EXHIBIT 1.1
3,200,000 SHARES
TRANSEASTERN PROPERTIES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
November __, 1996
BT Securities Corporation
Cruttenden Xxxx Incorporated
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
As Representatives of the Several Underwriters
Named in Schedule I Attached Hereto
c/o BT Securities Corporation
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Transeastern Properties, a Florida corporation (the "Company"),
proposes to issue and sell, and certain of its selling shareholders named in
Schedule II hereto (the "Selling Shareholders") severally propose to sell, an
aggregate of 3,200,000 shares (the "Offered Shares") of the Company's common
stock, $0.01 par value (the "Common Stock"), to BT Securities Corporation,
Cruttenden Xxxx Incorporated and Xxxxxx Xxxxxxxxxx Xxxxx Inc. (collectively, the
"Representatives") and the underwriters named in Schedule I hereto (collectively
with the Representatives, the "Underwriters" and individually, an "Underwriter,"
which terms shall also include any Underwriter substituted as hereinafter
provided in Section 12). The Offered Shares consist of 2,892,326 shares of
Common Stock to be issued and sold by the Company and 307,674 outstanding shares
of Common Stock to be sold by the Selling Shareholders. The Offered Shares shall
be offered to the public at an initial offering price of $_____ per Offered
Share (the "Offering Price")
In addition, the several Underwriters, solely in order to cover
over-allotments in the sale of the Offered Shares, may purchase from the Company
and the Selling Shareholders within 30 days after the Effective Date (as
hereinafter defined), for their own account for offering to the public at the
Offering Price, up to 96,000 and 384,000, respectively, additional shares of
Common
Stock (the "Optional Shares"), upon the terms and conditions set forth in
Section 5 hereof. The Offered Shares and the Optional Shares are hereinafter
collectively referred to as the "Shares." In addition, the Company proposes to
sell to the Representatives, individually and not in their capacity as
Representatives, five-year warrants (the "Representatives' Warrants") to
purchase up to 320,000 shares of Common Stock of the Company (the
"Representatives' Warrant Stock"), which sale will be consummated in accordance
with the terms and conditions of the Representatives' Warrant Agreement (the
"Representatives' Warrant Agreement"), the form of which is filed as an exhibit
to the Registration Statement described below. Unless the context otherwise
requires, references herein to the "Company" include Transeastern Properties,
Inc. together with its subsidiaries described in the Prospectus (hereinafter
defined). The Company, intending to be legally bound hereby, confirms its
agreement with each of the Underwriters as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, the several
Underwriters that:
(a) The Company has prepared in conformity with the
requirements of the Securities Act of 1933, as amended (the
"Act") , and the rules, regulations, releases and instructions
(the "Regulations") of the Securities and Exchange Commission
(the "SEC") under the Act in effect at all applicable times and
has filed with the SEC a registration statement on Form S-1 (File
No. 333-10375) and one or more amendments thereto registering the
Shares under the Act. Any preliminary prospectus included in such
registration statement or filed with the SEC pursuant to Rule
424(a) of the Regulations is hereinafter called a "Preliminary
Prospectus." The various parts of such registration statement,
including all exhibits thereto and the information contained in
any form of final prospectus filed with the SEC pursuant to Rule
424(b) of the Regulations in accordance with Section 6(a) of this
Agreement and deemed by virtue of Rule 430A of the Regulations to
be part of such registration statement at the time it was
declared effective, each as amended at the time such registration
statement became effective, and each registration statement, if
any, filed pursuant to Rule 462(b) under the Act increasing the
size of the offering registered under the Act, are hereinafter
collectively referred to as the "Registration Statement." The
final prospectus in the form included in the Registration
Statement or first filed with the SEC pursuant to Rule 424(b) of
the Regulations and any amendments or supplements thereto is
hereinafter referred to as the "Prospectus."
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(b) The Registration Statement has or will become
effective under the Act as of the Effective Date, and the SEC has
not issued any stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of any
Preliminary Prospectus nor has the SEC instituted, threatened to
institute or, to the Company's knowledge, contemplated
proceedings with respect to such an order. The Company has not
received any stop order suspending the sale of the Shares in any
jurisdiction designated by the Representatives pursuant to
Section 6(f) hereof, and no proceedings for that purpose have
been instituted or, to the Company's knowledge, are threatened or
contemplated. The Company has complied with any request of the
SEC and any state securities commission in a state designated by
the Representatives pursuant to Section 6(f) hereof, for
additional information to be included in the Registration
Statement or Prospectus or otherwise. Each Preliminary Prospectus
conformed to the requirements of the Act and the Regulations as
of its date and did not as of its date contain an untrue
statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading, except the foregoing shall not apply to
statements in or omissions from any Preliminary Prospectus in
reliance upon and in conformity with information furnished to the
Company in writing by or on behalf of any Underwriters through
the Representatives expressly for use therein. The Registration
Statement on the date on which it was declared effective by the
SEC (the "Effective Date") conformed, and any post-effective
amendment thereof on the date it shall become effective, and the
Prospectus at the time it is filed with the SEC pursuant to Rule
424(b) of the Regulations and on the Closing Date (as defined in
Section 4 hereof) and any Option Closing Date (as defined in
Section 5(b) hereof) will conform, to the requirements of the Act
and the Regulations, and neither the Registration Statement, any
post-effective amendment thereof nor the Prospectus will, on any
of such respective dates, 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, except that this representation and warranty does not
apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing
by or on behalf of any Underwriter through the Representatives
expressly for use therein. It is understood that the written
information described in
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Section 13 constitutes the only information furnished in writing
by or on behalf of any Underwriters for inclusion in any
Preliminary Prospectus, the Prospectus or the Registration
Statement.
(c) The consolidated financial statements (including the
notes thereto) filed as part of any Preliminary Prospectus, the
Prospectus and the Registration Statement present fairly the
consolidated financial position of the Company and each
corporation or other entity of which the Company owns or will own
fifty percent or more of the outstanding equity securities as of
the Closing Date (individually a "Subsidiary," and collectively
the "Subsidiaries"), as of the respective dates thereof, and the
consolidated results of operations and cash flows of the Company
and its Subsidiaries, for the periods indicated therein, all in
conformity with generally accepted accounting principles
("GAAP"), consistently applied through the periods involved,
except as may be otherwise stated therein. The supporting
schedules included in the Registration Statement fairly state the
information required to be stated therein in relation to the
basic financial statements taken as a whole. The other financial
and statistical information included in the Prospectus, including
without limitation the data under the captions "Prospectus
Summary" and "Selected Financial Data," presents fairly the
information shown therein and has been compiled on a basis
consistent with that of the audited financial statements included
in the Registration Statement and the books and records of the
Company. No other financial statements or schedules are required
to be included in the Registration Statement.
(d) The Company does not have any Subsidiaries other than
Transeastern Properties at the Cove, Inc., a Florida corporation;
Transeastern Wellington Properties, Inc., a Florida corporation;
Transeastern Aberdeen Properties, Inc., a Florida corporation;
Transeastern Pembroke Villages, Inc., a Florida corporation;
Transeastern Pembroke Properties, a Florida corporation;
Transeastern Plantation Apartments, Inc., a Florida corporation;
Transeastern Hollywood Apartments, Inc., a Florida corporation;
and Transeastern Finance, Inc., a Florida corporation, and the
Company does not own any stock or other equity interest in, or
control, directly or indirectly, any other corporation,
partnership or other entity.
(e) Each of the Company and the Subsidiaries is
a corporation duly incorporated, validly existing and
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in good standing under the laws of its jurisdiction of
incorporation with all necessary corporate power and authority,
and all required licenses, permits, certifications,
registrations, approvals, consents and franchises to own or lease
and operate its properties and to conduct its business as
described in the Prospectus and to execute, deliver and perform
this Agreement. Each of the Company and the Subsidiaries is duly
qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would
not have a material adverse effect on the Company.
(f) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and the
Representatives' Warrants to purchase the shares of Common Stock
to be issued and sold to the Representatives under the terms of
the Warrant Agreement (as hereinafter defined) in accordance with
Section 6(p) of this Agreement.
(g) This Agreement and the Warrant Agreement have been
duly authorized, executed and delivered by the Company and,
assuming due authorization and execution by the other respective
parties thereto, constitute its valid and binding obligations,
enforceable against the Company in accordance with their
respective terms, except as rights to indemnity and contribution
hereunder or thereunder may be limited by federal or state
securities laws or principles of public policy, and except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles.
(h) The execution, delivery and performance of this
Agreement, the Warrant Agreement and the Representatives'
Warrants by the Company does not and will not, with or without
the giving of notice or the lapse of time, or both, (A) conflict
with any terms or provisions of the Certificate of Incorporation
or Bylaws of the Company, as amended to the date hereof and the
Closing Date or Option Closing Date, as the case may be; (B)
result in a breach of, constitute a default under, result in the
termination or modification of or result in the creation or
imposition of any lien, security interest, charge or encumbrance
upon any of the properties of the Company pursuant to any
indenture, mortgage, deed of trust, contract, commitment or other
agreement or instrument to which the Company is a
5
party or by which any of its properties or assets are bound or
affected, the effect of which would have a material adverse
effect on the business or properties of the Company; (C) violate
any law, rule, regulation, judgment, order or decree of any
government or governmental agency, instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
of its properties or businesses; or (D) result in a breach,
termination or lapse of the power and authority of the Company to
own or lease and operate its properties and conduct its business
as described in the Prospectus, the effect of which would have a
material adverse effect on the business or properties of the
Company.
(i) The Company has authorized and outstanding capital
stock and, as of the date or dates indicated the Company had the
capitalization, set forth under the caption "Capitalization" in
the Prospectus and will have the as-adjusted capitalization set
forth under the caption "Capitalization" in the Prospectus
assuming the purchase and sale of the Offered Shares pursuant to
this Agreement is consummated. On the Effective Date, the Closing
Date and any Option Closing Date, there will be no options or
warrants for the purchase of, other outstanding rights to
purchase, agreements or obligations to issue or agreements or
other rights to convert or exchange any obligation or security
into, capital stock of the Company or securities convertible into
or exchangeable for capital stock of the Company (except for
subsequent issuances, if any, pursuant to employee benefit plans
referred to in the Prospectus) except as described in the
Prospectus.
(j) The authorized capital stock of the Company,
including, without limitation, the outstanding shares of Common
Stock and the Shares being issued on the Closing Date and Option
Closing Date (if any and to the extent applicable), conforms to
the descriptions thereof in the Prospectus, and such descriptions
conform to the descriptions thereof set forth in the instruments
defining the same. The information in the Prospectus insofar as
it relates to outstanding options that have been granted to
employees and directors and the Representatives' Warrants, in
each case as of the Effective Date, the Closing Date and any
Option Closing Date, is true, correct and complete in all
material respects. As of the Closing Date, all of the outstanding
capital stock or other securities evidencing equity ownership of
the Subsidiaries will have been duly and validly authorized and
issued and will be fully paid and nonassessable and will be
owned, directly or indi-
6
rectly, by the Company, free and clear of any security interest,
claim, lien or encumbrance, except as disclosed in the
Prospectus; there are no outstanding rights, warrants or options
to acquire, or instruments convertible into or exchangeable for,
any shares of capital stock or other equity interest in any
Subsidiary.
