally available for redemption of such
shares. In such event, the Corporation shall select the shares for
redemption on a pro rata basis for each holder based on its percentage of
Convertible Preferred Stock held. At any time thereafter when additional
funds of the Corporation are legally available for the redemption of
Convertible Preferred Stock, such funds will be used at the earliest
permissible time, to redeem the balance of such shares, or such portion
thereof for which funds are then legally available.
16. Rank. The shares of the Convertible Preferred Stock shall rank
prior to all shares of any other class or series of capital stock of the
Corporation, unless such other class or series by its terms ranks senior to
the shares of the Convertible Preferred Stock, with respect to voting
powers, preferences and relative, participating, optional and other special
rights of the shares of such series and the qualifications, limitations and
restrictions thereof, including, without limitation, with respect to the
payment of dividends and the distribution of assets, whether upon
liquidation or otherwise.
17. Board Representation.
(a) The holders of the Convertible Preferred Stock shall have
the exclusive right to nominate and elect one member of the Corporation's
Board of Directors on or after the Issue Date at any annual or special
meeting of the stockholders of the Corporation, at any special meeting
called by the holders of at least 10% of the outstanding shares of
Convertible Preferred Stock or by a written consent in lieu of a meeting
undertaken by the holders of at least a majority of the outstanding shares
of Convertible Preferred Stock. Such member shall become a member of the
Corporation's Board of Directors and shall (subject to the provisions of
this Section 17) be subject to the same provisions of the Corporation's
Bylaws as other members of such class.
(b) If the Corporation shall fail, (i) within 60 days after any
Dividend Payment Date set forth in Section 3 hereof, to pay in full two
consecutive dividends on the Convertible Preferred Stock, or (ii) to redeem
shares of the Convertible Preferred Stock upon the redeeming holder's
election pursuant to Sections 15 or 18 hereof, then the holders of the
Convertible Preferred Stock shall have the right to elect a majority of the
members of the Board of Directors of the Corporation at any annual or
special meeting of stockholders, at any special meeting called by the
holders of record of at least 10% of the Convertible Preferred Stock or by
a written consent in lieu of a meeting undertaken by the holders of at
least a majority of the outstanding shares of Convertible Preferred Stock
until (i) all such distributions have been declared and paid or set aside
for payment or (ii) all shares to be redeemed have been redeemed in full.
The term of office of all directors so elected will terminate with the
termination of such voting rights, which will be such time as (i) all
accrued and unpaid dividends are paid in cash or (ii) all shares to be
redeemed have been redeemed in full.
(c) Any director elected by the holders of the Convertible
Preferred Stock may be removed at any time with or without cause by and
only by the vote or written consent of the holders of a majority of the
shares of Convertible Preferred Stock then outstanding at any annual or
special meeting of the stockholders of the Corporation, at any special
meeting called by the holders of at least 10% of the outstanding shares of
Convertible Preferred Stock or by a written consent in lieu of a meeting
undertaken by the holders of at least a majority of the outstanding shares
of Convertible Preferred Stock, and any vacancy occurring by reason of such
removal or by reason of death, resignation or inability to serve of any
director so elected, shall be filled by and only by a vote or written
consent of the holders of a majority of the Convertible Preferred Stock
then outstanding at any annual or special meeting of the stockholders of
the Corporation, at any special meeting called by the holders of at least
10% of the outstanding shares of Convertible Preferred Stock or by a
written consent in lieu of a meeting undertaken by the holders of at least
a majority of the outstanding shares of Convertible Preferred Stock. Any
director so elected under this paragraph shall serve until his or her
successor is duly elected and qualified at or his or her earlier death,
resignation or removal as provided herein.
18. Covenants.
(a) The Corporation may not, without the consent of the holders
of a majority of the shares of Convertible Preferred Stock, (i) issue any
class or series of equity security ranking senior to or on a parity with
the Convertible Preferred Stock as to payment of dividends or as to
payments on any liquidation, dissolution or winding up of the Corporation,
(ii) enter into any agreement that would restrict the Corporation's ability
to perform its obligations under Section 4 of the Securities Purchase
Agreement, (iii) amend its charter or Bylaws in any manner which would
materially impair or reduce the rights of the holders of the Convertible
Preferred Stock, (iv) make any single investment or series of related
investments in an amount exceeding $50 million in market value (other than
investments in investment grade assets), (v) acquire or merge with or into
or consolidate with another entity, the value of whose common stock equity
and equity of securities convertible into common stock equity at a price
lower than the market price of the common stock equity on the date of such
merger or consolidation is greater than $50 million, (vi) enter into any
transaction in excess of $5 million with an Affiliate of the Corporation,
except for any payments made pursuant to the Management Agreement between
the Corporation and BlackRock Financial Management, Inc. in effect on
December 2, 1999, (vii) make investments which are not consistent with the
Corporation's stated objective of investing in a diversified portfolio of
multifamily, commercial and residential mortgage loans, mortgage-backed
securities and other real estate-related assets in U.S. and non-U.S.
markets, (viii) amend, repeal or change, directly or indirectly, any of the
provisions of these Articles Supplementary, including the authorization,
creation or issuance of additional or new classes or series of shares of
Convertible Preferred Stock, (ix) amend Article II, Section 4.1.2 or
Section 4.2 of the Articles, (x) increase the number of members of the
Corporation's Board of Directors except in connection with an acquisition
of a business, a Change of Control or an investment by a third party (that
is not an affiliate of the Corporation or the Manager) in the Corporation
pursuant to which such third party is granted the right to elect members to
the Board of Directors, or (xi) pay any dividends in the course of any
fiscal year which, in the aggregate, exceed the greater of either the
Corporation's tax basis income or GAAP income for such year (except to the
extent necessary to preserve the Corporation's election to be subject to
tax as a real estate investment trust within the meaning of Sections 856-
860 of the Code (as hereinafter defined).
(b) As long as any shares of Convertible Preferred Stock are
outstanding, the Corporation shall comply with all of the following
financing requirements:
The ratio of the Corporation's Indebtedness to the
Corporation's book net worth (calculated in accordance with generally
accepted accounting principles ("GAAP")) shall not exceed the lesser of (x)
4.5 to 1.0 and (y) the Weighted Average Leverage Limit, calculated on the
last day of each calendar quarter. "Weighted Average Leverage Limit"
shall be determined by taking the sum of (A), (B) and (C), described below,
and dividing that result by the aggregate principal balance of the
Corporation's assets.
(A) The product of (i) TWO, and (ii) the book value of
the Corporation as determined under GAAP (the "GAAP Book Value") of
Corporation's assets which are unrated securities, non-securitizable loans
and mezzanine loans.
(B) The product of (i) THREE, and (ii) the GAAP Book
Value of Corporation's assets which are non-investment grade securities and
securitizable whole loans.
(C) The product of (i) EIGHT, and (ii) the GAAP Book
Value of Corporation's assets which are investment grade securities;
The classification of the above referenced assets shall be made
by the Corporation.
(c) In the event that the Corporation fails to comply with any
of the covenants listed in Section 18 (a) or (b), each holder, subject to
the notification provisions and the Corporation's opportunity to remedy
such breach set forth below, will have the right to cause the Corporation
to redeem all of its shares of Convertible Preferred Stock at a redemption
price per share payable in cash equal to 110% of the Liquidation Preference
together with accrued but unpaid dividends thereon and unpaid interest to
the date fixed for such redemption ("Premium Redemption Price"). To effect
such a redemption, a redeeming holder shall notify the Corporation in
writing of the Corporation's breach of the covenant(s) set forth in Section
18 (a) or (b) and of its election to exercise its redemption right ("Notice
of Breach"). The Corporation shall have the opportunity to remedy such
breach for a period of 150 days following the Corporation's receipt of the
Notice of Breach. If the Corporation fails to remedy such breach during
the 150 days following the receipt of the Notice of Breach, the Corporation
shall redeem the electing holders' shares of Convertible Preferred Stock at
the Premium Redemption Price not later than the 150th day following the
Corporation's receipt of the Notice of Breach. Upon receipt of the Notice
of Breach, the Corporation shall promptly notify the remaining holders of
Convertible Preferred Stock. If notice has been mailed and provided that
the Corporation pays, or sets aside for payment, the applicable redemption
price, on or before the redemption date as set by the Corporation, then,
from and after the redemption date, dividends on the shares of the
Convertible Preferred Stock so called for redemption shall cease to
accumulate, and said shares shall no longer be deemed to be outstanding and
shall not have the status of shares of Convertible Preferred Stock, and all
rights of the holders thereof as stockholders of the Corporation (except
the right to receive from the Corporation the redemption price) shall
cease. Upon surrender, in accordance with said notice, of the certificates
for any shares so redeemed (properly endorsed or assigned for transfer, if
the Corporation shall so require and the notice shall so state), such
shares shall be redeemed by the Corporation at the redemption price.
Holders electing to have their shares redeemed pursuant to this Section
18(c) will be required to surrender the certificate or certificates
representing such shares to the Corporation at the principal office of the
Corporation prior to the close of business on the date of such redemption.
19. Right of First Offer.
(a) In the event a holder of Convertible Preferred Stock (the
"Selling Holder") intends to sell all or any portion of its shares (the
"Offered Shares"), it will first notify the Corporation in writing (the
"Offer Notice").
(b) The Offer Notice shall contain a written offer (the "Offer")
to sell the Offered Shares to the Corporation stating the price (the "Offer
Price") and the other material terms upon which the Selling Holder desires
to sell the Offered Shares. The Corporation may accept the Offer by giving
written notice thereof to the Selling Holder within twenty-five (25) days
of receipt of the Offer Notice (the "Acceptance"). The Corporation and the
Selling Holder must then close on such transaction within twenty-five (25)
days of receipt of the Acceptance, time being of the essence.
(c) Subject to paragraph (d) below, if the Offer contained in
the Offer Notice is not accepted in its entirety by the Corporation in
accordance with this Section, the Selling Holder may sell the Offered
Shares to any other Person (a "Third Party") without further restriction;
provided, that (i) such sale occurs within six months from the earlier of
the affirmative rejection of the Offer Notice by the Corporation and the
expiration of the 25-day period in which the Corporation may accept the
Offer Notice, (ii) the purchase price to be paid by such Third Party shall
be an amount equal to or greater than 92.5% of the Offer Price payable by
such Third Party in cash and (iii) the non-price related terms shall be
substantially similar to the Offer. After such six month period the
provisions of this Section will apply again.
(d) In connection with any permitted sale by a Selling Holder to
a Third Party, in accordance with the provisions of this Section, the
Corporation shall provide all information such Third Party reasonably
requests to make its investment decision and the officer and directors of
the Corporation and the Manager shall make themselves reasonably available
to answer questions and/or to meet with such Third Party to help promote
the sale of the Offered Shares.
20. Preemptive Rights.
(a) The Corporation shall not issue any New Securities (as
defined below) unless it first delivers to each holder of Convertible
Preferred Stock (each such holder being referred to in this Section 20 as a
"Holder") a written notice (the "Notice of Proposed Issuance") specifying
the type and total number of such New Securities that the Corporation then
intends to issue (the "Offered New Securities"), all of the terms,
including the price upon which the Corporation proposes to issue the
Offered New Securities and stating that the Holders shall have the right to
purchase the Offered New Securities in the manner specified in this Section
20 for the same price per share and in accordance with the same terms and
conditions specified in such Notice of Proposed Issuance.
(b) During the 30 consecutive day period commencing on the date
the Corporation delivers to all of the Holders the Notice of Proposed
Issuance (the "Exercise Period"), the Holders shall have the option to
purchase a portion of the Offered New Securities at the same price per
share and upon the same terms and conditions specified in the Notice of
Proposed Issuance. Each Holder electing to purchase Offered New Securities
must give written notice of its election to the Corporation prior to the
expiration of the Exercise Period.
(c) Each Holder shall have the right to purchase that number of
the Offered New Securities as shall be equal to the number of the Offered
New Securities multiplied by a fraction, the numerator of which shall be
the number of shares of Common Stock then held by such Holder plus all
shares of Common Stock issuable upon conversion of all Convertible
Securities then held by such Holder and the denominator of which shall be
the aggregate number of shares of Common Stock Deemed Outstanding (as
defined below). The amount of such Offered New Securities that each Holder
is entitled to purchase under this Section 20 shall be referred to as its
"Proportionate Share."
(d) If all of the Offered New Securities have not been purchased
by the Holders pursuant to Section 20(a)-(c) hereof, then the Corporation
shall have the right, until the expiration of 180 consecutive days
commencing on the first day immediately following the expiration of the
Exercise Period, to issue the Offered New Securities at not less, and on
terms no more favorable to the purchasers thereof, than the price and terms
specified in the Notice of Proposed Issuance. If for any reason the
Offered New Securities are not issued within such period and at such price
and on such terms, the right to issue in accordance with the Notice of
Proposed Issuance shall expire and the provisions of this Section 20 shall
continue to be applicable to the Offered New Securities.
21. Legends. Certificates representing the Convertible Preferred
Stock shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
APPLICABLE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED AS
COLLATERAL IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LENDING
ARRANGEMENT."
The legend set forth above shall be removed and the Corporation
shall issue a certificate without such legend to the holder of any
Convertible Preferred Stock upon which it is stamped, if, unless otherwise
required by applicable state securities laws, (a) such Convertible
Preferred Stock is sold pursuant to an effective registration statement
filed under the Securities Act of 1933 or otherwise may be sold pursuant to
Rule 144 of the Securities Act of 1933 without any restriction as to the
number of securities as of a particular date that can then be immediately
sold, or (b) such holder provides the Corporation with reasonable
assurances that such Convertible Preferred Stock can be sold pursuant to
Rule 144 of the Securities Act of 1933. The holder agrees to sell all
Convertible Preferred Stock, including those shares represented by a
certificate(s) from which the legend has been removed, in compliance with
applicable prospectus delivery requirements, if any.
