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XXXXX EQUITY, INC.
3,500,000 Shares of Common Stock
(par value $0.01 per share)
UNDERWRITING AGREEMENT
December 12, 1997
X.X. XXXXXX SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
BT ALEX. XXXXX INCORPORATED
As Representatives of several underwriters
listed in Schedule I hereto
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxx Equity, Inc., a Florida corporation (the "Company"),
proposes to issue and sell to the several underwriters listed in Schedule I
hereto (collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), an aggregate of 3,500,000 shares of
Common Stock, par value $0.01 per share, of the Company (the "Underwritten
Shares") and, for the sole purpose of covering over-allotments in connection
with the sale of the Underwritten Shares, at the option of the Underwriters, up
to an additional 450,000 shares of Common Stock of the Company (the "Option
Shares"). The Underwritten Shares and the Option Shares are herein referred to
as the "Shares". The shares of Common Stock of the Company to be outstanding
after giving effect to the sale of the Shares are herein referred to as the
"Stock".
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), two registration
statements (the file numbers of which are 33-55179 and 333-37919) on Form S-3,
including preliminary prospectuses, relating to the registration of Shares (the
"Shelf Securities") to be issued from time to time by the Company. The Company
also has filed with, or proposes to file with, the Commission pursuant to Rule
424 under the Securities Act a prospectus supplement specifically relating to
the Shares. The registration statements as amended to the date of this Agreement
are here-
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inafter referred to as the "Registration Statement" and the related prospectus
covering the Shelf Securities in the form first used to confirm sales of the
Shares is hereinafter referred to as the "Basic Prospectus". The Basic
Prospectus as supplemented by the prospectus supplement specifically relating to
the Shares in the form first used to confirm sales of the Shares is hereinafter
referred to as the "Prospectus". If the Company has filed an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement. Any reference in this Agreement to the Registration Statement, the
Basic Prospectus, any preliminary form of Prospectus (a "preliminary
prospectus") previously filed with the Commission pursuant to Rule 424 or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act which
were filed under the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission thereunder (collectively, the "Exchange Act")
on or before the date of this Agreement or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be; and any reference
to "amend", "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any preliminary prospectus or the Prospectus
shall be deemed to refer to and include any documents filed under the Exchange
Act after the date of this Agreement, or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be, which are deemed
to be incorporated by reference therein.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to issue and sell the Underwritten
Shares to the several Underwriters as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase,
severally and not jointly, from the Company the respective number of
Underwritten Shares set forth opposite such Underwriter's name in Schedule I
hereto at a purchase price per share (the "Purchase Price") of $19.14.
In addition, the Company agrees to issue and sell the Option
Shares to the several Underwriters as hereinafter provided, and the Underwriters
on the basis of the representations and warranties herein contained, but subject
to the conditions hereinafter stated, shall have the option to purchase,
severally and not jointly, from the Company up to an aggregate of 450,000 Option
Shares at the Purchase Price, for the sole purpose of covering over-allotments
(if any) in the sale of Underwritten Shares by the several Underwriters.
If any Option Shares are to be purchased, the number of Option
Shares to be purchased by each Underwriter shall be the number of Option Shares
which bears the same ratio to the aggregate number of Option Shares being
purchased as the number of Under-
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written Shares set forth opposite the name of such Underwriter in Schedule I
hereto (or such number increased as set forth in Section 9 hereof) bears to the
aggregate number of Underwritten Shares being purchased from the Company by the
several Underwriters, subject, however, to such adjustments to eliminate any
fractional Shares as the Representatives in their sole discretion shall make.
The Underwriters may exercise the option to purchase the
Option Shares at any time (but not more than once) on or before the thirtieth
day following the date of this Agreement, by written notice from the
Representatives to the Company. Such notice shall set forth the aggregate number
of Option Shares as to which the option is being exercised and the date and time
when the Option Shares are to be delivered and paid for which may be the same
date and time as the Closing Date (as hereinafter defined) but shall not be
earlier than the Closing Date nor later than the tenth full Business Day (as
hereinafter defined) after the date of such notice (unless such time and date
are postponed in accordance with the provisions of Section 9 hereof). Any such
notice shall be given at least two Business Days prior to the date and time of
delivery specified therein.
2. The Company understands that the Underwriters intend (i) to
make a public offering of the Shares and (ii) initially to offer the Shares upon
the terms set forth in the Prospectus.
3. Payment for the Shares shall be made to the Company by wire
transfer in immediately available funds to the account specified by the Company
to the Representatives in the case of the Underwritten Shares, on December 17,
1997, or at such other time on the same or such other date, not later than the
fifth Business Day thereafter, as the Representatives and the Company may agree
upon in writing or, in the case of the Option Shares, on the date and time
specified by the Representatives in the written notice of the Underwriters'
election to purchase such Option Shares. The time and date of such payment for
the Underwritten Shares is referred to herein as the "Closing Date" and the time
and date for such payment for the Option Shares, if other than the Closing Date,
are herein referred to as the "Additional Closing Date". As used herein, the
term "Business Day" means any day other than a day on which banks are permitted
or required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or
the Additional Closing Date, as the case may be, shall be made against delivery
to the Representatives for the respective accounts of the several Underwriters
of the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company. The certificates for
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the Shares will be made available for inspection and packaging by the
Representatives at the office of X.X. Xxxxxx Securities Inc. set forth above not
later than 1:00 P.M., New York City time, on the Business Day prior to the
Closing Date or the Additional Closing Date, as the case may be.