(k) The outstanding shares of Common Stock (including the
Shares to be sold by the Selling Shareholders) have been duly
authorized and are validly issued, fully paid and non-assessable.
The Representatives' Warrants, as of the Closing Date, will have
been duly authorized and validly issued and, when executed and
delivered by the Company, will be a valid and binding obligation
enforceable against the Company in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by
general equitable principles. The shares of Common Stock issuable
pursuant to the Representatives' Warrants, when issued in
accordance with the respective terms thereof, will be duly
authorized, validly issued, fully paid and nonassessable. None of
such outstanding shares of Common Stock were, and none of the
Representatives' Warrants or the shares of Common Stock issuable
upon exercise of the Representatives' Warrants will be, issued in
violation of any preemptive rights of any security holder of the
Company. The Company has reserved a sufficient number of shares
of Common Stock for issuance pursuant to the Representatives'
Warrants. The holders of the outstanding shares of Common Stock
are not, and will not be, subject to personal liability solely by
reason of being such holders, and the holders of shares of Common
Stock issuable pursuant to the Representatives' Warrants will not
be subject to personal liability solely by reason of being such
holders. The offers and sales of the outstanding shares of Common
Stock were, and the issuance of Common Stock upon exercise of the
Representatives' Warrants will be, made in conformity with
applicable registration requirements or exemptions therefrom
under federal and applicable state securities laws.
(l) The issuance and sale of the Shares by the Company
have been duly authorized and, when the Shares have been duly
delivered against payment there for as contemplated by this
Agreement, the Shares will be validly issued, fully paid and
nonassessable, and the holders thereof will not be subject to
personal liability solely by reason of being such holders. None
of
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the Shares will be issued in violation of any preemptive rights
of any security holder of the Company. The certificates
representing the Shares are in proper legal form under, and
conform to the requirements of the Florida Business Corporation
Act, as amended (the "FBCA"). Except with respect to the Shares
being sold by the Selling Stockholders hereby, neither the filing
of the Registration Statement nor the offering or sale of the
Shares as contemplated by this Agreement gives any security
holder of the Company any rights, other than those which have
been waived, for or relating to the registration of any shares of
Common Stock or other security of the Company.
(m) No consent, approval, authorization, order,
registration, license or permit of any court, government,
governmental agency, instrumentality or other regulatory body or
official is required for the valid authorization, issuance, sale
and delivery by the Company of any of the Shares (including the
anticipated use of proceeds therefrom), or for the execution,
delivery or performance by the Company of this Agreement, except
such as may be required for the registration of the Shares under
the Act, the Regulations and the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), which consent and authorization
have been obtained, and for compliance with the applicable state
securities or Blue Sky laws, or the By-laws, rules and other
pronouncements of the National Association of Securities Dealers,
Inc. (the "NASD"). The Common Stock is registered under Section
12(g) of the Exchange Act and all necessary filings have been
made to include the Shares in such registration. Upon the
effectiveness of the Registration Statement, the Shares will be
listed on Nasdaq's National Market. The Company has taken no
action designed, or is likely, to have the effect of terminating
the registration of the Common Stock under Section 12(g) of the
Exchange Act, nor has the Company received any notification that
the SEC is contemplating terminating such registration.
(n) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of or references to
contracts, agreements or other documents, are accurate in all
material respects and present or summarize fairly, the
information required to be disclosed under the Act and the
Regulations, and there are no contracts, agreements or other
documents required to be described or referred to in the
Registration Statement or Prospectus or to be filed as exhibits
to the Registration Statement under the act or the Regulations
8
that have not been so described, referred to or filed, as
required.
(o) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, there has not been (A) any material
adverse change (including, whether or not insured against, any
material loss or damage to any assets), or development involving
a prospective material adverse change, in the general affairs,
properties, assets, management, condition (financial or
otherwise), results of operations, stockholders' equity, business
or prospects of the Company and the Subsidiaries, considered as
one enterprise, (B) any transaction entered into by the Company
or any Subsidiary that is material to the Company and the
Subsidiaries, considered as one enterprise, and not in the
ordinary course of business, (C) any dividend or distribution of
any kind declared, paid or made by the Company on its capital
stock, (D) any liabilities or obligations, direct or indirect,
incurred by the Company or any Subsidiary that are material to
the Company and the Subsidiaries, or (E) any material change in
the short-term debt or long-term debt of the Company or any
Subsidiary. The Company and the Subsidiaries do not have any
contingent liabilities or obligations that are material and that
are not disclosed in the Prospectus.
(p) The Company has not distributed and, prior to the
later to occur of the Closing Date, the Option Closing Date or
the completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering
or sale of the Shares other than the Registration Statement, each
Preliminary Prospectus and the Prospectus, in any such case only
as permitted by the Act and the Regulations.
(q) Each of the Company and the Subsidiaries has filed
with the appropriate federal, state and local governmental
agencies, and all foreign countries and political subdivisions
thereof, all tax returns that are required to be filed, or has
duly obtained extensions of time for the filing thereof. All such
tax returns are true, complete and correct in all material
respects. All material taxes that are due or claimed to be due
from the Company and the Subsidiaries have been paid other than
those (i) currently payable without penalty or interest or (ii)
being contested in good faith and by appropriate proceedings and
for which adequate reserves have been established in accordance
with GAAP. None of the Company or the Subsidiaries has executed
or filed with any taxing authority, foreign or
9
domestic, any agreement extending the period for assessment or
collection of any income taxes or is a party to any pending
action or proceeding by any foreign or domestic governmental
agencies for the assessment or collection of taxes, and no claims
for assessment or collection of taxes have been asserted against
the Company or the Subsidiaries that might materially adversely
affect the general affairs, properties, assets, condition
(financial or otherwise), results of operations, shareholders'
equity, business or prospects of the Company and the
Subsidiaries, considered as one enterprise.
(r) KPMG Peat Marwick LLP, which has examined the
financial statements of the Company, together with the related
schedules and notes, as of June 30, 1996 and 1995 and for each of
the years in the three (3) year period ended June 30, 1996 filed
with the SEC as a part of the Registration Statement, which are
included in the Prospectus, are independent accountants within
the meaning of the Act and the Rules and Regulations.
(s) None of the Company or the Subsidiaries is in
violation of, or in default under, any of the terms or
provisions, of (A) its Articles or Certificate of Incorporation
or By-laws, as applicable, each as amended to the date hereof,
the Closing Date or the Option Closing Date, as the case may be,
(B) any indenture, mortgage, deed of trust, contract, loan or
credit agreement, commitment or other agreement or instrument to
which the Company or the Subsidiaries is a party or by which any
of them or any of their properties are bound or affected, (C) any
law, rule, regulation, judgment, order or decree of any
government or governmental agency, instrumentality or court,
domestic or foreign, having jurisdiction over the Company or the
Subsidiaries or any of their properties or businesses or (D) any
license, permit, certification, registration, approval, consent
or franchise referred to in subsection (e) or (m) of this Section
1, except where such violation or default would not have a
material adverse effect on the business or properties of the
Company and the Subsidiaries, considered as one enterprise.
(t) Except as disclosed in the Prospectus, there are no
claims, actions, suits, proceedings, arbitrations, investigations
or inquiries pending before or, to the Company's knowledge,
threatened or contemplated by, any governmental agency,
instrumentality, court or tribunal, domestic or foreign, or
before any private arbitrational tribunal, relating to or
affecting the
10
Company or the Subsidiaries or their properties or businesses
that might affect the issuance or validity of any of the Shares
or the validity of any of the outstanding shares of Common Stock,
or that, if determined adversely to the Company or the
Subsidiaries, respectively, would, individually or in the
aggregate, result in any material adverse change in the general
affairs, properties, assets, condition (financial or otherwise),
results of operations, shareholders' equity, business or
prospects, of the Company and the Subsidiaries, considered as one
enterprise; nor, to the Company's knowledge, is there any
reasonable basis for any such claim, action, suit, proceeding,
arbitration, investigation or inquiry; all pending legal or
governmental proceedings to which the Company or any Subsidiary
is a party or of which any of their property is the subject which
are not described in the Registration Statement and the
Prospectus, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material to
the Company and the Subsidiaries, considered as one enterprise.
There are no outstanding orders, judgments or decrees of any
court, governmental agency, instrumentality or other tribunal
enjoining the Company or the Subsidiaries from, or requiring the
Company or the Subsidiaries to take or refrain from taking any
action, or to which the Company or the Subsidiaries, or any of
their properties, assets or businesses is bound or subject.
(u) Except as otherwise stated in the Prospectus, the
Company and the Subsidiaries own or possess adequate rights to
use all patents, patent applications, trademarks, trademark
registrations, applications for trademark registration, trade
names, service marks, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential technology, information, systems,
design methodologies and devices or procedures developed or
derived from the Company's or the Subsidiaries' businesses),
trade secrets, confidential information, processes and
formulations necessary for, used in or proposed to be used in the
conduct of their businesses as described in the Prospectus
(collectively, the "Intellectual Property") that, if not so owned
or possessed, would materially adversely affect the general
affairs, properties, condition (financial or otherwise), results
of operations, shareholders' equity, business or prospects of the
Company and the Subsidiaries, considered as one enterprise. None
of the Company or the Subsidiaries has infringed, is infringing
or has received any notice of conflict with the asserted rights
of others with re-
11
spect to the Intellectual Property, and, to the Company's
knowledge, no others have infringed upon or are in conflict with
the Intellectual Property.
(v) The Company and the Subsidiaries have obtained all
permits, licenses and other authorizations that are required
under all environmental laws (collectively, the "Environmental
Laws"), other than any permits, licenses or other authorizations
which, if not obtained, would not have a material adverse effect
on the business or properties of the Company and the
Subsidiaries, considered as one enterprise. Each of the Company
and the Subsidiaries is in compliance with all terms and
conditions of any required permits, licenses and authorizations,
and is in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws,
except where the failure to so comply would not have a material
adverse effect on the Company and the Subsidiaries, considered as
one enterprise, or otherwise require disclosure in the
Registration Statement.
(w) There are no present or past events, conditions,
circumstances, activities, practices, incidents, actions or plans
relating to the business as currently being conducted by the
Company and the Subsidiaries that interfere with or prevent
compliance with or continued compliance with the Environmental
Laws, the non-compliance with which would have a material adverse
effect on the Company and the Subsidiaries, considered as one
enterprise, or which would be reasonably likely to give rise to
any material legal liability (whether statutory or common law) or
otherwise would be reasonably likely to form the basis of any
claim, action, demand, suit, proceeding, hearing, notice of
violation, study, investigation, remediation, or clean up based
on or related to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release into the workplace,
community or environment of any pollutant, contaminant, chemical
or industrial, toxic, or hazardous substance or waste, which
claim, action, demand, suit, proceeding, hearing, notice of
violation, study, investigation, remediation, or clean up would
have a material adverse effect on the Company and the
Subsidiaries, considered as one enterprise.
