Exhibit 10.1

 

GREAT AJAX CORP.

2,265,000 Shares of Common Stock

 

UNDERWRITING AGREEMENT

 

June 10, 2016

 

PIPER JAFFRAY & CO.

As Representative of the several Underwriters

 

c/o Piper Jaffray & Co.

U.S. Bancorp Center

800 Nicollet Mall, Suite 800

Minneapolis, Minnesota 55402

 

Dear Sirs:

 

Great Ajax Corp., a Maryland corporation (the “Company”), Great Ajax Operating
Partnership LP, a Delaware limited partnership (the “Operating Partnership”),
and Thetis Asset Management LLC, a Delaware limited liability company (the
“Manager”), each confirms its agreement with each of the Underwriters listed on
Schedule I hereto (collectively, the “Underwriters”), for whom Piper Jaffray &
Co. (“Piper”) is acting as Representative (in such capacity, the
“Representative”), with respect to (i) the sale by the Company of 2,265,000
shares (the “Initial Shares”) of Common Stock, par value $0.01 per share, of the
Company (the “Common Stock”), and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of shares of Common Stock
set forth opposite the names of the Underwriters in Schedule I hereto, and
(ii) the grant of the option described in Section 1(b) hereof to purchase all or
any part of 339,750 additional shares of Common Stock (the “Option Shares”) from
the Company to the Underwriters, acting severally and not jointly, in the
respective numbers of shares of Common Stock set forth opposite the names of
each of the Underwriters listed in Schedule I hereto. The Initial Shares to be
purchased by the Underwriters and all or any part of the Option Shares subject
to the option described in Section 1(b) hereof are hereinafter called,
collectively, the “Shares.”

 

The Company understands that the Underwriters propose to make a public offering
of the Shares as soon as the Underwriters deem advisable after this Underwriting
Agreement (the “Agreement”) has been executed and delivered.

 

The Company has filed with the Securities and Exchange Commission (the
“Commission”), a registration statement on Form S-3 (No. 333-209513) including a
related base prospectus, for the registration of the Shares under the Securities
Act of 1933, as amended (the “Securities Act”), and the rules and regulations
thereunder (the “Securities Act Regulations”). The registration statement has
been declared effective under the Securities Act by the Commission. Such
registration statement, as of any time, means such registration statement as

 

 

 

  

amended by any post-effective amendments thereto to such time, including the
exhibits and any schedules thereto at such time, the documents incorporated by
reference therein at such time pursuant to Item 12 of Form S-3 under the
Securities Act and the documents otherwise deemed to be a part thereof as of
such time pursuant to Rule 430B (“Rule 430B”) under the Securities Act
Regulations (the “430B Information”), is referred to herein as the “Registration
Statement;” provided, however, that the “Registration Statement” without
reference to a time means such registration statement as amended by any
post-effective amendments thereto as of the time of the first contract of sale
for the Shares, which time shall be considered the “new effective date” of such
registration statement with respect to the Shares within the meaning of
paragraph (f)(2) of Rule 430B, including the exhibits and schedules thereto as
of such time, the documents incorporated or deemed incorporated by reference
therein at such time pursuant to Item 12 of Form S-3 under the Securities Act
and the 430B Information. Any registration statement filed pursuant to
Rule 462(b) of the Securities Act Regulations is hereinafter called the
“Rule 462(b) Registration Statement,” and after such filing the term
“Registration Statement” shall include the 462(b) Registration Statement.

 

The base prospectus in the form in which it has most recently been filed with
the Commission on or prior to the date of this Agreement is herein called the
“Base Prospectus.” Each preliminary prospectus supplement to the Base Prospectus
(including the Base Prospectus as so supplemented), that describes the Shares
and the offering thereof, that omitted the Rule 430B Information and that was
used prior to the filing of the final prospectus supplement referred to in the
following sentence is herein called a “Preliminary Prospectus.” Promptly after
execution and delivery of this Agreement, the Company will prepare and file with
the Commission a final prospectus supplement to the Base Prospectus relating to
the Shares and the offering thereof in accordance with the provisions Rule 430B
and Rule 424(b) of the Securities Act Regulations. Such final prospectus
supplement (including the Base Prospectus as so supplemented) in the form filed
with the Commission pursuant to Rule 424(b) is herein called the “Prospectus.”
Any reference herein to the Base Prospectus, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of
the date of such prospectus.

 

For purposes of this Agreement, all references to the Registration Statement,
the Rule 462(b) Registration Statement, the Base Prospectus, any Preliminary
Prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval System or any successor
system thereto (“EDGAR”). All references in this Agreement to financial
statements and schedules and other information which is “described,”
“contained,” “included” or “stated” in the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Prospectus (or other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is incorporated by reference in or
otherwise deemed by the Rules and Regulations to be a part of or included in the
Registration Statement, the Base Prospectus, any Preliminary Prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, the Base Prospectus,
any Preliminary Prospectus or the Prospectus shall be deemed to mean and include
the subsequent filing of any document under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and which is deemed to be

 

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incorporated by reference therein or otherwise deemed by the Rules and
Regulations to be a part thereof.

 

The term “Disclosure Package” means (i) the Preliminary Prospectus, as most
recently amended or supplemented immediately prior to the Initial Sale Time (as
defined herein), (ii) the Issuer Free Writing Prospectuses (as defined below),
if any, identified in Schedule II hereto, (iii) any other Free Writing
Prospectus (as defined below) that the parties hereto shall hereafter expressly
agree to treat as part of the Disclosure Package and (iv) the information set
forth included on Schedule III hereto.

 

The term “Issuer Free Writing Prospectus” means any issuer free writing
prospectus, as defined in Rule 433 of the Securities Act Regulations. The term
“Free Writing Prospectus” means any free writing prospectus, as defined in
Rule 405 of the Securities Act Regulations.

 

The Company, the Operating Partnership, the Manager and the Underwriters agree
as follows:

 

1.           Sale and Purchase.

 

(a)          Initial Shares. Upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per share of Common Stock of $12.455 with respect to 1,757,918 of the
Initial Shares and $13.25 with respect to 507,082 of the Initial Shares, the
Company agrees to sell to the Underwriters the Initial Shares, and each
Underwriter agrees, severally and not jointly, to purchase from the Company the
number of Initial Shares set forth in Schedule I opposite such Underwriter’s
name, plus any additional number of Initial Shares which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 8 hereof,
subject in each case, to such adjustments among the Underwriters as the
Representative in its sole discretion shall make to eliminate any sales or
purchases of fractional shares.

 

(b)          Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per share of Common Stock set forth in paragraph (a) above, the Company
hereby grants an option to the Underwriters, acting severally and not jointly,
to purchase from the Company, all or any part of the Option Shares, plus any
additional number of Option Shares in the same proportion which such Underwriter
may become obligated to purchase pursuant to the provisions of Section 9 hereof.
The option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time within such 30-day period upon
notice by the Representative to the Company setting forth the number of Option
Shares as to which the several Underwriters are then exercising the option and
the time and date of payment and delivery for such Option Shares. Any such time
and date of delivery (an “Option Closing Time”) shall be determined by the
Representative, but shall not be later than three full business days (or
earlier, without the consent of the Company, than two full business days) after
the exercise of such option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Shares, each of the Underwriters, acting severally and not jointly, will
purchase its proportionate share of the number of Option Shares then being
purchased based on its proportionate share of the number of Initial Shares set
forth in Schedule I opposite the name

 

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of such Underwriter, subject in each case to such adjustments among the
Underwriters as in their sole discretion shall make to eliminate any sales or
purchases of fractional shares.

 

2.           Payment and Delivery.

 

(a)          Initial Shares. The Initial Shares to be purchased by each
Underwriter hereunder, registered in such names and amounts as the
Representative may request upon at least 48 hours’ prior notice to the Company,
shall be delivered by or on behalf of the Company to the Representative through
the facilities of The Depository Trust Company (“DTC”) for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified to the Representative by the Company. The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, at the office of
Clifford Chance US LLP, 31 West 52nd Street, New York, New York 10019 (the
“Designated Office”), on the third (fourth, if the determination of the purchase
price of the Initial Shares occurs after 4:30 p.m., New York City time) business
day after the date hereof (unless another time and date shall be agreed to by
the Representative and the Company). The time and date at which such delivery
and payment are actually made is hereinafter called the “Closing Time.”

 

(b)          Option Shares. Any Option Shares to be purchased by each
Underwriter hereunder, registered in such names and amounts as the
Representative may request upon at least 48 hours’ prior notice to the Company
shall be delivered by or on behalf of the Company to the Representative through
the facilities of DTC for the account of such Underwriter, against payment by or
on behalf of such Underwriter of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified to the Representative by the
Company. The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, at the Designated Office, on the date specified by the
Representative in the notice given by the Representative to the Company of the
Underwriters’ election to purchase such Option Shares or on such other time and
date as the Company and the Representative may agree upon in writing.