4. The Company represents and warrants to each Underwriter
that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424
under the Securities Act, complied when so filed in all material respects
with the Securities Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein;
(b) (i) the Registration Statement has been declared effective by
the Commission under the Securities Act; (ii) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company, threatened by the Commission; (iii) the Registration
Statement and Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the Securities
Act and do not and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of the date
of the Prospectus and any amendment or supplement thereto, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and (iv) the Prospectus, as amended or supplemented, if
applicable, at the Closing Date or Additional Closing Date, as the case
may be, will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
except that the foregoing representations and warranties shall not apply
to statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein;
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(c) the documents incorporated by reference in the Prospectus,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents are
filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act, and will 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;
(d) Deloitte & Touche LLP, the accounting firm that certified
certain financial statements of the Company and its subsidiaries, are, to
the knowledge of the Company, independent public accountants as required
by the Securities Act;
(e) the financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of
the dates indicated and the results of their operations and changes in
their consolidated cash flows for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly in all material respects the information
required to be stated therein;
(f) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
change in the capital stock (other than the grant of stock options
pursuant to the Company's Stock Option Plans and the Company's Common
Stock issued pursuant to the Company's (i) Stock Option Plans, (ii) Stock
Investment Plan, (iii) Dividend Reinvestment Plan and (iv) 401(k) Plan)
or long-term debt of the Company or any of its subsidiaries, or any
material adverse change, or any development that is reasonably likely to
result in a material adverse change, in or affecting the business,
assets, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, taken as a whole, in
each case, otherwise than as set forth or contemplated in the Prospectus;
and, except as set forth or contemplated in the Prospectus, neither the
Company nor any of its subsidiaries has entered into any transaction or
agreement (whether or not in the ordinary course of business) material to
the Company and its subsidiaries taken as a whole;
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(g) the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(h) the Company has been incorporated and is validly existing as a
corporation and its status is active under the laws of the State of
Florida, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
(i) each of the Company's subsidiaries has been incorporated and
is validly existing as a corporation under the laws of its jurisdiction
of incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus,
and has been duly qualified as a foreign corporation for the transaction
of business and is in good standing under the laws of each jurisdiction
in which it owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so
qualified or in good standing would not have a material adverse effect on
the Company and its subsidiaries taken as a whole; and all the
outstanding shares of capital stock of each subsidiary of the Company
have been duly authorized and validly issued, are fully-paid and
non-assessable, and (except, in the case of foreign subsidiaries, for
directors' qualifying shares) are owned by the Company, directly or
indirectly, free and clear of all liens, encumbrances, security interests
and claims;
(j) this Agreement has been duly authorized, executed and
delivered by the Company;
(k) the Company has an authorized capitalization as set forth in
the Prospectus and such authorized capital stock conforms as to legal
matters in all material respects to the description thereof set forth in
the Prospectus, and all of the outstanding shares of capital stock of the
Company have been duly authorized and val-
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idly issued, are fully-paid and non-assessable and, except as set forth
in the Registration Statement or Prospectus, are not subject to any
preemptive or similar rights; and, except as described in or expressly
contemplated by the Registration Statement or Prospectus, there are no
outstanding rights (including, without limitation, preemptive rights),
warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in
the Company or any of its subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such subsidiary, any
such convertible or exchangeable securities or any such rights, warrants
or options;
(l) the Shares to be issued and sold by the Company hereunder have
been duly authorized, and, when issued and delivered to and paid for by
the Underwriters in accordance with the terms of this Agreement, will be
duly issued and will be fully paid and non-assessable and will conform in
all material respects to the descriptions thereof in the Prospectus; and,
except with respect to the rights of XXXXX II Realty Trust, Inc.