(x) Each of the Company and the Subsidiaries has good and
marketable title in fee simple to all real property, interests in
real property and personal property (tangible and intangible)
described in the
12
Prospectus as being owned by them, in each case, free and clear
of all liens, security interests, charges or encumbrances, except
such as are described in the Prospectus or which do not
materially affect the aggregate value of such property and
interests taken as a whole and do not interfere in any material
respect with the use made and proposed to be made of such
property and interests by the Company or any of its Subsidiaries.
Each of the Company and the Subsidiaries has adequately insured
the property of the Company and the Subsidiaries, respectively,
against loss or damage by fire or other casualty and maintains,
in adequate amounts customary for the business engaged in by the
Company, insurance against such other risks as management of the
Company deems appropriate. Except as described in the Prospectus,
none of the Company or the Subsidiaries owns any real property,
and all real property used or leased by the Company and the
Subsidiaries, as described in the Prospectus (the "Premises"), is
held by the Company or the Subsidiaries, as applicable, under a
valid, subsisting and enforceable lease, and except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles. There is no, and the Company and the Subsidiaries
have not received notice (written or oral) of any, claim, demand,
investigation, regulatory action, suit or other action instituted
or, to the best knowledge of the Company after due inquiry,
threatened against any of them or the Premises relating to any of
the Environmental Laws. The Company has not received any notice
(written or oral) of material violation, citation, complaint,
order, directive, request for information or response thereto,
notice letter, demand letter or compliance schedule to or from
any governmental or regulatory agency arising out of or in
connection with hazardous substances (as defined by applicable
Environmental Laws) on, about, beneath, arising from, or
generated at the Premises. The Company and the Subsidiaries have
conducted environmental investigations of, and have reviewed
reasonably available information, as appropriate, regarding the
business, properties and operations of the Company and the
Subsidiaries, and of other properties within the vicinity of
their business, properties and operations, as appropriate for the
circumstances of each such property and operation. On the basis
of such review, investigations and inquiries, the Company has
reasonably concluded that, except as disclosed in the
Registration Statement, any costs and liabilities associated with
such matters would not have, singularly or in the aggregate,
13
a material adverse effect on the Company and its Subsidiaries,
taken as a whole, or otherwise require disclosure in the
Registration Statement.
(y) The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization, (B) transactions
are recorded as necessary in order to permit preparation of
financial statements in accordance with generally accepted
accounting principles and to maintain accountability for assets,
(C) access to assets is permitted only in accordance with
management's general or specific authorization and (D) the
recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(z) No unregistered securities of the Company have been
sold by the Company or on behalf of the Company by any person or
persons controlling, controlled by or under common control with
the Company within the three years prior to the date hereof,
except as disclosed in the Registration Statement.
(aa) Each contract or other instrument (however
characterized or described) to which the Company or the
Subsidiaries is a party or by which any of the properties or
business of it or them is bound or affected and to which
reference has been made in the Prospectus or which has been filed
as an exhibit to the Registration Statement has been duly and
validly executed by the Company or the Subsidiaries, as
applicable, and, to the best knowledge of the Company, by the
other parties thereto. Except as described in the Prospectus,
each such contract or other instrument is in full force and
effect and is enforceable against the parties thereto in
accordance with its terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles, and none of the
Company, the Subsidiaries or, to the best knowledge of the
Company, any other party is in default thereunder and no event
has occurred to the best knowledge of the Company that, with the
lapse of time or the giving of notice, or both, would constitute
a default thereunder.
(ab) Except as disclosed in the Prospectus, and
except for the Company's 401(k) plan, none of the
Company or the Subsidiaries has any employee benefit
14
plan, profit sharing plan, employee pension benefit plan or
employee welfare benefit plan or deferred compensation
arrangements (collectively, "Plans") that is subject to the
provisions of the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations thereunder
("ERISA"). To the Company's knowledge, all Plans that are subject
to ERISA are, and have been at all times since their
establishment, in compliance in all material respects with ERISA
and, to the extent required by the Internal Revenue Code of 1986,
as amended (the "Code"), in compliance in all material respects
with the Code. To the Company's knowledge, none of the Company or
the Subsidiaries has had any employee pension benefit plan that
is subject to Part 3 of Subtitle B of Title l of ERISA or any
defined benefit plan or multiemployer plan. To the Company's
knowledge, none of the Company or the Subsidiaries has maintained
retiree life and retiree life and retiree health insurance plans
that are employee welfare benefit plans providing for continuing
benefit or coverage for any employee or any beneficiary of any
employee after such employee's termination of employment, except
as required by Section 4980B of the Code. To the Company's
knowledge, no fiduciary or other party in interest with respect
to any of the Plans has caused any of such Plans to engage in a
"prohibited action" as defined in Section 406 of ERISA. As used
in this subsection, the terms "defined benefit plan," "employee
benefit plan," "employee pension benefit plan," "employee welfare
benefit plan," "fiduciary" and "multiemployer plan" shall have
the respective meanings assigned to such terms in Section 3 of
ERISA.
(ac) To the best of their knowledge, neither the Company
nor any of its Subsidiaries is engaged in any unfair labor
practice which would have a material adverse effect on the
Company and its Subsidiaries considered as one enterprise. Except
for matters which are not material in the aggregate to the
Company and its Subsidiaries, considered as one enterprise, (A)
there is (x) no unfair labor practice complaint pending or, to
the best of their knowledge, threatened against the Company or
any of its Subsidiaries before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of
or under collective bargaining agreements is pending or, to the
best of their knowledge, threatened, (y) no strike, labor
dispute, slowdown or stoppage pending or, to the best knowledge
of the Company or any of its Subsidiaries after due inquiry,
threatened against the Company or any of its Subsidiaries and (z)
no union representation question existing with respect to the
employees of the
15
Company or any of its Subsidiaries and, to the best knowledge of
the respective managements of the Company or any of its
Subsidiaries, no union organizing activities are taking place and
(B) there has been no violation of any federal, state or local
law relating to discrimination in the hiring, promotion or pay of
employees, of any applicable wage or hour laws, nor any
provisions of ERISA or the rules and regulations promulgated
thereunder.
(ad) Except as described in the Prospectus, the Company
has not incurred any liability for any finder's fees or similar
payments in connection with the transactions contemplated herein.
(ae) Except as described in the Prospectus, none of the
Company or the Subsidiaries is a party to, or is bound by, any
agreement pursuant to which any material royalties, honoraria or
fees are payable by the Company or the Subsidiaries to any person
by reason of the ownership or use of any Intellectual Property.
(af) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to
be disclosed therein by Item 404 of Regulation S-K of the
Regulations.
(ag) The Company is familiar with the Investment Company
Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder, and has in the past conducted, and
intends in the future to continue to conduct, its affairs in such
a manner to ensure that it will not become an "investment
company" within the meaning of the 1940 Act and such rules and
regulations.
(ah) None of the Company, the Subsidiaries or director,
officer, agent, employee or other person associated with or
acting on behalf of the Company or the Subsidiaries has, directly
or indirectly, (A) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to any political activity, (B) made any unlawful payment
to foreign or domestic governments or governmental officials or
employees or to foreign or domestic political parties or
campaigns from corporate funds, (C) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or (D) made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(ai) The Company and its Subsidiaries have all
governmental licenses, certificates, permits, authori-
16
zations, approvals, franchises or other rights necessary to carry
on their business as such business is presently conducted by
them. Neither the Company nor any of its Subsidiaries has any
reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any such license,
certificate, permit, authorization, approval, franchise or right
in any material respect. Neither the Company nor any of its
Subsidiaries has any reason to believe that any such license,
permit or approval necessary in the future to conduct the
business of the Company and its Subsidiaries as described in the
Prospectus will not be granted upon application, or that any
governmental agencies are investigating the Company or any of its
Subsidiaries other than in ordinary course administrative reviews
or an ordinary course review of the transactions contemplated
hereby.
(aj) Except as disclosed in the Prospectus, no holder of
any security of the Company has any right to require registration
of shares of Common Stock or any other security of the Company.
(ak) There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for
the benefit of any of the officers or directors of the Company or
any of the members of the families of any of them, except as
disclosed in the Registration Statement and the Prospectus.
(al) Except as set forth in the Registration Statement and
Prospectus, the Company has not consummated the acquisition or
disposition of any business or property which is "significant" to
the Company within the meaning of Regulation S-X under the Act,
and no such acquisition or disposition is probable.
Any certificate signed by any officer of the Company in such
capacity and delivered to the Representatives or to counsel for the Underwriters
pursuant to this Agreement shall be deemed a representation and warranty by the
Company to the several Underwriters as to the matters covered thereby.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. The
Selling Shareholders each severally represents and warrants to each Underwriter
that:
(a) Such Selling Shareholder is the lawful owner of the
Shares to be sold by such Selling Shareholder pursuant to this
Agreement and has, and on the Closing
17
Date (and Option Closing Date, if applicable) will have, good and
clear title to such Shares, free of all restrictions on transfer,
liens, encumbrances, security interests and claims whatsoever
(other than restrictions imposed by applicable federal and state
securities laws).
(b) Upon delivery of and payment for such Shares pursuant
to this Agreement, good and clear title to such Shares will pass
to the Underwriters, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever (other
than restrictions imposed by applicable federal and state
securities laws).
(c) Certificates in negotiable form for such Selling
Shareholder's Shares have been placed in custody for delivery
pursuant to the terms of this Agreement, under a Custody
Agreement duly authorized, executed and delivered by such Selling
Shareholder in the form heretofore furnished to you (the "Custody
Agreement") with American Stock Transfer & Trust Company, as
Custodian (the "Custodian"); the Shares represented by the
certificates so held in custody for such Selling Shareholder are
subject to the interests hereunder of the Underwriters, the
Company and the other Selling Shareholders; the arrangements for
custody and delivery of such certificates made by such Selling
Shareholder hereunder and under the Custody Agreement, are not
subject to termination by any acts of such Selling Shareholder,
or by operation of law, whether by the death or incapacity of
such Selling Shareholder or the occurrence of any other event;
and if any such death, incapacity or any other such event shall
occur before the delivery of such Shares hereunder, certificates
for the Shares will be delivered by the Custodian in accordance
with the terms and conditions of this Agreement and the Custody
Agreement as if such death, incapacity or other event had not
occurred, regardless of whether or not the Custodian shall have
received notice of such death, incapacity or other event.
(d) The Selling Shareholder has, and on the Closing Date
will have, full legal right, power and authority to enter into
this Agreement and the Custody Agreement and to sell, assign,
transfer and deliver such Shares in the manner provided herein
and therein, and this Agreement and the Custody Agreement have
been duly authorized, executed and delivered by or on behalf of
the Selling Shareholder and each of this Agreement and the
Custody Agreement is a valid and binding agreement of the Selling
Shareholder enforceable in accor-
18
dance with its terms, except as rights to indemnity and
contribution hereunder may be limited by applicable law.