 

3.           Representations and Warranties of the Company and the Operating
Partnership.

 

The Company and the Operating Partnership, jointly and severally, represent and
warrant to the Underwriters as of the date hereof, the Initial Sale Time (as
defined below), as of the Closing Time and as of any Option Closing Time (if
any), and agrees with each Underwriter, that:

 

(a)          the Company has the authorized capitalization as set forth in the
Registration Statement, the Disclosure Package and the Prospectus under the
section captioned “Capitalization”; the outstanding shares of capital stock of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable. All of the outstanding shares of capital stock, partnership
interests and membership interests, as the case may be, of the subsidiaries of
the Company identified on Schedule IV hereto (each, a “Subsidiary”) have been
duly authorized and are validly issued, fully paid and non-assessable securities
thereof and, except as disclosed in both the Prospectus and the Disclosure
Package, all of the outstanding shares of capital stock, partnership interest or
membership interests, as the case may be, of the

 

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Subsidiaries are directly or indirectly owned of record and beneficially by the
Company; except as disclosed in both the Prospectus and the Disclosure Package,
there are no outstanding (i) securities or obligations of the Company or any of
the Subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such Subsidiary, (ii) warrants, rights or options to subscribe
for or purchase from the Company or any such Subsidiary any such capital stock
or any such convertible or exchangeable securities or obligations, or
(iii) obligations of the Company or any such Subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or obligation, or
any such warrants, rights or options; all issued and outstanding units of
partnership interest in the Operating Partnership (“Units”) owned by the Company
are owned free and clear of any perfected security interest or any other
security interests, claims, liens or encumbrances;

 

(b)          each of the Company and each of the Subsidiaries has been duly
incorporated, formed or organized and is validly existing as a corporation,
general or limited partnership or limited liability company in good standing
under the laws of its respective jurisdiction of incorporation, formation or
organization with full power and authority to own its respective properties and
to conduct its respective businesses as described in each of the Registration
Statement, the Prospectus and the Disclosure Package, and, in the case of the
Company and the Operating Partnership, to execute and deliver this Agreement and
to consummate the transactions contemplated herein and to perform its
obligations under the Amended and Restated Management Agreement, dated October
27, 2015, by and among the Company, the Operating Partnership and the Manager
(the “Management Agreement”);

 

(c)          the Company and each of the Subsidiaries is duly qualified or
licensed and in good standing in each jurisdiction in which it conducts its
businesses or in which it owns or leases real property or otherwise maintains an
office and in which the failure, individually or in the aggregate, to be so
qualified or licensed would have a material adverse effect on the assets,
business, operations, earnings, prospects, properties or condition (financial or
otherwise) of the Company and the Subsidiaries taken as a whole, (any such
effect or change, where the context so requires, is hereinafter called a
“Material Adverse Effect” or “Material Adverse Change”); except as disclosed in
both the Prospectus and the Disclosure Package, no Subsidiary is prohibited or
restricted, directly or indirectly, from paying dividends to the Company, or
from making any other distribution with respect to such Subsidiary’s capital
stock or from repaying to the Company or any other Subsidiary any amounts which
may from time to time become due under any loans or advances to such Subsidiary
from the Company or such other Subsidiary, or from transferring any such
Subsidiary’s property or assets to the Company or to any other Subsidiary; other
than as disclosed in both the Prospectus and the Disclosure Package, the Company
and the Operating Partnership do not own, directly or indirectly, any capital
stock or other equity securities of any other corporation or any ownership
interest in any partnership, joint venture or other association;

 

(d)          the Company and the Subsidiaries are in compliance in all material
respects with all applicable laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with affiliates;

 

(e)          neither the Company nor any Subsidiary is in breach of or in
default under (nor has any event occurred which with notice, lapse of time, or
both would constitute a breach of, or

 

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default under), (i) its respective charter, bylaws, agreement of limited
partnership, operating agreement or other similar organizational documents (the
“organizational documents”), (ii) the performance or observance of any
obligation, agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, loan or credit agreement or other agreement
or instrument to which the Company or any Subsidiary is a party or by which any
of them or their respective properties is bound, or (iii) any federal, state,
local or foreign law, regulation or rule or any decree, judgment, permit or
order (each, a “Law”) applicable to the Company or any Subsidiary, except, in
the case of clauses (ii) and (iii) above, for such breaches or defaults which
would not, individually or in the aggregate, have a Material Adverse Effect;

 

(f)           the execution, delivery and performance of this Agreement, and
consummation of the transactions contemplated herein will not (A) conflict with,
or result in any breach of, or constitute a default under (nor constitute any
event which with notice, lapse of time, or both would constitute a breach of, or
default under), (i) any provision of the organizational documents of the Company
or any Subsidiary, or (ii) any provision of any license, indenture, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of them or their
respective properties may be bound or affected, or under any Law applicable to
the Company or any Subsidiary, except in the case of this clause (ii) for such
breaches or defaults which would not, individually or in the aggregate, have a
Material Adverse Effect; or (B) result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or asset of the Company or
any Subsidiary;

 

(g)          this Agreement and the Management Agreement have been duly
authorized, executed and delivered by the Company and the Operating Partnership
and each is a legal, valid and binding agreement of the Company and the
Operating Partnership enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally, and by general equitable principles, and
except to the extent that the indemnification and contribution provisions of
Section 10 hereof may be limited by federal or state securities laws and public
policy considerations in respect thereof;

 

(h)          the Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus;

 

(i)           no approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency is required in connection with the execution, delivery
and performance of this Agreement by the Company or the Operating Partnership,
their consummation of the transactions contemplated herein, and the Company’s
sale and delivery of the Shares, other than (A) such as have been obtained, or
will have been obtained at the Closing Time or the relevant Option Closing Time,
as the case may be, under the Securities Act and the Exchange Act, (B) such
approvals as have been obtained in connection with the approval of the listing
of the Shares on the New York Stock Exchange (the “NYSE”), (C) such as have been
obtained or made under the rules and regulations of the Financial Industry
Regulatory Authority (“FINRA”) and (D) any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters;

 

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(j)           each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any Law, and has obtained all necessary authorizations,
consents and approvals from other persons, required in order to conduct their
respective businesses as described in the Registration Statement, Prospectus and
the Disclosure Package, except to the extent that any failure to have any such
licenses, authorizations, consents or approvals, to make any such filings or to
obtain any such authorizations, consents or approvals would not, individually or
in the aggregate, have a Material Adverse Effect; neither the Company nor any of
the Subsidiaries is required by any applicable law to obtain accreditation or
certification from any governmental agency or authority in order to provide the
products and services which it currently provides or which it proposes to
provide as set forth in the Registration Statement, Prospectus and the
Disclosure Package; neither the Company, nor any of the Subsidiaries is in
violation of, in default under, or has received any notice regarding a possible
violation, default or revocation of any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or rule or any
decree, order or judgment applicable to the Company or any of the Subsidiaries
the effect of which could result in a Material Adverse Change; and no such
license, authorization, consent or approval contains a materially burdensome
restriction that is not adequately disclosed in each of the Registration
Statement, the Prospectus and the Disclosure Package;

 

(k)          the Company meets the requirements for use of Form S-3 under the
Securities Act; each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the Securities Act and no stop
order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the Securities Act and
no proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated or threatened by the Commission; and
the Company has complied to the Commission’s satisfaction with any request on
the part of the Commission for additional information;

 

(l)           the Preliminary Prospectus when filed and the Registration
Statement as of each effective date (including each deemed effective date with
respect to the Underwriters pursuant to Rule 430B or otherwise under the
Securities Act) and as of the date hereof complied or will comply, and the
Prospectus and any further amendments or supplements to the Registration
Statement, the Preliminary Prospectus or the Prospectus will, when they become
effective or are filed with the Commission, as the case may be, comply, in all
material respects with the requirements of the Securities Act and the Securities
Act Regulations; the documents incorporated by reference in the Registration
Statement and the Prospectus, when they became effective or at the time they
were or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission under the Exchange Act (the “Exchange Act
Regulations”);

 

(m)         the Registration Statement, as of each effective date (including
each deemed effective date with respect to the Underwriters pursuant to Rule
430B or otherwise under the Securities Act) and as of the date hereof, at the
Closing Time or any Option Closing Time, did not, and does not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
the Preliminary Prospectus does not, and the Prospectus or any amendment or
supplement thereto will not, as of the applicable filing date, the date hereof
and at the Closing Time and on each

 

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Option Closing Time (if any), contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no warranty or representation with respect to
any statement contained in or omitted from the Registration Statement, the
Preliminary Prospectus or the Prospectus in reliance upon and in conformity with
the information concerning the Underwriters and furnished in writing by or on
behalf of the Underwriters by the Representative to the Company expressly for
use therein (that information being limited to that described in the last
sentence of the first paragraph of Section 10(b) hereof); the documents
incorporated by reference in the Registration Statement, the Disclosure Package
and the Prospectus, at the time the Registration Statement became effective or
when such documents incorporated by reference were filed with the Commission, as
the case may be, when read together with the other information in the
Registration Statement, the Disclosure Package or the Prospectus, as the case
may be, did not and will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading;

 

(n)          as of 8:20 am (Eastern time) on June 10, 2016 (the “Initial Sale
Time”), the Disclosure Package did not, and at the time of each sale of Shares
and at the Closing Time and each Option Closing Time, the Disclosure Package
will not, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; as of the issue
date or date of first use and at all subsequent times through the Initial Sale
Time, each Issuer Free Writing Prospectus did not, and at the time of each sale
of Shares and at the Closing Time and each Option Closing Time, each such Issuer
Free Writing Prospectus will not, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in or omitted from the
Disclosure Package in reliance upon and in conformity with the information
concerning the Underwriters and furnished in writing by or on behalf of the
Underwriters by the Representative to the Company expressly for use therein
(that information being limited to that described in the last sentence of the
first paragraph of Section 10(b) hereof);

 

(o)          each Issuer Free Writing Prospectus, if any, as of its issue date
and at all subsequent times through the completion of the public offer and sale
of the Shares did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the
Registration Statement, Preliminary Prospectus or the Prospectus, including any
document incorporated by reference therein, and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or modified;

 

(p)          the Company is eligible to use Free Writing Prospectuses in
connection with this offering pursuant to Rules 164 and 433 under the Securities
Act; any Free Writing Prospectus that the Company is required to file pursuant
to Rule 433(d) under the Securities Act Regulations has been, or will be, filed
with the Commission in accordance with the requirements of the Securities Act
and the Securities Act Regulations; and each Free Writing Prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act Regulations or that was prepared by or on behalf of or used by
the Company complies or will

 

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comply in all material respects with the requirements of the Securities Act and
the Securities Act Regulations;

 

(q)          except for the Issuer Free Writing Prospectuses identified in
Schedule II hereto, and any electronic road show relating to the public offering
of shares contemplated herein, the Company has not prepared, used or referred
to, and will not, without the prior consent of the Representative, prepare, use
or refer to, any Free Writing Prospectus;

 