("Apollo"), pursuant to the Stock Purchase Agreement dated October 10,
1996 between Apollo and the Company which have been exercised with
respect to the issuance of Shares, the issuance of the Shares is not
subject to any preemptive or similar rights;
(m) (i) neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both would be, in violation
of or in default under, its Articles of Incorporation or By-Laws or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which it or any of them or any of their respective properties is
bound, except for violations and defaults which individually and in the
aggregate are not material to the Company and its subsidiaries taken as a
whole; (ii) the issue and sale of the Shares and the performance by the
Company of its obligations under this Agreement and the consummation of
the transactions contemplated herein (A) will not conflict with or result
in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, and (B) will not result in any violation of the
provisions of the Articles of Incorporation or the By-Laws of the Company
or any applicable law or statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company, its subsidiaries or any of their respective properties; and
(iii) no consent, approval, authorization, order, license, registration
or qualification
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of or with any such court or governmental agency or body is required for
the issue and sale of the Shares or the consummation by the Company of
the transactions contemplated by this Agreement, except such consents,
approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act and under
the rules of the American Stock Exchange and as may be required under
state securities, real estate syndication or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters;
(n) other than as set forth or contemplated in the Prospectus and
as set forth on Schedule II hereto, there are no legal or governmental
investigations, actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any of its subsidiaries or any of their respective properties or to which
the Company or any of its subsidiaries is or may be a party or to which
any property of the Company or any of its subsidiaries is or may be the
subject which, if determined adversely to the Company or any of its
subsidiaries, could individually or in the aggregate have, or reasonably
be expected to have, a material adverse effect on the business, assets,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, and to
the best of the Company's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others; and
there are no statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or Prospectus or
to be filed as exhibits to the Registration Statement that are not
described or filed as required;
(o) immediately after any sale of Shares by the Company hereunder,
the aggregate amount of Shares which have been issued and sold by the
Company hereunder and of any securities of the Company (other than the
Shares) that shall have been issued and sold pursuant to the Registration
Statement will not exceed the amount of securities registered under the
Registration Statement;
(p) (i) the Company and its subsidiaries have good and marketable
title in fee simple to all items of real property and good and marketable
title to all personal property owned by them, in each case free and clear
of all liens, encumbrances and defects except such as are described or
referred to in the Prospectus or such as do not materially 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 its subsidiaries; (ii) any
real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, existing and enforceable
leases with such exceptions as 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 its subsidiaries; (iii) each of the Company's properties is in
compliance with all applicable codes and zoning
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laws and regulations, except for such failures to comply that,
individually or in the aggregate, could not, individually or in the
aggregate, have a material adverse effect on the general affairs,
business, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, taken as a whole; and
(iv) the Company has no knowledge of any pending or threatened
condemnation, zoning change or other proceeding or action that will in
any manner affect the size of, use of, improvements on, construction on
or access to the Company's properties, except such proceedings or actions
that, individually or in the aggregate, would not have a material adverse
effect on the general affairs, business, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(q) no relationship, direct or indirect, exists between or among
the Company or any or its subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of the Company
or any of its subsidiaries on the other hand, which is required by the
Securities Act to be described in the Registration Statement and the
Prospectus which is not so described;
(r) except as described in the Registration Statement and
Prospectus and pursuant to a Registration Rights Agreement dated August
9, 1993 between the Company and T.C.W. Special Credits, no person has the
right to require the Company to register any securities for offering and
sale under the Securities Act by reason of the filing of the Registration
Statement with the Commission or the issue and sale of the Shares;
(s) the Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or, to the
knowledge of the Company, 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");
(t) the Company and its subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be filed
and have paid all taxes shown thereon and all assessments received by
them or any of them to the extent that such taxes have become due and are
not being contested in good faith except for the failure to file such tax
returns or pay such taxes which would not, individually or in the
aggregate, be reasonably likely to have a material adverse effect on the
Company and its subsidiaries taken as whole; and, except as disclosed in
the Registration Statement and the Prospectus, there is no tax deficiency
which has been or might reasonably be expected to be asserted or
threatened against the Company or any subsidiary;
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(u) the Company has met the requirements for qualification as a
real estate investment trust ("REIT") under the Internal Revenue Code of
1986, as amended (the "Code"), and the Company's present and contemplated
operations, assets and income continue to meet such requirements;
(v) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Common Stock;
(w) except as would not, individually or in aggregate, reasonably
be likely to have a material adverse effect on the Company and its
subsidiaries taken as a whole, (i) each of the Company and its
subsidiaries owns, possesses or has obtained all licenses, permits,
certificates, consents, orders, approvals and other authorizations from,
and has made all declarations and filings with, all federal, state, local
and other governmental authorities (including foreign regulatory
agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case
may be, and to operate its properties and to carry on its business as
conducted as of the date hereof, and neither the Company nor any such
subsidiary has received any actual notice of any proceeding relating to
revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described in
the Registration Statement and the Prospectus, and (ii) each of the
Company and its subsidiaries is in compliance with all laws and
regulations relating to the conduct of its business as conducted as of
the date hereof;
(x) there are no existing or, to the best knowledge of the
Company, threatened labor disputes with the employees of the Company or
any of its subsidiaries which are likely to have a material adverse
effect on the Company and its subsidiaries taken as a whole;
(y) the Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except in each case, where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggre-
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gate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(z) other than as disclosed in the Prospectus, the Company has no
knowledge of (a) the unlawful presence of any hazardous substances,
hazardous materials, toxic substances or waste materials (collectively,
"Hazardous Materials") on any of the properties of the Company or of (b)
any unlawful spills, release, discharges or disposal of Hazardous
Materials that have occurred or are presently occurring from the
properties of the Company as a result of any construction on or operation
and use of the properties of the Company, which presence or occurrence
would individually or in the aggregate have a material adverse effect on
the Company and its subsidiaries, taken as a whole;
(aa) except as disclosed in the Prospectus, each entity identified
in the Prospectus as a tenant of any of the Company's properties, or a
subtenant thereof, is in actual possession of such property under a lease
to such tenant or, if applicable, a sublease to such subtenant; except as
disclosed in the Prospectus, each such lease is in full force and effect