(e) The Selling Shareholder has not taken, and will not
take, directly or indirectly, any action designed to, 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 pursuant to the
distribution contemplated by this Agreement, and other than as
permitted by the Act, the Selling Shareholder has not distributed
and will not distribute any prospectus or other offering material
in connection with the offering and sale of the Shares.
(f) The execution, delivery and performance of this
Agreement by the Selling Shareholder, compliance by the Selling
Shareholder with all the provisions hereof and the consummation
of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
(except as such may be under the Act, state securities laws or
Blue Sky laws) and will not conflict with or constitute a breach
of any of the terms or provisions of any agreement, indenture or
other instrument to which the Selling Shareholder is a party or
by which the Selling Shareholder or property of the Selling
Shareholder is bound, or violate or conflict with any laws,
administrative regulation or ruling or court decree applicable to
the Selling Shareholder or property of the Selling Shareholder.
(g) Such-parts of the Registration Statement under the
caption "Principal and Selling Shareholders" which specifically
relate to the Selling Shareholder do not, and will not on the
Closing Date (and any Option Closing Date, if applicable),
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, in light of circumstances under
which they were made, not misleading.
(h) At any time during the period described in paragraph
6(b) hereof, if there is any change in the information referred
to in paragraph 2(g) above with respect to a Selling Shareholder,
such Selling Shareholder will immediately notify you of such
change.
(i) The Selling Shareholder is not aware, and
has no reason to believe, that any representation or
19
warranty of the Company set forth in Section 1 above is untrue or
inaccurate in any material respect.
3. PURCHASE AND SALE OF OFFERED SHARES. On the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, (i) the Company shall sell
2,892,326 Offered Shares; and (ii) each of the Selling Shareholders, severally
and not jointly, agrees to sell the number of Offered Shares listed next to his
or her name on Schedule II hereto, to the several Underwriters at the Offering
Price less the underwriting discount shown on the cover page of the Prospectus
(the "Underwriting Discount"), and the Underwriters, severally and not jointly,
shall purchase from the Company and the Selling Shareholders, on a firm
commitment basis, at the Offering Price less the Underwriting Discount, the
respective Offered Shares set forth opposite their names on Schedule I hereto.
In making this Agreement, each Underwriter is contracting severally, and not
jointly, and, except as provided in Sections 5 and 12 hereof, the agreement of
each Underwriter is to purchase only that number of Offered Shares specified
with respect to that Underwriter in Schedule I hereto. The Underwriters shall
offer the Offered Shares to the public as set forth in the Prospectus.
4. PAYMENT AND DELIVERY. Payment for the Offered Shares shall be made to
the Company and the Selling Shareholders by certified or official bank check
payable to the order of the Company and the Selling Shareholders in next day
funds, at the offices of Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx & Xxxxxxxxx,
Miami, Florida, or at such other location as shall be agreed upon by the Company
and the Representatives, or in immediately available funds wired to such account
or accounts as the Company and the Selling Shareholders may specify (with all
costs and expenses incurred by the Underwriters in connection with such
settlement (including, but not limited to, interest or cost of funds expenses)
to be borne by the Company and the Selling Shareholders), against delivery of
the Offered Shares to the Representatives at such place as the Representatives
shall designate, for the respective accounts of the Underwriters. Such payments
and delivery will be made by 10:00 a.m., Eastern time, on the fourth business
day after the date of this Agreement or at such other time and date thereafter
as the Representatives and the Company shall agree upon. Such time and date are
referred to herein as the "Closing Date." The certificates representing the
Offered Shares to be sold and delivered will be in such denominations and
registered in such names as the Representatives request not less than two full
business days prior to the Closing Date, and will be made available to the
Representatives for inspection, checking and packaging at the office of the
Company's Transfer Agent, on the business day prior to the Closing Date. The
Representatives have advised the Company that each Underwriter has authorized
the
20
Representatives to accept delivery of the Offered Shares and to make payment and
receipt therefor.
5. OPTION TO PURCHASE OPTIONAL SHARES.
(a) Solely for the purposes of covering any
over-allotments in connection with the distribution and sale of
the Offered Shares as contemplated by the Prospectus, subject to
the terms and conditions herein set forth, the several
Underwriters are hereby granted an option by the Company and the
Selling Shareholders to purchase all or any part of the Optional
Shares from the Company and the Selling Shareholders in the
amounts set forth in the second paragraph of this Agreement (the
"Over-allotment Option"). The purchase price per share to be paid
for the Optional Shares shall be the Offering Price less the
Underwriting Discount. The Over-allotment Option granted hereby
may be exercised by the Representatives on behalf of the several
Underwriters as to all or any part of the Optional Shares at any
time (but not more than once) within 30 days after the Effective
Date after which time it shall expire. No Underwriter shall be
under any obligation to purchase any Optional Shares prior to an
exercise of the Over-allotment Option.
(b) The Over-allotment Option granted hereby may be
exercised by the Representatives on behalf of the several
Underwriters by giving notice to the Company by a letter sent by
registered or certified mail, postage prepaid, telex, telegraph,
telegram or facsimile (such notice to be effective when sent,
unless such notice is sent by registered or certified mail, in
which case such notice will be effective two business days after
it is sent), addressed as provided in Section 14 hereof, setting
forth the number of Optional Shares to be purchased, the date and
time for delivery of and payment for the Optional Shares and
stating that the Optional Shares referred to therein are to be
used for the purpose of covering over-allotments in connection
with the distribution and sale of the Offered Shares. If such
notice is given prior to the Closing Date, the date set forth
therein for such delivery and payment shall not be earlier than
either two full business days thereafter or the Closing Date,
whichever occurs later. If such notice is given on or after the
Closing Date, the date set forth therein for such delivery and
payment shall be a date selected by the Representatives that is
not later than three full business days after the exercise of the
Over-allotment Option. The date and time set forth in such a
notice is referred to herein as the "Option Closing Date," and a
closing held
21
pursuant to such a notice is referred to herein as the "Option
Closing." The number of Optional Shares to be sold to each
Underwriter pursuant to the exercise of the Over-allotment Option
shall be the number that bears the same ratio to the aggregate
number of Optional Shares being purchased through such
Over-allotment Option exercise as the number of Offered Shares
opposite the name of such Underwriter in Schedule I hereto bears
to the total number of all Offered Shares; subject, however, to
such adjustment as the Representatives may approve to eliminate
fractional shares. Upon the exercise of the Over-allotment
Option, the Company and the Selling Shareholders, each severally
and not jointly, shall become obligated to sell to the
Representatives for the respective accounts of the Underwriters,
and on the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and
conditions herein set forth, and the several Underwriters shall
become severally, but not jointly, obligated to purchase from the
Company and the Selling Shareholders, the number of Optional
Shares specified in each notice of exercise of the Over-allotment
Option.
(c) Payment for the Optional Shares shall be made to the
Company and the Selling Shareholders by certified or official
bank check payable to the order of the Company and the Selling
Shareholders in next day funds, at the office of Xxxxxxx Xxxxxx
Xxxxxx Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, Miami, Florida, or such
other location as shall be agreed upon by the Company and the
Representatives, or in immediately available funds wired to such
accounts as the Company and the Selling Shareholders may specify
(with all costs and expenses incurred by the Underwriters in
connection with such settlement in immediately available funds
(including, but not limited to, interest or cost of funds
expenses) to be borne by the Company and the Selling
Shareholders), against delivery of the Optional Shares to the
Representatives at such place as you shall designate, for the
respective accounts of the Underwriters. The certificates
representing the Optional Shares to be issued and delivered will
be in such denominations and registered in such names as the
Representatives request not less than two full business days
prior to the Option Closing Date, and will be made available to
the Representatives for inspection, checking and packaging at the
office of the Company's Transfer Agent on the business day prior
to the Option Closing Date.
22
6. CERTAIN COVENANTS AND AGREEMENTS OF THE COMPANY. The Company
covenants and agrees with the several Underwriters as follows:
(a) If Rule 430A of the Regulations is employed, the
Company will timely file the Prospectus pursuant to and in
compliance with Rule 424(b) of the Regulations and will advise
the Representatives of the time and manner of such filing.
(b) The Company will not at any time, whether before or
after the Registration Statement shall have become effective,
during such period as, in the opinion of counsel for the
Underwriters, the Prospectus is required by law to be delivered
in connection with sales by the Underwriters or a dealer, file or
publish any amendment or supplement to the Registration Statement
or Prospectus of which the Representatives has not been
previously advised and furnished a copy, or which is not in
compliance with the Regulations, or, during the period before the
distribution of the Offered Shares and the Optional Shares is
completed, file or publish any amendment or supplement to the
Registration Statement or Prospectus to which the Representatives
reasonably objects in writing.
(c) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time and date
that this Agreement is executed and delivered by the parties
hereto, to become effective and will advise the Representatives
immediately, and confirm such advice in writing, (i) when the
Registration Statement, or any post-effective amendment to the
Registration Statement, is filed with the SEC, (ii) of the
receipt of any comments from the SEC, (iii) when the Registration
Statement has become effective and when any post-effective
amendment thereto becomes effective, or when any supplement to
the Prospectus or any amended Prospectus has been filed, (iv) of
any request of the SEC for amendment or supplementation of the
Registration Statement or Prospectus or for additional
information, (v) during the period when the Prospectus is
required to be delivered under the Act and Regulations, of the
happening of any event which in the Company's judgment makes any
material statement in the Registration Statement or the
Prospectus untrue or which requires any changes to be made in the
Registration Statement or Prospectus in order to make any
material statements therein not misleading and (vi) of the
issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or of any order
preventing or suspending the use of any
23
Preliminary Prospectus or the Prospectus, the suspension of the
qualification of any of the Shares for offering or sale in any
jurisdiction in which the Underwriters intend to make such offers
or sales, or of the initiation or threatening of any proceedings
for any such purposes. The Company will use its best efforts to
prevent the issuance of any such stop order or of any order
preventing or suspending such use and, if any such order is
issued, to obtain as soon as possible the lifting thereof.
(d) The Company has delivered to the Representatives,
without charge, and will continue to deliver from time to time
until the Effective Date, as many copies of each Preliminary
Prospectus as the Representatives may reasonably request. The
Company will deliver to the Representatives, without charge, as
soon as possible after the Effective Date, and thereafter from
time to time during the period when delivery of the Prospectus is
required under the Act, such number of copies of the Prospectus
(as supplemented or amended, if the Company makes any supplements
or amendments to the Prospectus) as the Representatives may
reasonably request. The Company hereby consents to the use of
such copies of each Preliminary Prospectus and the Prospectus for
purposes permitted by the Act, the Regulations and the securities
or Blue Sky laws of the jurisdictions in which the Shares are
offered or sold by the several Underwriters and by all dealers to
whom Shares may be offered or sold, both in connection with the
offering and sale of the Shares and for such period of time
thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer.
The Company has furnished or will furnish to the Representatives
two signed copies of the Registration Statement as originally
filed and of all amendments thereto, whether filed before or
after the Effective Date, two copies of all exhibits filed
therewith and two signed copies of all consents and certificates
of experts, and will deliver to the Representatives such number
of conformed copies of the Registration Statement, including
financial statements and exhibits, and all amendments thereto, as
the Representatives may reasonably request.