(r)          the Preliminary Prospectus, the Prospectus and any Issuer Free
Writing Prospectuses (to the extent any such Issuer Free Writing Prospectus was
required to be filed with the Commission) delivered to the Underwriters for use
in connection with the public offering of the Shares contemplated herein have
been and will be identical to the versions of such documents transmitted to the
Commission for filing via the Electronic Data Gathering Analysis and Retrieval
System (“EDGAR”), except to the extent permitted by Regulation S-T;

 

(s)          the Company filed the Registration Statement with the Commission
before using any Issuer Free Writing Prospectus; and each Issuer Free Writing
Prospectus, if any, was preceded or accompanied by the most recent Preliminary
Prospectus satisfying the requirements of Section 10 under the Securities Act,
which Preliminary Prospectus included an estimated price range;

 

(t)           from September 23, 2014 through the date hereof, the Company has
been and is an “emerging growth company” as defined in Section 2(a)(19) of the
Securities Act. The Company (i) has not alone engaged in any Testing-the-Waters
Communications other than Testing-the-Waters Communications with the consent of
the Representative with entities that are qualified institutional buyers within
the meaning of Rule 144A under the Securities Act or institutions that are
institutional accredited investors within the meaning of Rule 501 under the
Securities Act and (ii) has not authorized anyone other than the Representative
to engage in Testing-the-Waters Communications;

 

(u)          there are no actions, suits, proceedings, inquiries or
investigations pending or, to the knowledge of the Company or the Operating
Partnership, threatened against the Company or any Subsidiary or any of their
respective officers and directors or to which the properties, assets or rights
of any such entity 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 result in a judgment, decree,
award or order having a Material Adverse Effect;

 

(v)          the consolidated financial statements, including the notes thereto,
included in each of the Registration Statement, the Prospectus and the
Disclosure Package present fairly the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and their consolidated
results of operations and changes in financial position and cash flows for the
periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles as applied in the United States
and on a consistent basis during the periods involved and in accordance with
Regulation S-X promulgated by the Commission; the financial statement schedules,
if any, included in the Registration Statement and the amounts in both the
Prospectus and Disclosure Package under the captions “Summary—Summary

 

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Financial Information” and “Selected Financial Information” fairly present the
information shown therein and have been compiled on a basis consistent with the
financial statements included in each of the Registration Statement, the
Prospectus and the Disclosure Package; no other financial statements or
supporting schedules are required to be included in the Registration Statement,
the Prospectus or the Disclosure Package; the interactive data in eXtensible
Business Reporting Language incorporated by reference in the Registration
Statement, the Disclosure Package and the Prospectus fairly presents the
information called for in all material respects and has been prepared in
accordance with the Commission’s rules and guidelines applicable thereto; all
disclosures contained in the Registration Statement, the Disclosure Package or
the Prospectus, or incorporated by reference therein, regarding “non-GAAP
financial measures” (as such term is defined by the rules and regulations of the
Commission) comply with Regulation G of the Exchange Act and Item 10 of
Regulation S-K of the Securities Act, to the extent applicable;

 

(w)         Moss Adams LLP, whose reports on the consolidated financial
statements of the Company and its subsidiaries are filed with the Commission as
part of each of the Registration Statement, the Prospectus and the Disclosure
Package is, and was during the periods covered by its reports, independent
public accountants as required by the Securities Act and the Securities Act
Regulations, and the Exchange Act and the Exchange Act Regulations and is
registered with the Public Company Accounting Oversight Board;

 

(x)          subsequent to the respective dates as of which information is given
in each of the Registration Statement, the Prospectus and the Disclosure
Package, and except as may be otherwise stated in such documents, there has not
been (A) any Material Adverse Change or any development that could reasonably be
expected to result in a Material Adverse Change, whether or not arising in the
ordinary course of business, (B) any transaction that is material to the Company
and the Subsidiaries taken as a whole, contemplated or entered into by the
Company or any of the Subsidiaries, (C) any obligation, contingent or otherwise,
directly or indirectly incurred by the Company or any Subsidiary that is
material to the Company and the Subsidiaries taken as a whole or (D) any
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock or by the Operating Partnership on its Units;

 

(y)          the Shares conform in all material respects to the description
thereof contained in the Registration Statement, the Prospectus and the
Disclosure Package; and this Agreement conforms in all material respects to the
description thereof contained in the Registration Statement, the Disclosure
Package and the Prospectus;

 

(z)          except as disclosed in the Registration Statement, the Prospectus
and the Disclosure Package, there are no persons with registration or other
similar rights to have any equity or debt securities, including securities which
are convertible into or exchangeable for equity securities, registered pursuant
to the Registration Statement or otherwise registered by the Company or the
Operating Partnership under the Securities Act, all of which registration or
similar rights described in clauses (i) and (ii) are fairly summarized in the
Registration Statement, the Prospectus and the Disclosure Package;

 

(aa)        the Shares have been duly authorized and, when issued and duly
delivered against payment therefor as contemplated by this Agreement, will be
validly issued, fully paid and non-assessable, free and clear of any pledge,
lien, encumbrance, security interest or other claim, and

 

 - 10 - 

 

  

the issuance and sale of the Shares by the Company is not subject to preemptive
or other similar rights arising by operation of law, under the organizational
documents of the Company or the Operating Partnership or under any agreement to
which the Company or any Subsidiary is a party or otherwise;

 

(bb)        the Shares have been approved for listing on the NYSE, subject to
official notice of issuance; the Company has taken all necessary actions to
ensure that, upon and at all times since the NYSE shall have approved the Shares
for listing, it is and will be in compliance with all applicable corporate
governance requirements set forth in the NYSE’s listing standards that are then
in effect;

 

(cc)         neither the Company nor the Subsidiaries, or any of their
respective directors, officers, representatives or affiliates has taken, nor
will take, directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or to result in a violation of
Regulation M under the Exchange Act;

 

(dd)        neither the Company nor any of the Subsidiaries or any of their
respective affiliates (i) is required to register as a “broker” or “dealer” in
accordance with the provisions of the Exchange Act Regulations, or
(ii) directly, or indirectly through one or more intermediaries, controls or has
any other association with any member firm of FINRA;

 

(ee)        any certificate signed by any officer of the Company or any
Subsidiary delivered to the Representative or to counsel for the Underwriters
pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company or the Operating Partnership to each
Underwriter as to the matters covered thereby;

 

(ff)          the form of certificate used to evidence the Common Stock complies
in all material respects with all applicable statutory requirements, with any
applicable requirements of the organizational documents of the Company and the
requirements of the NYSE;

 

(gg)        each of the Company and the Subsidiaries have good and marketable
title in fee simple to all real property, if any, and good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except such as
are disclosed in the Registration Statement, the Prospectus and the Disclosure
Package or such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of such
property by the Company and the Subsidiaries; and any real property and
buildings held under lease by the Company or any Subsidiary are held under
valid, existing and enforceable leases, with such exceptions as are disclosed in
the Registration Statement, the Prospectus and the Disclosure Package or are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or such Subsidiary;

 

(hh)        the descriptions in each of the Registration Statement, the
Prospectus and the Disclosure Package of the legal or governmental proceedings,
contracts, leases and other legal documents therein described present fairly the
information required to be shown, and there are no legal or governmental
proceedings, contracts, leases, or other documents of a character

 

 - 11 - 

 

  

required to be described in the Registration Statement, the Prospectus or the
Disclosure Package or to be filed as exhibits to the Registration Statement
which are not described or filed as required; all agreements between the Company
or any of the Subsidiaries and third parties expressly referenced in the
Registration Statement, Prospectus and the Disclosure Package are legal, valid
and binding obligations of the Company or one or more of the Subsidiaries,
enforceable in accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general
equitable principles;

 

(ii)          the Company and each Subsidiary owns or possesses adequate
licenses or other rights to use all patents, trademarks, service marks, trade
names, copyrights, software and design licenses, trade secrets, manufacturing
processes, other intangible property rights and know-how (collectively
“Intangibles”) necessary to entitle the Company and each Subsidiary to conduct
its business as described in the Registration Statement, the Prospectus and the
Disclosure Package, and neither the Company nor any Subsidiary has received
notice of infringement of or conflict with (and neither the Company nor any
Subsidiary knows of any such infringement of or conflict with) asserted rights
of others with respect to any Intangibles which would have a Material Adverse
Effect;

 

(jj)          the Company and each of the Subsidiaries have established and
maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) under the Exchange Act), which (i) are designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s principal executive officer and its
principal financial officer by others within those entities, particularly during
the periods in which the periodic reports required under the Exchange Act are
being prepared, and (ii) are effective in all material respects to perform the
functions for which they were established;

 

(kk)        the Company and each of the Subsidiaries maintain effective internal
control over financial reporting (as defined under Rules 13a-15 and 15d-15 under
the Exchange Act Regulations) and a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management’s general or specific
authorization; (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences; and (v) the interactive data in eXtensible Business
Reporting Language incorporated by reference in the Registration Statement, the
General Disclosure Package and the Prospectus fairly presents the information
called for in all material respects and is prepared in accordance with the
Commission’s rules and guidelines applicable thereto; and since the date of the
last audited financial statements of the Company included in the Disclosure
Package, the Registration Statement and the Prospectus, the Company is not aware
of (a) any significant deficiency or material weakness in the design or
operation of its internal controls over financial reporting which are reasonably
likely to adversely affect the Company’s ability to record, process, summarize
and report financial information to management and the Board of

 

 - 12 - 

 

  

Directors, or (b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company’s internal control
over financial reporting;

 

(ll)          each of the Company and the Subsidiaries maintains insurance
(issued by insurers of recognized financial responsibility) of the types and in
the amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and the Subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect;

 

(mm)       Except as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, (i) neither the Company nor the
Subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products, asbestos-containing
materials or mold (collectively, “Hazardous Materials”) or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) each
of the Company and the Subsidiaries has all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (iii) there are no pending or, to the
knowledge of the Company or the Operating Partnership, threatened
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating to any Environmental Law against the Company or the
Subsidiaries, and (iv) to the knowledge of the Company or the Operating
Partnership, there are no events or circumstances that would reasonably be
expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or agency,
against or affecting the Company or the Subsidiaries relating to Hazardous
Materials or any Environmental Laws.