and neither the Company nor any of its subsidiaries has notice of any
defense to the obligations of the tenant thereunder or any claim asserted
or threatened by any person or entity, which claim, if sustained, would
have a material adverse effect on the Company and its subsidiaries, taken
as a whole; and except as disclosed in the Prospectus, the lessor under
each lease has complied with its obligations under such lease in all
material respects and neither the Company nor any of its subsidiaries has
notice of any default by the tenant under such lease which, individually
or in the aggregate with other such defaults, would have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
(bb) the mortgages and deeds of trust encumbering the properties
of the Company are not (i) cross-defaulted to any indebtedness other than
indebtedness of the Company or any of its subsidiaries or (ii)
cross-collateralized to any property not owned by the Company or any of
its subsidiaries;
(cc) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and its affiliates has been maintained in all material respects
in compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended ("Code"). No
prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code has occurred with respect to any such plan
excluding transactions effected pur-
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suant to a statutory or administrative exemption. For each such plan
which is subject to the funding rules of Section 412 of the Code or
Section 302 of ERISA no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the
fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the present value of
all benefits accrued under such plan determined using reasonable
actuarial assumptions;
(dd) the statements set forth in the Prospectus under the caption
"Description of Common Stock", insofar as they purport to constitute a
summary of the terms of the Shares, and under the captions "Federal
Income Tax Considerations" and "Provisions of Florida Law", to the extent
such statements purport to describe factual matters of law or regulation
or constitute summaries of documents described therein, are accurate and
complete in all material respects;
(ee) the Company has and will maintain property and casualty
insurance in favor of the Company and its subsidiaries (as the case may
be) with respect to each of the Company's properties, in an amount and on
such terms as is reasonable and customary for businesses of the type
proposed to be conducted by the Company and its subsidiaries; the Company
has not received from any insurance company written notice of any
material defects or deficiencies affecting the insurability of any of its
properties;
5. The Company covenants and agrees with each of the several
Underwriters as follows:
(a) to file the Prospectus in a form approved by you pursuant to
Rule 424 under the Securities Act not later than the Commission's close
of business on the second Business Day following the date of
determination of the offering price of the Shares or, if applicable, such
earlier time as may be required by Rule 424(b);
(b) to furnish to each Representative and counsel for the
Underwriters, at the expense of the Company, a signed copy of the
Registration Statement (as originally filed) and each amendment thereto,
in each case including exhibits and documents incorporated by reference
therein and, during the period mentioned in paragraph (e) below, to
furnish each of the Underwriters as many copies of the Prospectus
(including all amendments and supplements thereto) and documents
incorporated by reference therein as you may reasonably request;
(c) from the date hereof and prior to the Closing Date, to furnish
to you a copy of any proposed amendment or supplement to the Registration
Statement or the
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Prospectus, for your review, and not to file any such proposed amendment
or supplement to which you reasonably object, provided, that any such
objection shall not be unreasonably withheld or delayed;
(d) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Shares and during such same period, to
advise you promptly, and to confirm such advice in writing, (i) when any
amendment to the Registration Statement shall have become effective, (ii)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for any
additional information, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation or threatening of any proceeding for that purpose, and
(iv) of the receipt by the Company of any notification with respect to
any suspension of the qualification of the Shares for offer and sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to prevent the issuance of any
such stop order or notification and, if issued, to obtain as soon as
possible the withdrawal thereof;
(e) if, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
a prospectus relating to the Shares is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur
as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus
to comply with law, forthwith to prepare and furnish, at the expense of
the Company, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have been
sold by you on behalf of the Underwriters and to any other dealers upon
request, such amendments or supplements to the Prospectus as may be
necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law;
(f) to use its best efforts to qualify the Shares for offer and
sale under the securities or Blue Sky and real estate syndication laws of
such jurisdictions as the Representatives shall reasonably request and to
continue such qualification in effect so long as reasonably required for
distribution of the Shares; provided that the Company shall not be
required to file a general consent to service of process in any
jurisdiction or to file for a qualification to do business in any
jurisdiction;
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(g) to make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter
of the Company occurring after the effective date of the Registration
Statement, which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Commission promulgated thereunder;
(h) so long as the Shares are outstanding, to furnish to the
Representatives (but after five years from the date of this Agreement,
only upon request) copies of all reports or other communications
(financial or other) furnished to holders of the Shares, and copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange;
(i) for a period of 90 days after the date of the public offering
of the Shares not to (i) offer, pledge, announce the intention to sell,
sell, contract to sell, sell any option or contract to sell, grant any
options, right or warrant to purchase or otherwise transfer or dispose
of, directly or indirectly, any shares of Stock or any securities
convertible into or exercisable or exchangeable for Stock or (ii) enter
into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Stock, whether any such
transaction described in clause (i) or (ii) is to be settled by delivery
of Stock or such other securities, in cash or otherwise without the prior
written consent of the Representatives, other than the Shares to be sold
by the Company hereunder and any shares of Stock of the Company issued
upon the exercise of options granted under the Company's existing Stock
Option Plans or Shares issued pursuant to the Stock Investment Plan,
Dividend Reinvestment Plan and 401(k) Plan;
(j) to use the net proceeds received by the Company from the sale
of the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(k) whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all costs and expenses incident to the performance of its
obligations hereunder, including without limiting the generality of the
foregoing, all costs and expenses of the Company (i) incident to the
preparation, issuance, execution and delivery of the Shares, (ii)
incident to the preparation, printing and filing under the Securities Act
of the Registration Statement, the Prospectus and any preliminary
prospectus (including in each case all exhibits, amendments and
supplements thereto), (iii) incurred in connection with the registration
or qualification of the Shares under the laws of such jurisdictions as
the Representatives may designate (including fees of counsel for the
15
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Underwriters and its disbursements), (iv) in connection with the listing
of the Shares on the American Stock Exchange, (v) in connection with the
printing (including word processing and duplication costs) and delivery
of this Agreement, the Preliminary and Supplemental Blue Sky Memoranda
and the furnishing to the Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing and
shipping, as herein provided, (vi) any expenses incurred by the Company,
but not those expenses incurred by the Representatives, in connection
with a "road show" presentation to potential investors, (vii) the cost of
preparing stock certificates and (viii) the cost and charges of any
transfer agent and any registrar; and
(l) the Company will meet the requirements to qualify,
effective for the fiscal year ending December 31, 1997, as a "real
estate investment trust" under the Code.