(e) The Company will comply with the Act, the Regulations,
the Exchange Act and the rules and regulations thereunder so as
to permit the continuance of offers and sales of, and dealings
in, the Shares for as long as may be necessary to complete the
distribution of the Shares as contemplated hereby.
24
(f) The Company will furnish such information as may be
required and otherwise cooperate in the registration or
qualification of the Shares, or exemption therefrom, for offering
and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions in which the
Representatives determines to offer the Shares, after
consultation with the Company, and will file such consents to
service of process or other documents necessary or appropriate in
order to effect such registration or qualification; provided,
however, that no such qualification shall be required in any
jurisdiction where, solely as a result thereof, the Company would
be subject to taxation or qualification as a foreign corporation
doing business in such jurisdiction where it is not now so
qualified or to take any action which would subject it to service
of process in suits, other than those arising out of the offering
or sale of the Shares, in any jurisdiction where it is not now so
subject. The Company will, from time to time, prepare and file
such statements and reports as are or may be required to continue
such qualification in effect for so long a period as is required
under the laws of such jurisdiction for such offering and sale.
(g) Subject to subsection (b) of this Section 6, in case
of any event, at any time within the period during which, in the
opinion of counsel for the Underwriters, a prospectus is required
to be delivered under the Act and Regulations, as a result of
which event any Preliminary Prospectus or the Prospectus, as then
amended or supplemented, would contain, in the judgment of the
Company or in the opinion of counsel for the Underwriters, an
untrue statement of a material fact, or omit to state any
material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading, or, if it is necessary at any time to amend any
Preliminary Prospectus or the Prospectus to comply with the Act
and Regulations or any applicable securities or Blue Sky laws,
the Company promptly will prepare and file with the SEC, and any
applicable state securities commission, an amendment or
supplement that will correct such statement or omission or an
amendment that will effect such compliance and will furnish to
the Representatives such number of copies of such amendment or
amendments or supplement or supplements to such Preliminary
Prospectus or the Prospectus (in form and substance satisfactory
to the Representatives and counsel for Underwriters) as the
Representatives may reasonably request. For purposes of this
subsection, the Company will furnish such information to the
Representatives, the
25
Underwriters' counsel and counsel for the Company as shall be
necessary to enable such persons to consult with the Company with
respect to the need to amend or supplement any Preliminary
Prospectus or the Prospectus, and shall furnish to the
Representatives and the Underwriters' counsel such further
information as each may from time to time reasonably request. If
the Company and the Representatives agree that any Preliminary
Prospectus or the Prospectus should be amended or supplemented,
the Company, if requested by the Representatives, will, if and to
the extent required by law, promptly issue a press release
announcing or disclosing the matters to be covered by the
proposed amendment or supplement.
(h) The Company will make generally available to its
security holders as soon as practicable and in any event not
later than 45 days after the end of the period covered thereby,
an earnings statement of the Company (which need not be audited
unless required by the Act, the Regulations, the Exchange Act or
the rules or regulations thereunder) that shall comply with
Section 11(a) of the Act and cover a period of at least 12
consecutive months beginning not later than the first day of the
Company's fiscal quarter next following the Effective Date.
(i) For a period of five years from the Effective Date,
the Company will deliver to the Representatives: (A) a copy of
each report or document, including, without limitation, reports
on Forms 8-K, 10-C, 10-K and 10-Q (or such similar forms as may
be designated by the SEC), registration statements and any
exhibits thereto, filed with or furnished to the SEC or any
securities exchange or the NASD, as soon as practicable after the
date each such report or document is so filed or furnished, (B)
as soon as practicable, copies of any reports or
communications(financial or other) of the Company mailed to its
security holders and (C) every material press release in respect
of the Company or the Subsidiaries or their affairs that was
released or prepared by the Company or the Subsidiaries.
(j) During the course of the distribution of the Shares,
the Company has not taken, nor will it take, directly or
indirectly, any action designed to or that might, in the future,
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock.
(k) The Company will cause each person listed on
Schedule II hereto to execute a legally binding and
26
enforceable agreement (a "lockup agreement") to, for the period
commencing on the Effective Date and ending 180 days after the
Effective Date, not sell, offer to sell, contract to sell, grant
any option for the sale of or otherwise transfer or dispose of
any shares of Common Stock (except for the sale of the Shares as
contemplated by this Agreement), any options or warrants to
purchase Common Stock or any securities convertible into or
exchangeable for Common Stock without the prior written consent
of the Representatives, which lockup agreement shall be in form
and substance satisfactory to the Representatives and the
Underwriters' counsel, and deliver such lockup agreement to the
Representatives prior to the Effective Date. Appropriate stop
transfer instructions will be issued by the Company to the
transfer agent for the securities affected by the lockup
agreements.
(l) The Company will not sell, issue, contract to sell,
offer to sell or otherwise dispose of any Common Stock, options
to purchase Common Stock or any other security convertible into
or exchangeable for Common Stock, from the date of the Effective
Date through 180 days after the Effective Date, without the prior
written consent of the Representatives, except for the sale of
the Shares as contemplated by this Agreement, the granting of
options and the issuance of Common Stock upon their exercise,
under the Company's stock option plans described in the
Prospectus and the issuance of the Representatives' Warrants.
(m) The Company will use all reasonable efforts to
maintain the inclusion of the Common Stock on the Nasdaq National
Market (or a national securities exchange) for a period of five
years after the date hereof.
(n) The Company shall, at its sole cost and expense,
supply and deliver to the Representatives and the Underwriters'
counsel, within a reasonable period after the Closing Date, six
transaction binders, each of which shall include the Registration
Statement, as amended or supplemented, all exhibits to the
Registration Statement, each Preliminary Prospectus, the
Prospectus, the Preliminary Blue Sky Memorandum and any
supplement thereto and all underwriting and other closing
documents.
(o) The Company will use the net proceeds from the sale of
the Shares to be sold by it hereunder substantially in accordance
with the description thereof set forth in the Prospectus and
shall file such
27
reports with the SEC with respect to the sale of such Shares and
the application of the proceeds therefrom as may be required in
accordance with Rule 463 under the Act.
(p) On the Closing Date, the Company shall sell to the
Representatives, at a purchase price of $0.001 per warrant, the
Representatives' Warrants to purchase 320,000 shares of Common
Stock. Such Representatives' Warrant shall be issued pursuant to
the terms of the Warrant Agreement and shall have an exercise
price per share equal to $_____, shall be exercisable during the
period beginning on the first anniversary of the Effective Date
and ending on the fifth anniversary of the Effective Date, and
shall contain customary anti-dilution and registration rights
provisions.
(q) The Company confirms as of the date hereof that it is
in compliance with all provisions of Section 1 of Laws of
Florida, Chapter 92-198, AN ACT RELATING TO DISCLOSURE OF DOING
BUSINESS WITH CUBA, and the Company further agrees that if it
commences engaging in business with the government of Cuba or
with any person or affiliate located in Cuba after the date the
Registration Statement becomes or has become effective with the
Securities and Exchange Commission or with the Florida Department
of Banking and Finance (the "Department"), whichever date is
later, or if the information reported in the Prospectus, if any,
concerning the Company's business with Cuba or with any person or
affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or
change, as appropriate, in a form acceptable to the Department.
(r) The Company will use its best efforts to do and
perform all things required to be done and performed by it prior
to or after the Closing Date and to satisfy all conditions
precedent on its part to the delivery of the Shares.
7. PAYMENT OF EXPENSES.
(a) Whether or not the transactions contemplated by this
Agreement are consummated and regardless of the reason this
Agreement is terminated, the Company will pay or cause to be
paid, and bear or cause to be borne, all costs and expenses
incident to the performance of the obligations of the Company
under this Agreement, including: (i) the fees and expenses of the
accountants and counsel for the Company incurred in the
preparation of the Registration Statement and any post-effective
28
amendments thereto (including financial statements and exhibits),
each Preliminary Prospectus and the Prospectus and any amendments
or supplements thereto; (ii) printing and mailing expenses
associated with the Registration Statement and any post-effective
amendments thereto, each Preliminary Prospectus, the Prospectus
(including any supplement thereto), this Agreement, the Agreement
Among Underwriters, the Underwriters' Questionnaire, the Selected
Dealer Agreement and related documents and the Preliminary Blue
Sky Memorandum and any supplement thereto; (iii) the costs
incident to the authentication, issuance, delivery and transfer
of the Shares to the Underwriters; (iv) all taxes, if any, on the
issuance, delivery and transfer of the Shares to be sold by the
Company to the Underwriters; (v) the fees, expenses and all other
costs of qualifying the Shares for the sale under the securities
or Blue Sky laws of those jurisdictions in which the Shares are
to be offered or sold including the fees and disbursements of
Underwriters' counsel and such local counsel as may have been
reasonably required and retained for such purpose; (vi) the fees,
expenses and other costs of, or incident to, securing any review
or approvals by or from the NASD including the fees of the
Underwriters' counsel up to a maximum of $20,000; (vii) the
filing fees of the SEC; (viii) the cost of furnishing to the
Underwriters copies of the Registration Statement, each
Preliminary Prospectus and the Prospectus (including any
supplement or amendment thereto) as herein provided; (ix) the
Company's travel expenses in connection with meetings with the
brokerage community and institutional investors and expenses
associated with hosting such meetings, including meeting rooms,
meals, facilities and ground transportation expenses; (x) the
costs and expenses associated with settlement in same day funds
(including, but not limited to, interest or cost of funds
expenses), if desired by the Company; (xi) the fees for inclusion
of the Shares on the Nasdaq National Market; (xii) the cost of
printing and engraving certificates for the Shares; (xiii) the
cost and charges of any transfer agent; and (xiv) all other costs
and expenses reasonably incident to the performance of its
obligations hereunder that are not otherwise specifically
provided for in this Section 7.
(b) In addition to the foregoing expenses, the Company
shall at the Closing Date pay to the Representatives a
non-accountable expense allowance equal to two percent (2%) of
the gross proceeds received from the sale of the Offered Shares.
In the event the Over-allotment Option is exercised,
29
the Company shall pay to the Representatives at the Option
Closing Date an additional amount equal to two percent (2%) of
the gross proceeds received upon exercise of the Over-allotment
Option.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligation of each
Underwriter to purchase and pay for the Offered Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which its right to purchase under Section 5 has been exercised on
an Option Closing Date, is subject at the date hereof, the Closing Date and any
Option Closing Date to the continuing accuracy in all material respects of the
representations and warranties of the Company and the Selling Shareholders set
forth herein, to the performance by the Company and the Selling Shareholders of
its or their covenants, agreements and obligations hereunder and to the
following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m., Eastern time, on the date of this Agreement, or at
such later time or on such later date as the Representatives may agree
to in writing; if required by the Regulations, the Prospectus shall have
been filed with the SEC pursuant to Rule 424 (b) of the Regulations
within the applicable time period prescribed for such filing by the
Regulations and in accordance with subsection (a) of Section 6 hereof;
on or prior to the Closing Date or any Option Closing Date, as the case
may be, no stop order or other order preventing or suspending the
effectiveness of the Registration Statement or the sale of any of the
Shares shall have been issued under the Act or any state securities law
and no proceedings for that purpose shall have been initiated or shall
be pending or, to the Representatives' knowledge or the knowledge of the
Company, shall be contemplated by the SEC or any authority in any
jurisdiction designated by the Representatives pursuant to subsection
(f) of Section 6 hereof and any request on the part of the SEC for
additional information shall have been complied with to the reasonable
satisfaction of counsel for the Underwriters.