 

(nn)        neither the Company nor any Subsidiary is in violation of or has
received notice of any violation with respect to any federal or state law
relating to discrimination in the hiring, promotion or pay of employees, nor any
applicable federal or state wages and hours law, nor any state law precluding
the denial of credit due to the neighborhood in which a property is situated,
the violation of any of which would have a Material Adverse Effect;

 

(oo)        the Company and each of the Subsidiaries are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (“ERISA”); no “reportable event” (as
defined in ERISA) has occurred with respect to any “pension plan” (as defined in
ERISA) for which the Company or any of the Subsidiaries would have any
liability; the Company and each of the Subsidiaries have not incurred and do not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from,

 

 - 13 - 

 

  

any “pension plan” or (ii) Section 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (“Code”); and each “pension plan” for which the Company and each of
its Subsidiaries would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause the loss
of such qualification;

 

(pp)        except as otherwise disclosed in the Registration Statement, the
Prospectus and the Disclosure Package, there are no outstanding loans,
extensions of credit or advances or guarantees of indebtedness by the Company or
any of the Subsidiaries to or for the benefit of any of the officers or
directors of the Company or any of the Subsidiaries or any of the members of the
families of any of them;

 

(qq)        all securities issued by the Company, any of the Subsidiaries or any
trusts established by the Company or any Subsidiary, have been or will be issued
and sold in compliance with (i) all applicable federal and state securities
laws, and (ii) the laws of the applicable jurisdiction of incorporation of the
issuing entity and, (iii) to the extent applicable to the issuing entity, the
requirements of the NYSE;

 

(rr)          in connection with this offering, the Company has not offered and
will not offer its Common Stock or any other securities convertible into or
exchangeable or exercisable for Common Stock in a manner in violation of the
Securities Act; and the Company has not distributed and will not distribute any
offering material in connection with the offer and sale of the Shares except for
the Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus
or the Registration Statement;

 

(ss)        except for the payments to the Underwriters provided for hereunder,
the Company has not incurred any liability for any finder’s fees or similar
payments in connection with the transactions herein contemplated;

 

(tt)          no relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of the Subsidiaries
on the other hand, which is required by the Securities Act and the Securities
Act Regulations to be described in the Registration Statement, the Prospectus or
the Disclosure Package, which is not so described;

 

(uu)        neither the Company nor any of the Subsidiaries is and, after giving
effect to the offering and sale of the Shares, will be an “investment company”
or an entity “controlled” by an “investment company”, as such terms are defined
in the Investment Company Act of 1940, as amended (the “Investment Company
Act”);

 

(vv)        there are no existing or, to the knowledge of the Company or the
Operating Partnership, threatened labor disputes with the employees of the
Company or any of the Subsidiaries which would have, individually or in the
aggregate, a Material Adverse Effect; no labor dispute exists between any
officers of the Company or the Operating Partnership (each, a “Company-Focused
Professional”), on the one hand, and the employer of each such individual on the
other hand;

 

 - 14 - 

 

  

(ww)      neither the Company nor the Operating Partnership nor, to the best of
the Company’s or the Operating Partnership’s knowledge, any employer of any
Company-Focused Professional has been notified that any such Company-Focused
Professional plans to terminate his or her employment with his or her
employer; neither the Company nor the Operating Partnership nor, to the best of
the Company’s knowledge, any Company-Focused Professional is subject to any
noncompete, nondisclosure, confidentiality, employment, consulting or similar
agreement that would be violated by the present or proposed business activities
of the Company, the Operating Partnership or the Manager as described in the
Registration Statement, the General Disclosure Package and the Prospectus;

 

(xx)         there is and has been no failure on the part of the Company and the
Subsidiaries and any of the officers and directors of the Company and the
Subsidiaries, in their capacities as such, to comply in all material respects
with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated thereunder and with which the Company is required to
comply, including Section 402 related to loans and Sections 302 and 906 related
to certifications;

 

(yy)        commencing with its taxable year ended December 31, 2014, the
Company has been organized and operated in conformity with the requirements for
qualification and taxation as a real estate investment trust (a “REIT”) under
the Code; the present and contemplated method of operation of the Company and
the Subsidiaries does and will enable the Company to continue to meet the
requirements for qualification and taxation as a REIT under the Code for its
taxable year ending December 31, 2016 and thereafter and all statements
regarding the Company’s qualification and taxation as a REIT and descriptions of
the Company’s organization and method of operation (inasmuch as they relate to
the Company’s qualification and taxation as a REIT) set forth in the
Registration Statement, the Disclosure Package and the Prospectus are accurate
and fair summaries of the legal or tax matters described therein in all material
respects. The Operating Partnership is treated as a partnership and not as an
association taxable as a corporation for U.S. federal income tax purposes;

 

(zz)         each of the Company and the Subsidiaries has timely filed all tax
returns required to be filed (except in any case in which the failure to so file
would not result in a Material Adverse Effect) and has paid all taxes required
to be paid and any other assessment, fine or penalty levied against it, to the
extent that any of the foregoing would otherwise be delinquent, except, in all
cases, for any such tax, assessment, fine or penalty that is being contested in
good faith and except in any case in which the failure to so pay would not
result in a Material Adverse Effect;

 

(aaa)       neither the Company nor any of the Subsidiaries or any officer or
director purporting to act on behalf of the Company or any of the Subsidiaries,
nor the Manager or its affiliates acting on behalf of the Company or any of the
Subsidiaries, has at any time (i) made any unlawful contributions to any
candidate for political office, or failed to disclose fully any such
contributions, in violation of law, (ii) made any payment to any state, federal
or foreign governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or allowed
by applicable law, (iii) made any payment outside the ordinary course of
business to any investment officer or loan broker or person charged with similar
duties of any entity to which the Company or any of the Subsidiaries sells or
from which the Company or any of the Subsidiaries buys loans or servicing
arrangements for

 

 - 15 - 

 

  

the purpose of influencing such agent, officer, broker or person to buy loans or
servicing arrangements from or sell loans to the Company or any of the
Subsidiaries, or (iv) engaged in any transactions, maintained any bank account
or used any corporate funds except for transactions, bank accounts and funds
which have been and are reflected in the normally maintained books and records
of the Company and the Subsidiaries; neither the Company nor any of the
Subsidiaries or, to the knowledge of the Company or the Operating Partnership,
any director, officer, agent, employee or affiliate of such entities is aware of
or has taken any action, directly or indirectly, that would result in a
violation by such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (the “FCPA”), including,
without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA and the Company and the Subsidiaries and,
to the knowledge of the Company and the Operating Partnership, their affiliates
have conducted their businesses in compliance with the FCPA;

 

(bbb)      neither the Company nor any of its subsidiaries, nor, to the
Company’s or the Operating Partnership’s knowledge, any of their affiliates or
any director, officer, agent or employee of, or other person associated with or
acting on behalf of, the Company or any of its subsidiaries, has violated the
Bank Secrecy Act, as amended, the Uniting and Strengthening of America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
(USA PATRIOT ACT) of 2001 or the rules and regulations promulgated under any
such law or any successor law;

 

(ccc)       neither the Company nor the Subsidiaries, nor, to the Company’s or
the Operating Partnership’s knowledge, any employee or agent of the Company or
the Subsidiaries, has made any payment of funds of the Company or the
Subsidiaries or received or retained any funds in violation of any law, rule or
regulation, including without limitation the “know your customer” and anti-money
laundering laws of any jurisdiction (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or the Subsidiaries
with respect to the Money Laundering Laws is pending or, to the knowledge of the
Company or the Operating Partnership, threatened; and

 

(ddd)      neither the Company nor the Subsidiaries, nor, to the knowledge of
the Company or the Operating Partnership, any director, officer, agent, employee
or affiliate of the Company or the Subsidiaries, nor the Manager or its
affiliates acting on behalf of the Company or the Operating Partnership, is
currently subject to any U.S. sanctions administered by the United States
Government, including, without limitation, the Office of Foreign Assets Control
of the U.S. Department of the Treasury (“OFAC”), the United Nations Security
Council (“UNSC”), the European Union, Her Majesty’s Treasury (“HMT”), or other
relevant sanctions authority (collectively, “Sanctions”); and the Company will
not directly or indirectly use the proceeds of the offering of the Shares
hereunder, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject of Sanctions or in any
other manner that

 

 - 16 - 

 

  

will result in a violation by any person (including any person participating in
the transaction, whether as underwriter, advisor, investor or otherwise) of
Sanctions. For the past five years, the Company and its subsidiaries have not
knowingly engaged in and are not now knowingly engaged in any dealings or
transactions with any person that at the time of the dealing or transaction is
or was the subject or the target of Sanctions or with any country subject to
Sanctions.

 

4.           Representations and Warranties of the Manager.

 

The Manager represents and warrants to the Underwriters as of the date hereof,
the Initial Sale Time, as of the Closing Time and as of any Option Closing Time
(if any), and agrees with each Underwriter, that:

 

(a)          as of the date of this Agreement, the Manager has no plan or
intention to materially alter its investment policy, investment allocation
policy or exclusivity policy with respect to the Company as described in the
Registration Statement, the Disclosure Package or the Prospectus;

 

(b)          the Manager has been duly incorporated, formed or organized and is
validly existing as a corporation, general or limited partnership or limited
liability company in good standing under the laws of its respective jurisdiction
of incorporation, formation or organization with full power and authority to own
its respective properties and to conduct its respective businesses as described
in each of the Registration Statement, the Prospectus and the Disclosure
Package, and to execute and deliver this Agreement and to consummate the
transactions contemplated herein;

 

(c)          the Manager is duly qualified or licensed and in good standing in
each jurisdiction in which it conducts its businesses or in which it owns or
leases real property or otherwise maintains an office and in which the failure,
individually or in the aggregate, to be so qualified or licensed would have a
material adverse effect on the assets, business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Manager (any
such effect or change, where the context so requires, is hereinafter called a
“Manager Material Adverse Effect” or “Manager Material Adverse Change”);

 

(d)          the Manager is in compliance in all material respects with all
applicable laws, rules, regulations, orders, decrees and judgments, including
those relating to transactions with affiliates;

 

(e)          the Manager is not in breach of or in default under (nor has any
event occurred which with notice, lapse of time, or both would constitute a
breach of, or default under), (i) its operating agreement, bylaws or other
similar organizational documents (the “Manager organizational documents”),
(ii) the performance or observance of any obligation, agreement, covenant or
condition contained in any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Manager is a
party or by which any of it or its respective properties is bound (together with
the Manager organizational documents, the “Manager Agreements”), or (iii) any
Law applicable to the Manager, except, in the case of

 

 - 17 - 

 

  

clauses (ii) and (iii) above, for such breaches or defaults which would not,
individually or in the aggregate, have a Manager Material Adverse Effect;

 

(f)           the execution, delivery and performance of this Agreement, and
consummation of the transactions contemplated herein, and compliance by the
Manager with its obligations hereunder and the Management Agreement will not
(A) conflict with, or result in any breach of, or constitute a default under
(nor constitute any event which with notice, lapse of time, or both would
constitute a breach of, or default under), (i) any provision of the Manager
organizational documents, or (ii) any provision of any license, indenture,
mortgage, deed of trust, loan or credit agreement or other agreement or
instrument to which the Manager is a party or by which any of it or its
respective properties may be bound or affected, or under any Law applicable to
the Manager, except in the case of this clause (ii) for such breaches or
defaults which would not, individually or in the aggregate, have a Manager
Material Adverse Effect; or (B) result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or asset of the Manager;

 

(g)          this Agreement and the Management Agreement have been duly
authorized, executed and delivered by the Manager and each is a legal, valid and
binding agreement of the Manager enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors’ rights generally, and by general equitable
principles, and except to the extent that the indemnification and contribution
provisions of Section 10 hereof may be limited by federal or state securities
laws and public policy considerations in respect thereof; and

 

(h)          the Manager has all necessary licenses, authorizations, consents
and approvals and has made all necessary filings required under any Law, and has
obtained all necessary authorizations, consents and approvals from other
persons, required in order to conduct its business as described in the
Registration Statement, Prospectus and the Disclosure Package, except to the
extent that any failure to have any such licenses, authorizations, consents or
approvals, to make any such filings or to obtain any such authorizations,
consents or approvals would not, individually or in the aggregate, have a
Manager Material Adverse Effect; the Manager is not required by any applicable
law to obtain accreditation or certification from any governmental agency or
authority in order to provide the products and services which it currently
provides or which it proposes to provide as set forth in the Registration
Statement, Prospectus and the Disclosure Package; the Manager is not in
violation of, in default under, or has received any notice regarding a possible
violation, default or revocation of any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or rule or any
decree, order or judgment applicable to the Manager the effect of which could
result in a Manager Material Adverse Change; and no such license, authorization,
consent or approval contains a materially burdensome restriction that is not
adequately disclosed in each of the Registration Statement, the Prospectus and
the Disclosure Package;

 

(i)           the Manager does not have any employees;

 

(j)           none of the Manager or any of its respective directors, officers,
representatives or affiliates has taken, nor will take, directly or indirectly,
any action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or

 

 - 18 - 

 

  

manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares or to result in a violation at Regulation M under the
Exchange Act;

 

(k)          the Manager maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (A) the transactions that may be
effectuated by it on behalf of the Company pursuant to its duties set forth in
the Management Agreement will be executed in accordance with management’s
general or specific authorization and (B) access to the Company’s assets is
permitted only in accordance with its management’s general or specific
authorization;

 

(l)           there are no actions, suits, proceedings, inquiries or
investigations pending or, to the knowledge of the Manager, threatened against
the Manager or any of its respective officers and directors or to which the
properties, assets or rights of any such entity 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 result in a judgment, decree, award or order having a Manager Material
Adverse Effect; and

 

(m)         the Manager is not required to register as an investment adviser
with the Commission under the Advisers Act, and is not prohibited by the
Advisers Act, or the rules and regulations thereunder, from performing its
obligations under the Management Agreement as described in the Management
Agreement, the Registration Statement, General Disclosure Package and the
Prospectus.

 

5.           Certain Covenants of the Company.

 

The Company and the Operating Partnership, jointly and severally, agree with
each Underwriter:

 

(a)          to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such jurisdictions (both domestic and foreign) as the
Representative may designate and to maintain such qualifications in effect as
long as requested by the Representative for the distribution of the Shares,
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
jurisdiction (except service of process with respect to the offering and sale of
the Shares);

 

(b)          if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible and will advise the Representative promptly and, if requested by the
Representative, will confirm such advice in writing, when such post-effective
amendment has become effective;

 

(c)          to prepare the Prospectus in a form approved by the Underwriters
and file such Prospectus with the Commission pursuant to Rule 424(b) under the
Securities Act not later than 10:00 p.m. (New York City time), on June 14, 2016
or on such other day as the parties may mutually agree and to furnish promptly
(and with respect to the initial delivery of such Prospectus, not later than
10:00 p.m. New York City time) on the day following the execution

 

 - 19 - 

 

  

and delivery of this Agreement or on such other day as the parties may mutually
agree to the Underwriters copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration Statement) in
such quantities and at such locations as the Underwriters may reasonably request
for the purposes contemplated by the Securities Act Regulations, which
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the version transmitted to the Commission for
filing via EDGAR, except to the extent permitted by Regulation S-T;

 

(d)          to advise the Representative promptly and (if requested by the
Representative) to confirm such advice in writing, when any post-effective
amendment to the Registration Statement becomes effective under the Securities
Act Regulations;

 

(e)          to furnish a copy of each proposed Free Writing Prospectus to the
Representative and counsel for the Underwriters and obtain the consent of the
Representative prior to referring to, using or filing with the Commission any
Free Writing Prospectus pursuant to Rule 433(d) under the Securities Act, other
than the Issuer Free Writing Prospectuses, if any, identified in Schedule II
hereto;

 

(f)           to comply with the requirements of Rules 164 and 433 of the
Securities Act Regulations applicable to any Issuer Free Writing Prospectus,
including timely filing with the Commission, legending and record keeping, as
applicable;

 

(g)          to advise the Representative immediately, confirming such advice in
writing, of (i) the receipt of any comments from, or any request by, the
Commission for amendments or supplements to the Registration Statement, the
Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus, or
for additional information with respect thereto, (ii) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of the Preliminary
Prospectus, the Prospectus or any Issuer Free Writing Prospectus, or of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes and, if the Commission or any other government agency or authority
should issue any such order, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible, (iii) any examination
pursuant to Section 8(e) of the Securities Act concerning the Registration
Statement, or (iv) if the Company becomes subject to a proceeding under
Section 8A of the Securities Act in connection with the public offering of
Shares contemplated herein; to advise the Representative promptly of any
proposal to amend or supplement the Registration Statement, the Preliminary
Prospectus, the Prospectus or any Issuer Free Writing Prospectus and to file no
such amendment or supplement to which the Representative shall reasonably object
in writing;

 

(h)          to the extent not available on EDGAR, to furnish to the
Underwriters for a period of five years from the date of this Agreement (i) as
soon as available, copies of all annual, quarterly and current reports or other
communications supplied to holders of shares of Common Stock, (ii) as soon as
practicable after the filing thereof, copies of all reports filed by the Company
with the Commission, FINRA or any securities exchange and (iii) such other

 

 - 20 - 

 

  

information as the Underwriters may reasonably request regarding the Company and
the Subsidiaries;

 

(i)           to advise the Underwriters promptly of the happening of any event
or development known to the Company within the time during which a Prospectus
relating to the Shares (or in lieu thereof the notice referred to in Rule 173(a)
under the Securities Act Regulations) is required to be delivered under the
Securities Act Regulations which, in the judgment of the Company or in the
reasonable opinion of the Representative or counsel for the Underwriters,
(i) would require the making of any change in the Registration Statement, the
Prospectus or the Disclosure Package so that the Registration Statement, the
Prospectus or the Disclosure Package would not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (ii) as a result of which any Issuer
Free Writing Prospectus conflicted or would conflict with the information
contained in the Registration Statement relating to the Shares, or (iii) if it
is necessary at any time to amend or supplement the Prospectus or the Disclosure
Package to comply with any law and, during such time, to promptly prepare and
furnish to the Underwriters copies of the proposed amendment or supplement
before filing any such amendment or supplement with the Commission and
thereafter promptly furnish at the Company’s own expense to the Underwriters and
to dealers, copies in such quantities and at such locations as the
Representative may from time to time reasonably request of an appropriate
amendment or supplement to the Prospectus or the Disclosure Package so that the
Prospectus or the Disclosure Package as so amended or supplemented will not, in
the light of the circumstances when it (or in lieu thereof the notice referred
to in Rule 173(a) under the Securities Act Regulations) is so delivered, be
misleading or , in the case of any Issuer Free Writing Prospectus, conflict with
the information contained in the Registration Statement, or so that the
Prospectus or the Disclosure Package will comply with the law;

 

(j)           to file promptly with the Commission any amendment or supplement
to the Registration Statement, any Preliminary Prospectus, the Prospectus or any
Issuer Free Writing Prospectus that may, in the judgment of the Company or the
Representative, be required by the Securities Act or requested by the
Commission;

 

(k)          prior to filing with the Commission any amendment or supplement to
the Registration Statement, any Preliminary Prospectus, the Prospectus or any
Issuer Free Writing Prospectus, to furnish a copy thereof to the Representative
and counsel for the Underwriters and obtain the consent of the Representative to
the filing;

 

(l)           during the period referred to in paragraph (i) above, to file all
such documents in the manner and within the time periods required by the
Exchange Act and the Exchange Act Regulations;

 

(m)         to apply the net proceeds of the sale of the Shares in accordance
with its statements under the caption “Use of Proceeds” in the Registration
Statement, the Prospectus and the Disclosure Package;

 

 - 21 - 

 

  