6. The several obligations of the Underwriters hereunder to
purchase the Shares on the Closing Date or the Additional Closing Date, as the
case may be, are subject to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) the Prospectus shall have been filed with the Commission
pursuant to Rule 424 within the applicable time period prescribed for
such filing by the rules and regulations under the Securities Act; no
stop order suspending the effectiveness of the Registration Statement
shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your satisfaction;
(b) the representations and warranties of the Company
contained herein are true and correct on and as of the Closing Date or
the Additional Closing Date, as the case may be, as if made on and as
of the Closing Date or the Additional Closing Date, as the case may be,
and the Company shall have complied with all agreements and all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date or the Additional Closing Date, as the case
may be;
(c) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development that is
reasonably likely to result in a material adverse change, in or
affecting the business, assets, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, in each case, otherwise than as set
forth or contemplated in the Prospectus, the effect of
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which in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares on the Closing Date or the Additional Closing Date, as the case
may be, on the terms and in the manner contemplated in the Prospectus;
and neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree which would, individually or in the
aggregate, be reasonably likely to have a material adverse effect on the
Company and its subsidiaries taken as a whole, and otherwise than as set
forth or contemplated in the Prospectus;
(d) the Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a
certificate of two executive officers of the Company, with specific
knowledge about the Company's financial matters, satisfactory to the
Representatives to the effect set forth in subsections (a) through (c)
with respect to the respective representations, warranties, agreements
and conditions of the Company) of this Section and to the further effect
that there has not occurred any material adverse change, or any
development that is reasonably likely to result in a material adverse
change, in or affecting the business, management, assets, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole in each case, from that set forth
or contemplated in the Registration Statement;
(e) Xxxxxx & XxXxxx, counsel for the Company, shall have
furnished to the Representatives its written opinion, dated the Closing
Date or the Additional Closing Date, as the case may be, in form and
substance satisfactory to the Representatives, to the effect that:
(i) the Company has been incorporated and is validly
existing as a corporation and its status is active under the laws
of its jurisdiction of incorporation, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus, as amended or supplemented;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so
qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole;
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(iii) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under the
laws of its jurisdiction of incorporation with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus and has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so
qualified and in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole; and
all of the outstanding shares of capital stock of each subsidiary
have been duly and validly authorized and issued, are fully paid
and non-assessable, and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims;
(iv) to the best of such counsel's knowledge, other than
as set forth or contemplated in the Prospectus, and as disclosed
in Schedule I to such counsel's opinion, there are no legal or
governmental investigations, actions, suits or proceedings pending
or, to the best of such counsel's knowledge, threatened against or
affecting the Company or any of its subsidiaries or any of their
respective properties or to which the Company or any of its
subsidiaries is or may be a party or to which any property of the
Company or its subsidiaries is or may be the subject which, if
determined adversely to the Company or any of its subsidiaries,
could individually or in the aggregate have, or reasonably be
expected to have, a material adverse effect on the general
affairs, business, management, financial position, stockholders'
equity or results of operations of the Company and its
subsidiaries taken as a whole; to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and such counsel
does not know of any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as
required;
(v) this Agreement has been duly authorized, executed
and delivered by the Company;
(vi) the authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the
Prospectus;
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(vii) the shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be sold by the
Company have been duly authorized and are validly issued, fully
paid and non-assessable;
(viii) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when delivered to and
paid for the Underwriters in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable
and except as described in the Prospectus, the issuance of the
Shares is not subject to any preemptive or similar rights;
(ix) the statements in the Prospectus under "Provisions
of Florida Law" and "Description of Common Stock", in the
Prospectus and in the Registration Statement, insofar as such
statements constitute a summary of the terms of the Stock, legal
matters, documents or proceedings referred to therein, fairly
present in all material respects the information called for with
respect to such terms, legal matters, documents or proceedings;
(x) such counsel does not know of any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement, required to be described in the Prospectus
or incorporated by reference therein which are not so filed,
described or incorporated, as required;
(xi) the Registration Statement has been declared
effective under the Securities Act, the Prospectus was filed with
the Commission pursuant to Rule 424 within the applicable time
period prescribed by Rule 424 and, to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose is
pending or threatened by the Commission;
(xii) neither the Company nor any of its subsidiaries is,
or with the giving of notice or lapse of time or both would be, in
violation of or in default under, its Articles of Incorporation or
By-Laws or any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which
the Company or any of its subsidiaries is a party or by which it
or any of them or any of their respective properties is bound,
except for violations and defaults which individually and in the
aggregate are not material to the Company and its subsidiaries
taken as a whole; the issue and sale of the Shares being delivered
on the Closing Date or the Additional Closing Date, as the case
may be, and the performance by the Company of its obligations
under this Agreement and the consummation of the transactions
contemplated herein will not conflict with or result in a breach
of any of
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-19-
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company