(b) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of Company,
dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplement to the Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on
and as of the Closing Date and the
30
Option Closing Date, if any, with the same effect as if made on
the Closing Date and the Option Closing Date, if any, 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 Date and the Option Closing Date, if any;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse change in
the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(c) Each of the Selling Shareholders shall have furnished to the
Representatives a certificate, signed by such Selling Shareholder, dated
the Closing Date and the Option Closing Date, if any, to the effect that
the signer of such certificate has carefully examined the Registration
Statement, the Prospectus, any supplement to the Prospectus and this
Agreement and that the representations and warranties of such Selling
Shareholder in this Agreement are true and correct in all material
respects on and as of the Closing Date to the same effect as if made on
the Closing Date.
(d) All corporate proceedings and other matters incident to the
authorization, form and validity of this Agreement, the Warrant
Agreement, the Representatives' Warrants and the Shares and the form of
the Registration Statement, each Preliminary Prospectus and the
Prospectus, and all other legal matters relating to this Agreement and
the transactions contemplated hereby, shall be satisfactory in all
respects to counsel to the Underwriters; the Company shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters; and the
Representatives shall have received from the Underwriters' counsel,
Skadden, Arps, Slate, Xxxxxxx & Xxxx, a customary opinion, dated as of
the Closing Date and any Option Closing Date, as the case may be, and
addressed to the Representatives individually and as the Representatives
of the several Underwriters.
31
(e) The NASD shall have indicated that it has no objection to the
underwriting arrangements pertaining to the sale of any of the Shares.
(f) The Representatives shall have received copies of the lockup
agreements described in subsection (k) of Section 6 signed by those
persons set forth on Schedule II hereto.
(g) The Representatives shall have received on the Closing Date
and on the Option Closing Date, if any, an opinion from Xxxxxxx Xxxxxx
Xxxxxx Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, counsel for the Company, dated the
Closing Date and the Option Closing Date, if any, and addressed to the
Underwriters and with reproduced copies or signed counterparts thereof
for each of the Underwriters, substantially in the form attached hereto
as "Exhibit A."
(h) The Representatives shall have received on the Closing Date
and on the Option Closing Date, if any, an opinion from Xxxxxxx Xxxxxx &
Xxxxxxxxxx LLC, counsel for the Selling Shareholders, dated the Closing
Date and the Option Closing Date, if any, and addressed to Underwriters
and with reproduced copies or signed counterparts thereof for each of
the Underwriters, substantially in the form attached hereto as "Exhibit
B."
(i) The Representatives shall have received on the Closing Date
and on the Option Closing Date, if any, an opinion from the Law Offices
of Xxxx Xxxxxx, real estate counsel to the Company, dated the Closing
Date and the Option Closing Date, if any, and addressed to the
Underwriters and with reproduced copies or signed counterparts thereof
for each of the Underwriters, substantially in the form attached hereto
as "Exhibit C."
(j) At the Closing Date and any Option Closing Date: (A) the
Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall contain all
statements that are required to be stated therein in accordance with the
Act and the Regulations and shall conform, in all material respects, to
the requirements of the Act and the Regulations, and neither the
Registration Statement nor any post-effective amendment thereto nor the
Prospectus and any amendments or supplements thereto shall 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, in light of the circumstances under which they were made, not
misleading; (B) since the respective dates as of which information is
given in the Registration Statement and any post-effective amendment
thereto and the Prospectus and any amendments or supplements thereto,
except as otherwise
32
stated therein, there shall have been no material adverse change in the
properties, condition (financial or otherwise), results of operations,
shareholders' equity, business or management of the Company, from that
set forth therein, whether or not arising in the ordinary course of
business, other than as referred to in the Registration Statement or
Prospectus; (C) since the respective dates as of which information is
given in the Registration Statement and any post-effective amendment
thereto and the Prospectus or any amendment or supplement thereto, there
shall have been no transaction, contract or agreement entered into by
the Company or the Subsidiaries, other than in the ordinary course of
business and as set forth in the Registration Statement or Prospectus,
that has not been, but would be required to be, set forth in the
Registration Statement or Prospectus; (D) no action, suit or proceeding
at law or in equity shall be pending or, to the knowledge of the Company
or the Subsidiaries, threatened against the Company that would be
required to be set forth in Prospectus, other than as set forth therein,
and no proceedings shall be pending or, to the knowledge of the Company,
threatened against the Company or the Subsidiaries before or by any
federal, state or other commission, board or administrative agency
wherein an unfavorable decision, ruling or finding would materially
adversely affect the properties, condition (financial or otherwise),
results of operations, shareholders' equity or business of the Company
or the Subsidiaries, considered as one enterprise, other than as set
forth in the Prospectus.
(k) At the time this Agreement is executed and at the Closing
Date and any Option Closing Date, the Representatives shall have
received a letter addressed to the Representatives, individually and as
the Representatives of the several Underwriters, and in form and
substance satisfactory to the Representatives in all respects (including
the nonmaterial nature of the changes or decreases, if any, referred to
in clause (iii) below) from KPMG Peat Marwick LLP, dated as of the date
of this Agreement, the Closing Date or Option Closing Date, as the case
may be:
(i) confirming that they are independent certified public
accountants within the meaning of the Act and the related
published Rules and Regulations thereunder;
(ii) stating that, in their opinion, the financial
statements of the Company audited by them and included in the
Registration Statement comply in form in all material respects
with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
33
(iii) stating that, on the basis of specified procedures,
which included a reading of the latest available unaudited
interim financial statements of the Company (with an indication
of the date of the latest available unaudited interim financial
statements), a reading of the minutes of the meetings of the
shareholders and the Board of Directors of the Company and audit
and compensation committees of such Board, if any, and inquiries
to certain officers and other employees of the Company who are
responsible for financial and accounting matters and other
specified procedures and inquiries, nothing has come to their
attention that would cause them to believe that (A) the unaudited
financial statements and related schedules of the Company
included in the Registration Statement, if any, (I) do not comply
in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or (II) were not fairly presented in conformity with
generally accepted accounting principles on a basis substantially
consistent with that of the audited financial statements and
related schedules included in the Registration Statement or
(B)(I) at a specified date, not more than five business days
prior to the date of such letter there was any change in the
common or redeemable preferred stock, or construction loans
payable, acquisition and development loans, or subordinated debt
of the Company, or any decrease in total assets or shareholders'
equity as compared with the amounts shown in the June 30, 1996
balance sheet of the Company included in the Registration
Statement, other than as set forth in or contemplated by the
Registration Statement and Prospectus, and (II) during the period
from June 30, 1996 to a specified date not more than five
business days prior to the date of such letter, there has been
any decrease as compared with the corresponding period in the
preceding year, in revenues, or income before income taxes and
extraordinary gains or in total or per common and common
equivalent share amounts of net income of the Company or, if
there was any such decrease setting forth the amount of such
decrease; and
(iv) stating that they have compared specific dollar
amounts, numbers of shares and other information pertaining to
the Company set forth in the Registration Statement and
Prospectus that have been specified by the Representatives prior
to the date of this Agreement, to the extent that such amounts,
numbers, percentages and information may be derived from the
general accounting or other records of the Company with the
result obtained from the application of specified
34
readings, inquiries and other appropriate procedures (which
procedures do not constitute an audit in accordance with
generally accepted auditing standards) set forth in the letter,
and found them to be in agreement.
(l) The Company shall have executed and delivered an agreement
memorializing the Representatives' Warrants in a form satisfactory to
the Representatives (the "Warrant Agreement") and there shall have been
tendered to the Representatives, against delivery of the consideration
therefor, certificates representing all of the Representatives' Warrants
described in subsection (p) of Section 6, to be purchased by the
Representatives on the Closing Date.
(m) At the Closing Date and any Option Closing Date, the
Representatives shall have been furnished such additional documents and
certificates as they shall reasonably request.
(n) Other than as a result of actions taken by or on behalf of
any Underwriter, no action shall have been taken by the NASD, the effect
of which is to make it improper, at any time prior to the Closing Date
or any Option Closing Date, for members of the NASD to execute
transactions as principal or as agent in the Shares or to trade or deal
in the Shares, and no proceedings for the purpose of taking such action
shall have been instituted or shall be pending or, to the Company's or
the Representatives' knowledge, shall be contemplated by the NASD.
If any conditions to the Underwriters' obligations hereunder to be
fulfilled prior to or at the Closing Date shall not have been fulfilled, the
Representatives may on behalf of the several Underwriters terminate this
Agreement or, if they so elect, waive any such conditions which have not been
fulfilled or extend the time for their fulfillment.
9. INDEMNIFICATION.
(a) The Company and each of the Selling Shareholders, jointly and
severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against any and all
losses, claims, damages, liabilities and judgments, joint or several,
caused by any untrue statement or alleged untrue statement of a material
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
35
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission which is based upon
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives expressly for use therein.
Notwithstanding the foregoing, the liability of each of the Selling
Shareholders under this paragraph shall be limited to an amount equal to
the net proceeds of the Shares sold by such Selling Shareholder to the
Underwriters; PROVIDED, HOWEVER, that the foregoing indemnity agreement
with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such
losses, claims, damages and liabilities and judgments purchased Shares,
or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf
of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended and
supplemented) would have cured the defect giving rise to such loss,
claim, damage, liability or judgment.
(b) In case any action shall be brought against any Underwriter
or any person controlling such Underwriter, based upon any preliminary
prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto and with respect to which indemnity may
be sought against the Company and the Selling Shareholders, such
Underwriter shall promptly notify the parties against whom
indemnification is being sought (the "Indemnifying Parties") in writing
and the Indemnifying Parties shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses. Any Underwriter or any such
controlling person shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the employment of such counsel has
been specifically authorized in writing by the Indemnifying Parties,
(ii) the Indemnifying Parties shall have failed to assume the defense
and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both such Underwriter or such
controlling person and the Indemnifying Parties and such Underwriter or
such controlling person shall have been advised by such counsel that
there may be one or more legal defenses available to it which are
different from or additional to those available to
36
the Indemnifying Parties (in which case the Indemnifying Parties shall
not have the right to assume the defense of such action on behalf of
such Underwriter or such controlling person, it being understood,
however, that the Indemnifying Parties shall not, in connection with any
one such action or separate but substantially similar or related actions
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel)
for all such Underwriters and controlling persons, which firm shall be
designated in writing by the Representatives and that all such
reasonable fees and expenses shall be reimbursed as they are incurred).
The Indemnifying Parties shall not be liable for any settlement of any
such action effected without their written consent. If settled with such
written consent, the Indemnifying Parties agree to indemnify and hold
harmless any Underwriter and any such controlling person from and
against any loss or liability by reason of such settlement.
Notwithstanding the immediately preceding sentence, if in any case where
the fees and expenses of counsel are at the expense of the Indemnifying
Parties and an indemnified party shall have requested the Indemnifying
Parties to reimburse the indemnified party for such fees and expenses of
counsel as incurred, the Indemnifying Parties agree that they shall be
liable for any settlement of any action effected without its written
consent if (i) such settlement is entered into more than ten business
days after the receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall have failed to reimburse
the indemnified party in accordance with such request for reimbursement
prior to the date of such settlement. No Indemnifying Party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which
any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
proceeding.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement, any person controlling the Company
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, each of the Selling Shareholders and each person, if any,
controlling such Selling Shareholder within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company and each of the Selling
Shareholders to each Underwriter but only with reference to information
furnished in writing by or on
37
behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus. In
case any action shall be brought against the Company, any of its
directors, any such officer or any person controlling the Company or the
Selling Shareholders or any person controlling the Selling Shareholders
based on the Registration Statement, the Prospectus or any preliminary
prospectus and in respect of which indemnity may be sought against any
Underwriter, the Underwriter shall have the rights and duties given to
the Company and the Selling Shareholders by paragraph (b) above (except
that if any of the Company or the Selling Shareholders shall have
assumed the defense thereof, such Underwriter shall not be required to
do so, but may employ separate counsel therein and participate in the
defense thereof but the fees and expenses of such counsel shall be at
the expense of such Underwriter), and the Company, its directors, any
such officers and any person controlling the Company and each of the
Selling Shareholders and any person controlling such Selling
Shareholders shall have the rights and duties given to the Underwriter
by Section 9(b) hereof.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
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, claims, damages, liabilities and judgments
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and each of the Selling Shareholders 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 and the Selling Shareholders
and the Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Shareholders
and the Underwriters shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses)
received by the Company and each of the Selling Shareholders, and the
total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Shares, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company and each of the Selling Shareholders
and the Underwriters shall be determined by reference to, among other
things, whether the untrue or
38
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company, each of
the Selling Shareholders or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and each of the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9(d) 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 the immediately
preceding paragraph. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall
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 which 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 11(f) of the 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
(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.
10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Date and any Option Closing Date; and such
representations, warranties and agreements of the Underwriters and the Company,
including without limitation the indemnity and contribution agreements contained
in Section 9 hereof and the agreements contained in Sections 7, 10, 11 and 13
hereof, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person,
and shall survive delivery of the Shares and termination of this Agreement,
whether before or after the Closing Date or any Option Closing Date.
39
11. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION THEREOF.
(a) This Agreement shall become effective immediately as to
Sections 7, 9, 10, 11 and 13 and, as to all other provisions, (i) if at
the time of execution and delivery of this Agreement the Registration
Statement has not become effective, at 6:30 a.m., Pacific time, on the
first business day following the Effective Date, or (ii) if at the time
of execution and delivery of this Agreement the Registration Statement
has been declared effective, at 6:30 a.m., Pacific time, on the date of
execution of this Agreement; but this Agreement shall nevertheless
become effective at such earlier time after the Registration Statement
becomes effective as the Representatives may determine by notice to the
Company or by release of any of the Shares for sale to the public. For
the purposes of this Section 11, the Shares shall be deemed to have been
so released upon the release for publication of any newspaper
advertisement relating to the Shares or upon the release by the
Representatives of telegrams (i) advising the Underwriters that the
Shares are released for public offering or (ii) offering the Shares for
sale to securities dealers, whichever may occur first. The
Representatives may prevent the provisions of this Agreement (other than
those contained in Sections 7, 9, 10, 11 and 13) hereof from becoming
effective without liability of any party to any other party, except as
noted below, by giving the notice indicated in subsection (c) of this
Section 10 before the time the other provisions of this Agreement become
effective.
(b) The Representatives shall have the right to terminate this
Agreement at any time prior to the Closing Date as provided in Sections
8 and 12 hereof or if any of the following have occurred: (i) since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or
affecting the condition, financial or otherwise, of the Company, or the
earnings, business affairs, management or business prospects of the
Company, whether or not arising in the ordinary course of business; (ii)
any outbreak of hostilities or other national or international calamity
or crisis or change in economic, political or financial market
conditions if such outbreak, calamity, crisis or change would, in the
Representatives' reasonable judgment, make it impractical or inadvisable
to commence or continue the offering of the Shares; (iii) suspension of
trading generally in securities on the New York Stock Exchange, Inc.
("NYSE") or on the Nasdaq National Market System or minimum or maximum
prices shall have been established thereon (other than limitations on
hours or numbers of days of trading) for
40
securities or the promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority
which in the Representatives' reasonable opinion materially and
adversely affects trading on either such NYSE or on the Nasdaq National
Market System; (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order
of any court or other governmental authority which in the
Representatives' reasonable opinion materially and adversely affects or
will materially and adversely affect the business or operations of the
Company; (v) declaration of a banking moratorium by either federal or
California, New York or Florida authorities; (vi) the taking of any
action by any federal, state or local government or agency in respect of
its monetary or fiscal affairs which in the Representatives' reasonable
opinion has a material adverse effect on the securities markets in the
United States; (vii) trading in any securities of the Company shall have
been suspended or halted by the NASD or the SEC; or (viii) any
securities of the Company shall have been downgraded or placed on any
"watch list" for possible downgrading by any nationally recognized
statistical rating organization.
(c) If the Representatives elect to prevent this Agreement from
becoming effective or to terminate this Agreement as provided in this
Section 11, the Representatives shall notify the Company thereof
promptly by telephone, telex, telegraph or facsimile, confirmed by
letter.
12. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Offered Shares or Optional Shares
hereunder, and if the Offered Shares or Optional Shares with respect to
which such default relates do not exceed the aggregate of ten percent
(10%) of the number of Offered Shares or Optional Shares, as the case
may be, that all Underwriters have agreed to purchase hereunder, then
such Offered Shares or Optional Shares to which the default relates
shall be purchased severally by the non-defaulting Underwriters in
proportion to their respective commitments hereunder.
(b) If such default relates to more than ten percent (10%) of the
Offered Shares or Optional Shares, as the case may be, the
Representatives may in its discretion arrange for another party or
parties (including a non-defaulting Underwriter) to purchase such
Offered Shares or Optional Shares to which such default relates, on the
terms contained herein. In the event that the Representatives do not
arrange for the purchase of the Offered Shares or Optional
41
Shares to which a default relates as provided in this Section 12 within
36 hours after such default, this Agreement may be terminated by the
Representatives or by the Company without liability on the part of the
nondefaulting Underwriters (except as provided in Section 9 hereof) or
the Company (except as provided in Sections 7 and 9 hereof), but nothing
herein shall relieve a defaulting Underwriter of its liability, if any,
to the other several Underwriters and to the Company or the Selling
Shareholders for damages occasioned by its default hereunder.
(c) If the Offered Shares or Optional Shares to which the default
relates are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, the
Representatives or the Company shall have the right to postpone the
Closing Date or any Option Closing Date, as the case may be, for a
reasonable period but not in any event exceeding seven days, in order to
effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment to
the Registration Statement or supplement to the Prospectus which in the
opinion of counsel for the Underwriters may thereby be made necessary.
The terms "Underwriters" and "Underwriter" as used in this Agreement
shall include any party substituted under this Section 12 with like
effects as if it had originally been a party to this Agreement with
respect to such Offered Shares or Optional Shares.
13. INFORMATION FURNISHED BY UNDERWRITERS. The Representatives, on
behalf of the Underwriters, represent and warrant to the Company that the
information appearing in any preliminary prospectus, the Prospectus or the
Registration Statement (a) on the cover page of the Prospectus with respect to
price, underwriting discounts and commissions and terms of offering, (b) on the
inside front cover page with respect to stabilization, (c) in the section
entitled "Underwriting," and (d) in the section entitled "Legal Matters" with
respect to the identity of counsel for the Underwriters was furnished to the
Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and the Prospectus and is correct in
all material respects. The parties acknowledge that this information constitutes
the only information furnished in writing by or on behalf of any Underwriter for
inclusion in any preliminary prospectus, the Prospectus or the Registration
Statement referred to in subsection (b) of Section 1 hereof and subsection (a)
of Section 9 hereof.
14. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, telexed,
42
telegrammed, telegraphed or telecopied and confirmed to such Underwriter, c/o BT
Securities, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President,
with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx, 000 Xxxxx Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X. XxXxxxxx, Esq.;
if sent to the Company shall be mailed, delivered, telexed, telegrammed,
telegraphed or telecopied and confirmed to Transeastern Properties, Inc., 0000
Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxxxx, Xxxxxxx 00000, Attention: President,
with a copy to Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, Museum
Tower, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, Attention:
Xxxxxx X. Xxxxx, Esq.
15. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the several Underwriters, the Company, the Selling
Shareholders and the controlling persons, directors and officers referred to in
Section 9 hereof, and their respective successors, assigns, heirs and legal
representatives, and no other person shall have or be construed to have any
legal or equitable right, remedy or claim under or in respect of or by virtue of
this Agreement or any provision herein contained. The term "successors" and
"assigns" shall not include any purchaser of the Shares merely because of such
purchase.
16. DEFINITION OF BUSINESS DAY. For purposes of this Agreement,
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and all such counterparts will constitute one and the same
instrument.
18. CONSTRUCTION. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and performed entirely within such state.
If the foregoing correctly sets forth the understanding among the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement by and
among the Underwriters and the Company.
Very truly yours,
TRANSEASTERN PROPERTIES, INC.
By:__________________________
Its:______________________
43
SELLING SHAREHOLDERS
By:__________________________
Its:______________________
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
BT SECURITIES CORPORATION
CRUTTENDEN XXXX INCORPORATED
XXXXXX XXXXXXXXXX XXXXX INC.
By: BT Securities Corporation
By: __________________________
Authorized Signatory
For each of themselves and as Representatives of the several
Underwriters named in Schedule I hereto
44
SCHEDULE I
UNDERWRITERS
NUMBER OF OFFERED SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
BT Securities
Cruttenden Xxxx Incorporated
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
-----------------
Total 3,200,000
=================
45
SCHEDULE II
SELLING SHAREHOLDERS AND
PERSONS SUBJECT TO LOCKUP AGREEMENTS
NUMBER OF SHARES
1. SELLING SHAREHOLDERS BEING OFFERED
-------------------- ----------------
a. Xxxx Xxxxx 1,000
b. Xxxxxx X. Xxxxxxx, trustee 30,000
c. Xxxxxxxxxxx Xxxxxx 18,000(1)
d. Xxxxxx Xxxxxxxxx 5,143(2)
e. Xxxxx X. Xxxxxx 10,283(3)
f. Xxxxx X. Xxxxxx 5,143(2)
g. Handler Family Trust 56,431(4)
x. Xxxxxxxxxxx Family Partnership 11,351
i. Xxxxxx Xxxxx 11,611
j. Xxxxxxx X. Xxxxxxxxxx 1,392
k. Xxxx Xxxxxxxxxxx 1,162
l. Xxxxxx Xxxxx 4,645
m. Xxxxx X. Xxxx 2,322
n. Forest Hasmilton 5,000
o. Xxxxx X. Xxxxxxxxx 1,162
x. Xxxxx and Xxx Xxxxxxxx 2,787
q. Xxx Xxxxxxxxx 1,858
r. Xxxxxxx X. Day 1,162
s. Xxxxx Xxxxxxxx 4,645
t. Xxxxxxx X. Xxxxx 4,645
u. Xxxxx X. and Xxxx X. Xxxxxxx 8,129
x. Xxxx X. Xxxxxxxxxx 1,160
w. Xxxxxx X. XxXxxxxxxx 1,160
x. Xxxx Xxxx 1,160
y. Xxxxxx Xxxxx 1,160
z. Xxxx Xxxxxx 928
aa. Xxxx X. Xxxxxxxxx 1,160
aa. XxXxx X. Xxxxxxxxx, trustee 1,160
bb. Xxxx & Xxxxx Xxxxxxxxxx 6,967
cc. Xxxxxxx X. Xxxxx, trustee 2,324
dd. Xxxxxx X. Xxxxxxx, Xx. 1,624
ee. Xxxxxxx Xxxxx 100,000
--------
(1) Intends to sell 9,600 shares if the over-allotment
option is exercised in full.
(2) Intends to sell 2,743 shares if the over-allotment
option is exercised in full.
(3) Intends to sell 5,484 shares if the over-allotment
option is exercised in full.
(4) Intends to sell 27,430 shares if the over-allotment
option is exercised in full.
46
ff. Xxxxxx Xxxxxxx (5)
gg. Xxxxxxx Xxxxx (5)
hh. Xxxxxx Xxxxxxx (5)
-------
Total 307,674
--------
(5) Intends to sell 112,000 shares if the over-allotment
option is exercised in full.
47
EXHIBIT A
FORM OF OPINION OF
XXXXXXX XXXXXX XXXXXX XXXXXXXX XXXXXXXX & XXXXXXXXX,
COUNSEL FOR THE COMPANY
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Florida.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement and the Warrant Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not have a material adverse effect on the Company
and the Subsidiaries, taken as a whole.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual" under
the caption "Capitalization" (except for subsequent issuances, if any, pursuant
to the Underwriting Agreement); the shares of issued and outstanding capital
stock have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights of any
securityholder of the Company arising by operation of law, under the charter or
bylaws of the Company or, to the best of our knowledge, under any agreement to
which the Company is a party.
(v) The Shares have been duly authorized for issuance and sale to
the Underwriters pursuant to the Underwriting Agreement and, when issued and
delivered by the Company pursuant to the Underwriting Agreement against payment
of the consideration set forth in the Underwriting Agreement, will be validly
issued and fully paid and non-assessable.
(vi) The issuance of the Shares is not subject to pre-emptive or
other similar rights arising by operation of law, under the charter or bylaws of
the Company or, to the best of our knowledge and information, otherwise.
(vii) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate
48
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration Statement, all
of the issued and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, to the best
of our knowledge and information, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital stock of
any Subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary.
(viii) The Underwriting Agreement, the Warrant Agreement and the
Representatives' Warrant have each been duly authorized, executed and delivered
by the Company.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge and information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectus and each amendment or supplement to the
Registration Statement and Prospectus, as of their respective effective or issue
dates (other than the financial statements, financial information and supporting
schedules included therein or omitted therefrom, as to which no opinion need be
rendered) complied as to form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
(xii) 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 charter and by-laws of the Company and
the requirements of the Nasdaq National Market.
49
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any Subsidiary is a party, or to which the property of the Company or
any Subsidiary is subject, before or brought by any court or governmental agency
or body, domestic or foreign, which are required to be described in the
Prospectus that are not described as required, or which could reasonably be
expected to materially and adversely affect the consummation of the Underwriting
Agreement or the performance by the Company of its obligations thereunder.
(xiv) The information in the Prospectus under "Description of
Capital Stock," "Shares Eligible for Future Sale," "Business--Summary of
Residential Communities," "Business--Land Acquisition," "Business--Legal
Proceedings," "Certain Federal Income Tax Considerations For Non-U.S. Holders of
Common Stock" and in the Registration Statement under Item 14, to the extent
that it constitutes matters of law, summaries of legal matters, the Company's
charter and bylaws or legal proceedings, or legal conclusions, has been reviewed
by us and is correct in all material respects.
(xv) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are not
described as required;
(xvi) All descriptions in the Prospectus of contracts and other
documents to which the Company or its subsidiaries are a party are accurate in
all material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments or agreements required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
(xvii) To the best of our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xviii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the 1933
Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states or the laws
and rules of the NASD, as to which we need express no opinion) is
50
necessary or required in connection with the due authorization, execution and
delivery of the Underwriting Agreement, the Warrant Agreement or the
Representatives' Warrants, or for the offering, issuance or sale of the Shares
by the Company to the Underwriters.
(xix) The execution, delivery and performance of the Underwriting
Agreement, the Warrant Agreement or the Representatives' Warrants, and the
consummation of the transactions contemplated in the Underwriting Agreement and
in the Registration Statement (including the issuance and sale of the Shares and
the use of the proceeds from the sale of the Shares as described in the
Prospectus under the caption "Use Of Proceeds") and compliance by the Company
with its obligations under the Underwriting Agreement will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default under or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or
any Subsidiary pursuant to any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument,
known to us, to which the Company or any Subsidiary is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any Subsidiary is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any Subsidiary, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to us, of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their respective
properties, assets or operations.
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 0000
Xxx.
(xxi) To the best of our knowledge and information, there are no
persons with registration or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered by the
Company under the 1933 Act.
We have participated in conferences with directors, officers and other
representatives of the Company, the Representatives, the Company's independent
accountants and counsel for the Underwriters at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed and, although we have not verified and are not opining upon or
assuming any responsibility for the accuracy or completeness of the information
contained in the Registration Statement or the Prospectus (except as otherwise
specifically stated herein), on the basis of the foregoing (and relying as to
materiality to a
51
large extent upon the certificates of officers and other representatives of the
Company and Subsidiaries), nothing has come to our attention that would lead us
to believe that the Registration Statement or any amendment thereto, including
the Rule 430A Information and Rule 434 Information (if applicable), (except for
financial statements and schedules and other financial data included therein or
omitted therefrom, as to which we make no statement), at the time such
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading or that the
Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which such counsel need make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
52
EXHIBIT B
FORM OF OPINION OF XXXXXXX XXXXXX & XXXXXXXXXX LLC, COUNSEL FOR THE
SELLING SHAREHOLDERS
(i) No filing with, or consent, approval, authorization, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than the issuance of the order of the
Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which we need express no opinion) is necessary or required to be
obtained by the Selling Shareholders for the performance by each Selling
Shareholder of its obligations under the Underwriting Agreement or in the Power
of Attorney and the Custody Agreement, or in connection with the offer, sale or
delivery of the Shares.
(ii) Each Power of Attorney and Custody Agreement has been duly executed
and delivered by the respective Selling Shareholder named therein and
constitutes the valid and binding agreement of such Selling Shareholder in
accordance with its terms.
(iii) The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of each Selling Shareholder.
(iv) The sale of the Shares by the Selling Shareholders is not subject
to preemptive or similar rights of any securityholder of the Company.
(v) Each Attorney-in-Fact has been duly authorized by the Selling
Shareholders to deliver the Shares on behalf of the Selling Shareholders in
accordance with the terms of the Underwriting Agreement.
(vi) The execution, delivery and performance of the Underwriting
Agreement and the Power of Attorney and Custody Agreement and the sale and
delivery of the Shares and the consummation of the transactions contemplated in
the Underwriting Agreement and in the Registration Statement and compliance by
the Selling Shareholders with its obligations under the Underwriting Agreement
have been duly authorized by all necessary action on the part of the Selling
Shareholders and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of, or
default under or result in the creation or imposition of any tax, lien, charge
or encumbrance upon the Shares or any property or assets of the Selling
Shareholders pursuant to, any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, license, lease or other instrument or agreement to
which any Selling Shareholder is a party or by which they may be bound, or to
which any of the property or assets of the Selling Shareholders may be
53
subject nor will such action result in any violation of the provisions of the
charter or by-laws of the Selling Shareholders, if applicable, or any law,
administrative regulation, judgment or order of any governmental agency or body
or any administrative or court decree having jurisdiction over such Selling
Shareholder or any of its properties.
(vii) Each Selling Shareholder is, and immediately prior to Closing time
will be, the sole registered owner of the Shares to be sold by such Selling
Shareholder; upon consummation of the sale of the Shares pursuant to the
Underwriting Agreement, each of the Underwriters will be the registered owner of
the Shares purchased by it from such Selling Shareholder and, assuming the
Underwriters purchased the Shares for value in good faith and without notice of
any adverse claim, the Underwriters will have acquired all rights of such
Selling Shareholder in the Shares free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity, and the owner of the
Shares, if other than such Selling Shareholder, is precluded from asserting
against the Underwriters the ineffectiveness of any unauthorized endorsement;
and such Selling Shareholder has the full right, power and authority (a) to
enter into the Underwriting Agreement and the Power of Attorney and Custody
Agreement and (B) to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder under the Underwriting Agreement.
(viii) The information in the Prospectus under "Principal and Selling
Shareholders" and in the Registration Statement under Item 15, to the extent
that it constitutes matters of law, summaries of legal matters, the Company's
charter and bylaws or legal proceedings, or legal conclusions, has been reviewed
by me and is correct in all material respects.
54
EXHIBIT C
FORM OF OPINION OF
XXXX XXXXXX, REAL ESTATE COUNSEL
FOR THE COMPANY
(i) Each of the Company and the Subsidiaries has good and marketable
title in fee simple to all real property and interests in real property
described in the Prospectus as being owned by them, in each case, free and clear
of all liens, security interests, charges and encumbrances, except as described
in the Prospectus which do not materially affect the aggregate value of such
property and interests taken as a whole and do not interfere with the use made
and proposed to be made of such property and interests by the Company or any of
its Subsidiaries.
(ii) The information on the number of homes completed, sold and
delivered by the Company, as of the date or dates indicated in the Prospectus,
is as set forth under the caption "Summary of Residential Communities" in the
Business Section of the Prospectus and to the extent that it constitutes matters
of law, summaries of legal matters or legal conclusions, has been reviewed by me
and is correct in all material respects.
(iii) The Company's communities are as set forth under the caption
"Narrative Summary of Residential Communities" in the Business Section of the
Prospectus and to the extent that it constitutes matters of law, summaries of
legal matters or legal conclusions, has been reviewed by me and is correct in
all material respects.
(iv) The total land/homesite position of the Company at June 30, 1996 is
as set forth under the caption "Land Acquisition" in the Business Section of the
Prospectus and to the extent that it constitutes matters of law, summaries of
legal matters or legal conclusions, has been reviewed by me and is correct in
all material respects.
55