(n)          to make generally available to its security holders and to deliver
to the Representative as soon as practicable, but in any event not later than
the end of the fiscal quarter first occurring after the first anniversary of the
effective date of the Registration Statement an earnings statement complying
with the provisions of Section 11(a) of the Securities Act (in form, at the
option of the Company, complying with the provisions of Rule 158 of the
Securities Act Regulations,) covering a period of 12 months beginning after the
effective date of the Registration Statement;

 

(o)          to use its best efforts to maintain the listing of the Shares on
the NYSE and to file with the NYSE all documents and notices required by the
NYSE of companies that have securities that are listed on the NYSE;

 

(p)          to promptly notify the Representative if the Company ceases to be
an Emerging Growth Company at any time prior to the later of (i) the completion
of the distribution of the Shares within the meaning of the Securities Act and
(ii) completion of the 90-day restricted period referred to in Section 4(s)
hereof;

 

(q)          to refrain, from the date hereof until 90 days after the date of
the Prospectus, without the prior written consent of the Representative, from,
directly or indirectly, (i) offering, pledging, selling, contracting to sell,
selling any option or contract to purchase, purchasing any option or contract to
sell, granting any option for the sale of, or otherwise disposing of or
transferring, (or entering into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any time in
the future of), any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or filing any registration
statement under the Securities Act with respect to any of the foregoing, or
(ii) entering into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder (B) any shares of Common Stock issued by
the Company upon the exercise of an option outstanding on the date hereof and
referred to in the Prospectus, (C) any shares of Common Stock issued pursuant to
the 2014 Director Equity Plan or the 2016 Equity Incentive Plan referred to in
the Registration Statement, the General Disclosure Package and the Prospectus or
(D) the filing of any registration statement on Form S-8;

 

(r)           not to, and to use its best efforts to cause its officers,
directors and affiliates not to, (i) take, directly or indirectly prior to
termination of the underwriting syndicate contemplated by this Agreement, any
action designed to stabilize or manipulate the price of any security of the
Company, or which may cause or result in, or which might in the future
reasonably be expected to cause or result in, the stabilization or manipulation
of the price of any security of the Company, to facilitate the sale or resale of
any of the Shares, (ii) sell, bid for, purchase or pay anyone any compensation
for soliciting purchases of the Shares or (iii) pay or agree to pay to any
person any compensation for soliciting any order to purchase any other
securities of the Company;

 

(s)          to cause each officer and director of the Company to furnish to the
Representative, prior to the Initial Sale Time, a letter or letters,
substantially in the form of Exhibit A hereto,

 

 - 22 - 

 

  

pursuant to which each such person shall agree to the lock-up provisions as set
forth in Exhibit A; and

 

(t)           that the Company will continue to use its best efforts to meet the
requirements to qualify as a REIT under the Code; and

 

(u)          neither the Company nor any of the Subsidiaries is and, after
giving effect to the offering and sale of the Shares, will be an “investment
company” or an entity “controlled” by an “investment company”, as such terms are
defined in the Investment Company Act.

 

6.           Payment of Expenses.

 

(a)          The Company and the Operating Partnership, jointly and severally,
agree to pay all costs and expenses incident to the performance of their
obligations under this Agreement, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, including expenses,
fees and taxes in connection with (i) the preparation and filing of the
Registration Statement, each Preliminary Prospectus, the Prospectus, any Issuer
Free Writing Prospectus and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the preparation,
issuance and delivery of any certificates for the Shares to the Underwriters,
including any stock or other transfer taxes or duties payable upon the sale of
the Shares to the Underwriters, (iii) the qualification of the Shares for
offering and sale under state laws that the Company and the Representative have
mutually agreed are appropriate and the determination of their eligibility for
investment under state law as aforesaid and the printing and furnishing of
copies of any blue sky surveys or legal investment surveys to the Underwriters
and to dealers, (iv) filing for review of the public offering of the Shares by
FINRA (including the reasonable legal fees and other disbursements of counsel
for the Underwriters relating thereto in the maximum amount of $10,000), (v) the
fees and expenses of any transfer agent or registrar for the Shares and
miscellaneous expenses referred to in the Registration Statement, (vi) the fees
and expenses incurred in connection with the inclusion of the Shares in the
NYSE, (vii) the costs and expenses of the Company in making road show
presentations with respect to the offering of the Shares, and (viii) the
performance of the Company’s other obligations hereunder. Upon the request of
the Representative, the Company will provide funds in advance for filing fees.

 

(b)          The Company and the Operating Partnership, jointly and severally,
agree with each Underwriter to pay (directly or by reimbursement) all fees and
expenses incident to the performance of the obligations of the Company and the
Operating Partnership under this Agreement which are otherwise specifically
provided for herein.

 

(c)          If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company, the
Operating Partnership, or the Manager to comply with the terms or to fulfill any
of the conditions of this Agreement, or if for any reason the Company, the
Operating Partnership or the Manager shall be unable to perform its or their
obligations under this Agreement, the Company or the Operating Partnership will
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(such as printing, facsimile, courier service, direct computer expenses,
accommodations, travel and the fees and

 

 - 23 - 

 

  

disbursements of Underwriters’ counsel) and any other advisors, accountants,
appraisers, etc. reasonably incurred by such Underwriters in connection with
this Agreement or the transactions contemplated herein.

 

7.           Conditions of the Underwriters’ Obligations.

 

The obligations of the Underwriters hereunder to purchase Shares at the Closing
Time or on each Option Closing Time, as applicable, are subject to the accuracy
of the representations and warranties of the Company, the Operating Partnership
and the Manager hereunder on the date hereof and at the Closing Time and on each
Option Closing Time, as applicable, the performance by the Company, the
Operating Partnership and the Manager of their respective obligations hereunder,
and to the satisfaction of the following further conditions at the Closing Time
or on each Option Closing Time, as applicable:

 

(a)          The Company shall furnish or cause to be furnished to the
Underwriters at the Closing Time and on each Option Closing Time the opinion and
negative assurance letter of Morrison & Foerster LLP, counsel for the Company,
the Operating Partnership and the Manager, addressed to the Underwriters and
dated the Closing Time and each Option Closing Time, substantially in the form
of Exhibit B-1 hereto. In addition, the Company shall furnish or caused to be
furnished to the Underwriters at the Closing Time and on each Option Closing
Time the opinion of Morrison & Foerster LLP, tax counsel for the Company
regarding certain U.S. federal income tax matters, addressed to the Underwriters
and dated the Closing Time and on each Option Closing Time, substantially in the
form of Exhibit B-2 hereto.

 

(b)          The Underwriters shall have received at the Closing Time a
favorable opinion and negative assurance letter from Clifford Chance US LLP,
counsel for the Underwriters, dated the Closing Time, in form and substance
satisfactory to the Underwriters.

 

(c)          The Underwriters shall have received from Moss Adams LLP a
“comfort” letter dated, respectively, as of the date hereof and the Closing Time
and on each Option Closing Time, addressed to the Representative, in
substantially the form attached as Exhibit C-1 hereto.

 

In the event that the letters referred to above set forth any changes in
indebtedness, decreases in total assets or retained earnings or increases in
borrowings, it shall be a further condition to the obligations of the
Underwriters that (A) such letters shall be accompanied by a written explanation
of the Company as to the significance thereof, unless the Representative deems
such explanation unnecessary, and (B) such changes, decreases or increases do
not, in the sole judgment of the Representative, make it impractical or
inadvisable to proceed with the purchase and delivery of the Shares as
contemplated by the Registration Statement.

 

(d)          No amendment or supplement to the Registration Statement, the
Prospectus or any document in the Disclosure Package shall have been filed to
which the Underwriters shall have objected in writing.

 

(e)          Prior to the Closing Time and each Option Closing Time (i) no stop
order suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of the Prospectus or any document in the
Disclosure Package shall have been issued, and no proceedings for such purpose
shall have been initiated or threatened, by the Commission, and

 

 - 24 - 

 

  

no suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or the initiation or threatening of any proceedings for any of
such purposes, has occurred; (ii) all requests for additional information on the
part of the Commission shall have been complied with to the reasonable
satisfaction of the Representative; (iii) the Registration Statement shall not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and (iv) the Registration Statement, Prospectus and the Disclosure
Package shall not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

 

(f)           All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the Closing Time shall have been made
within the applicable time period prescribed for such filing by such Rule.

 

(g)          Between the time of execution of this Agreement and the Closing
Time or the relevant Option Closing Time there shall not have been any Material
Adverse Change or Manager Material Adverse Change or any prospective Material
Adverse Change or Manager Material Adverse Change, and (ii) no transaction which
is material and unfavorable to the Company shall have been entered into by the
Company or any of the Subsidiaries, in each case, which in the Representative’s
sole judgment, makes it impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Registration Statement.

 

(h)          The Shares shall have been approved for listing on the NYSE.

 

(i)           FINRA shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.

 

(j)           The Representative shall have received lock-up agreements, signed
by the persons listed on Schedule V hereto, in the form of Exhibit A attached
hereto, and such letter agreements shall be in full force and effect.

 

(k)          The Company and the Operating Partnership will, at the Closing Time
and on each Option Closing Time, deliver to the Underwriters a certificate of
their Chief Executive Officer and Chief Financial Officer, to the effect that:

 

(i)          the representations and warranties of the Company and the Operating
Partnership in this Agreement are true and correct, as if made on and as of the
Closing Time or any Option Closing Time, as applicable, and the Company has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Time or any Option Closing
Time, as applicable;

 

(ii)         no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no proceedings for that
purpose have been instituted or are pending or threatened under the Securities
Act;

 

(iii)        the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, the Disclosure Package, any amendment or
supplement thereto, and this Agreement, and that when the Registration Statement
became effective and at all times

 

 - 25 - 

 

  

subsequent thereto up to the Closing Time or any Option Closing Time, as
applicable, the Registration Statement and the Prospectus and the Preliminary
Prospectus, and any amendments or supplements thereto, contained all material
information required to be included therein by the Securities Act or the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, as the case may be, and in all material respects conformed to the
requirements of the Securities Act or the Exchange Act and the applicable rules
and regulations of the Commission thereunder, as the case may be; the
Registration Statement and any amendments thereto, did not and, as of the
Closing Time or any Option Closing Time, as applicable, does not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading and
the Registration Statement, the Prospectus and the Disclosure Package, and any
amendments or supplements thereto, did not and as of the Closing Time or any
Option Closing Time, as applicable, do not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and, since the effective date of the
Registration Statement, there has occurred no event required to be set forth in
an amendment or supplement to the Prospectus or the Disclosure Package which has
not been so set forth; and

 

(iv)        subsequent to the respective dates as of which information is given
in the Registration Statement, the Prospectus and the Disclosure Package, there
has not been (a) any Material Adverse Change, (b) any transaction that is
material to the Company and the Subsidiaries considered as one enterprise,
except transactions entered into in the ordinary course of business, (c) any
obligation, direct or contingent, that is material to the Company and the
Subsidiaries considered as one enterprise, incurred by the Company, the
Operating Partnership or the Subsidiaries, except obligations incurred in the
ordinary course of business, (d) any change in the capital stock or outstanding
indebtedness of the Company or any Subsidiary that is material to the Company
and the Subsidiaries considered as one enterprise, (e) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company or of any Subsidiary, or (f) any loss or damage (whether or not insured)
to the property of the Company or any Subsidiary which has been sustained or
will have been sustained which has a Material Adverse Effect.

 

(l)           At the Closing Time, the Underwriters shall have received a
certificate of the Chief Executive Officer of the Manager and the Chief
Financial Officer of the Manager, dated as of the Closing Time, to the effect
that (i) since the date hereof, since the Initial Sale Time or since the
respective dates as of which information is given in the Registration Statement,
the Prospectus or the Disclosure Package, there has been no Manager Material
Adverse Change in the condition, financial or otherwise, or in the earnings,
business affairs, properties, assets or business prospects of the Manager and
its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, (ii) the representations and warranties in
Section 4 hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Time and (iii) the Manager has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time or any Option Closing Time.

 

(m)         The Company, the Operating Partnership and the Manager shall have
furnished to the Underwriters such other documents and certificates as to the
accuracy and completeness of

 

 - 26 - 

 

  

any statement in the Registration Statement, the Prospectus and the Disclosure
Package, the representations, warranties and statements of the Company and
Manager contained herein, and the performance by the Company, the Operating
Partnership and Manager of their covenants contained herein, and the fulfillment
of any conditions contained herein, as of the Closing Time or any Option Closing
Time, as the Underwriters may reasonably request.

 

8.           Termination.

 

The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representative, at any time prior
to the Closing Time or any Option Closing Time, (i) if any of the conditions
specified in Section 7 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, or (ii) if there has been since the respective
dates as of which information is given in the Registration Statement, the
Prospectus or the Disclosure Package, any Material Adverse Change or Manager
Material Adverse Change, or any development involving a prospective Material
Adverse Change or Manager Material Adverse Change, or material change in
management of the Company, the Manager or any Subsidiary, whether or not arising
in the ordinary course of business, or (iii) if there has occurred any outbreak
or escalation of hostilities or other national or international calamity or
crisis or change in economic, political or other conditions, the effect of which
on the United States or international financial markets is such as to make it,
in the judgment of the Representative, impracticable to market the Shares or
enforce contracts for the sale of the Shares, or (iv) if trading in any
securities of the Company has been suspended by the Commission or by the NYSE,
or if trading generally on the NYSE or in the Nasdaq over-the-counter market has
been suspended (including an automatic halt in trading pursuant to
market-decline triggers, other than those in which solely program trading is
temporarily halted), or limitations on prices for trading (other than
limitations on hours or numbers of days of trading) have been fixed, or maximum
ranges for prices for securities have been required, by such exchange or FINRA
or the over-the-counter market or by order of the Commission or any other
governmental authority, or (v) if there has been any downgrade in the rating of
any of the Company’s debt securities or preferred stock by any “nationally
recognized statistical rating organization” (as defined for purposes of
Rule 436(g) under the Securities Act), or (vi) any federal, state, local or
foreign statute, regulation, rule or order of any court or other governmental
authority has been enacted, published, decreed or otherwise promulgated which,
in the reasonable opinion of the Representative, materially adversely affects or
will materially adversely affect the business or operations of the Company or
the Operating Partnership, or (vii) any action has been taken by any federal,
state, local or foreign government or agency in respect of its monetary or
fiscal affairs which, in the reasonable opinion of the Representative, could
reasonably be expected to have a material adverse effect on the securities
markets in the United States.

 

If the Representative elects to terminate this Agreement as provided in this
Section 8, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.

 

If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under

 

 - 27 - 

 

  

this Agreement (except to the extent provided in Sections 6 and 10 hereof) and
the Underwriters shall be under no obligation or liability to the Company under
this Agreement (except to the extent provided in Section 8 hereof) or to one
another hereunder.

 

9.           Increase in Underwriters’ Commitments.

 

If any Underwriter shall default at the Closing Time or on any Option Closing
Time in its obligation to take up and pay for the Shares to be purchased by it
under this Agreement on such date, the Representative shall have the right,
within 36 hours after such default, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Shares which such Underwriter shall have agreed but failed
to take up and pay for (the “Defaulted Shares”). Absent the completion of such
arrangements within such 36-hour period, (i) if the total number of Defaulted
Shares does not exceed 10% of the total number of Shares to be purchased on such
date, each non-defaulting Underwriter shall take up and pay for (in addition to
the number of Shares which it is otherwise obligated to purchase on such date
pursuant to this Agreement) the portion of the total number of Shares agreed to
be purchased by the defaulting Underwriter on such date in the proportion that
its underwriting obligations hereunder bears to the underwriting obligations of
all non-defaulting Underwriters; and (ii) if the total number of Defaulted
Shares exceeds 10% of such total, the Representative may terminate this
Agreement by notice to the Company, without liability of any party to any other
party except that the provisions of Sections 6 and 10 hereof shall at all times
be effective and shall survive such termination.

 

Without relieving any defaulting Underwriter from its obligations hereunder, the
Company agrees with the non-defaulting Underwriters that it will not sell any
Shares hereunder on such date unless all of the Shares to be purchased on such
date are purchased on such date by the Underwriters (or by substituted
Underwriters selected by the Representative with the approval of the Company or
selected by the Company with the approval of the Representative).

 

If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Option Closing Time for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.

 

The term “Underwriter” as used in this Agreement shall refer to and include any
Underwriter substituted under this Section 9 with the same effect as if such
substituted Underwriter had originally been named in this Agreement.

 

10.         Indemnity and Contribution by the Company and the Underwriters.

 

(a)          The Company and the Operating Partnership, jointly and severally,
agree to indemnify, defend and hold harmless each Underwriter and any person who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, and the respective affiliates, directors,
officers, employees and agents of each Underwriter from and against any loss,
expense, liability, damage or claim (including the reasonable cost of
investigation) which, jointly or severally, any such indemnified party may

 

 - 28 - 

 

  

incur arising under the Securities Act, the Exchange Act or otherwise, insofar
as such loss, expense, liability, damage or claim arises out of or is based upon
(A) any breach of any representation, warranty or covenant of the Company or
Operating Partnership contained herein, (B) an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment), any Issuer Free Writing Prospectus that the Company has filed or
was required to file with the Commission or is otherwise required retain, or the
Prospectus (the term Prospectus for the purpose of this Section 9 being deemed
to include any Preliminary Prospectus, the Prospectus and the Prospectus as
amended or supplemented by the Company), (C) any application or other document,
or any amendment or supplement thereto, executed by the Company or the Operating
Partnership or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction (domestic or foreign) in order to qualify the
Shares under the securities or blue sky laws thereof or filed with the
Commission or any securities association or securities exchange (each an
“Application”), (D) an omission or alleged omission to state a material fact
required to be stated in any such Registration Statement, or necessary to make
the statements made therein not misleading, (E) an omission or alleged omission
from any such Issuer Free Writing Prospectus, Prospectus or any Application of a
material fact necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, (F) an untrue
statement or alleged untrue statement of a material fact contained in any audio
or visual materials used in connection with the marketing of the Shares,
including, without limitation, slides, videos, films and tape recordings;
except, in each case of (B), (D) and (E) above only, insofar as any such loss,
expense, liability, damage or claim arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in and in conformity with the statements set forth in
the first paragraph under the heading “Underwriting–Commissions and Discounts,”
the information in the first paragraph under the heading “Underwriting–Short
Positions” and the information under the heading “Underwriting–Electronic
Distribution” in the Preliminary Prospectus, the Disclosure Package and the
Prospectus (to the extent such statements relate to the Underwriters). The
indemnity agreement set forth in this Section 10(a) shall be in addition to any
liability which the Company or the Operating Partnership may otherwise have.

 

If any action is brought against an Underwriter or controlling person in respect
of which indemnity may be sought against the Company or the Operating
Partnership pursuant to subsection (a) above, such Underwriter shall promptly
notify the Company in writing of the institution of such action, and the Company
shall assume the defense of such action, including the employment of counsel and
payment of expenses; provided, however, that any failure or delay to so notify
the Company will not relieve the Company of any obligation hereunder, except to
the extent that its ability to defend is actually impaired by such failure or
delay. Such Underwriter or controlling person shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
the employment of such counsel shall have been authorized in writing by the
Company in connection with the defense of such action, or the Company shall not
have employed counsel to have charge of the defense of such action within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available
to it or them which are different from or additional to those available to the
Company, (in which case neither the Company shall have the right to direct the
defense of such action on behalf of the indemnified party or parties or the
named parties in any such proceeding (including any impleaded parties included
by the Company and

 

 - 29 - 

 

  

the indemnified person)) or representation by both parties by the same counsel
would be inappropriate due to a conflict or potential differing interests
between such parties, in any of which events such fees and expenses shall be
borne by the Company and paid as incurred (it being understood, however, that
the Company shall be liable for the expenses of more than one separate firm of
attorneys for the Underwriters or controlling persons in any one action or
series of related actions in the same jurisdiction (other than local counsel in
any such jurisdiction) representing the indemnified parties who are parties to
such action). Anything in this paragraph to the contrary notwithstanding, the
Company shall not be liable for any settlement of any such claim or action
effected without its consent.

 

(b)          Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, the Company’s directors, the Company’s
officers that signed the Registration Statement, any person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and the Operating Partnership from and against any loss,
expense, liability, damage or claim (including the reasonable cost of
investigation) which the Company, the Operating Partnership or any such person
may incur under the Securities Act, the Exchange Act or otherwise, insofar as
such loss, expense, liability, damage or claim arises out of or is based upon
(A) an untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment), any Issuer Free Writing
Prospectus that the Company has filed or was required to file with the
Commission, or the Prospectus, or any Application, (B) an omission or alleged
omission to state a material fact required to be stated in any such Registration
Statement, or necessary to make the statements made therein not misleading, or
(C) an omission or alleged omission from any such Issuer Free Writing
Prospectus, Free Writing Prospectus. Prospectus or any Application of a material
fact necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
insofar as such untrue statement or alleged untrue statement or omission or
alleged omission was made in such Registration Statement, Issuer Free Writing
Prospectus, Prospectus or Application in reliance upon and in conformity with
information furnished in writing by the Underwriters through the Representative
to the Company or the Operating Partnership expressly for use therein. The
statements set forth in the first paragraph under the heading
“Underwriting–Commissions and Discounts,” the information in the first paragraph
under the heading “Underwriting–Short Positions” and the information under the
heading “Underwriting–Electronic Distribution” in the Preliminary Prospectus,
the Disclosure Package and the Prospectus (to the extent such statements relate
to the Underwriters) constitute the only information furnished by or on behalf
of any Underwriter through the Representative to the Company or the Operating
Partnership for purposes of this Agreement.

 

If any action is brought against the Company, the Operating Partnership, the
Manager or any such person in respect of which indemnity may be sought against
any Underwriter pursuant to the foregoing paragraph, the Company, the Operating
Partnership, the Manager or such person shall promptly notify the Representative
in writing of the institution of such action and the Representative, on behalf
of the Underwriters, shall assume the defense of such action, including the
employment of counsel and payment of expenses. The Company, the Operating
Partnership, the Manager or such person shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of the Company, the Operating Partnership, the Manager or such
person unless the employment of such counsel shall have been

 

 - 30 - 

 

  

authorized in writing by the Representative in connection with the defense of
such action or the Representative shall not have employed counsel to have charge
of the defense of such action within a reasonable time or such indemnified party
or parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Underwriters (in which case the
Representative shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the expenses
of more than one separate firm of attorneys in any one action or series of
related actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of any such claim or action
effected without the written consent of the Representative.

 

(c)          If the indemnification provided for in this Section 10 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a), (b) and (c) of this Section 9 in respect of any losses,
expenses, liabilities, damages or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, expenses, liabilities, damages or claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Operating Partnership and the Underwriters from the offering of the
Shares or (ii) if (but only if) the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and of the Underwriters in connection with the
statements or omissions which resulted in such losses, expenses, liabilities,
damages or claims, as well as any other relevant equitable considerations. The
relative benefits received by the Company, the Operating Partnership and the
Underwriters shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company or the Operating Partnership bear to
the underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company, the Operating Partnership and of the Underwriters
shall be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission relates to information supplied by the Company, the Operating
Partnership or by the Underwriters and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any claim or action.

 

(d)          The Company, the Operating Partnership and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in
subsection (d)(i) and, if applicable (ii), above.

 

 - 31 - 

 

  

Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter pursuant to
this Agreement. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.

 

11.         Survival.

 

The indemnity and contribution agreements contained in Section 9 and the
covenants, warranties and representations of the Company, the Operating
Partnership and the Manager contained in Sections 3, 4 and 5 of this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of any Underwriter, or any person who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and the respective directors, officers, employees and agents of each
Underwriter or by or on behalf of the Company, the Operating Partnership and the
Manager and any of their directors and officers or any person who controls the
Company, the Operating Partnership and the Manager within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the sale and delivery of the
Shares. The Company, the Operating Partnership and the Manager and each
Underwriter agree promptly to notify the others of the commencement of any
litigation or proceeding against it and, in the case of the Company, against any
of the Company’s officers and directors, in connection with the sale and
delivery of the Shares, or in connection with the Registration Statement or
Prospectus.

 

12.         Duties.

 

Nothing in this Agreement shall be deemed to create a partnership, joint venture
or agency relationship between the parties. The Underwriters undertake to
perform such duties and obligations only as expressly set forth herein. Such
duties and obligations of the Underwriters with respect to the Shares shall be
determined solely by the express provisions of this Agreement, and the
Underwriters shall not be liable except for the performance of such duties and
obligations with respect to the Shares as are specifically set forth in this
Agreement. The Company acknowledges and agrees that: (i) the purchase and sale
of the Shares pursuant to this Agreement, including the determination of the
public offering price of the Shares and any related discounts and commissions,
is an arm’s-length commercial transaction between the Company and the several
Underwriters and the Company is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement; (ii) in connection with each transaction
contemplated hereby and the process leading to such transaction each Underwriter
is and has been acting solely as a principal and is not the financial advisor,
agent or fiduciary of the Company, the Operating Partnership or the Manager and
their respective affiliates, stockholders, creditors or employees or any other
party; (iii) no Underwriter has assumed or will assume an advisory, agency or
fiduciary responsibility in favor of the Company, the Operating Partnership or
the Manager with respect to any of the transactions contemplated hereby or the
process leading thereto (irrespective of whether such Underwriter has advised or
is currently advising the Company, the Operating

 

 - 32 - 

 

  

Partnership or the Manager on other matters); and (iv) the several Underwriters
and their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Company, the Operating
Partnership or the Manager and that the several Underwriters have no obligation
to disclose any of such interests. The Company, the Operating Partnership and
the Manager acknowledge that the Underwriters disclaim any implied duties
(including any fiduciary duty), covenants or obligations arising from the
Underwriters’ performance of the duties and obligations expressly set forth
herein. The Company, the Operating Partnership and the Manager hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company,
the Operating Partnership or the Manager may have against the several
Underwriters with respect to any breach or alleged breach of agency or fiduciary
duty in connection with the offering of the Shares pursuant to this Agreement.

 

13.         Notices.

 

Except as otherwise herein provided, all statements, requests, notices and
agreements shall be in writing and, if to the Underwriters, shall be mailed via
overnight delivery service or hand delivered via courier to the Representative
c/o Piper Jaffray & Co., U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis,
Minnesota 55402, Attention: Equity Capital Markets, with a copy to General
Counsel; or if to the Company or the Manager, shall be sufficient in all
respects if delivered to the Company or the Manager at the offices of the
Company at Great Ajax Corp.; 9400 Beaverton-Hillsdale Hwy, Suite 131; Beaverton,
Oregon 97005.

 

14.         Governing Law; Headings.

 

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The
section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.

 

15.         Parties at Interest.

 

The Agreement herein set forth has been and is made solely for the benefit of
the Underwriters, the Company, the Operating Partnership, the Manager and the
controlling persons, directors and officers referred to in Sections 9 and 10
hereof, and their respective successors, assigns, executors and administrators.
No other person, partnership, association or corporation (including a purchaser,
as such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.

 

16.         Counterparts and Facsimile Signatures.

 

This Agreement may be signed by the parties in counterparts (including by
facsimile or other standard form of electronic transmission) which together
shall constitute one and the same agreement among the parties, and each such
signature shall constitute an original signature for all purposes hereof.

 

If the foregoing correctly sets forth the understanding among the Company, the
Operating Partnership, the Manager and the Underwriters, please so indicate in
the space provided below

 

 - 33 - 

 

  

for the purpose, whereupon this Agreement shall constitute a binding agreement
among the Company, the Operating Partnership, the Manager and the Underwriters.

 

[Signature pages follow]

 

 - 34 - 

 

 

  Very truly yours,       Great Ajax Corp.         By: /s/ Lawrence Mendelsohn

 

  Great Ajax Operating Partnership LP         By: /s/ Lawrence Mendelsohn

 

  Thetis Asset Management LLC         By: /s/ Lawrence Mendelsohn

 

[Signature page to Underwriting Agreement]

 

 

 

  

Accepted and agreed to as

of the date first above written:

 

PIPER JAFFRAY & CO.       By: /s/ David W. Stadinski    

Name: David W. Stadinski

  Title: Managing Director        

For itself and as Representative of the other

Underwriters named on Schedule I hereto.

 

[Signature page to Underwriting Agreement]

 

 

 

 

SCHEDULE I

 

Underwriter  Number of Initial
Shares to be Purchased        Piper Jaffray & Co.   1,449,600         FBR
Capital Markets & Co.   815,400         Total   2,265,000 

 

 Sch. I-1 

 

 

SCHEDULE II

 

Issuer Free Writing Prospectuses

 

 Sch. II-1 

 

 

SCHEDULE III

 

Pricing Terms

 

1.The Company is selling 2,265,000 Initial Shares.

 

2.The Company has granted an option to the Underwriters to purchase up to an
additional 339,750 Option Shares.

 

3.The initial public offering price per share for the Shares is $13.25.

  

 Sch. III-1 

 

 

SCHEDULE IV

 

Subsidiaries

 

Great Ajax Operating LLC

 

Great Ajax Operating Partnership LP

 

GA-TRS LLC

 

Great Ajax Funding LLC

 

AJX Mortgage Trust I

 

GAJX Real Estate LLC

 

FLAIAS LLC

 

 Sch. IV-1 

 

 

SCHEDULE V

 

List of Persons and Entities Subject to Lock-up

 

Lawrence Mendelsohn

 

Steven L. Begleiter

 

John C. Condas

 

Jonathan Bradford Handley, Jr.

 

Daniel Hoffman

 

J. Kirk Ogren, Jr.

 

Russell Schaub

 

Mary B. Doyle