or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject,
nor will any such action result in any violation of the provisions
of the Articles of Incorporation or the By-Laws of the Company or
any applicable law or statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over
the Company, its subsidiaries or any of their respective
properties;
(xiii) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental
agency or body is required for the issue and sale of the Shares or
the consummation of the other transactions contemplated by this
Agreement, except such consents, approvals, authorizations,
orders, licenses, registrations or qualifications as have been
obtained under the Securities Act and under the rules of the
American Stock Exchange and as may be required under applicable
state securities, real estate syndication or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters; and
(xiv) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment
company" or, to the knowledge of such counsel, an entity
"controlled" by an "investment company", as such terms are defined
in the Investment Company Act; and
(xv) such counsel (A) is of the opinion that each
document incorporated by reference in the Registration Statement
and the Prospectus as amended or supplemented (other than the
financial statements and related schedules therein, as to which
such counsel need express no opinion) complied as to form when
filed with the Commission in all material respects with the
Exchange Act, and the rules and regulations of the Commission
thereunder, (B) believes that (except for the financial statements
included therein as to which such counsel need express no belief)
each part of the Registration Statement (including the documents
incorporated by reference therein) filed with the Commission
pursuant to the Securities Act relating to the Securities, when
such part became effective, did not contain an untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (C) is of the opinion that the Registration Statement
and the Prospectus and any amendments and supplements thereto
(except for the financial statements included therein as to
20
-20-
which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Securities Act
and (D) believes that (except for the financial statements
included therein as to which such counsel need express no belief)
the Registration Statement and the Prospectus, on the date of this
Agreement, did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and that
the Prospectus as amended or supplemented, if applicable, does not
contain any 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.
The opinion of Xxxxxx & XxXxxx and described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein. In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the
United States and the State of Florida, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws; (B) as to
matters of fact, to the extent such counsel deems proper, on certificates
of responsible officers of the Company and certificates or other written
statements of officials of jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company. The
opinion of such counsel for the Company shall state that the opinion of
any such other counsel upon which they relied is in form satisfactory to
such counsel and, in such counsel's opinion, the Underwriters and they
are justified in relying thereon. With respect to the matters to be
covered in subparagraph (x) above counsel may state their opinion and
belief is based upon their participation in the preparation of the
Registration Statement and the Prospectus and any amendment or supplement
thereto and review and discussion of the contents thereof but is without
independent check or verification except as specified.
(f) Ropes & Xxxx, special counsel to the Company, shall have
furnished to the Representatives its written opinion dated the Closing
Date or the Additional Closing Date, as the case may be, in form and
substance satisfactory to the Representatives, to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by the Company;
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(ii) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when delivered to and
paid for the Underwriters in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable
and except as described in the Prospectus, the issuance of the
Shares is not subject to any preemptive or similar rights;
(iii) the statements in the Prospectus under "Description
of Common Stock" and "Federal Income Tax Considerations", insofar
as such statements constitute a summary of the terms of the Stock,
legal matters, documents or proceedings referred to therein,
fairly present in all material respects the information called for
with respect to such terms, legal matters, documents or
proceedings;
(iv) to such counsel's knowledge, the Company (a) has
qualified to be taxed as a REIT pursuant to the Internal Revenue
Code for the taxable years ended December 31, 1994 through
December 31, 1996 and (b) is in a position under present law to so
qualify for the fiscal year ending December 31, 1997;
(v) the Registration Statement has been declared
effective under the Securities Act, the Prospectus was filed with
the Commission pursuant to Rule 424 within the applicable time
period prescribed by Rule 424 and, to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose is
pending or threatened by the Commission;
(vi) no consent, approval, authorization, order, license,
registration or qualification of or with any federal or
Massachusetts court or governmental agency or body is required for
the issue and sale of the Shares or the consummation of the other
transactions contemplated by this Agreement, except such consents,
approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act and
under the rules of the American Stock Exchange and as may be
required under applicable state securities, real estate
syndication or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(vii) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment
company" or, to the knowledge of such Counsel, an entity
"controlled" by an "investment company", as such terms are defined
in the Investment Company Act; and
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(viii) such counsel (A) believes that (except for the
financial statements therein as to which such counsel need express
no belief) the registration statement (file number 333-37919)
(including the documents incorporated by reference therein) filed
with the Commission pursuant to the Securities Act relating to the
Securities, when such registration statement became effective, did
not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (B) is of the
opinion that the Registration Statement and the Prospectus (in
each case, excluding the documents incorporated by reference
therein) and any amendments and supplements thereto (except for
the financial statements included therein as to which such counsel
need express no opinion) comply as to form in all material
respects with the requirements of the Securities Act and (C)
believes that (except for the financial statements included
therein as to which such counsel need express no belief) the
registration statement (file number 333-37919) and the Prospectus,
on the date of this Agreement, did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and that the Prospectus as amended or
supplemented, if applicable, does not contain any 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.