Until (i) the Board of Directors of the Corporation determines it
is no longer in the best interests of the Corporation to attempt to, or
continue to, qualify as a REIT and (ii) there is an affirmative vote of not
less than two-thirds of all of the votes ordinarily entitled to be cast in
the election of directors, voting together as a single class approving the
determination of the Board of Directors set forth in clause (i) above, the
Convertible Preferred Stock shall bear a legend in substantially the
following form (and a stop-transfer order may be placed against transfer of
the certificates for such Convertible Preferred Stock):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER FOR THE PURPOSE OF THE COMPANY'S ELECTION TO BE
SUBJECT TO TAX AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"). SUBJECT TO THE EXEMPTIONS GRANTED
(I) UNDER THE SECURITIES PURCHASE AGREEMENT DATED DECEMBER 2, 1999, BETWEEN
THE COMPANY AND RECP II ANTHRACITE, LLC, A DELAWARE LIMITED LIABILITY
COMPANY ("RECP II"), A WHOLLY OWNED SUBSIDIARY OF DLJ REAL ESTATE CAPITAL
PARTNERS II, L.P. ("RECP") AND THAT CERTAIN LETTER FROM THE COMPANY TO RECP
II AND RECP DATED DECEMBER 2, 1999 REGARDING SUCH EXEMPTIONS OR (II)
PURSUANT TO SECTION 6.1.7 OF THE ARTICLES OF INCORPORATION OF THE COMPANY,
NO PERSON MAY (I) BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF COMMON
STOCK IN EXCESS OF 9.8% OF THE NUMBER OF OUTSTANDING SHARES OF COMMON
STOCK, (II) BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF ANY CLASS OR
SERIES OF PREFERRED STOCK IN EXCESS OF 9.8% OF THE NUMBER OF OUTSTANDING
SHARES OF SUCH CLASS OR SERIES OF PREFERRED STOCK, (III) BENEFICIALLY OWN
SHARES OF EQUITY STOCK THAT WOULD RESULT IN THE SHARES OF EQUITY STOCK
BEING BENEFICIALLY OWNED BY FEWER THAN 100 PERSONS (DETERMINED WITHOUT
REFERENCE TO ANY RULES OF ATTRIBUTION), OR (IV) BENEFICIALLY OWN OR
CONSTRUCTIVELY OWN SHARES OF EQUITY STOCK THAT WOULD RESULT IN THE COMPANY
BEING "CLOSELY HELD" WITHIN THE MEANING OF SECTION 856(H) OF THE CODE. ANY
PERSON WHO ATTEMPTS TO BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF
EQUITY STOCK IN EXCESS OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE
COMPANY IN WRITING. IF THE RESTRICTIONS ABOVE ARE VIOLATED, THE SHARES OF
EQUITY STOCK REPRESENTED HEREBY WILL BE TRANSFERRED AUTOMATICALLY AND BY
OPERATION OF LAW TO A TRUST AND SHALL BE DESIGNATED SHARES-IN-TRUST. ALL
CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED IN THE COMPANY'S
ARTICLES OF AMENDMENT AND RESTATEMENT FILED WITH THE DEPARTMENT OF
ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND ON MARCH 20, 1998, AS THE
SAME MAY BE FURTHER AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING
THE RESTRICTIONS ON TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH
STOCKHOLDER WHO SO REQUESTS."
22. Lost or Damaged Certificates. Upon receipt by the Corporation of
evidence of the loss, theft, destruction or mutilation of any Convertible
Preferred Stock Certificates representing shares of Convertible Preferred
Stock, and (in the case of loss, theft or destruction) of indemnity
reasonably satisfactory to the Corporation, and upon surrender and
cancellation of the Preferred Stock Certificate(s), if mutilated, the
Corporation shall execute and deliver new Preferred Stock Certificate(s) of
like tenor and date.
23. Certain Definitions. The following terms, whenever used in
capitalized form herein without definition, shall have the meanings
indicated below:
"Affiliate" means a Person who directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common
control with, the respective Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Automatic Conversion Event" shall mean the occurrence on or after the
date that is the third anniversary of the Issue Date of the closing of a
public offering of Common Stock pursuant to a registration statement filed
by the Corporation with the Securities and Exchange Commission pursuant to
which (i) the aggregate offering price is not less than $10 million and
(ii) the offering price per share is at least 150% of the then applicable
Conversion Price, subject to adjustments pursuant to Section 6 hereof.
"Change of Control" shall mean either (i) the acquisition by a person
or group of persons (as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934) of the right to elect a majority of the members of
the Corporation's Board of Directors, (ii) a change in the Manager, or
(iii) a sale of all or substantially all of the assets of the Corporation.
"Common Stock" shall mean and include the authorized Common Stock,
$.001 par value per share, as constituted as of the date hereof and any
other capital stock of any class of the Corporation hereafter authorized
which shall not be limited to a fixed sum or percentage of par value in
respect of the rights of the holders thereof to participate in dividends or
in the distribution of assets upon liquidation or dissolution of the
Corporation.
"Conversion Notice" shall have the meaning set forth in Section 4(c).
"Manager" shall mean BlackRock Financial Management Inc.,
("BlackRock").
"New Securities" shall mean (a) any shares of equity securities of the
Corporation, (b) or any rights, options, or warrants to purchase such
equity securities, and (c) securities of any type whatsoever that are, or
may become, convertible into, exercisable, exchangeable, or that carry
rights to subscribe for any such equity securities, in each case with the
exception of any securities issued in connection with (i) a public offering
registered under the Securities Act of 1933, as amended or (ii) issuances
to employees of the Manager pursuant to the Corporation's compensatory
stock option plans approved by the Board of Directors.
"Person" shall mean any individual, corporation, partnership, limited
liability company, limited liability partnership, trust, unincorporated
association or other entity.
"Securities Purchase Agreement" shall mean that certain Securities
Purchase Agreement dated as of December 2, 1999, with respect to the
issuance and sale of the Convertible Preferred Stock, by and between the
Corporation and the Buyer named as such therein, as the same may be amended
from time to time.
"Shares of Common Stock Deemed Outstanding" shall mean, at any given
time, the number of shares of Common Stock actually outstanding at such
time, plus the number of shares of Common Stock issuable upon conversion in
full of all Convertible Securities whether or not the Convertible
Securities are convertible into, exercisable or exchangeable for shares of
Common Stock at such time.
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf on this second day
of December, 1999 by its Chief Financial Officer who acknowledges that
these Articles Supplementary are the act of the Corporation and the best of
his knowledge, information and belief and under penalties for perjury, all
matters and facts contained in these Articles Supplementary are true in all
material respects.
ATTEST ANTHRACITE CAPITAL, INC.
(SEAL)
By:/s/ Robert Friedberg By: /s/ Christopher Milner
----------------------- -----------------------------
Secretary Name: Christopher Milner
Title: Vice President
Exhibit 99.2
------------
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of
December 2, 1999, by and between Anthracite Capital, Inc., a Maryland
corporation, with headquarters located at 345 Park Avenue, 29th Floor, New
York, New York 10154 (the "Company"), and RECP II Anthracite, LLC, a
Delaware limited liability company (the "Buyer"), a wholly-owned subsidiary
of DLJ Real Estate Capital Partners II, L.P. ("RECP").
WHEREAS:
A. The Company and the Buyer are executing and delivering this
Agreement in reliance upon the exemption from securities registration
afforded by Rule 506 under Regulation D ("Regulation D") as promulgated by
the United States Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "1933 Act");
B. The Company has authorized a new series of preferred stock, $.001
par value per share ("Preferred Stock"), designated as 10.5% Series A
Senior Cumulative Convertible Redeemable Preferred Stock (together with any
preferred stock issued in replacement thereof or otherwise with respect
thereto in accordance with the terms thereof, the "Preferred Shares"),
having the rights, preferences and privileges set forth in the Articles
Supplementary to the charter of the Company attached hereto as Exhibit A
(the "Articles Supplementary");
C. The Buyer desires to purchase and the Company desires to issue
and sell, upon the terms and conditions set forth in this Agreement,
1,200,000 Preferred Shares for an aggregate purchase price of thirty
million dollars ($30,000,000) (the "Purchase Price");
D. The Preferred Shares shall have the rights, terms and conditions,
and are convertible into shares of common stock, $0.001 par value per
share, of the Company ("Common Stock"), as set forth in the Articles
Supplementary;
E. Contemporaneous with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement, in the form attached hereto as Exhibit B (the
"Registration Rights Agreement"), pursuant to which the Company has agreed
to provide certain registration rights under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained and intending to be legally bound, the Company and the
Buyer hereby agree as follows:
1. PURCHASE AND SALE OF PREFERRED SHARES
A. PURCHASE OF PREFERRED SHARES. On the Closing Date (as defined
below), the Company agrees to issue and sell to the Buyer and the Buyer
agrees to purchase from the Company 1,200,000 Preferred Shares.
B. FORM OF PAYMENT. On or prior to the Closing Date, subject to the
satisfaction (or waiver) of all of the terms and conditions set forth
herein, and in reliance on the representations, warranties and covenants
set forth or referred to herein, the Buyer agrees to pay the Purchase Price
to the Company, which shall be $25.00 for each Preferred Share, or $30
million in the aggregate, for the Preferred Shares to be issued and sold to
it at the Closing (as defined below), by wire transfer of immediately
available funds to the account designated by the Company at least three (3)
business days prior to the Closing Date, against delivery of a duly
executed certificate registered in the name of the Buyer and in the form
agreed upon by the Company and the Buyer representing the Preferred Shares
which the Buyer is purchasing.
C. CLOSING DATE. Subject to the satisfaction (or waiver) of all of
the terms and conditions set forth in Section 5 and Section 6 below, the
date and time of the issuance and sale of the Preferred Shares pursuant to
this Agreement (the "Closing Date") shall be 1:00 p.m. Eastern Standard
Time on December 2, 1999 (the "Closing").
2. BUYER'S REPRESENTATIONS AND WARRANTIES. The Buyer represents and
warrants to the Company that:
A. INVESTMENT PURPOSE. As of the date hereof, the Buyer is agreeing
to purchase the Preferred Shares and the shares of Common Stock issuable
upon conversion or otherwise pursuant to the Preferred Shares (such shares
of Common Stock sometimes referred to herein as the "Conversion Shares"
and, collectively with the Preferred Shares, the "Securities") for its own
account and not with a present view towards the public sale or distribution
thereof, except pursuant to sales registered or exempted from registration
under the 1933 Act; provided, however, that by making the representation
herein, the Buyer does not agree to hold any of the Securities for any
minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act. Notwithstanding the
foregoing or anything else contained herein to the contrary, the Securities
may be pledged as collateral in connection with a bona fide margin account
or other lending arrangement.
B. ACCREDITED INVESTOR STATUS. RECP, the wholly-owned parent of the
Buyer, is an "accredited investor" as that term is defined in Rule 501(a)
of Regulation D (an "Accredited Investor").
C. RELIANCE ON EXEMPTIONS. The Buyer understands that the
Securities are being offered and sold to it in reliance upon specific
exemptions from the registration requirements of United States federal and
state securities laws and that the Company is relying upon the truth and
accuracy of, and the Buyer's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Buyer set
forth herein in order to determine the availability of such exemptions and
the eligibility of the Buyer to acquire the Securities. The Buyer
acknowledges that it has reviewed the provisions of Rule 144 (as defined
below) and in connection with the sale of the Securities other than
pursuant to an effective registration statement under the 1933 Act will
comply with terms of such rule or another available exemption from
registration.
D. INFORMATION. Except as listed on Schedule 2(D) hereof, the Buyer
and its advisors, if any, have been furnished with all materials relating
to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities which have been requested
by the Buyer or its advisors. The Buyer and its advisors, if any, have
been afforded the opportunity to ask questions of the Company. Neither
such inquiries nor any other due diligence investigation conducted by the
Buyer or any of its advisors or representatives shall modify, amend or
affect the Buyer's right to rely on the Company's representations and
warranties contained in Section 3 below. The Buyer understands that its
investment in the Securities involves a significant degree of risk.
E. GOVERNMENTAL REVIEW. The Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
F. TRANSFER OR RE-SALE. The Buyer understands that: (i) except as
provided in the Registration Rights Agreement, the sale or re-sale of the
Securities has not been and is not being registered under the 1933 Act or
any applicable state securities laws, and the Securities may not be
transferred unless (a) the Securities are sold pursuant to an effective
registration statement under the 1933 Act, (b) the Securities are sold or
transferred in compliance with certain provisions of the Company's Articles
of Incorporation as amended (the "Articles") relating to Company's election
to be taxed as a Real Estate Investment Trust (a "REIT") under the rules
and regulations of the Internal Revenue Code of 1986, as amended (the
"Code") as described more fully in the Company's registration statement on
Form S-3, which does not register the sale of the Preferred Shares to the
Buyer, originally filed under Rule 415 of the 1933 Act with the SEC on
April 1, 1999 (Registration No. 333-75473) (as amended, the "Registration
Statement") under the section titled "DESCRIPTION OF CAPITAL STOCK --
Repurchase of Shares and Restrictions on Transfer," (c) the Securities are
sold or transferred to an "affiliate" (as defined in Rule 144 promulgated
under the 1933 Act (or a successor rule) ("Rule 144") of the Buyer who
agrees to sell or otherwise transfer the Securities only in accordance with
this Section 2(F) and who is an Accredited Investor or (d) the Securities
are sold pursuant to Rule 144 if available; (ii) any sale of such
Securities made in reliance on Rule 144 may be made only in accordance with
the terms of said Rule 144 and further, if said Rule 144 is not applicable,
any re-sale of such Securities under circumstances in which the seller (or
the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require
compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC promulgated thereunder; and (iii) neither the
Company nor any other person is under any further obligation to register
such Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder (in each
case, other than pursuant to the Registration Rights Agreement) .
Notwithstanding the foregoing or anything else contained herein to the
contrary, the Securities may be pledged as collateral in connection with a
bona fide margin account or other lending arrangement.
G. LEGENDS. The Buyer understands that the Preferred Shares shall
bear a restrictive legend in substantially the following form (and a stop-
transfer order may be placed against transfer of the certificates for such
Securities):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE
OFFERED, SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE APPLICABLE
SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED AS COLLATERAL
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LENDING
ARRANGEMENT."
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it
is stamped, if, unless otherwise required by applicable state securities
laws, (a) such Security is sold pursuant to an effective registration
statement filed under the 1933 Act or otherwise may be sold pursuant to
Rule 144 without any restriction as to the number of securities as of a
particular date that can then be immediately sold, or (b) such holder
provides the Company with reasonable assurances that such Security can be
sold pursuant to Rule 144. The Buyer agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has
been removed, in compliance with applicable prospectus delivery
requirements, if any.
Until (i) the Board of Directors of the Company determines it is no
longer in the best interests of the Company to attempt to, or continue to,
qualify as a REIT and (ii) there is an affirmative vote of not less than
two-thirds of all of the votes ordinarily entitled to be cast in the
election of directors, voting together as a single class approving the
determination of the Board of Directors set forth in clause (i) above, the
Preferred Shares shall bear a legend in substantially the following form
(and a stop-transfer order may be placed against transfer of the
certificates for such Securities):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER FOR THE PURPOSE OF THE COMPANY'S ELECTION TO BE SUBJECT TO TAX
AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"). SUBJECT TO THE EXEMPTIONS GRANTED UNDER (I) THE
SECURITIES PURCHASE AGREEMENT DATED DECEMBER 2, 1999, BETWEEN THE COMPANY
AND RECP II ANTHRACITE, LLC, A DELAWARE LIMITED LIABILITY COMPANY ("RECP
II"), A WHOLLY OWNED SUBSIDIARY OF DLJ REAL ESTATE CAPITAL PARTNERS II,
L.P. ("RECP") AND THAT CERTAIN LETTER FROM THE COMPANY TO RECP II AND RECP
DATED DECEMBER 2, 1999 REGARDING SUCH EXEMPTIONS OR (II) PURSUANT TO
SECTION 6.1.7 OF THE ARTICLES OF INCORPORATION OF THE COMPANY, NO PERSON
MAY (I) BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF COMMON STOCK IN
EXCESS OF 9.8% OF THE NUMBER OF OUTSTANDING SHARES OF COMMON STOCK, (II)
BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF ANY CLASS OR SERIES OF
PREFERRED STOCK IN EXCESS OF 9.8% OF THE NUMBER OF OUTSTANDING SHARES OF
SUCH CLASS OR SERIES OF PREFERRED STOCK, (III) BENEFICIALLY OWN SHARES OF
EQUITY STOCK THAT WOULD RESULT IN THE SHARES OF EQUITY STOCK BEING
BENEFICIALLY OWNED BY FEWER THAN 100 PERSONS (DETERMINED WITHOUT REFERENCE
TO ANY RULES OF ATTRIBUTION), OR (IV) BENEFICIALLY OWN OR CONSTRUCTIVELY
OWN SHARES OF EQUITY STOCK THAT WOULD RESULT IN THE COMPANY BEING "CLOSELY
HELD" WITHIN THE MEANING OF SECTION 856(H) OF THE CODE. ANY PERSON WHO
ATTEMPTS TO BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF EQUITY STOCK
IN EXCESS OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE COMPANY IN
WRITING. IF THE RESTRICTIONS ABOVE ARE VIOLATED, THE SHARES OF EQUITY
STOCK REPRESENTED HEREBY WILL BE TRANSFERRED AUTOMATICALLY AND BY OPERATION
OF LAW TO A TRUST AND SHALL BE DESIGNATED SHARES-IN-TRUST. ALL CAPITALIZED
TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED IN THE COMPANY'S ARTICLES
FILED WITH THE DEPARTMENT OF ASSESSMENT AND TAXATION OF THE STATE OF
MARYLAND ON MARCH 20, 1998, AS THE SAME MAY BE FURTHER AMENDED FROM TIME TO
TIME (THE "ARTICLES"), A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON
TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS."
H. OWNERSHIP LIMITATIONS. Subject to Sections 3(Y), 4(H) and 6(I)
hereof, the Buyer understands the restrictions on transfer and ownership of
the Company's shares of beneficial interest included in the Articles and
this Agreement as such restrictions relate to the election by the Company
to be taxed as a REIT for United States federal income tax purposes
pursuant to Sections 856 through 860 of the Code (the "REIT Provisions of
the Code"), and as described in the Registration Statement the section
titled "DESCRIPTION OF CAPITAL STOCK -- Repurchase of Shares and
Restrictions on Transfer."
I. AUTHORIZATION; ENFORCEMENT. This Agreement and the Registration
Rights Agreement have been duly and validly authorized by the Buyer. This
Agreement has been duly executed and delivered on behalf of the Buyer, and
this Agreement constitutes, and upon execution and delivery by the Buyer of
the Registration Rights Agreement, such agreement will constitute, valid
and binding agreements of the Buyer enforceable in accordance with their
terms, subject, in each case, to applicable bankruptcy, insolvency,
reorganization or similar laws affecting generally the enforcement of
creditors' rights and subject to a court's discretionary authority with
respect to the granting of specific performance or other equitable
remedies.
J. NO CONFLICTS. The execution and performance of this Agreement
and the Registration Rights Agreement do not conflict with any agreement to
which the Buyer is a party or is bound thereby, any court order or judgment
addressed to the Buyer, or the constituent documents of the Buyer.
K. RESIDENCY. The Buyer is a resident of the jurisdiction set forth
immediately below such Buyer's name on the signature pages hereto.
L. USE OF ASSETS. The assets being used by the Buyer to purchase
the Securities do not constitute assets of any employee benefit plan
(within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended), or any plan (within the meaning of
Section 4975 of the Code).
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Buyer that:
A. ORGANIZATION AND QUALIFICATION. The Company, Anthracite
Securitization Corp., a Delaware corporation ("ASC") and Anthracite
Funding, LLC, a Delaware limited liability company ("AFLLC," and together
with ASC, the "Subsidiaries"), and Black Rock Financial Management Inc., a
Delaware corporation (the "Manager"), have each been duly organized and
are each validly existing as corporations or limited liability companies in
good standing under the laws of their respective jurisdictions of
incorporation or formation and are duly qualified or registered to transact
business in each jurisdiction in which they conduct their business as now
conducted or proposed to be conducted as described in the Registration
Statement, with full power and authority to own, lease, use and operate
their properties and to carry on their business as and where now owned,
leased, used, operated and conducted or proposed to be conducted as
described in the Registration Statement, except where the failure to be so
qualified or registered cannot reasonably be expected to have a material
adverse effect on (i) the business, operations, assets, financial
condition, results of operations or prospects of the Company and the
Subsidiaries, or (ii) the ability of the Manager to perform its obligations
under the Investment Advisory Agreement between the Manager and the Company
dated March 28, 1998 (the "Management Agreement") or the Administration
Agreement between the Company and the Manager dated January 1, 1998 (the
"Administration Agreement") (a "Material Adverse Effect"). Except for the
Subsidiaries, the Company has no other "significant subsidiaries" as
defined under the 1933 Act. The Company owns 100% of the equity interests
in AFLLC and 10% of the issued and outstanding shares of voting Class A
common stock, par value $.01 per share, of ASC and 90% of the issued and
outstanding shares of non-voting Class B common stock, par value $.01 per
share of ASC.
B. AUTHORIZATION; ENFORCEMENT. (i) The Company has all requisite
corporate power and authority to file and perform its obligations under the
Articles Supplementary and to enter into and perform this Agreement and the
Registration Rights Agreement and to consummate the transactions
contemplated hereby and thereby and to issue and sell the Securities, in
accordance with the terms hereof and thereof, (ii) the execution and
delivery of this Agreement and the Registration Rights Agreement by the
Company, the filing of the Articles Supplementary and the consummation by
it of the transactions contemplated hereby and thereby (including without
limitation, the issuance of the Preferred Shares and the issuance and
reservation for issuance of the Conversion Shares issuable upon conversion
of or otherwise pursuant to the Preferred Shares) have been duly authorized
by the Company's Board of Directors and no further consent or authorization
of the Company, its Board of Directors, its stockholders, any governmental
authority or any third party is required, (iii) this Agreement has been
and, as of the Closing, the Articles Supplementary and the Registration
Rights Agreement will be, duly executed and delivered by the Company, and
(iv) this Agreement constitutes, and upon execution and delivery by the
Company of the Registration Rights Agreement and the execution and filing
of the Articles Supplementary, each of such agreements and instruments will
constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization or similar laws affecting
generally the enforcement of creditors' rights and subject to a court's
discretionary authority with respect to the granting of specific
performance or other equitable remedies.
C. CAPITALIZATION. As of September 30, 1999, the authorized capital
stock of the Company consists of: (i) 400,000,000 shares of Common Stock
of which 20,998,334 shares are issued and outstanding and 1,758,144 shares
are reserved for issuance upon the exercise of outstanding options and (ii)
100,000,000 shares of preferred stock, none of which are issued and
outstanding. Except as contemplated by this Agreement and pursuant to the
Company's 1998 Stock Option Plan (the "Plan"), since September 30, 1999,
the Company has not issued any capital stock. All of such issued and
outstanding shares of capital stock have been duly authorized, validly
issued, fully paid and are nonassessable and have been offered, sold and
issued by the Company in compliance with all applicable laws (including,
without limitation, federal and state securities laws). No shares of
capital stock of the Company are subject to preemptive rights of the
stockholders of the Company, and all shares of capital stock of the Company
are free and clear of all liens, pledges, charges, security interests,
encumbrances, options or rights of any kind ("Liens") imposed through the
actions or failure to act of the Company. Except as disclosed in Schedule
3(C), as of the effective date of this Agreement, (i) there are no
outstanding options, warrants, scrips, rights to subscribe for, puts,
calls, rights of first refusal, agreements, understandings, claims or other
commitments or rights of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for any shares of
capital stock of the Company, or arrangements by which the Company is or
may become bound to issue additional shares of capital stock of the
Company; (ii) there are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement
providing rights to security holders) that will be triggered by the
issuance of the Preferred Shares or the Conversion Shares; (iii) 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 1933 Act with respect to
any securities of the Company or to require the Company to include any
securities of the Company in a registration statement filed under the 1933
Act, other than the registration rights granted to the underwriters in
connection with the Company's initial public offering; and (iv) the Company
is not a party to, nor does it have any knowledge of, any agreement with
respect to the voting of the Common Stock.
D. REIT STATUS. At all times commencing with its taxable year
ending December 31, 1998, the Company has been, and upon the sale of the
Preferred Shares, the Company will continue to be, organized and operated
in conformity with the requirements for qualification and taxation as a
REIT under the Code, and its proposed method of operation 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 would cause such qualification to be lost. The
Company is not currently a "pension-held REIT" within the meaning of Code
Section 856(h)(3)(D) and the Treasury Regulations promulgated thereunder.
E. ISSUANCE OF SHARES. The Preferred Shares have been duly
authorized and, upon issuance in accordance with the terms of this
Agreement and payment in respect thereof, will be validly issued, fully
paid and non-assessable, and free from all taxes and Liens with respect to
the issue thereof and shall not be subject to any preemptive rights, rights
of first refusal or offer or other similar rights. The Conversion Shares
are duly authorized and reserved for issuance, and, upon conversion of the
Preferred Shares in accordance with the terms thereof, will be validly
issued, fully paid and non-assessable, and free from all taxes and Liens
with respect to the issuance thereof and will not be subject to preemptive
rights, rights of first refusal or offer (other than those contained
herein) or other similar rights. The form of certificates evidencing the
Preferred Shares, and upon conversion of the Preferred Shares, the form of
certificates evidencing the Conversion Shares will comply with all
applicable legal requirements and the rules of the New York Stock Exchange
(the "NYSE") and, in all material respects, with all applicable
requirements of the Articles and By-laws of the Company, as amended (the
"By-laws").
F. NO CONFLICTS. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the filing of the Articles
Supplementary and the issuance, sale and delivery of the Preferred Shares
and the issuance and reservation for issuance of the Conversion Shares)
will not (i) conflict with or result in a violation of any provision of the
Articles or By-laws or the constituent documents of the Subsidiaries (ii)
violate or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which with notice or lapse of time or
both could become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material
agreement, license, instrument, contract, commitment, arrangement or
indenture to which the Company or any of the Subsidiaries are a party or by
which any of them or their assets are bound (each a "Material Contract"),
or (iii) result in a violation of any law, statute, rule, regulation,
ordinance, order, judgment or decree (including Federal and state
securities laws and regulations and regulations of any self-regulatory
organizations to which the Company, any of the Subsidiaries or their
securities are subject) applicable to the Company or any of the
Subsidiaries or by which any of them or their property or assets are bound
or affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or
in the aggregate, have a Material Adverse Effect), (iv) result in the
creation or imposition of a material Lien on any assets owned or held by
the Company, (v) violate or result in the revocation or suspension of any
permit held by the Company or the Subsidiaries or (vi) cause the Company to
fail to qualify to be taxed as a REIT for the year ending December 31,
1999. Except as specifically contemplated by this Agreement and as
required under the 1933 Act, any applicable state securities laws and the
rules of the NYSE, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any
court, governmental agency, regulatory agency, self regulatory organization
or stock market or any third party in order for it to execute, deliver or
perform any of its obligations under this Agreement, the Registration
Rights Agreement or the Articles Supplementary in accordance with the terms
hereof or thereof or to issue and sell the Preferred Shares in accordance
with the terms hereof and to issue the Conversion Shares upon conversion of
the Preferred Shares. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the date
hereof.
G. MANAGEMENT AGREEMENT. Each of the Company and the Manager, has
all requisite power and authority to perform the Management Agreement and
the Administration Agreement and to consummate the transactions
contemplated therein; the Management Agreement and the Administration
Agreement have been duly authorized, executed and delivered by each of the
Company and the Manager and constitute valid and binding agreements of each
of the Company and the Manager, enforceable in accordance with their 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. CONSENTS. 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, the Articles Supplementary, the Registration Rights Agreement,
or the consummation of the transaction contemplated hereby and thereby,
(ii) the sale and delivery of the Preferred Shares, other than (x) such as
have been obtained, or will have been obtained at the Closing, under the
1933 Act or the 1934 Act (as defined herein) and (y) any necessary
qualification under the applicable securities or blue sky laws.
I. COMPLIANCE. The Company is in compliance in all material
respects with all applicable statutes, laws, ordinances, rules,
regulations, orders, decrees and judgments applicable to it, except those
noncompliance with which is not reasonably expected by the Company to have
a Material Adverse Effect.
J. PROCEEDINGS. There are no actions, suits, proceedings, inquiries
or investigations pending or, to the Company's knowledge, threatened
against the Company, the Subsidiaries or the Manager or any of their
officers and directors or to which the properties, assets or rights of the
Company or the Subsidiaries are 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, or which could adversely affect the consummation of the
transactions contemplated by this Agreement, the Registration Rights
Agreement, the Management Agreement or the Administration Agreement in any
material respect.
K. BROKER/DEALER. The Company (i) is not required to register as a
"broker" or "dealer" in accordance with the provisions of the Securities
Exchange Act of 1934 or the rules and regulations thereunder (the "1934
Act"), and (ii) directly, or indirectly through one or more intermediaries,
does not control or have any other association with (within the meaning of
Article 1 of the By-laws of the National Association of Securities Dealers,
Inc. (the "NASD")) any member firm of the NASD.
L. INSIDER LOANS. Except as otherwise disclosed in the Company SEC
Documents (defined below), there are no material outstanding loans or
advances or material guarantees of indebtedness by the Company to or for
the benefit of any of the officers or directors of the Company.
M. INVESTMENT COMPANY. The Company is not, nor as a result of
transactions contemplated hereby and the application of the proceeds from
the sale of the Preferred Shares, will it become an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"1940 Act").
N. FINDERS FEES. The Company has not incurred any liability for any
brokers' or finder's fees or similar payments in connection with the
transactions herein contemplated.
O. SEC FILINGS. Since January 1, 1998, the Company has filed in a
timely manner all reports required to be filed by it pursuant to the
federal securities laws and the rules and regulations of the SEC
promulgated thereunder (the "Company SEC Documents"), all of which, to the
Company's knowledge, at the time such Company SEC Documents were filed,
complied in all material respects with the requirements of the 1933 Act or
the 1934 Act, as applicable, and the rules and regulations of the SEC
thereunder applicable to such Company SEC Documents. To the Company's
knowledge, none of the Company SEC Documents (including all financial
statements included therein, and exhibits and schedules thereto, and
documents incorporated by reference therein), at the time filed, contained
any 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.
The Company has not filed any report or other document with the SEC since
November 15, 1999.
P. FINANCIAL INFORMATION. To the Company's knowledge, the financial
statements of the Company included in the Company SEC Documents (i) comply
as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto,
(ii) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods covered
thereby, (iii) fairly present (subject, in the case of the unaudited
statements, to normal, recurring audit adjustments and the absence of
footnotes) the consolidated financial position of the Company and any
consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and their cash flow statements for the periods
then ended, and (iv) are correct and complete in all material respects, and
are materially consistent with the Company's books and records, which books
and records are accurate and complete in all material respects. The pro
forma financial data included in the Company's most recent Form 10-Q has
been prepared in accordance with the applicable rules and guidelines of the
SEC with respect to pro forma financial data, and the adjustments used
therein are appropriate to give effect to the transaction or circumstance
referred to therein.
Q. ABSENCE OF CERTAIN CHANGES. Except as set forth in the Company
SEC Documents, since December 31, 1998, the Company and the Subsidiaries
have conducted their respective businesses in the ordinary course. Since
September 30, 1999, there has been no development in the Company's business
which has had a Material Adverse Effect.
R. LIABILITIES. Except as set forth in the Company SEC Documents,
the Company has no liabilities or obligations (whether absolute, accrued,
contingent or otherwise), except for liabilities incurred in the ordinary
and usual course of business since September 30, 1999 consistent with the
past practices of the Company.
S. PRIVATE OFFERING. None of the Company, its Affiliates (as
defined below) or any person acting on their or any of their Affiliates'
behalf, has engaged, or will engage, in connection with the offering of the
Securities, in any communication or other form of general solicitation or
general advertising within the meaning of Rule 502(c) under the 1933 Act.
Assuming the representations and warranties of the Buyer set forth in
Section 2 are true, the offer, issuance and sale of the Securities in the
manner contemplated by this Agreement are exempt from the registration and
prospectus delivery requirements of the 1933 Act, and have been registered
or qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws. "Affiliate" of any person or entity means a person or
entity which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such person
or entity.
T. YEAR 2000 COMPLIANCE. Except as set forth in Schedule 3(T): (i)
all of the equipment and systems used by the Company and its Subsidiaries
are "Year 2000 Compliant" so that they will accurately process, calculate,
compare, sequence, transmit and receive date/time data from, into, and
between the 20th and 21st centuries and the years 1999 and 2000 and leap
year calculations, except for such noncompliance that would not,
individually or in the aggregate, have a Material Adverse Effect; and (ii)
no material equipment and systems will create any logical or mathematical
inconsistency or malfunction or cease to function when processing date/time
data, except for such inconsistencies or malfunctions that would not,
individually or in the aggregate, have a Material Adverse Effect.
U. NO DEFAULTS. Neither the Company nor any Subsidiary is in breach
or violation 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 or give to others any rights of termination, amendment, acceleration
or cancellation), its charter or by-laws, 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,
contract, or other agreement or instrument to which the Company or the
Subsidiaries is a party or by which any of them or their respective assets
are bound, except for such breaches or defaults that could be reasonably
expected not to have a Material Adverse Effect. The Manager is not in
breach or violation 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 or give to others any rights of termination, amendment,
acceleration or cancellation) the Management Agreement or Administration
Agreement.
V. BUSINESS. Neither the Company nor the Subsidiaries own or
operate any real property.
W. EMPLOYEES. Neither the Company nor the Subsidiaries retain any
employees.
X. INVESTMENTS. As used in this Section 3(X), "Company" means the
Company and the Subsidiaries. The Company owns and has good and marketable
title to all of the investments in other persons or entities
("Investments"), free and clear of all Liens, except those Liens that
could, individually or in the aggregate, not reasonably be expected to
result in a Material Adverse Effect. There is no monetary default, breach,
violation or event of acceleration on the part of any person or entity that
is a party thereto beyond any applicable grace period existing under any of
the Investments or loans securing such Investments or loans by the Company
to any other person or entity, except for (i) such defaults, breaches,
violations or events of acceleration that would not reasonably be expected
to result in a Material Adverse Effect and (ii) such loans in special
servicing set forth on Schedule 3(X) hereto. The Company has not given any
notice (that is still outstanding) of any non-monetary default, breach,
violation or event of acceleration and, to the Company's knowledge there is
no non-monetary default, breach, violation or event of acceleration
existing under any of the Investments, loans securing such Investments or
loans by the Company to any other person or entity that could, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect. The Company has not received any written notice or been informed
of any default, breach or violation by the Company of any of the terms of
any Investment, loans securing such Investments or loans by the Company to
any other person or entity, and to the Company's knowledge, no such
default, breach or violation exists, except, in either instance, for such
defaults, breaches or violations that could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect,
and no person has any right of offset against the Company in respect of any
Investment, loans securing such Investments or loans by the Company to any
other person or entity. To the Company's knowledge, there is no monetary
default or any material default, breach, violation or event of acceleration
under any loan or security ranking in priority senior to any Investment,
loans securing such Investmensts or loans by the Company to any other
person or entity of the Company.
Y. OWNERSHIP LIMITATIONS. The Company has taken all actions
necessary to (i) exempt (the "Exemption") the Buyer, RECP and their
respective Affiliates and the direct and indirect holders of interests
therein ("Ownership Limitation Affiliates") from the Ownership Limit (as
defined in the Articles) pursuant to Section 6.1.7 of the Articles with
respect to all Preferred Shares and 22% of the Common Stock (after taking
into account any Common Stock issuable upon conversion of the Preferred
Shares) of the Company determined by (i) the number of shares outstanding
or (ii) Current Market Price (as defined in the Articles Supplementary)
whichever produces the largest holding of Common Stock under the two
methods, computed with regard to all outstanding shares of Common Stock
(the "Allowed Common Shares"), and (ii) to exempt Buyer, RECP and Ownership
Limitation Affiliates from the "Interested Stockholder" and "Control Share
Acquisition" provisions (Subtitles 6 and 7 of Title 3) of the Maryland
General Corporation Law, with respect to the ownership by the Buyer, RECP,
the Ownership Limitation Affiliates or any Qualifying Transferee of the
Preferred Shares and any future ownership of Allowed Common Shares, and the
Company will not take any action that results in the Buyer, RECP, the
Ownership Limitation Affiliates or any Qualifying Transferee no longer
being exempted or excepted, as applicable, from the Ownership Limit and
Maryland law provisions, as described above, provided Buyer complies with
the terms and conditions of the Exemption as set forth in that certain
letter from the Company to Buyer dated the date hereof regarding the
Exemption (the "Exemption Letter"). Any transferee of the Buyer (i) which
is not an "individual" (within the meaning of Section 542(a)(2) of the
Code, as modified by Section 856(h)(3), i.e., not treating a pension fund
under Section 401(a) of the Code as an individual), (ii) whose ownership of
Preferred Shares or Allowed Common Shares into which such Preferred Shares
are convertible will not cause the Company to (a) fail to qualify as a REIT
under the Code or (b) be a "pension-held REIT" within the meaning of
Section 856(h)(3)(D) of the Code and (iii) who executes a shareholder
undertaking substantially similar to that executed by Buyer in connection
with the Company's issuance of the Exemption (a "Qualifying Transferee"),
shall, upon such transfer, also be (i) exempt from the Ownership Limit with
respect to the Preferred Shares and the Allowed Common Shares and (ii)
exempt from the "Interested Stockholder" and "Control Share Acquisition"
provisions of the Maryland General Corporation Law.
Z. DISCLOSURE. Neither this Agreement, the Registration Rights
Agreement, the Articles Supplementary, any exhibit or schedule hereto or
thereto, nor any other statements or certificates made or delivered in
connection herewith or therewith, on behalf of the Company, the
Subsidiaries or the Manager (as supplemented or amended by documents
delivered at a later time, but prior to the Closing), contains any untrue
statement of a material fact and, when taken together with the Company SEC
Documents, do not omit to state a material fact necessary to make the
statements herein or therein, in light of the circumstances under which
they were made, not misleading.
AA. AFFILIATE TRANSACTIONS. Neither the Company nor any Subsidiary
has entered into any transaction, agreement or arrangement with the Manager
or any of its Affiliates except for the Management Agreement, the
Administration Agreement or as set forth on Schedule 3(AA).
BB. TAX RETURNS. The Company and ASC each has timely filed all
material United States federal, state, local, and foreign tax returns
required to be filed which tax returns are true, accurate and complete in
all material respects. The Company and ASC each has paid all material
United States federal, state, local, and foreign taxes required to be paid.
There are no material tax liens against the Company or its assets except
for liens for taxes not yet due or payable. AFLLC is a wholly-owned
limited liability company that is treated as a disregarded entity for
United States federal income tax purposes.
4. COVENANTS.
A. BEST EFFORTS. The parties shall use their best efforts to
satisfy timely each of the conditions described in Sections 5 and 6 of this
Agreement.
B. FORM D; BLUE SKY LAWS. The Company agrees to file a Form D with
respect to the Securities as required under Regulation D of the Securities
Act and to provide a copy thereof to each Buyer promptly after such filing.
The Company shall take such action as the Company shall reasonably
determine is necessary to qualify the Securities for issuance and sale to
the Buyer at the date of issuance pursuant to this Agreement under
applicable securities or "blue sky" laws of the states of the United States
(or to obtain an exemption from such qualification).
C. REPORTING STATUS; ELIGIBILITY TO USE FORM S-3. The Common Stock
is registered under Section 12(g) of the 1934 Act. So long as the Buyer
beneficially owns any of the Securities, the Company shall timely file all
reports required to be filed with the SEC pursuant to the 1934 Act, and the
Company shall not, so long as the Buyer beneficially owns any of the
Securities, terminate its status as an issuer required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would permit such termination. The Company currently meets,
and, so long as the Buyer beneficially owns any of the Securities, will
take reasonable action to continue to meet, the "registrant eligibility"
requirements set forth in the general instructions to Form S-3 under the
Securities Act.
D. RESERVATION OF SHARES. The Company shall at all times have
authorized, and reserved for the purpose of issuance, a sufficient number
of shares of Common Stock to provide for the full conversion of the
outstanding Preferred Shares and issuance of the Conversion Shares in
connection therewith.
E. LISTING. Following registration thereof under the 1933 Act, the
Company shall promptly secure the listing of the Conversion Shares upon
each national securities exchange or automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official
notice of issuance) and, so long as the Buyer or its assigns owns any of
the Securities, shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of the Conversion Shares.
F. NO INTEGRATION. The Company shall not make any offers or sales
of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder
under the 1933 Act or cause the offering of Securities to be integrated
with any other offering of securities by the Company for the purpose of any
stockholder approval provision applicable to the Company or its securities.
G. CONSENTS AND APPROVALS. 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, the Articles Supplementary, the Registration Rights
Agreement, the consummation of the transactions contemplated hereby and
thereby or (ii) the sale and delivery of the Preferred Shares, other than
(x) such as have been obtained, or will have been obtained at the Closing,
under the 1933 Act or the 1934 Act and (y) any necessary qualification
under the applicable securities or blue sky laws.
H. EXCEPTED HOLDER. In accordance with Section 3(Y) hereof, the
Company will not cause the Buyer, RECP, or the Ownership Limitation
Affiliates or any Qualifying Transferee to fail to be (a) exempt from the
Ownership Limit (as defined in the Articles) pursuant to 6.1.7 of the
Articles with respect to the Preferred Shares and the Allowed Common Shares
as set forth in the Exemption Letter and (b) exempted from the "Interested
Stockholder" and "Control Share Acquisition" provisions (Subtitles 6 and 7
of Title 3) of the Maryland General Corporation Law, with respect to the
ownership by the Buyer, RECP, the Ownership Limitation Affiliates or any
Qualifying Transferee of the Preferred Shares and any future ownership of
Allowed Common Shares. As set forth in the Exemption Letter, the Company
may demand reasonable information concerning any proposed transferee
demonstrating that such Person satisfies the requirements to be a
Qualifying Transferee (as set forth in Section 3(Y)) prior to registering
such transfer of Preferred Shares or Allowed Common Shares.
I. REIT STATUS. The Company will use its best efforts to operate in
a manner in accordance with the requirements for qualification and taxation
as a REIT. In the event of the taking or proposed taking of any action
that would cause any representation set forth in Section 3(D) to be
incorrect if made as of any date following the Closing, the Company shall
use reasonable efforts to notify the undersigned prior to the taking of
such action.
J. INVESTMENT COMPANY. The Company will conduct its affairs in such
a manner so as to ensure that the Company is not an "investment company" or
an entity subject to regulation as an investment company within the meaning
of the 1940 Act.
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The obligation of the
Company hereunder to issue and sell the Preferred Shares to the Buyer at
the Closing is subject to the satisfaction (or waiver), on or before the
Closing Date, of each of the following conditions thereto, provided that
these conditions are for the Company's sole benefit and may be waived by
the Company at any time in its sole discretion by prior delivery of written
notice of such waiver to the Buyer:
A. The Buyer shall have executed this Agreement and the Registration
Rights Agreement, and delivered the same to the Company.
B. The Buyer shall have delivered the Purchase Price in accordance
with Section 1(B) above.
C. The representations and warranties of the Buyer shall be true and
correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a particular date and in such case shall be
true and correct as of that particular date), and the Buyer shall have
performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Buyer at or prior to the
Closing Date.
D. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
E. The Buyer shall have delivered an executed copy of the
Shareholder's Undertaking, dated as of the Closing Date, in the form
attached as Exhibit C hereto.
6. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE. The obligation of
the Buyer hereunder to purchase the Preferred Shares at the Closing is
subject to the satisfaction (or waiver), on or before the Closing Date, of
each of the following conditions, provided that these conditions are for
the Buyer's sole benefit and may be waived by the Buyer at any time in its
sole discretion by prior delivery of written notice by the Buyer to the
Company:
A. The Company shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to the Buyer and all
covenants, agreements and conditions contained therein that are required to
have been performed or complied with on or prior to the Closing, shall have
been performed or complied with or waived in writing by the Buyer.
B. The Company shall have delivered to the Buyer a duly executed
certificate representing the Preferred Shares in accordance with Section
1(B) above.
C. The Articles Supplementary shall have been accepted for filing
with the SDAT, and a copy thereof certified by the SDAT shall have been
made available to the Buyer, and the Articles Supplementary shall be in
full force and effect without modification.
D. The representations and warranties of the Company shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at such time (except for representations and
warranties that speak as of a particular date and in such case shall be
true and correct as of that particular date) and the Company shall have
performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to the
Closing Date.
E. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement, nor shall any action, suit or
proceeding be pending or threatened with respect thereto.
F. Trading in the Common Stock on the NYSE shall not have been
suspended by the SEC or the NYSE.
G. The Company shall have obtained all requisite consents of or
approvals from federal, state and any other Governmental Authority (as
defined below) necessary to consummate the transactions contemplated by
this Agreement and issue the Securities and permit the utilization of the
proceeds of the Preferred Shares as described herein. "Governmental
Authority" means any nation or government, any state, province, county or
other political subdivision thereof, and any entity exercising any
executive, legislative, judicial, regulatory or administrative functions
of, or pertaining to, government.
H. There shall be no pending (of which an employee of the Company
has received service or notice of process) or threatened action, suit,
investigation, litigation or proceeding affecting the Company or any of the
Subsidiaries before any Governmental Authority ("Litigation"), that would
in the reasonable opinion of the Company, result in an adverse decision
that could (A) have a Material Adverse Effect or (B) restrain, prevent or
impose materially adverse conditions upon the transactions contemplated by
this Agreement.
I. In accordance with Section 3(Y), the Company shall have taken all
action necessary to (i) exempt the Buyer, RECP, the Ownership Limitation
Affiliates or any Qualifying Transferee from the Ownership Limit (as
defined in the Articles) pursuant to Section 6.1.7. of the Articles, as set
forth in the Exemption Letter, with respect to all Preferred Shares and the
Allowed Common Shares and (ii) cause the Buyer, the Ownership Limitation
Affiliates or any Qualifying Transferee to be exempt from the "Interested
Stockholder" and "Control Share Acquisition" provisions (Subtitles 6 and 7
of Title 3) of the Maryland General Corporation Law, with respect to the
ownership by the Buyer, RECP, the Ownership Limitation Affiliates or any
Qualifying Transferee of the Preferred Shares and any future ownership of
Allowed Common Shares, and the Company will not take any action that
results in the Buyer, the Ownership Limitation Affiliates or any Qualifying
Transferee no longer being exempted or excepted, as applicable, from the
Ownership Limit and Maryland law provisions, as described above, provided
such persons comply with the terms and conditions of the Exemption Letter.
Any transferee of the Buyer (i) which is not an "individual" (within the
meaning of Section 542(a)(2) of the Code, as modified by Section 856(h)(3),
i.e., not treating a pension fund under Section 401(a) of the Code as an
individual), (ii) whose ownership of Preferred Shares or Allowed Common
Shares into which such Preferred Shares are convertible will not cause the
Company to (a) fail to qualify as a REIT under the Code or (b) be a
"pension-held REIT" within the meaning of Section 856(h)(3)(D) of the Code
and (iii) who executes a shareholder undertaking substantially similar to
that executed by Buyer in connection with the Company's issuance of the
Exemption (a "Qualifying Transferee"), shall, upon such transfer, be (i)
exempt from the Ownership Limit with respect to the Preferred Shares and
the Allowed Common Shares, as set forth in the Exemption Letter, and (ii)
exempt from the "Interested Stockholder" and "Control Share Acquisition"
provisions of the Maryland General Corporation Law. The Company shall have
delivered a letter to the Buyer, in a form reasonably satisfactory to the
Buyer confirming the above described exemptions from the Ownership Limit
and "Interested Stockholder" and "Control Share Acquisition" provisions.
J. The Buyer shall have received the following, addressed to them
and in form and substance reasonably satisfactory to them:
(i) certified copies of the resolutions adopted by the Board of
Directors of the Company authorizing the execution, delivery and
performance of this Agreement, the Registration Rights Agreement, each
of the other agreements, instruments and transactions contemplated
hereby or thereby including the issuance and sale of the Securities;
(ii) certified copies of the Articles of Incorporation and By-
laws of the Company as in effect at the Closing;
(iii) a certificate of the Secretary of the Company dated the
Closing Date, as to the incumbency and signatures of the officers
executing this Agreement and all instruments executed pursuant hereto;
(iv) Officer's Certificate, dated as of the Closing Date, of the
Company to the effect set forth in Sections 6(A) (with respect to
performance and compliance with the covenants, agreements and
conditions of this Agreement) and 6(D); and
(v) the opinion of each of (A) Skadden, Arps, Slate, Meagher &
Flom LLP and (B) Miles & Stockbridge, P.C., Maryland counsel to the
Company, each in a form reasonably acceptable to the Buyer and its
counsel.
K. All matters relating to this Agreement, the Registration Right
Agreement, the Securities and the transactions contemplated hereby and
thereby and the legal and organizational structure of the Company shall be
reasonably satisfactory from a legal point of view to the Buyer, and the
Buyer shall have received such additional certificates, legal opinions and
other documentation as it may have reasonably requested with respect to
this Agreement, the Registration Right Agreement, the Securities and the
transactions contemplated hereby and thereby.
L. Andrew P. Rifkin shall be appointed a Director of the Company by
the Buyer.
7. INDEMNIFICATION
A. The Company shall indemnify and hold harmless the Buyer and its
respective directors, officers, employees, agents, affiliates, successors
and permitted assigns from and against any and all (x) liabilities, losses
or damages ("Loss") and (y) reasonable out-of-pocket expenses, including
without limitation attorneys' fees and expenses ("Expense") incurred by
such party in connection with (i) the Company's breach or failure to
perform its obligations and covenants under this Agreement, the Articles
Supplementary, the Registration Rights Agreement or in connection with the
enforcement by the Buyer of any of the Company's obligations or covenants
hereunder or thereunder including the enforcement of this indemnity and
(ii) any breach of any warranty or the inaccuracy of any representation, or
misrepresentation or omission, made by the Company in this Agreement.
B. The Buyer shall indemnify and hold the Company and its trustees,
officers, employees, agents, affiliates, successors and permitted assigns
harmless from and against any and all Losses and Expenses incurred by the
Company in connection with (i) the Buyer's breach or failure to perform its
obligations under this Agreement, or in connection with the enforcement by
the Company of any of the Buyer's obligations or covenants hereunder or
thereunder including the enforcement of this Indemnity and (ii) any breach
of any warranty or the inaccuracy of any representation, or
misrepresentation or omission, made by the Buyer in this Agreement.
C. If a party believes that any of the persons entitled to
indemnification under this Section 7 has suffered or incurred any Loss or
incurred any Expense, such party shall notify the indemnifying party
promptly in writing describing such Loss or Expense, the amount thereof, if
known, and the method of computation of such Loss or Expense, all with
reasonable particularity and containing a reference to the provisions of
this Agreement, the Articles Supplementary, the Registration Rights
Agreement, or any certificate delivered pursuant hereto in respect of which
such Loss or Expense shall have occurred; provided, however, that the
omission by such indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its indemnification obligation under
this Section 7 except to the extent that such indemnifying party suffers a
material Loss as a result of such failure to give notice. If any action at
law or suit in equity is instituted against a third party with respect to
which any of the persons entitled to indemnification under this Section 7
intends to claim any liability or expense as Loss or Expense under this
Section 7, any such person shall promptly notify the indemnifying party of
such action or suit as specified in this Section 7(C) and in Section 7(D).
D. In the event of any claim for indemnification hereunder resulting
from or in connection with any claim or legal proceeding by a third party,
the indemnified persons shall give notice thereof to the indemnifying party
not later than 20 business days prior to the time any response to the
asserted claim is required, if possible, and in any event within 15 days
following the date such indemnified person has actual knowledge thereof;
provided, however, that the omission by such indemnified party to give
notice as provided therein shall not relieve the indemnifying party of its
indemnification obligation under this Section 7 except to the extent that
such indemnifying party suffers a material Loss as a result of such failure
to give notice. In the event of any such claim for indemnification
resulting from or in connection with a claim or legal proceeding by a third
party, the indemnifying party may, at its sole cost and expense, assume the
defense thereof; provided, however, that counsel for the indemnifying
party, who shall conduct the defense of such claim or legal proceeding,
shall be reasonably satisfactory to the indemnified party; and provided,
further, that if the defendants in any such actions include both the
indemnified persons and the indemnifying party and the indemnified persons
shall have reasonably concluded based on a written opinion of counsel that
there may be legal defenses or rights available to them which have not been
waived and are in actual or potential conflict with those available to the
indemnifying party, the indemnified persons shall have the right to select
one law firm reasonably acceptable to the indemnifying party to act as
separate counsel, on behalf of such indemnified persons, at the expense of
the indemnifying party. Unless the indemnified persons are represented by
separate counsel pursuant to the second proviso of the immediately
preceding sentence, if an indemnifying party assumes the defense of any
such claim of legal proceeding, such indemnifying party shall not consent
to entry of any judgment, or enter into any settlement, that (a) is not
subject to indemnification in accordance with the provisions of this
Section 7, (b) provides for injunctive or other nonmonetary relief
affecting the indemnified persons or (c) does not include as an
unconditional term thereof the giving by each claimant or plaintiff to such
indemnified persons of an unconditional release from all liability with
respect to such claim or legal proceeding, without the prior written
consent of the indemnified person (which consent, in the case of clauses
(b) and (c), shall not be unreasonably withheld); and provided, further,
that unless the indemnified persons are represented by separate counsel
pursuant to the second proviso of the immediately preceding sentence, the
indemnified persons may, at their own expense, participate in any such
proceeding with the counsel of their choice without any right of control
thereof. So long as the indemnifying party is in good faith defending such
claim or proceeding, the indemnified persons shall not compromise or settle
such claim or proceeding without the prior written consent of the
indemnifying party, which consent shall not be unreasonably withheld. If
the indemnifying party does not assume the defense of any such claim or
litigation in accordance with the terms hereof, the indemnified persons may
defend against such claim or litigation in such manner as they may deem
appropriate, including, without limitation, settling such claim or
litigation (after giving prior written notice of the same to the
indemnifying party) on such terms as the indemnified persons may deem
appropriate, and the indemnifying party will promptly indemnify the
indemnified persons in accordance with the provisions of Section 7.
8. GOVERNING LAW; MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without
regard to the principles of conflict of laws.
B. COUNTERPARTS; SIGNATURES BY FACSIMILE. This Agreement may be
executed in one or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party. This
Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
C. HEADINGS. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of,
this Agreement.
D. SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction.
E. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Schedules,
Exhibits and instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor
the Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived
other than by an instrument in writing signed by the party to be charged
with enforcement and no provision of this Agreement may be amended other
than by an instrument in writing signed by the Company and the holders of
at least a majority of the Preferred Shares then outstanding. No such
amendment shall be effective to the extent that it applies to less than all
of the holders of the Preferred Shares then outstanding. No consideration
shall be offered or paid to any person to amend or consent to a waiver or
modification of any provision of this Agreement, the Registration Rights
Agreement or the Articles Supplementary unless the same consideration also
is offered to all the parties to this Agreement or the Registration Rights
Agreement or holders of the Preferred Shares, as the case may be.
F. NOTICES. Any notices required or permitted to be given under the
terms of this Agreement shall be sent overnight by express mail or
delivered personally or by courier (including an overnight delivery
service) or by facsimile and shall be effective upon receipt, if delivered
by overnight express mail, personally or by courier (including an overnight
delivery service) or by facsimile, in each case addressed to a party. The
addresses for such communications shall be:
If to the Company:
Anthracite Capital, Inc.
345 Park Avenue, 29th Floor
New York, NY 10154
Attention: Chief Financial Officer
Facsimile: 212-754-8758
With copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
Attention: Vincent J. Pisano, Esq.
Facsimile: 212-735-2000
If to the Buyer to:
RECP II Anthracite, LLC
c/o DLJ Real Estate Capital Partners II, L.P.
277 Park Avenue, 19th Floor
New York, NY 10172
Attention: Andrew P. Rifkin, Phillip C. Tager
and William C. Helm
Facsimile: (212) 892-7553
With copy to:
Rogers & Wells LLP
200 Park Avenue
New York, NY 10166
Attention: Robert E. King, Jr.
Facsimile: (212) 878-8375
Each party shall provide written notice to the other party of any change in
address.
G. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns.
Neither the Company nor the Buyer shall assign this Agreement or any rights
or obligations hereunder without the prior written consent of the other;
provided, that, subject to Section 2(F), the Buyer may assign its rights
and obligations hereunder to any person that purchases Securities in a
private transaction from the Buyer or to any of its "affiliates," as that
term is defined under the 1934 Act, without the consent of the Company;
provided, further, however, that the transferee has agreed in writing to be
bound by the provisions of this Agreement and acknowledges the assignment
provisions of the Registration Rights Agreement with such transferee
becoming a "Buyer" under this Agreement with all of the rights and
obligations the Buyer has hereunder and the Company shall have been
notified of the name and address of the transferee.
H. THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
I. FURTHER ASSURANCES. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
J. NO STRICT CONSTRUCTION. The language used in this Agreement
shall be deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against
any party.
K. EXPENSES. Each of the parties hereto shall pay its own costs and
expenses in connection with the transactions contemplated hereby, whether
or not such transactions shall be consummated, except as shall be
explicitly provided otherwise in the Registration Rights Agreement.
L. SURVIVAL. The agreements and covenants set forth in Sections 3,
4, 7 and 8 shall survive the closing hereunder notwithstanding any due
diligence investigation conducted by or on behalf of the Buyer.
M. KNOWLEDGE CLAUSES. As used in this Agreement, the phrases "to
the Company's knowledge," "to the knowledge of the Company" and phrases of
similar import means the knowledge of the Chief Executive Officer,
President, any Vice President and the Chief Financial Officer of the
Company, after reasonable investigation and inquiry commensurate with that
of a reasonable person holding such position with a public company in the
ordinary course of business.
N. VALIDITY. If fulfillment of any provision of this Agreement, at
the time such fulfillment shall be due, shall transcend the limit of
validity prescribed by law, then the obligation to be fulfilled shall be
reduced to the limit of such validity; and if any clause or provision
contained in this Agreement operates or would operate to invalidate this
Agreement, in whole or in part, then such clause or provision only shall be
held ineffective, as though not herein contained, and the remainder of this
Agreement shall remain operative and in full force and effect.
IN WITNESS WHEREOF, the Buyer and the Company have caused this
Agreement to be duly executed as of the date first above written.
ANTHRACITE CAPITAL, INC.
By: /s/ Richard M. Shea
----------------------------
Richard M. Shea
Chief Operating Officer and Chief Financial Officer
RECP II ANTHRACITE, LLC
By: /s/ Philip C. Tager
-----------------------------
Name: Philip C. Tager
Title: Senior Vice President
ADDRESS: 277 Park Avenue, 19th Floor
New York, NY 10172
AGGREGATE SUBSCRIPTION AMOUNT: $30,000,000
Number of Preferred Shares: 1,200,000
Exhibit 99.3
------------
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of December
2, 1999, by and among Anthracite Capital, Inc., a Maryland corporation,
with its headquarters located at 345 Park Avenue, 29th Floor, New York, NY
10154 (the "Company"), and RECP II Anthracite, LLC, a Delaware Limited
Liability Company (together with any assignee or transferee of all of its
respective rights hereunder, the "Investor"), a wholly-owned subsidiary of
DLJ Real Estate Capital Partners II, L.P. ("RECP").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the "Securities Purchase
Agreement"), the Company has agreed, upon the terms and subject to the
conditions contained therein, to issue and sell to the Investor shares of
its preferred stock ("Preferred Stock"), $.001 par value per share,
designated and classified 10.5% Series A Senior Cumulative Convertible
Redeemable Preferred Stock (the "Preferred Shares"), that are convertible
into shares (as converted, the "Conversion Shares") of the Company's common
stock, par value $.001 per share (the "Common Stock"), upon the terms and
subject to the limitations and conditions set forth in the Articles
Supplementary to the Articles of Incorporation of the Company (the
"Articles Supplementary"); and
B. To induce the Investor to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, or any similar successor statute
(collectively, the "1933 Act"), and applicable state securities laws;
C. The Company registered Preferred Stock and Common Stock pursuant
to a registration statement on Form S-3 filed under Rule 415 of the 1933
Act with the Securities and Exchange Commission (the "SEC") that was
declared effective by the SEC on September 29, 1999 (Registration No. 333-
75473) (the "Existing Registration Statement").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
the Investor hereby agrees as follows:
1. DEFINITIONS.
A. As used in this Agreement, the following terms shall have the
following meanings:
(i) "Investor" means RECP II Anthracite, LLC and any transferee
or assignee who agrees to become bound by the provisions of
this Agreement in accordance with Section 9 hereof.
(ii) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration
Statement or Statements in compliance with the 1933 Act and
pursuant to Rule 415 under the 1933 Act or any successor
rule providing for offering securities on a continuous basis
("Rule 415"), and the declaration or ordering of
effectiveness of such Registration Statement by the United
States Securities and Exchange Commission (the "SEC").
(iii) "Registrable Securities" means (i) the Preferred Shares
and the Conversion Shares issued or issuable upon
conversion of or otherwise pursuant to the Preferred
Shares, (ii) any securities of the Company issued as
(or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in
exchange by the Company generally for, or in
replacement by the Company generally of, the Preferred
Shares or the Conversion Shares or (iii) any
securities issued in exchange for Registrable
Securities in any merger or reorganization of the
Company.
(iv) "Registration Period" means the period ending on the
earliest to occur of (i) the sale of all the Registrable
Securities under an effective Registration Statement or (ii)
the date on which all of the Registrable Securities are
eligible for sale pursuant to Rule 144 under the 1933 Act
and can be sold in one transaction in accordance with the
volume limitations contained in Rule 144(e)(1)(i) under the
1933 Act, if applicable.
(v) "Registration Statement(s)" means a registration
statement(s) of the Company under the 1933 Act covering the
resale of the Registrable Securities, including the Existing
Registration Statement as amended by a post-effective
amendment allowing the Registrable Securities to be included
in the Existing Registration Statement.
B. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Securities Purchase
Agreement.
2. REGISTRATION.
A. DEMAND REGISTRATION. The Company, within sixty (60) days of the
date hereof, shall prepare and file with the SEC a Registration Statement
on Form S-3 (or, if Form S-3 is not then available, on such form of
Registration Statement as is then available to effect a registration of the
Registrable Securities) (the "Investor Registration Statement"), covering
the resale of the Registrable Securities and complying as to form in all
material respects with applicable SEC rules. The number of shares of
Preferred Stock initially included in such Registration Statement shall
equal the number of Preferred Shares issued. The number of shares of
Common Stock initially included in such Registration Statement shall equal
the number of Conversion Shares that are then issuable upon conversion of
the Preferred Stock. The Registration Statement, to the extent allowable
under the 1933 Act and the rules and regulations promulgated thereunder
(including Rule 416), shall state that such Registration Statement also
covers such indeterminate number of additional shares of Common Stock as
may become issuable upon conversion of the Preferred Shares to prevent
dilution resulting from stock splits, stock dividends or similar
transactions, and to the extent necessary such Registration Statement shall
be amended from time to time to cover additional Registrable Securities of
the Investor.
B. UNDERWRITTEN OFFERING. If any offering pursuant to a
Registration Statement pursuant to Section 2(A) hereof involves an
underwritten offering pursuant to Section 2E herein, the Investor shall
have the right to select one legal counsel and an investment banker or
bankers and manager or managers to administer the offering, which
investment banker or bankers or manager or managers and legal counsel shall
be reasonably satisfactory to the Company.
C. PIGGY-BACK REGISTRATIONS. Subject to the last sentence of this
Section 2(C), if at any time prior to the expiration of the Registration
Period, the Company shall determine to file with the SEC a Registration
Statement relating to an offering for its own account or the account of
others under the 1933 Act of any of its equity securities (other than on
Form S-4 or Form S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any
entity or business or equity securities issuable in connection with stock
option or other employee benefit plans), the Company shall send to the
Investor who is entitled to registration rights under this Section 2(C)
written notice of such determination and, if within ten (10) days after the
date of such written notice, the Investor shall so request in writing, the
Company shall include in such Registration Statement all or any part of the
Registrable Securities the Investor requests to be registered, except that
if, in connection with any underwritten public offering for the account of
the Company the managing underwriter(s) thereof shall impose a limitation
on the number of shares of Common Stock which may be included in the
Registration Statement because, in the good faith judgment of such
underwriter(s), marketing or other factors dictate that such limitation is
necessary to facilitate public distribution, then the Company shall be
obligated to include in such Registration Statement only such limited
number of the Registrable Securities with respect to which the Investor has
requested inclusion hereunder as the underwriter shall advise. Any
exclusion of Registrable Securities shall be made pro rata among the
Investor and any other holders of Registrable Securities seeking to include
Registrable Securities in proportion to the number of Registrable
Securities sought to be included by the Investor and such other holders of
Registrable Securities; provided, however, that the Company shall not
exclude any Registrable Securities unless the Company has first excluded
all outstanding securities, the holders of which are not entitled to demand
registration rights in such Registration Statement or are not entitled to
pro rata inclusion with the Registrable Securities; and provided, further,
however, that any exclusion of Registrable Securities shall be made pro
rata with holders of other securities having the right to include such
securities in the Registration Statement other than holders of securities
entitled to inclusion of their securities in such Registration Statement by
reason of demand registration rights. No right to registration of
Registrable Securities under this Section 2(C) shall be construed to limit
any registration required under Section 2(A) hereof. If an offering in
connection with which the Investor is entitled to registration under this
Section 2(C) is an underwritten offering, then the Investor whose
Registrable Securities are included in such Registration Statement shall,
unless otherwise agreed by the Company, offer and sell such Registrable
Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same
terms and conditions as other shares of Common Stock included in such
underwritten offering.
Notwithstanding anything to the contrary set forth herein, the
registration rights of the Investor pursuant to this Section 2(C) shall
only be available in the event and at such times as the Company fails to
timely file, obtain effectiveness or maintain effectiveness of any
Registration Statement to be filed pursuant to Section 2(A) in accordance
with the terms of this Agreement; provided, however, that if the Company
files a Registration Statement pursuant to this Section 2(C), the Company
shall take the steps necessary to obtain the effectiveness of or shall take
no steps to cause the lapse in effectiveness of, as the case may be, of any
such Registration Statement even if a Registration Statement filed pursuant
to Section 2(A) or this Section 2(C) becomes effective; provided, further,
however, that nothing contained in the preceding two provisos shall (i) be
construed as requiring the Company to register or maintain the registration
of any of the Registrable Securities pursuant to more than one Registration
Statement; or (ii) diminish the Company's obligation to register all of the
Registrable Securities.
D. ELIGIBILITY FOR FORM S-3. The Company represents and warrants
that it currently complies with the registrant eligibility and transaction
requirements for the use of Form S-3 for registration of the sale by the
Investor and of the Registrable Securities and the Company shall use its
best efforts to file all reports required to be filed by the Company with
the SEC in a timely manner so as to maintain such eligibility for the use
of Form S-3 until the expiration of the Registration Period.
3. OBLIGATIONS OF THE COMPANY. In connection with the registration of
the Registrable Securities, the Company shall have the following
obligations:
A. The Company shall prepare and file with the SEC a Registration
Statement with respect to the number of Registrable Securities provided in
Section 2(A), and thereafter use its best efforts to cause such
Registration Statement relating to the Registrable Securities to become
effective as soon as practicable after such filing (but in no event later
than ninety (90) days after the date on which the Investor Registration
Statement was filed with the SEC), and keep the Investor Registration
Statement effective, free of material misstatements or omissions (including
the preparation and filing of any amendments and supplements necessary for
such purpose), pursuant to Rule 415 at all times until the expiration of
the Registration Period and as a result of the event or circumstance
described in the foregoing clause, the legend with respect to transfer
restrictions required under the Agreement is removed. The Investor
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall comply with all applicable SEC rules
and regulations and shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein not misleading (except for an
untrue statement or alleged untrue statement of a material fact or omission
or alleged omission of a material fact made in reliance on and in
conformity with written information furnished to the Company by or on
behalf of the Investor specifically for use therein).
B. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Investor
Registration Statement and the prospectus used in connection with the
Investor Registration Statement as may be necessary to keep the Investor
Registration Statement effective at all times during the Registration
Period except for Allowed Delays, and, during such period, comply with the
provisions of the 1933 Act with respect to the disposition of all
Registrable Securities of the Company covered by the Investor Registration
Statement until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof as set forth in the Registration Statement.
C. The Company shall furnish to the Investor whose Registrable
Securities are included in a Registration Statement and its legal counsel,
without charge, (i) promptly after the same is prepared and publicly
distributed, filed with the SEC, or received by the Company, one copy of
each Registration Statement and any amendment thereto, each preliminary
prospectus and prospectus and each amendment or supplement thereto, and, in
the case of the Investor Registration Statement referred to in Section
2(A), each letter written by or on behalf of the Company to the SEC or the
staff of the SEC, and each item of correspondence from the SEC or the staff
of the SEC, in each case relating to such Registration Statement (other
than any portion thereof which contains information for which the Company
has sought confidential treatment), and (ii) such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as the Investor may reasonably
request in order to facilitate the disposition of the Registrable
Securities owned by the Investor. The Company will promptly notify the
Investor by facsimile of the effectiveness of each Registration Statement
or any post-effective amendment. The Company will promptly respond to any
and all comments received from the SEC, with a view towards causing each
Registration Statement or any amendment thereto to be declared effective by
the SEC as soon as practicable and shall file an acceleration request as
soon as practicable following the resolution or clearance of all SEC
comments or, if applicable, following notification by the SEC that any such
Registration Statement or any amendment thereto will not be subject to
review.
D. The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement
prior to the time that the Registration Statement is declared effective by
the SEC under all other securities or "blue sky" laws of all jurisdictions
in the United States as the Investor reasonably requests, (ii) prepare and
file in those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may
be necessary to maintain the effectiveness thereof during the Registration
Period, (iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary
or advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (a) qualify to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(D), (b) subject itself to general taxation
in any such jurisdiction and (c) file a general consent to service of
process in any such jurisdiction. The Company shall promptly notify the
Investor of the receipt by the Company of any notification with respect to
the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or "blue sky" laws of
any jurisdiction in the United States or its receipt of actual notice of
the initiation or threatening of any proceeding for such purpose.
E. In the event of an underwritten offering of the Registrable
Securities, the Investor shall select underwriters for the offering and the
Company shall enter into and perform its obligations under an underwriting
agreement, in usual and customary form, including, without limitation,
customary indemnification and contribution obligations, with the
underwriters of such offering. The Company shall only be obligated to
effect two such underwritten offerings pursuant to Section 2(B) hereof.
F. As promptly as practicable after becoming aware of such event,
the Company shall notify the Investor of the happening of any event, of
which the Company has knowledge, as a result of which the prospectus
included in any Registration Statement, as then in effect, includes an
untrue statement or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and use its
best efforts promptly to prepare a supplement or amendment to any
Registration Statement or the related prospectus or any document
incorporated therein by reference or file any other required document to
correct such untrue statement or omission, and deliver such number of
copies of such supplement or amendment to the Investor as the Investor may
reasonably request; provided that, at any time after the date which is
thirty (30) days after the Registration Statement is declared effective by
the SEC for not more than thirty (30) consecutive calendar days, the
Company may delay the disclosure of material non-public information
concerning the Company (as well as prospectus or Registration Statement
updating) the disclosure of which would materially impede, delay or
interfere with any pending material financing, acquisition or corporate
reorganization or other material corporate development involving the
Company or any of its subsidiaries, or require the disclosure of important
information which the Company has a material business purpose for
preserving as confidential or the disclosure of which would materially
impede the Company's ability to consummate a significant transaction (an
"Allowed Delay"); provided that no more than three such Allowed Delays may
be made in any twelve (12) month period; provided, further, that the
Company shall promptly (i) notify the Investor in writing of the existence
of an Allowed Delay and (ii) advise the Investor in writing to cease all
sales under such Registration Statement until the end of the Allowed Delay.
Upon expiration of the Allowed Delay, the Company shall again be bound by
the first sentence of this Section 3(F) with respect to the information
giving rise thereto.
G. The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of any Registration
Statement, and, if such an order is issued, to obtain the withdrawal of
such order at the earliest possible moment and to notify the Investor (or,
in the event of an underwritten offering, the managing underwriters) of the
issuance of such order and the resolution thereof.
H. The Company shall permit a single firm of counsel designated by
the holders whose shares make up at least a majority of the Registrable
Securities included in such Registration Statement to review such
Registration Statement and all amendments and supplements thereto (as well
as all requests for acceleration or effectiveness thereof), other than
documents filed pursuant to the Securities Exchange Act of 1934, as
amended, a reasonable period of time (but not less than five (5) business
days prior to the filing of such Registration Statement or supplement or
amendment thereto) prior to their filing with the SEC, and not file any
document in a form to which such counsel reasonably objects and will not
request acceleration of such Registration Statement without prior notice to
such counsel. The sections of such Registration Statement covering
information with respect to the Investor, the Investor's beneficial
ownership of securities of the Company or the Investor's intended method of
disposition of Registrable Securities shall conform in all material
respects to the information provided to the Company by the Investor.
I. The Company shall make generally available to its security
holders as soon as practicable, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the 1933 Act) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of the Registration
Statement.
J. The Company shall make available for inspection by (i) any
underwriter participating in any disposition pursuant to a Registration
Statement, (ii) one firm of attorneys and one firm of accountants or other
agents retained by the Investor, and (iii) one firm of attorneys retained
by all such underwriters (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the "Records"), as shall be
reasonably deemed necessary by each Inspector to enable each Inspector to
exercise its due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information which any
Inspector may reasonably request for purposes of such due diligence;
provided, however, that each Inspector shall hold in confidence and shall
not make any disclosure (except to an Investor or another Inspector) of any
Record or other information which the Company determines in good faith to
be confidential, and of which determination the Inspectors are so notified,
unless (a) the disclosure of such Records is necessary to avoid or correct
a misstatement or omission in any Registration Statement, (b) the release
of such Records is ordered pursuant to a subpoena or other order from a
court or government body of competent jurisdiction, or (c) the information
in such Records has been made generally available to the public other than
by disclosure in violation of this or any other agreement. The Company
shall not be required to disclose any confidential information in such
Records to any Inspector until and unless such Inspector shall have entered
into confidentiality agreements (in form and substance reasonably
satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3(J). The Investor agrees that
it shall, upon learning that disclosure of such Records is sought in or by
a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, the Records deemed confidential. Nothing
herein (or in any other confidentiality agreement between the Company and
the Investor) shall be deemed to limit the Investor's ability to sell
Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.
K. The Company shall hold in confidence and not make any disclosure
of information concerning the Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in any Registration Statement,
(iii) the release of such information is ordered pursuant to a subpoena or
other order from a court or governmental body of competent jurisdiction, or
(iv) such information has been made generally available to the public other
than by disclosure in violation of this or any other agreement. The
Company agrees that it shall, upon learning that disclosure of such
information concerning the Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt notice to the Investor prior to making such disclosure, and allow
the Investor, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.
L. The Company shall cause all the Registrable Securities covered by
the Registration Statement to be listed on each national securities
exchange on which securities of the same class or series issued by the
Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange.
Additionally, the Company shall, promptly after the registration of the
Conversion Shares with the SEC, apply to list the Conversion Shares on the
New York Stock Exchange.
M. The Company shall provide a transfer agent and registrar, which
may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
N. The Company shall cooperate with the Investor and the managing
underwriter or underwriters, if any, to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends)
representing Registrable Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the managing underwriter
or underwriters, if any, or the Investor may reasonably request and
registered in such names as the managing underwriter or underwriters, if
any, or the Investor may request. Additionally, management of the Company
shall make itself reasonably available in order to cooperate in good faith
with the managing underwriter or underwriters in connection with any road
show, presentations or conference calls undertaken in connection with an
underwritten offering pursuant to Section 2(B) hereof.
O. The Company shall, if reasonably requested by the Investor or
Investor's counsel, incorporate as promptly as practicable in a prospectus
supplement or post-effective amendment such information as such Investor or
Investor's counsel requests to be included therein, including, without
limitation, with respect to the Registrable Securities being sold by the
Investor to any underwriter or underwriters, the purchase price being paid
therefor by such underwriter or underwriters and any other terms of any
underwritten offering of the Registrable Securities to be sold in such
offering, and the Company shall as promptly as practicable make all
required filings of such prospectus supplement or post-effective amendment.
P. The Company shall reasonably cooperate with the Investor in good
faith to facilitate the timely preparation and delivery of certificates
(which shall not bear any restrictive legends unless required under
applicable law or the Company's Articles of Incorporation) representing
Registrable Securities sold under a Registration Statement to the
purchasers thereof, and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, or the Investor may request and keep available and
make available to the Company's transfer agent prior to the effectiveness
of such Registration Statement a supply of such certificates.
Q. The Company shall enter into such customary agreements
(including, if applicable, an underwriting agreement in customary form) and
take such other actions as the Investor or the underwriters participating
in an underwritten public offering, if any, may reasonably request in order
to expedite or facilitate the disposition of Registrable Securities. The
Investor may, at its option, require that any or all of the
representations, warranties and covenants of the Company to or for the
benefit of any underwriters also be made to and for the benefit of the
Investor.
R. The Company shall furnish to the Investor whose Registrable
Securities are included in the offering and to each underwriter, if any, if
requested by the Investor or underwriter, a signed counterpart, addressed
to the Investor or underwriter, of (i) an opinion or opinions of counsel to
the Company and (ii) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering matters
of the type customarily covered by opinions or comfort letters, as the case
may be.
S. The Company shall, during the period when the prospectus is
required to be delivered under the Securities Act, file in a timely fashion
all documents required to be filed with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act.
T. The Company covenants that it will file any reports required to
be filed by it under the Securities Act and the Exchange Act, and the rules
and regulations adopted by the Commission thereunder (or, if the Company is
not required to file such reports, it will, upon the request of any
Investor, make publicly available other information so long as necessary to
permit sales of the Registrable Securities under Rule 144 under the
Securities Act), and it will take such further action as any Investor may
reasonably request, all to the extent required from time to time to enable
such Investor to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule
144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any successor rule or similar provision or regulation
hereafter adopted by the Commission. Upon the request of any Investor, the
Company will deliver to such Investor a written statement as to whether it
has complied with such requirements.
U. The Company covenants that it will file all reports required to
be filed by it under the Securities Act and the Exchange Act, and the rules
and regulations adopted by the Commission thereunder (or if the Company is
not required to file such reports, it will, upon the request of any
Investor, make available other information so long as necessary to permit
sales of the Registrable Securities pursuant to Rule 144A under the
Securities Act), and it will take such further action as any Investor may
request, all to the extent required from time to time to enable such
Investor to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule
144A, as such rule may be amended from time to time, or (b) any successor
rule or similar provision or regulation hereafter adopted by the
Commission.
4. OBLIGATIONS OF THE INVESTOR. In connection with the registration of
the Registrable Securities, the Investor shall have the following
obligations.
A. The Investor shall promptly furnish (but in no event later than
three (3) business days prior to the filing of any Registration Statement
or amendment(s) or supplement(s) thereto with respect to the Registrable
Securities) to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of
the Registrable Securities held by it as shall be reasonably required to
effect the registration of such Registrable Securities and shall execute
such documents in connection with such registration as the Company may
reasonably request. At least six (6) business days prior to the
anticipated filing date of the Registration Statement and any amendment(s)
or supplement(s) thereto, the Company shall notify the Investor of the
information the Company reasonably requires from the Investor and the
Investor shall supply or cause its representatives to supply such
information within three (3) business days; provided, however, that if the
Investor fails to deliver to the Company the information referred to in the
first sentence of this paragraph prior to the filing of the Registration
Statement or amendment(s) or supplement(s) thereto, the Investor shall bear
the cost of any additional Registration Statement or amendment(s) or
supplement(s) thereto which the Company is required to file due solely to
such failure; provided, however, that the failure of the Investor to
provide such information shall not delay or otherwise prevent the Company
from the filing of the Registration Statement or amendment(s) or
supplement(s) thereto.
B. The Investor, by the Investor's acceptance of the Registrable
Securities for inclusion in a Registration Statement, agrees to cooperate
with the Company as reasonably requested by the Company in connection with
the preparation and filing of a Registration Statement hereunder, unless
the Investor has notified the Company in writing of the Investor's election
to exclude all of the Investor's Registrable Securities from a Registration
Statement.
C. In the event the Investor determines to engage the services of an
underwriter, the Investor agrees to enter into and perform the Investor's
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and take such
other actions as are reasonably required in order to expedite or facilitate
the disposition of the Registrable Securities, unless the Investor has
notified the Company in writing of such Investor's election to exclude all
of the Investor's Registrable Securities from the Registration Statement.
D. The Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(F)
or 3(G), the Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until the Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(F) or 3(G) or
notice from the Company that such supplement or amendment is not necessary
and, if so directed by the Company, the Investor shall deliver to the
Company (at the expense of the Company) or destroy (and deliver to the
Company a certificate of destruction) all copies in the Investor's
possession, of the prospectus covering such Registrable Securities current
at the time of receipt of such notice.
E. No Investor may participate in any underwritten registration
hereunder unless the Investor (i) agrees to sell the Investor's Registrable
Securities on the basis provided in any underwriting arrangements in usual
and customary form entered into by the Company and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements and (iii) agrees to pay its pro rata share of all
underwriting discounts and commissions and any expenses in excess of those
payable by the Company pursuant to Section 5 below.
F. At any time after the date which is thirty (30) days after the
date on which the Registration Statement is declared effective by the SEC,
in connection with any firm commitment underwritten public offering of the
Common Stock (other than any registration by the Company on Form S-4 or S-
8, as the case may be, or a successor or substantially similar form, of (A)
an employee stock option, stock purchase or compensation plan or of
securities issued or issuable pursuant to any such plan or (B) a dividend
reinvestment plan) resulting in gross proceeds to the Company of at least
$10,000,000 led by at least one underwriter of nationally recognized
standing (a "Qualified Public Offering"), the Investor agrees, if requested
in writing by the managing underwriter or the underwriters administering
such offering, not to sell Registrable Securities pursuant to the
Registration Statement in any public sale for a period commencing on the
seventh day prior to the expected effective date of the registration
statement covering such Qualified Public Offering or the date on which the
proposed offering is expected to commence (which date shall be stated in
such notice) and ending on the date specified by such managing underwriter
in such written request to the Investor, which date shall not be later than
forty-five (45) days after such expected date of effectiveness or the
commencement of the offering, as the case may be (the "Underwriters Lock-Up
Period"); provided that such underwriters in good faith determine that the
sale of the Registrable Securities under a Registration Statement would
have a material adverse effect on such Qualified Public Offering; and
further, provided that all of the Company's directors, executive officers
and affiliates shall have also agreed to similar restrictions. The
Investor shall be subject to no more than one such restriction in each
twelve (12) month period during the Registration Period.
5. EXPENSES OF REGISTRATION. All reasonable expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all SEC, state and stock exchange securities
registration, listing and qualification fees, all expenses incurred in
connection with the preparation, printing and distribution of the
Registration Statement and prospectus (including all expenses incurred with
the delivery to the Investor of such number of copies of any prospectus as
the Investor may reasonably request), the fees and disbursements of counsel
for the Company and the independent public accountants of the Company,
shall be borne by the Company (provided that the fees and disbursements of
the counsel selected by the Investor pursuant to Section 3(H) shall be paid
by the Investor), whether or not the Registration Statement is declared
effective by the SEC.
6. INDEMNIFICATION. In the event any Registrable Securities are included
in a Registration Statement under this Agreement:
A. To the extent permitted by law, the Company will indemnify, hold
harmless and defend: (i) the Investor who holds such Registrable
Securities, (ii) the directors, officers, partners, trustees, stockholders,
employees, agents and each person who controls the Investor within the
meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended
(the "1934 Act"), if any, (iii) any underwriter (as defined in the 1933
Act) for the Investor (subject to the Company receiving customary
indemnification from any such underwriter), and (iv) the directors,
officers, partners, employees and each person who controls any such
underwriter within the meaning of the 1933 Act or the 1934 Act, if any
(each, an "Indemnified Person"), against any joint or several losses,
claims, damages, liabilities or expenses (collectively, together with
actions, proceedings or inquiries by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof,
"Claims") to which any of them may become subject insofar as such Claims
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement (or any amendment
thereto), including all documents incorporated therein by reference, or the
omission or alleged omission to state therein a material fact required to
be stated or necessary to make the statements therein not misleading; (ii)
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the effective date
of such Registration Statement, or contained in the final prospectus (as
amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC), including all documents incorporated
therein by reference, or the omission or alleged omission to state therein
any material fact necessary to make the statements made therein, in light
of the circumstances under which the statements therein were made, not
misleading; or (iii) any violation or alleged violation by the Company of
the 1933 Act, the 1934 Act, any other securities laws including without
limitation, any state securities laws, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities (the matters in
the foregoing clauses (i) through (iii) being, collectively, "Violations").
Subject to the restrictions set forth in Section 6(C) with respect to the
number of legal counsel, the Company shall reimburse the Indemnified
Person, promptly as such expenses are incurred and are due and payable, for
any reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a): (i) shall not apply to a Claim arising out
of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by any
Indemnified Person or underwriter for such Indemnified Person expressly for
use in connection with such Registration Statement or preliminary or final
prospectus or any such amendment thereof or supplement thereto; (ii) shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which consent
shall not be unreasonably withheld; and (iii) with respect to any
preliminary prospectus, shall not inure to the benefit of any Indemnified
Person if the untrue statement or omission or alleged untrue statement or
omission of a material fact contained in the preliminary prospectus was
corrected on a timely basis in the prospectus, as then amended or
supplemented, such corrected prospectus was timely made available by the
Company pursuant to Section 3(C) hereof, and the Indemnified Person was
promptly advised in writing not to use the incorrect prospectus prior to
the use giving rise to a Violation and such Indemnified Person,
notwithstanding such advice, used it. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investor.
B. In connection with any Registration Statement in which the
Investor is participating, the Investor agrees to indemnify, hold harmless
and defend, to the same extent and in the same manner set forth in Section
6(A), the Company, each of its directors, each of its officers who signs
the Registration Statement, each person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act, any underwriter and any
other stockholder selling securities pursuant to the Registration Statement
or any of its directors or officers or any person who controls such
stockholder or underwriter within the meaning of the 1933 Act or the 1934
Act (an "Indemnified Party"), against any Claim to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as
such Claim arises out of or is based upon any Violation by the Investor, in
each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished to
the Company by the Investor expressly for use in connection with such
Registration Statement or preliminary or final prospectus or any such
amendment or supplement thereof or thereto; and subject to Section 6(C) the
Investor will reimburse any legal or other expenses promptly as such
expenses are incurred and are due and payable reasonably incurred by them
in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(B) shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Investor, which consent
shall not be unreasonably withheld; provided, further, however, that the
Investor shall be liable under this Agreement (including this Section 6(B)
and Section 7) for only that amount as does not exceed the net proceeds to
the Investor as a result of the sale of Registrable Securities pursuant to
such Registration Statement (after deducting the amounts already paid to
Indemnified Parties by the Investor pursuant to this Section 6(B) or
Section 7). Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified
Party and shall survive the transfer of the Registrable Securities by the
Investor pursuant to Section 9. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section
6(B) with respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of
material fact contained in the preliminary prospectus was corrected on a
timely basis in the prospectus, as then amended or supplemented.
C. Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party
a written notice of the commencement thereof, and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly
noticed, to assume control of the defense thereof at such indemnifying
party's or parties' own expense with counsel reasonably satisfactory to the
Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an indemnifying party shall not be entitled to assume such
defense and an Indemnified Person or Indemnified Party shall have the right
to retain its own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by
the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential conflict of interest under
applicable rules of professional conduct or that there may be legal
defenses available to the Indemnified Party which are different from or in
addition to those available to the indemnifying party. The indemnifying
party shall pay for up to one separate legal counsel for the Indemnified
Persons or the Indemnified Parties, as applicable, and such legal counsel
shall be selected by the Investor, if the Investor is entitled to
indemnification hereunder, or the Company, if the Company is entitled to
indemnification hereunder, as applicable. If the indemnifying party is not
entitled to assume the defense of such action or proceeding, the
indemnifying party's counsel shall be entitled to conduct the indemnifying
party's defense, and counsel for the Indemnified Party shall be entitled to
conduct the defense of the Indemnified Party, it being understood that both
such counsel will cooperate with each other to conduct the defense of such
action or proceeding as efficiently as possible. If the indemnifying party
(i) is not so entitled to assume the defense of such action, (ii) does not
assume such defense, after having received the notice referred to in the
first sentence of this paragraph, or (iii) fails to employ counsel that is
reasonably satisfactory to the Indemnified Party, after having received the
notice referred to in the first sentence of this paragraph, the
indemnifying party will pay the reasonable fees and expenses of counsel for
the Indemnified Party. In such event, however, the indemnifying party will
not be liable for any settlement effected without the written consent of
the indemnifying party, which consent shall not be unreasonably withheld.
No indemnifying party shall, without the consent of the Indemnified Party,
consent to entry of any judgment or enter into a settlement that does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation. If an indemnifying party is entitled
to assume, and assumes, the defense of such action or proceeding in
accordance with this paragraph, the indemnifying party shall not be liable
for any fees and expenses of counsel for the Indemnified Party incurred
thereafter in connection with such action or proceeding. The failure to
deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party under
this Section 6, except to the extent that the indemnifying party is
actually prejudiced in its ability to defend such action. The
indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due
and payable.
D. The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to law.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to
make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted
by law; provided, however, that (i) no contribution shall be made under
circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 6, (ii) no
seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty
of such fraudulent misrepresentation, and (iii) contribution (together with
any indemnification or other obligations under this Agreement) by any
seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such
Registrable Securities pursuant to such Registration Statement (after
deducting amounts already paid to indemnified parties by the Investor under
Sections 6(B) and 7).
8. ASSIGNMENT OF REGISTRATION RIGHTS. This Agreement shall inure to the
benefit of and be binding on the successors, assigns and transferees of
each of the parties, including, without limitation and without the need for
an express assignment, subsequent Investors. If any successor, assignee or
transferee of the Investor shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable
Securities shall be held subject to all of the terms of this Agreement, and
by taking and holding Registrable Securities such Person shall be
conclusively deemed to have agreed to be bound by all of the terms and
provisions hereof.
9. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with
the written consent of the Company and the holder(s) of a majority in
interest of the Registrable Securities; provided, however, that for
purposes of this Agreement, Registrable Securities that are owned, directly
or indirectly, by either the Company or an affiliate of the Company shall
not be deemed outstanding. Any amendment or waiver effected in accordance
with this Section 9 shall be binding upon the Investor and the Company.
10. MISCELLANEOUS.
A. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record or beneficially
such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons or entities
with respect to the same Registrable Securities, the Company shall act upon
the basis of an instruction, notice or election received from the
registered owner of such Registrable Securities and the Company shall have
no liability for following instructions from the registered owner of the
Registrable Securities and the registered owner by providing such
instructions agrees to indemnify the Company in accordance with the
provisions of Section 6(B).
B. Any notices required or permitted to be given under the terms
hereof shall be sent overnight by express mail or delivered personally or
by courier (including an overnight delivery service) or by facsimile and
shall be effective upon receipt, if delivered by overnight express mail,
personally or by courier (including an overnight delivery service) or by
facsimile, in each case addressed to a party. The addresses for such
communications shall be:
If to the Company:
Anthracite Capital, Inc.
345 Park Avenue, 29th Floor
New York, NY 10154
Attention: Chief Financial Officer
Facsimile: (212) 754-8758
With copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
Attention: Vincent J. Pisano, Esq.
Facsimile: 212-735-2000
If to the Investor: to
RECP II Anthracite, LLC
c/o DLJ Real Estate Capital Partners II, L.P.
277 Park Avenue, 19th Floor
New York, NY 10172
Attention: Andrew P. Rifkin, Phillip C. Tager and William C. Helm
Facsimile: (212) 892-7553
With copy to:
Rogers & Wells LLP
200 Park Avenue
New York, NY 10166
Attention: Robert G. King, Jr.
Facsimile: 212-878-8375
C. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
D. This Agreement shall be enforced, governed by and interpreted in
accordance with the laws of the State of New York without regard to the
principles of conflicts of laws. The parties agree that all disputes
between any of them arising out of, connected with, related to, or
incidental to the relationship established between them in connection with
this Agreement, and whether arising in law or in equity or otherwise, shall
be resolved by the federal or state courts located in New York, New York.
Nothing herein shall affect the right of any party to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the other in any other jurisdiction. In addition, each of
the parties hereto consents to submit to the personal jurisdiction of any
federal or state court located in the state of New York in the event that
any dispute arises out of this Agreement. The parties, for themselves and
their respective affiliates, hereby irrevocably waive all right to a trial
by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to the actions of
the parties or their respective affiliates pursuant to this Agreement in
the negotiation, administration, performance or enforcement thereof.
E. This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof.
F. Subject to the requirements of Section 8 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto and is not for the benefit of, nor
may any provision hereof be enforced by, any other person.
G. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
H. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this
Agreement.
I. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
J. Each of the parties shall pay its own costs and expenses in
connection with the transactions contemplated hereby, whether such
transactions are consummated, except as otherwise specifically provided
herein.
K. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules
of strict construction will be applied against any party.
L. The Company agrees to indemnify and hold harmless the Investor
and its respective officers, directors, employees and agents for loss, cost
or damages (including reasonable attorney's fees) arising as a result of or
related to any breach or alleged breach by the Company of its obligations
under this Agreement or in connection with the enforcement by the Investor
of any of the Company's obligations hereunder, including the enforcement of
this indemnity.
M. No waiver by a party hereto shall be effective unless made in a
written instrument duly executed by the party against whom such waiver is
sought to be enforced, and only to the extent set forth in such instrument.
Neither the waiver by any of the parties hereto of a breach or a default
under any of the provisions of this Agreement, nor the failure of any of
the parties, on one or more occasions, to enforce any of the provisions of
this Agreement or to exercise any right or privilege hereunder, shall
thereafter be construed as a waiver of any subsequent breach or default of
a similar nature, or as a waiver of any such provisions, rights or
privileges hereunder.
N. The parties hereto acknowledge that the obligations undertaken by
them hereunder are unique and that there would be no adequate remedy at law
if any party fails to perform any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which
it may be entitled at law or in equity, shall be entitled to (i) compel
specific performance of the obligations, covenants and agreements of any
other party under this Agreement in accordance with the terms and
conditions of this Agreement and (ii) obtain preliminary injunctive relief
to secure specific performance and to prevent a breach or contemplated
breach of this Agreement in any court of the United States or any State
thereof having jurisdiction.
O. If fulfillment of any provision of this Agreement, at the time
such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to
the limit of such validity; and if any clause or provision contained in
this Agreement operates or would operate to invalidate this Agreement, in
whole or in part, then such clause or provision only shall be held
ineffective, as though not herein contained, and the remainder of this
Agreement shall remain operative and in full force and effect.
IN WITNESS WHEREOF, the Company and the Investor have caused this
Agreement to be duly executed as of the date first above written.
ANTHRACITE CAPITAL, INC.
By:/s/ Richard M. Shea
--------------------------------
Richard M. Shea
Chief Operating Officer and
Chief Financial Officer
RECP II ANTHRACITE, LLC
By: /s/ Philip C. Tager
--------------------------------
Name: Philip C. Tager
Title: Senior Vice President
ADDRESS: 277 Park Avenue, 19th Floor
New York, NY 10172
Exhibit 99.4
------------
Thursday December 2, 3:28 pm Eastern Time
Company Press Release
Anthracite Announces $30 Million Capital
Investment by DLJ Real Estate Capital Partners
II, L.P.
NEW YORK--(BUSINESS WIRE)--Dec. 2, 1999--Anthracite Capital, Inc.
(Anthracite) (NYSE: AHR - news) announced today that DLJ Real Estate
Capital Partners II, L.P. (RECP), an affiliate of Donaldson, Lufkin and
Jenrette, Inc. (NYSE: DLJ - news) has made a $30 million investment in
Series A convertible preferred securities of Anthracite.
Hugh R. Frater, President and Chief Executive Officer of Anthracite, stated
"We are excited to increase our long-term capital base to over $200 million
while strengthening our strategic relationship with DLJ, one of the leading
real estate investment banks and equity investors. There are excellent
investment opportunities currently available in the commercial and
residential mortgage finance sectors and we expect that deployment of this
new capital into additional investments will be accretive to earnings in
2000."
The new series of private preferred stock carries a 10.5% coupon and is
convertible into AHR common stock at a price of $7.35. If converted, the
series A preferred would convert into approximately 4 million shares of
Anthracite common stock. The preferred stock was privately placed by
Anthracite and there was no underwriting discount paid. In connection with
the preferred investment the Board of Directors of Anthracite will be
expanded to include Andrew P. Rifkin, Managing Director of DLJ.
Mr. Rifkin stated, "We are excited about the opportunity to work with
Anthracite, which we consider to be one of the leaders in the commercial
and residential mortgage sectors. With its expanded capital base,
Anthracite is well positioned to take advantage of current market
conditions. This investment is consistent with RECP's strategy of aligning
itself with strong management teams to capitalize on market dislocations."
Prior to year end, Anthracite anticipates closing $19 million of
subordinate CMBS investments which will be funded in part by the closing of
a new $50 million, two year financing facility. With the closing of the
preferred investment and the new financing facility Anthracite will have
closed over $280 million in multi-year financings during 1999.
Anthracite is a specialty finance company externally managed by BlackRock,
Inc., a New York City based investment manager with over $148 billion in
global assets under management. The company's principal business objective
is to generate net income for distribution to stockholders from the spread
between the interest income on its mortgage-backed securities and loan
investments and the costs of financing these investments.
DLJ is a global investment and merchant banking firm servicing a broad
array of institutional, corporate, government and individual clients. DLJ
has assets of over $98 billion and 12,000 employees worldwide. Formed in
1995, RECP and its affiliates have invested in over 50 real estate
transactions, acquiring a diversified portfolio of real estate assets with
an aggregate transaction value in excess of $2.0 billion.
Certain matters discussed in this press release may constitute
forward-looking statements within the meaning of the federal securities
laws. Anthracite's actual results could differ materially from those
anticipated in such forward-looking statements as a result of certain
factors, including those detailed from time to time in Anthracite's reports
and filings with the Securities and Exchange Commission.
For further information, please contact Hugh Frater, President and Chief
Executive Officer at 212-754-5535 or Richard Shea, Chief Operating Officer
and Chief Financial Officer at 212-754-5579, or visit Anthracite's website
at www.anthracitecapital.com.
Contact:
Anthracite Capital, Inc.
Hugh R. Frater
President and CEO
Tel: (212) 754-5535
-or-
Richard Shea
COO and CFO
Tel: (212) 754-5579