The opinion of Ropes & Xxxx described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein. In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of the State of Florida, to the
extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel
reasonably acceptable to the Underwriters' counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of the Company and
certificates or other written statements of officials of jurisdictions
having custody of documents respecting the corporate existence or good
standing of the Company. The opinion of such counsel for the Company
shall state that the opinion of any such other counsel upon which they
relied is in form satisfactory to such counsel and, in such counsel's
opinion, the Underwriters and they are justified in relying thereon.
(g) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration State-
23
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ment and also on the Closing Date or Additional Closing Date, as the case
may be, Deloitte & Touche LLP shall have furnished to you letters, dated
the respective dates of delivery thereof, in form and substance
satisfactory to you, containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
(h) the Representatives shall have received on and as of the
Closing Date or Additional Closing Date, as the case may be, an opinion
of Xxxxxx Xxxxxx & Xxxxxxx, counsel to the Underwriters, with respect to
the due authorization and valid issuance of the Shares, the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters. In rendering such opinion, such
counsel may rely as to matters involving the application of the laws of
the State of Florida on an opinion of Xxxxxx & XxXxxx;
(i) separate "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and (i) the directors and executive
officers of the Company and (ii) XXXXX II Realty Trust, Inc., each
relating to sales and certain other dispositions of the Common Stock or
certain other securities, delivered to you on or before the date hereof,
shall be in full force and effect on the Closing Date or Additional
Closing Date, as the case may be; and
(j) on or prior to the Closing Date or Additional Closing Date, as
the case may be, the Company shall have furnished to the Representatives
such further certificates and documents as the Representatives shall
reasonably request.
The several obligations of the Underwriters to purchase Option
Shares hereunder are subject to satisfaction of the conditions set forth in
paragraphs (a)-(j) above on and as of the Additional Closing Date (references
therein to the Closing Date shall be deemed references to the Additional Closing
Date for this purpose), except that the certificate called for by paragraph (e)
above, the opinions called for by paragraphs (e), (f) and (h) above shall be
dated the Additional Closing Date.
7. The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, the reasonable legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material
24
-24-
fact contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except (i) insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use
therein or (ii) if such untrue statement or omission was made in a preliminary
prospectus and was corrected in the final Prospectus.
Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person who controls the Company within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to information relating to such Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to the preceding
paragraphs, such person (the "Indemnified Person") shall promptly notify the
person against whom such indemnity may be sought (the "Indemnifying Person") in
writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the reasonable fees and expenses of
such counsel related to such proceeding. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary, (ii) the Indemnifying Person has failed within a reasonable time
to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred.
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Any such separate firm for the Underwriters and such control persons of
Underwriters shall be designated in writing by X.X. Xxxxxx Securities Inc. and
any such separate firm for the Company, its directors, its officers who sign the
Registration Statement and such control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the Indemnifying Person agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
If the indemnification provided for in the first and second
paragraphs of this Section 7 is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other hand shall be
deemed to be in the same respective proportions as the net proceeds from the
offering (before deducting expenses) received by the Company and the total
underwriting discounts and the commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate public offering price of the Shares. The relative fault of the Company
on the one hand and the Un-
26
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derwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purposes) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section ll(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 7 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I hereto,
and not joint.
The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any other person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or
the obligations of the several Underwriters with respect to the Option Shares)
may be terminated in the absolute discretion of the Representatives, by notice
given to the Company, if after the execution and delivery of this Agreement and
prior to the Closing Date (or, in the case of the Option Shares, prior to the
Additional Closing Date) (i) trading generally shall
27
-27-
have been suspended or materially limited on or by, as the case may be, any of
the New York Stock Exchange or the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the
Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representatives, is material and
adverse and which, in the reasonable judgment of the Representatives, makes it
impracticable to market the Shares being delivered at the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
If on the Closing Date or the Additional Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-tenth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Shares which it or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date, and arrangements satisfactory to the Representatives and the
Company for the purchase of such Shares are not made within 36 hours after such
default, this Agreement (or the obligations of the several Underwriters to
purchase the Option Shares, as the case may be) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the Closing
Date (or, in the case of the Option Shares, the Additional Closing Date) but in
no event for longer than seven days, in order that the required
28
-28-
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
10. 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 to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement or any condition of the Underwriters' obligations cannot be
fulfilled, the Company agrees to reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and expenses of its counsel)
reasonably incurred by the Underwriter in connection with this Agreement or the
offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding
upon the Company, the Underwriters, any controlling persons referred to herein
and their respective successors and assigns. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person, firm
or corporation any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. No purchaser of Shares from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by X.X. Xxxxxx Securities Inc. on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
X.X. Xxxxxx Securities Inc. shall be binding upon the Underwriters. All notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (telefax: (000) 000-0000); Attention: Syndicate Department. Notices
to the Company shall be given to it at Xxxxx Equity, Inc., 0000 Xxxxxxxxx Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000 (telefax: (000) 000-0000);
Attention: Chief Executive Officer.
13. This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
29
-29-
If the foregoing is in accordance with your understanding, please
sign and return four counterparts hereof.
Very truly yours,
XXXXX EQUITY, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman of the Board
Accepted by:
X.X. Xxxxxx Securities Inc.
Bear, Xxxxxxx & Co. Inc.
BT Alex. Xxxxx Incorporated
By: X.X. Xxxxxx Securities Inc.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.
By: X.X. Xxxxxx Securities Inc.
------------------------------------
Name:
Title:
30
SCHEDULE I
Number of Shares
Underwriter To Be Purchased
----------- ---------------
X.X. Xxxxxx Securities Inc........................................734,000
Bear, Xxxxxxx & Co. Inc...........................................734,000
BT Alex. Xxxxx Incorporated.......................................734,000
Xxxxx & Company....................................................84,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.................84,000
Prudential Securities Incorporated.................................84,000
Xxxxx Xxxxxx Inc...................................................84,000
Xxxxxxx Xxxxxx & Co., Inc..........................................84,000
Xxxxxxxx & Strudwick, Inc..........................................42,000
X.X. Xxxxxxxx & Co.................................................42,000
Xxxxxxxxx & Co. of Virginia, Inc...................................42,000
Xxxxx X. Xxxxx & Co................................................42,000
Xxxxxxxx, Lemon & Co. Incorporated.................................42,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated...............................42,000
The Xxxxxxxx-Xxxxxxxx Company, Inc.................................42,000
Xxxxx & Xxxxxxxxxxxx, Inc..........................................42,000
Wheat, First Securities, Inc.......................................42,000
Total 3,000,000
===============
31
SCHEDULE II
32
EXHIBIT A
[FORM LOCK-UP AGREEMENT]
___________ __, 1997
X.X. XXXXXX SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
BT ALEX. XXXXX INCORPORATED
As Representatives of
the Underwriters named in
Schedule I to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Xxxxx Equity, Inc.--- Public Offering
Ladies and Gentlemen:
The undersigned owns and/or has the right to acquire and/or
has the right to direct the disposition of shares of common stock, par value
$0.01 per share (the "Common Stock"), of Xxxxx Equity, Inc., a Florida
corporation (the "Company"). The undersigned understands that the Company has
filed registration statements on Form S-3 (the "Registration Statement") under
the Securities Act of 1933, as amended (the "Act"), with respect to shares of
Common Stock (the "Shares") proposed to be issued and sold by the Company to the
several underwriters to be named on Schedule I (collectively, the
"Underwriters") to the underwriting agreement (the "Underwriting Agreement")
proposed to be entered into by and between the Company, on the one hand, and
X.X. Xxxxxx Securities Inc., Bear, Xxxxxxx & Co. Inc. and BT Alex. Xxxxx
Incorporated, for themselves and as representatives of the several Underwriters.
In order to induce the Company and the Underwriters to conduct
a public offering of the Shares and to enter into the Underwriting Agreement,
the undersigned agrees for the equal benefit of the Company and each of the
Underwriters, for a period of 90 days after the date of the public offering of
the Shares, not to (x) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of, directly or
indi-
33
-2-
rectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (y) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (x) or (y) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise, or (z) request or demand the
registration under the Act of any shares of capital stock of the Company, in
each case, without the prior written consent of X.X. Xxxxxx Securities Inc.,
provided, however, that nothing contained herein shall prevent an officer or
director of the Company from exercising an option to purchase shares of Common
Stock granted to such officer or director by the Company or an issuance of
Common Stock to an officer or director by the Company pursuant to its Stock
Option Plans, Stock Investment Plan, Dividend Reinvestment Plan or 401(k) Plan.
In furtherance of the foregoing, the Company, and any duly
appointed transfer agent for the registration or transfer of the securities
described herein, are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
Letter Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Letter Agreement.
All authority herein conferred or agreed to be conferred and any obligations of
the undersigned shall be binding upon the successors, assigns, heirs, legatees
or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting
Agreement does not become effective, or if the Underwriting Agreement (other
than the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Common Stock to be sold
thereunder, the undersigned shall be released form all obligations under this
Letter Agreement.
This lock-up agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof.
34
-3-
The undersigned understands that the Underwriters are entering
into the Underwriting Agreement and proceeding with the Public Offering in
reliance upon this Letter Agreement.
Very truly yours,
Name Of Stockholder
By:
------------------------
Name:
Title:
Accepted as of the date first set
forth above:
X.X. XXXXXX SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
BT. ALEX. XXXXX INCORPORATED
Acting severally on behalf of themselves and the several
Underwriters named in Schedule I to the Underwriting
Agreement
By: X.X. XXXXXX SECURITIES INC.
By:
------------------------------
Name:
Title:
