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Exhibit 1.1
EXECUTION COPY
WCI COMMUNITIES, INC.
AND EACH OF THE GUARANTORS LISTED ON EXHIBIT A HERETO
$250,000,000
10 5/8% Senior Subordinated Notes due 2011
Purchase Agreement
February 14, 2001
UBS WARBURG LLC
BEAR, XXXXXXX & CO. INC.
FLEET SECURITIES, INC.
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WCI Communities, Inc.
$250,000,000
10 5/8% Senior Subordinated Notes due 2011
PURCHASE AGREEMENT
February 14, 0000
Xxx Xxxx, Xxx Xxxx
UBS WARBURG LLC
BEAR, XXXXXXX & CO. INC.
FLEET SECURITIES, INC.
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
WCI Communities, Inc., a Delaware corporation (the "COMPANY"), proposes
to issue and sell to UBS Warburg LLC ("UBS"), Bear, Xxxxxxx & Co. Inc. and Fleet
Securities, Inc. (each, an "INITIAL PURCHASER" and, collectively, the "INITIAL
PURCHASERS") $250,000,000 in aggregate principal amount of 10 5/8% Series A
Senior Subordinated Notes due 2011 (the "SERIES A NOTES"), subject to the terms
and conditions set forth herein. The Series A Notes will be issued pursuant to
an indenture (the "INDENTURE"), to be dated the Closing Date (as defined), among
the Company, the Guarantors (as defined) and The Bank of New York, as trustee
(the "TRUSTEE"). The Notes (as defined) will be fully and unconditionally
guaranteed (the "GUARANTEES") as to payment of principal, interest, premium and
liquidated damages, if any, on an unsecured senior subordinated basis, jointly
and severally by each entity listed on Exhibit A hereto (collectively, the
"GUARANTORS"). Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Indenture.
1 Issuance of Securities. The Company proposes, upon the terms and
subject to the conditions set forth herein, to issue and sell to the Initial
Purchasers an aggregate of $250,000,000 in principal amount of Series A Notes.
The Series A Notes and the Series B Notes (as defined) issuable in exchange
therefor are collectively referred to herein as the "NOTES."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "ACT"), the Series A Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
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AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THE NOTE EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THE TIME
PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF
APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE
OF THE TRANSFER OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED
INVESTOR (AS DEFINED IN RULE 501(a) (1), (2), (3) or (7)
UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER,
FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY),
(D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON
TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN ONE YEAR AFTER THE ORIGINAL ISSUANCE OF
THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
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2 Offering. The Series A Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Act. The Company has prepared a preliminary offering memorandum, dated February
1, 2001 (the "PRELIMINARY OFFERING MEMORANDUM"), and a final offering
memorandum, dated February 14, 2001 (the "OFFERING MEMORANDUM"), relating to the
Company and its subsidiaries and the Series A Notes.
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "EXEMPT RESALES") of the Series A Notes on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to (i) persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBS") and (ii)
non U.S. persons outside the United States in reliance upon Regulation S
("REGULATION S") under the Act (each, a "REG S INVESTOR"). The QIBs and the Reg
S Investors are collectively referred to herein as the "ELIGIBLE PURCHASERS."
The Initial Purchasers will offer the Series A Notes to such Eligible Purchasers
initially at a price equal to 100% of the principal amount thereof. Such price
may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement
relating thereto (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing
Date, for so long as such Series A Notes constitute "TRANSFER RESTRICTED
SECURITIES" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company and the Guarantors will agree to file
with the Securities and Exchange Commission (the "COMMISSION"), under the
circumstances set forth therein, (i) a registration statement under the Act (the
"EXCHANGE OFFER REGISTRATION STATEMENT") relating to the Company's 10 5/8%
Series B Senior Subordinated Notes due 2011 (the "SERIES B NOTES") and
Guarantees thereof to be offered in exchange for the Series A Notes and
Guarantees thereof (the "EXCHANGE OFFER") and (ii) a shelf registration
statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT"
and, together with the Exchange Offer Registration Statement, the "REGISTRATION
STATEMENTS") relating to the resale by certain holders of the Series A Notes,
and to use their reasonable best efforts to cause such Registration Statements
to be declared effective and to consummate the Exchange Offer. This Agreement,
the Notes, the Guarantees, the Indenture and the Registration Rights Agreement
are hereinafter referred to collectively as the "OPERATIVE DOCUMENTS."
3 Purchase, Sale and Delivery. (a) On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to its terms
and conditions, the Company agrees to issue and sell to the Initial Purchasers,
and each Initial Purchaser agrees, severally and not jointly, to purchase from
the Company, the principal amounts of Series A Notes set forth opposite the name
of such Initial Purchasers on Exhibit B. The purchase price for the Series A
Notes will be $974 per $1,000 principal amount Series A Note.
(b) Delivery of the Series A Notes shall be made, against payment of
the purchase price therefor, at the offices of Xxxxxx & Xxxxxxx, New York, New
York or such other location as may be mutually acceptable. Such delivery and
payment shall be made at 9:00 a.m., New York City time, on February 20 2001 or
at such other time as shall be agreed upon by the Initial Purchasers and the
Company. The time and date of such delivery and payment are herein called the
"CLOSING DATE."
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(c) On the Closing Date, one or more Series A Notes in definitive
global form, registered in the name of Cede & Co., as nominee of The Depository
Trust Company ("DTC"), having an aggregate amount corresponding to the aggregate
principal amount of the Series A Notes (the "GLOBAL NOTE") sold pursuant to
Exempt Resales to Eligible Purchasers shall be delivered by the Company to the
Initial Purchasers (or as the Initial Purchasers direct), against payment by the
Initial Purchasers of the purchase price therefor, by wire transfer of same day
funds, to an account designated by the Company, provided that the Company shall
give at least two business days' prior written notice to the Initial Purchasers
of the information required to effect such wire transfer. The Global Note shall
be made available to the Initial Purchasers for inspection not later than 9:30
a.m. on the business day immediately preceding the Closing Date.
4 Agreements of the Company and the Guarantors. Each of the Company and
the Guarantors covenants and agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly upon becoming
aware and, if requested by the Initial Purchasers, confirm such advice
in writing, (i) of the issuance by any state securities commission of
any stop order suspending the qualification or exemption from
qualification of any Notes or the related Guarantees for offering or
sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory
authority and (ii) of the happening of any event that makes any
statement of a material fact made in the Preliminary Offering
Memorandum or the Offering Memorandum untrue or that requires the
making of any additions to or changes in the Preliminary Offering
Memorandum or the Offering Memorandum in order to make the statements
therein, in the light of the circumstances under which they are made,
not misleading. The Company and the Guarantors shall use their
reasonable best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemption of any Notes or the
related Guarantees under any state securities or Blue Sky laws and, if
at any time any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption of any Notes or the related Guarantees under any state
securities or Blue Sky laws, the Company and the Guarantors shall use
their reasonable best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as
many copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request. The Company and the Guarantors
consent to the use of the Preliminary Offering Memorandum and the
Offering Memorandum, and any amendments and supplements thereto
required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum for a period of forty days from
the Closing Date if in the opinion of counsel for the Initial
Purchasers the Preliminary Offering Memorandum or the Offering
Memorandum is required by law to be delivered in connection with Exempt
Resales and in connection with market-making activities of the Initial
Purchasers unless
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the Initial Purchasers shall previously have been advised thereof and
shall not have objected thereto in writing within a reasonable time
after being furnished a copy thereof, unless in the opinion of Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel to the Company, it is legally required to
do so. The Company and the Guarantors shall for a period of forty days
from the Closing Date promptly prepare, upon the Initial Purchasers'
request, any amendment or supplement to the Preliminary Offering
Memorandum or the Offering Memorandum that may be necessary or
advisable in connection with such Exempt Resales or such market making
activities.
(d) If, during the period referred to in 4(c) above, any event
shall occur as a result of which, in the judgment of the Company and
the Guarantors or in the reasonable opinion of counsel for the Company
and the Guarantors or counsel for the Initial Purchasers, it becomes
necessary or advisable to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum in order to make the statements
therein, in the light of the circumstances when such Offering
Memorandum is delivered to an Eligible Purchaser, not misleading, or if
it is necessary or advisable to amend or supplement the Preliminary
Offering Memorandum or the Offering Memorandum to comply with
applicable law, the Company agrees (i) to notify the Initial Purchasers
and (ii) forthwith to prepare an appropriate amendment or supplement to
such Preliminary Offering Memorandum or the Offering Memorandum so that
the statements therein as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be misleading, or
so that such Preliminary Offering Memorandum or the Offering Memorandum
will comply with applicable law.
(e) To reasonably cooperate with the Initial Purchasers and
counsel for the Initial Purchasers in connection with the qualification
or registration of the Series A Notes and the Guarantees thereof under
the securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may reasonably request and to continue such qualification in
effect so long as required for the distribution of the Series A Notes
pursuant to Exempt Resales, which distribution shall not exceed forty
days from the Closing Date; provided, however, that neither the Company
nor any Guarantor shall be required in connection therewith to register
or qualify as a foreign corporation where it is not now so qualified or
to take any action that would subject it to service of process in suits
or taxation, in each case, other than as to matters and transactions
relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction where it is not now
so subject.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is
terminated, to pay all costs, expenses, fees and taxes incident to the
performance of the obligations of the Company and the Guarantors
hereunder, including in connection with: (i) the preparation, printing,
filing and distribution of the Preliminary Offering Memorandum and the
Offering Memorandum (including, without limitation, financial
statements) and all amendments and supplements thereto required
pursuant hereto, (ii) the preparation (including, without limitation,
duplication costs) and delivery of all agreements, correspondence and
all other documents prepared and delivered in connection herewith,
(iii) the issuance, transfer and
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delivery of the Series A Notes and the Guarantees endorsed thereon to
the Initial Purchasers, (iv) the qualification or registration of the
Notes and the related Guarantees for offer and sale under the
securities or Blue Sky laws of the several states (including, without
limitation, the cost of printing and mailing a preliminary and final
Blue Sky Memorandum and the reasonable fees and disbursements of
counsel for the Initial Purchasers relating thereto), (v) furnishing
such copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and all amendments and supplements thereto, as may be
requested for use in connection with Exempt Resales, (vi) the
preparation of certificates for the Notes (including, without
limitation, printing and engraving thereof), (vii) the fees,
disbursements and expenses of the Company's and the Guarantors' counsel
and accountants, (viii) all fees and expenses (including fees and
expenses of counsel) of the Company and the Guarantors in connection
with the approval of the Notes by DTC for "book-entry" transfer, (ix)
rating the Notes by rating agencies, (x) unless otherwise paid by the
Trustee with respect to its counsel, the reasonable fees and expenses
of the Trustee and its counsel, (xi) the performance by the Company and
the Guarantors of their other obligations under this Agreement and the
other Operative Documents and (xii) "roadshow" travel and other
expenses incurred by the Company in connection with the marketing and
sale of the Notes.
(g) To use the proceeds from the sale of the Series A Notes in
the manner described in the Offering Memorandum under the caption "Use
of Proceeds."
(h) Unless otherwise required by law, not to voluntarily
claim, and to reasonably resist any attempts to claim, the benefit of
any usury laws against the holders of any Notes.
(i) To do and perform all reasonable things required to be
done and performed under this Agreement by them prior to or after the
Closing Date and to satisfy all conditions precedent on their part to
the delivery of the Series A Notes.
(j) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Series A Notes in a
manner that would require the registration under the Act of the sale to
the Initial Purchasers or the Eligible Purchasers of the Series A Notes
or to take any other action that would result in the Exempt Resales not
being exempt from registration under the Act.
(k) For so long as any of the Notes remain outstanding and
during any period in which the Company and the Guarantors are not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT"), to make available, upon request, to
any holder or beneficial owner of Series A Notes in connection with any
sale thereof and any prospective purchaser of such Series A Notes from
such holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act.
(l) To cause the Exchange Offer to be made in the appropriate
form to permit registered Series B Notes and the Guarantees thereof to
be offered in exchange for the
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Series A Notes and the Guarantees thereof and to comply in all material
respects with all applicable federal and state securities laws in
connection with the Exchange Offer.
(m) To comply in all material respects with all of its
agreements set forth in the Registration Rights Agreement and all of
its agreements set forth in the representation letters to DTC relating
to the approval of the Notes by DTC for "book-entry" transfer.
(n) With the cooperation of the Initial Purchasers, to effect
the inclusion of the Notes in PORTAL and to obtain approval of the
Series A Notes by DTC for "book-entry" transfer.
(o) During a period of three years following the Closing Date,
to deliver without charge to the Initial Purchasers, as they may
reasonably request, promptly upon their becoming available, copies of
(i) all reports or other publicly available information that the
Company and the Guarantors shall deliver to their security holders and
(ii) all reports, financial statements and proxy or information
statements filed by the Company with the Commission or any national
securities exchange and such other publicly available information
concerning the Company or any of its subsidiaries, including without
limitation, press releases.
(p) Prior to the Closing Date, to furnish to the Initial
Purchasers, as soon as they have been prepared in the ordinary course
by the Company, copies of any unaudited interim financial statements
for any period subsequent to the periods covered by the financial
statements appearing in the Offering Memorandum.
(q) Not to take, directly or indirectly, any action designed
to, or that 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 Notes. Except as
permitted by the Act, neither the Company nor any Guarantor will
distribute any (i) preliminary offering memorandum, including, without
limitation, the Preliminary Offering Memorandum, (ii) offering
memorandum, including, without limitation, the Offering Memorandum, or
(iii) other offering material in connection with the offering and sale
of the Notes.
(r) To use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this
Agreement prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Series A Notes and the Guarantees
thereof.
5 Representations and Warranties.
(a) The Company and the Guarantors, jointly and severally,
represent and warrant to the Initial Purchasers that:
(i) The Preliminary Offering Memorandum as of its date does
not, and the Offering Memorandum as of its date and as of the Closing
Date does not and will not, and any supplement or amendment to them
will not, contain any untrue statement of a
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material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this
paragraph shall not apply to statements in or omissions from the
Preliminary Offering Memorandum and the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in
conformity with information relating to the Initial Purchasers
furnished to the Company and the Guarantors in writing by the Initial
Purchasers expressly for use therein. No stop order preventing the use
of the Preliminary Offering Memorandum or the Offering Memorandum, or
any amendment or supplement thereto, or any order asserting that any of
the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(ii) Each of the Company and its subsidiaries (A) has been
duly incorporated or organized, as the case may be, and is validly
existing as a corporation, limited partnership or limited liability
company, as the case may be, in good standing under the laws of its
jurisdiction of incorporation or organization (B) has all requisite
power and authority to carry on its business as it is currently being
conducted and as described in the Offering Memorandum (other than Bay
Colony -- Gateway, Inc. with respect to Arizona and California) and to
own, lease and operate its properties, and (C) is duly qualified and is
in good standing as a foreign corporation, limited partnership or
limited liability company, as the case may be, authorized to do
business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except in the case of clause (B) or (C) where the failure to have all
requisite power and authority or to be so qualified would not
reasonably be expected to (x) result, individually or in the aggregate,
in a material adverse effect on the properties, business, results of
operations, condition (financial or otherwise), or affairs of the
Company and its subsidiaries, taken as a whole, (y) interfere with or
adversely affect the issuance or marketability of the Notes or (z) draw
into question the validity of this Agreement or any other Operative
Document or the transactions described in the Offering Memorandum under
the caption "Use of Proceeds" or, in any material respect, the
transactions described under the fifth and sixth paragraphs under the
caption "Recent Developments" (any of the events set forth in clauses
(x), (y) or (z), a "MATERIAL ADVERSE Effect").
(iii) The Company has no subsidiaries other than the entities
listed on Exhibit C attached hereto and the Company has not invested in
any Joint Ventures other than the entities listed on Exhibit C hereto.
(iv) All of the outstanding capital stock of each subsidiary
of the Company is owned, directly or indirectly, by the Company, free
and clear of any security interest, claim, lien, limitation on voting
rights or encumbrance, except for any such security interest, claim,
lien, limitation on voting rights or encumbrance disclosed in the
Offering Memorandum; and all such securities have been duly authorized,
validly issued, and are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights.
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(v) Each material joint venture, partnership and material
limited liability company in which the Company or any subsidiary has an
interest is listed on Exhibit C hereto, other than Bighorn Development,
L.P. (collectively, the "JOINT VENTURES"), and (A) has been duly
organized and is validly existing and in good standing under the laws
of its jurisdiction of organization, (B) has all requisite power and
authority to carry on its business as it is currently being conducted
and as described in the Offering Memorandum and to own, lease and
operate its properties, and (C) is duly qualified and is in good
standing as a foreign limited partnership or limited liability company,
as the case may be, authorized to do business 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 could not reasonably be expected to result in a Material
Adverse Effect.
(vi) Other than as disclosed in the Offering Memorandum, there
are not currently any outstanding subscriptions, rights, warrants,
calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any capital stock or other equity
interest of the Company's subsidiaries.
(vii) When the Series A Notes and the Guarantees thereof are
issued and delivered pursuant to this Agreement, no Series A Note or
Guarantee thereof will be of the same class (within the meaning of Rule
144A under the Act) as securities of the Company or any Guarantor that
are listed on a national securities exchange registered under Section 6
of the Exchange Act or that are quoted in a United States automated
inter-dealer quotation system.
(viii) Each of the Company and the Guarantors has all
requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement and each of the other Operative
Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the
corporate power and authority to issue, sell and deliver the Notes and
to issue and deliver the related Guarantees as provided herein and
therein.
(ix) This Agreement has been duly and validly authorized,
executed and delivered by the Company and each Guarantor and is the
legal, valid and binding agreement of the Company and each Guarantor,
enforceable against each of them in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(x) The Indenture has been duly and validly authorized by the
Company and each Guarantor and, when duly executed and delivered by the
Company and each Guarantor, will be the legal, valid and binding
agreement of the Company and each Guarantor, enforceable against each
of them in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. On the Closing Date, the Indenture will conform
in all material respects to the requirements of the Trust Indenture Act
of 1939, as amended (the "TRUST INDENTURE ACT"), and the
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rules and regulations of the Commission applicable to an indenture
which is qualified thereunder. The Offering Memorandum contains a
summary of certain terms of the Indenture, which is accurate in all
material respects.
(xi) The Registration Rights Agreement has been duly and
validly authorized by the Company and each Guarantor and, when duly
executed and delivered by the Company and each Guarantor, will be the
legal, valid and binding obligation of the Company and each Guarantor,
enforceable against each of them in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The Offering
Memorandum contains a summary of certain terms of the Registration
Rights Agreement, which is accurate in all material respects.
(xii) The Series A Notes have been duly and validly authorized
by the Company for issuance and sale to the Initial Purchasers pursuant
to this Agreement and, when issued and authenticated in accordance with
the terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid
and binding obligations of the Company, enforceable against it in
accordance with their terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity.
(xiii) The Guarantees of the Series A Notes have been duly and
validly authorized by each of the Guarantors and, when executed and
delivered in accordance with the terms of the Indenture and when the
Series A Notes have been issued and authenticated in accordance with
the terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid
and binding obligations of each of the Guarantors, enforceable against
each of them in accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. The Offering Memorandum contains a summary of
certain terms of the Guarantees, which is accurate in all material
respects.
(xiv) The Series B Notes have been duly and validly authorized
for issuance by the Company and, when issued and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, will
be the legal, valid and binding obligations of the Company, enforceable
against it in accordance with their terms and entitled to the benefits
of the Indenture, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity.
(xv) The Guarantees of the Series B Notes have been duly and
validly authorized by each of the Guarantors and, when executed and
delivered in accordance with the terms of the Indenture and when the
Series B Notes have been issued and authenticated in accordance with
the terms of the Exchange Offer and the Indenture, will
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be the legal, valid and binding obligations of each of the Guarantors,
enforceable against each of them in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity.
(xvi) The Credit Agreement has been duly and validly
authorized by the Company and each subsidiary party thereto and is the
legal, valid and binding obligation of the Company and each subsidiary
party thereto, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity.
(xvii) Each of the Company, its subsidiaries and the Joint
Ventures (other than Bighorn Development L.P.) is not and, after giving
effect to the Offering, will not be, (A) in violation of its charter or
bylaws, (B) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties is subject, which singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or (C) in
violation of any local, state, federal or foreign law, statute,
ordinance, rule, regulation, requirement, judgment or court decree
(including, without limitation, environmental laws, statutes,
ordinances, rules, regulations, judgments or court decrees) applicable
to it or any of its assets or properties (whether owned or leased),
which singly or in the aggregate, could reasonably be expected to have
a Material Adverse Effect. Except as could not reasonably be expected
to have a Material Adverse Effect to the best knowledge of the Company
and the Guarantors, there exists no condition that, with notice, the
passage of time or otherwise, would constitute a default under any such
document or instrument.
(xviii) Except as could not reasonably be expected to have a
Material Adverse Effect none of (A) the execution, delivery or
performance by the Company or any Guarantor of this Agreement or any of
the other Operative Documents to which it is a party and (B) the
issuance and sale of the Notes and the issuance of the Guarantees,
violates, conflicts with or constitutes a breach of any of the terms or
provisions of, or will violate, conflict with or constitute a breach of
any of the terms or provisions of, or a default under (or an event that
with notice or the lapse of time, or both, would constitute a default
under), or require consent under, or result in the imposition of a lien
or encumbrance on any properties of the Company or any of its
subsidiaries, or an acceleration of any indebtedness of the Company or
any of its subsidiaries pursuant to, (1) the charter or bylaws of the
Company or any of its subsidiaries, (2) any bond, debenture, note,
indenture, mortgage, contract, license, lease, deed of trust or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which any of them or their property is or may be
bound, (3) any statute, rule or regulation applicable to the Company or
any of its subsidiaries or any of their assets or properties or (4) any
judgment, injunction, order or decree of any court or governmental
agency or authority having jurisdiction over the Company or any of its
subsidiaries or any of their assets or
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properties, except the liens and encumbrances imposed by the Senior
Facility and the consents to issuance of the Notes and related
Guarantees pursuant to the Senior Facility and such other consents or
waivers which have been obtained or will be obtained prior to the
Closing Date. No consent, approval, authorization or order of, or
filing, registration, qualification, license or permit of or with, (A)
any court or governmental agency, body or administrative agency or (B)
any other person is required for (1) the execution, delivery and
performance by each of the Company and the Guarantors of this Agreement
or any of the other Operative Documents to which it is a party or (2)
the issuance and sale of the Notes, the issuance of the Guarantees and
the transactions contemplated hereby and thereby, except such as have
been or will be obtained and made on or prior to the Closing Date (or,
in the case of the Registration Rights Agreement, will be obtained and
made under the Act, the Trust Indenture Act, and state securities or
Blue Sky laws and regulations).
(xix) Except as otherwise disclosed in the Offering
Memorandum, there is (A) no action, suit, investigation, litigation or
proceeding before or by any court, arbitrator or governmental agency,
body or official, domestic or foreign, now pending or, to the best
knowledge of the Company and the Guarantors, threatened or contemplated
to which the Company or any of its subsidiaries is or may be a party or
to which the business or property of the Company or any of its
subsidiaries, is or may be subject, (B) no statute, rule, regulation or
order that has been enacted, adopted or issued by any governmental
agency or that has been proposed by any governmental body and (C) no
injunction, restraining order or order of any nature by a federal or
state court or foreign court of competent jurisdiction to which the
Company or any of its subsidiaries is or may be subject or to which the
business, assets or property of the Company or any of its subsidiaries
is or may be subject, that, in the case of clauses (A), (B) and (C)
above, could reasonably be expected to have a Material Adverse Effect.
(xx) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental agency
that prevents the issuance of the Notes or the Guarantees or prevents
or suspends the use of the Offering Memorandum to the knowledge of the
Company; no injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction has been issued that
prevents the issuance of the Notes or the Guarantees or prevents or
suspends the sale of the Notes or the Guarantees in any jurisdiction
referred to in Section 4(e) hereof; and every request of any securities
authority or agency of any jurisdiction for additional information has
been complied with in all material respects.
(xxi) There is (A) no significant unfair labor practice
complaint pending against the Company or any of its subsidiaries nor,
to the best knowledge of the Company and the Guarantors, threatened
against any of them, before the National Labor Relations Board, any
state or local labor relations board or any foreign labor relations
board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement
is so pending against the Company or any of its subsidiaries or, to the
best knowledge of the Company and the Guarantors, threatened against
any of them, (B) no significant strike, labor dispute, slowdown or
stoppage
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pending against the Company or any of its subsidiaries nor, to the best
knowledge of the Company and the Guarantors, threatened against any of
them and (C) to the best knowledge of the Company and the Guarantors,
no union representation question existing with respect to the employees
of the Company or any of its subsidiaries. To the best knowledge of the
Company and the Guarantors, no collective bargaining organizing
activities are taking place with respect to the Company or any of its
subsidiaries. None of the Company or any of its subsidiaries has
violated (A) any federal, state or local law or foreign law relating to
discrimination in hiring, promotion or pay of employees, (B) any
applicable wage or hour laws or (C) any provision of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the
rules and regulations thereunder, except those violations that could
not reasonably be expected to have a Material Adverse Effect.
(xxii) None of the Company or any of its subsidiaries has
violated any foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "ENVIRONMENTAL LAWS"), which violation could reasonably
be expected to have a Material Adverse Effect.
(xxiii) There is no alleged liability, or to the best
knowledge of the Company and the Guarantors, potential liability
(including, without limitation, alleged or potential liability or
investigatory costs, cleanup costs, governmental response costs,
natural resource damages, property damages, personal injuries or
penalties) of the Company or any of its subsidiaries arising out of,
based on or resulting from (A) the presence or release into the
environment of any Hazardous Material (as defined) at any location,
whether or not owned by the Company or such subsidiary, as the case may
be, or (B) any violation or alleged violation of any Environmental Law,
which alleged or potential liability is required to be disclosed in the
Offering Memorandum, other than as disclosed therein, or could
reasonably be expected to have a Material Adverse Effect. The term
"HAZARDOUS MATERIAL" means (i) any "hazardous substance" as defined by
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, (ii) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act, as amended, (iii) any petroleum
or petroleum product, (iv) any polychlorinated biphenyl, and (v) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of
any other law relating to protection of human health or the environment
or imposing liability or standards of conduct concerning any such
chemical material, waste or substance.
(xxiv) Each of the Company and its subsidiaries has such
permits, licenses, franchises, entitlements and authorizations of
governmental or regulatory authorities ("PERMITS"), including, without
limitation, under any applicable Environmental Laws, as are necessary
to own, lease and operate its respective properties and to conduct its
businesses, except where the failure to have such permits could not
reasonably be expected to have a Material Adverse Effect; except as
could not reasonably be expected to have a Material Adverse Effect,
each of the Company and its subsidiaries has fulfilled
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and performed all of its obligations with respect to such permits and
no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
impairment of the rights of the holder of any such permit; and, except
as described in the Offering Memorandum, such permits contain no
restrictions that are materially burdensome to the Company or such
subsidiary, as the case may be.
(xxv) Except as could not reasonably be expected to have a
Material Adverse Effect, or as disclosed in the Offering Memorandum
each of the Company and its subsidiaries has (A) good and marketable
title in fee simple to all of the properties (excluding land banks,
certain golf clubs, homeowner associations and district properties),
including improvements thereon, and assets described in the Offering
Memorandum as so owned by it, free and clear of all liens, charges,
encumbrances and restrictions, other than in the ordinary course of
business consistent with past practice, (B) possession under all
material leases to which any of them is a party as lessee and each of
which lease is valid and binding and no default exists thereunder, (C)
all licenses, certificates, permits, authorizations, approvals,
franchises, entitlements and other rights from, and has made all
declarations and filings with, all federal, state and local
authorities, all self-regulatory authorities and all courts and other
tribunals (each, an "AUTHORIZATION") necessary to engage in the
business conducted by any of them in the manner described in the
Offering Memorandum, and (D) no reason to believe that any governmental
body or agency is considering limiting, suspending or revoking any such
Authorization and no knowledge of any pending or threatened
condemnation proceedings, zoning changes or other similar proceedings
or actions that would effect the size, use of, improvements on,
construction on or access to any of the properties belonging to the
Company or any of its subsidiaries. All such Authorizations are valid
and in full force and effect and each of the Company and its
subsidiaries is in compliance in all respects with the terms and
conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with
respect thereto, except as could not reasonably be expected to have a
Material Adverse Effect. Each of the properties, belonging to the
Company or any Subsidiary, complies with all applicable codes, laws and
regulations (including without limitation, building and zoning laws)
except to the extent disclosed in the Offering Memorandum and except
for such failures to comply that would not reasonably be expected to
result in a Material Adverse Effect. No person, except as disclosed in
the Offering Memorandum, has an option or right of first refusal to
purchase all or a material part of any material property, belonging to
the Company or any Subsidiary, or any interest therein, except as
occurs in the ordinary course of the Company's business.
(xxvi) Except as would not reasonably be expected to have a
Material Adverse Effect, each of the Company and its subsidiaries owns,
possesses or has the right to employ all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, software, systems or procedures), trademarks, service
marks and trade names, inventions, computer programs, technical data
and information (collectively, the "INTELLECTUAL PROPERTY") presently
employed by it in connection with the businesses now
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operated by it, free and clear of and without violating any right,
claimed right, charge, encumbrance, pledge, security interest,
restriction or lien of any kind of any other person, and none of the
Company or any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect
to any of the foregoing. The use of the Intellectual Property in
connection with the business and operations of the Company or any of
its subsidiaries does not infringe on the rights of any person, except
such infringements as could not reasonably be expected to have a
Material Adverse Effect.
(xxvii) All material tax returns required to be filed by the
Company or any of its subsidiaries in all jurisdictions have been so
filed, except for those with respect to which extensions have been
granted, and all taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due
from such entities or that are due and payable have been paid,
including in certain cases payments based upon good faith estimates of
the Company, other than those being contested in good faith and for
which adequate reserves have been provided or those currently payable
without penalty or interest. To the knowledge of the Company and the
Guarantors, there are no proposed additional tax assessments against
the Company or any of its subsidiaries, or the assets or property of
the Company or any of its subsidiaries, except those tax assessments
for which adequate reserves have been established or with respect to
which would not reasonably be expected to be a Material Adverse Effect.
(xxviii) Each of the Company and its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (C), where appropriate, 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 the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(xxix) Each of the Company and its subsidiaries maintains
insurance covering its properties, operations, personnel and
businesses, insuring against such losses and risks as are customary for
similar businesses. None of the Company or any of its subsidiaries has
received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be
made in order to continue such insurance.
(xxx) None of the Company or any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "INVESTMENT COMPANY ACT").
(xxxi) There are no holders of securities of the Company or
any of its subsidiaries who, by reason of the execution by the Company
or any of the Guarantors of this Agreement or any other Operative
Document to which it is a party or the consummation
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by the Company or any of the Guarantors of the transactions
contemplated hereby and thereby, have the right to request or demand
that the Company or any of its subsidiaries register under the Act or
analogous foreign laws and regulations securities held by them other
than pursuant to the Registration Right Agreement.
(xxxii) None of the Company or any of its subsidiaries has (A)
taken, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company or any of its
subsidiaries to facilitate the sale or resale of the Notes or (B) since
the date of the Preliminary Offering Memorandum (1) sold, bid for,
purchased or paid any person any compensation for soliciting purchases
of the Notes or (2) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company or any of its subsidiaries.
(xxxiii) The accountants who have certified or will certify
the financial statements included or to be included as part of the
Offering Memorandum are independent accountants as required by the Act.
(xxxiv) The historical financial statements, together with
related schedules and notes thereto, comply as to form in all material
respects with the requirements applicable to registration statements on
Form S-1 under the Act and present fairly in all material respects the
financial position and results of operations of the Company and its
subsidiaries and of Florida Design Communities, Inc. and its related
entities at the dates and for the periods indicated. Such financial
statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the
periods presented. The other financial and statistical information and
data included in the Offering Memorandum derived from the historical
financial statements, are accurately presented in all material respects
and prepared on a basis consistent with the financial statements
included in the Offering Memorandum and the books and records of the
Company, its subsidiaries and of Florida Design Communities, Inc. and
its related entities.
(xxxv) No registration under the Act of the Series A Notes or
the Guarantees thereof is required for the sale of the Series A Notes
to the Initial Purchasers as contemplated hereby or for the Exempt
Resales assuming (A) that the purchasers who buy the Series A Notes in
the Exempt Resales are Eligible Purchasers and (B) the accuracy of the
Initial Purchasers' representations regarding the absence of general
solicitation in connection with the sale of Series A Notes to the
Initial Purchasers and the Exempt Resales contained herein. No form of
general solicitation or general advertising (as defined in Regulation D
under the Act) was used by the Company or any of the Guarantors or any
of their representatives (other than the Initial Purchasers, as to
which the Company and the Guarantors make no representation or
warranty) in connection with the offer and sale of any of the Series A
Notes or the Guarantees thereof or in connection with Exempt Resales,
including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by
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any general solicitation or general advertising. No securities of the
same class as the Notes have been issued and sold by the Company or any
of its subsidiaries within the six-month period immediately prior to
the date hereof.
(xxxvi) The execution and delivery of this Agreement, the
other Operative Documents and the sale of the Series A Notes to be
purchased by Eligible Purchasers will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975
of the Internal Revenue Code of 1986. The representation made by the
Company and the Guarantors in the preceding sentence is made in
reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by Eligible
Purchasers as set forth in the Offering Memorandum under the caption
"Notice to Investors."
(xxxvii) The statistical and market-related data included in
the Offering Memorandum, including but not limited to the data in the
Section entitled "Florida Real Estate Market," are based on or derived
from sources which the Company and the Guarantors believe to be
reliable and accurate in all material respects.
(xxxviii) Since the respective dates as of which information
is given in the Offering Memorandum and up to the Closing Date, except
as set forth in the Offering Memorandum, (i) there has not been any
material adverse change, or any development that is reasonably likely
to result in a material adverse change, in the capital stock or the
long-term debt, or material increase in the short-term debt, of the
Company or any of its subsidiaries from that set forth in the Offering
Memorandum, (ii) no dividend or distribution of any kind shall have
been declared, paid or made by the Company or any of its subsidiaries
on any class of its capital stock, except for dividends paid by the
Company to Watermark to enable Watermark to pay the subordinated notes
of Watermark held by Communities Finance Company, LLC and (iii) none of
the Company or any of its subsidiaries shall have incurred any
liabilities or obligations other than in the ordinary course consistent
with past practice, direct or contingent, that are material,
individually or in the aggregate, to the Company and its subsidiaries,
taken as a whole, and that are required to be disclosed on a balance
sheet or notes thereto in accordance with generally accepted accounting
principles and are not disclosed on the latest balance sheet or notes
thereto included in the Offering Memorandum nor have any of the Company
or its subsidiaries entered into a transaction not in the ordinary
course of business. Since the date hereof and since the dates as of
which information is given in the Offering Memorandum, there shall not
have occurred any change, or any development which, singly or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.
(xxxix) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement
thereto, as of its date, contains the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
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(xl) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the Trust Indenture
Act.
(xli) None of the Company, the Guarantors nor any of their
respective affiliates or any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Company and the
Guarantors make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with
respect to the Series A Notes and all such persons will comply with the
offering restrictions requirement contained in Regulation S, to the
extent applicable.
(xlii) The sale of the Series A Notes pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of
the Act.
(xliii) None of the execution, delivery and performance of
this Agreement, the issuance and sale of the Notes, the application of
the proceeds from the issuance and sale of the Notes and the
consummation of the transactions contemplated thereby as set forth in
the Offering Memorandum, will violate Regulations T, U or X promulgated
by the Board of Governors of the Federal Reserve System.
(xliv) Neither the Company nor any Guarantor intends to, nor
believes that it will, incur debts beyond its ability to pay such debts
as they mature. The present fair saleable value of the assets of the
Company and each Guarantor exceeds the amount that will be required to
be paid on or in respect of its existing debts and other liabilities
(including contingent liabilities) as they become absolute and matured.
The assets of the Company and each Guarantor do not constitute
unreasonably small capital to carry out its business as conducted or as
proposed to be conducted. Upon the issuance of the Notes and the
Guarantees, the present fair saleable value of the assets of the
Company and each Guarantor will exceed the amount that will be required
to be paid on or in respect of its existing debts and other liabilities
(including contingent liabilities) as they become absolute and matured.
Upon the issuance of the Notes and the Guarantees, the assets of the
Company and each Guarantor will not constitute unreasonably small
capital to carry out its business as now conducted, including the
capital needs of the Company and such Guarantor, taking into account
the projected capital requirements and capital availability.
(xlv) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company and its
subsidiaries and any other person that would give rise to a valid claim
against the Company or any of its subsidiaries or the Initial
Purchasers for a brokerage commission, finder's fee or like payment in
connection with the issuance, purchase and sale of the Notes.
(xlvi) Except as discussed in the Offering Memorandum, there
are no business relationships or related party transactions required to
be disclosed therein pursuant to Item 404 of Regulation S-K of the
Commission (assuming for purposes of this paragraph that Regulation S-K
is applicable to the Offering Memorandum).
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(xlvii) Each certificate signed by any officer of the Company
or any Guarantor and delivered to the Initial Purchasers or counsel for
the Initial Purchasers shall be deemed to be a representation and
warranty by the Company or such Guarantor, as the case may be, to the
Initial Purchasers as to the matters covered thereby.
Each of the Company and the Guarantors acknowledge that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 8 hereof, counsel for the Company and the
Guarantors and counsel for the Initial Purchasers, will rely upon the accuracy
and truth of the foregoing representations and hereby consent to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to the Company and the Guarantors
and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Series A
Notes.
(ii) Such Initial Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof that would violate the
Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling
the Series A Notes only to (i) QIBs in reliance on the exemption from
the registration requirements of the Act provided by Rule 144A and (ii)
in offshore transactions in reliance upon, and in compliance with,
Regulation S under the Act.
(iii) No form of general solicitation or general advertising
(within the meaning of Regulation D under the Act) has been or will be
used by such Initial Purchaser or any of its representatives in
connection with the offer and sale of any of the Series A Notes,
including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising.
(iv) Such Initial Purchaser agrees that, in connection with
the Exempt Resales, it will solicit offers to buy the Series A Notes
only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Such Initial Purchaser further (A) agrees that it will
offer to sell the Series A Notes only to, and will solicit offers to
buy the Series A Notes only from Eligible Purchasers that the Initial
Purchaser reasonably believes are QIBs or Reg S Investors and (B)
acknowledges and agrees that, in the case of such QIBs or Reg S
Investors, such Series A Notes will not have been registered under the
Act and may be resold, pledged or otherwise transferred only (1) to the
Company or any subsidiary thereof, (2) pursuant to a registration
statement which has been declared effective under the Act, (3) to a
person it reasonably believes is a "Qualified Institutional Buyer" as
defined in Rule 144A in a transaction meeting the requirements of Rule
144A, (4) pursuant to offers and sales to Non-U.S. Persons that occur
outside the United States in a transaction meeting the requirements of
Rule 904 under the Act, (5) to an Institutional "Accredited Investor"
(as defined in Rule 501 (a)(1), (2), (3) or (7) under the Act) in a
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transaction meeting the requirements of Rule 144 under the Act, or (6)
pursuant to any other available exemption from the registration
requirements under the Act (and in the case of a transfer pursuant to
clause (5) or (6), based on an opinion of counsel if the company so
requests), subject in each of the foregoing cases to applicable
securities laws of any state of the United States or any other
applicable jurisdiction, and (C) acknowledges that it will, and each
subsequent holder is required to, notify any purchaser from it of the
security evidenced thereby of the resale restrictions set forth in (B)
above.
(v) Such Initial Purchaser and its affiliates or any person
acting on its or their behalf have not engaged and will not engage in
any directed selling efforts within the meaning of Regulation S with
respect to the Series A Notes or the Guarantees thereof.
(vi) The Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S have been and
will be offered and sold only in offshore transactions.
(vii) The sale of Series A Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not
part of a plan or scheme to evade the registration provisions of the
Act.
(viii) At or prior to the confirmation of sale of any Series A
Notes sold in reliance on Regulation S, it will have sent to each
distributor, dealer or other person receiving a selling concession, fee
or other remuneration that purchases Series A Notes from it during the
restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering of
the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule
144A or any other available exemption from registration under
the Securities Act. Terms used above have the meanings given
to them in Regulation S."
(ix) It has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution of
the Series A Notes, except with its affiliates or with the prior
written consent of the Issuer.
(x) It has and will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells or
delivers Series A Notes or has in its possession or has distributed the
Preliminary Offering Memorandum or Offering Memorandum.
(xi) Each Initial Purchaser further represents and agrees that
(a) it has not offered or sold and prior to the date six months after
the date of issue of the Series A
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Notes will not offer or sell any Series A Notes to persons in the
United Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise
in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, (b) it has complied, and
will comply, with all applicable provisions of the Financial Services
Act of 1986 of Great Britain with respect to anything done by it in
relation to the Series A Notes in, from or otherwise involving the
United Kingdom, and (c) it has only issued or passed on and will only
issue or pass on in the United Kingdom any document received by it in
connection with the issuance of the Series A Notes to a person who is
of a kind described in Article 9(3) of the Financial Services Xxx 0000
(Investment Advertisements) (Exemptions) Order 1996 of Great Britain or
is a person to whom the document may otherwise lawfully be issued or
passed on.
(xii) Each Initial Purchaser agrees that it will not offer,
sell or deliver any of the Series A Notes in any jurisdiction outside
the United States except under circumstances that will result in
compliance with the applicable laws thereof, and that it will take
whatever action is required to permit its purchase and resale of the
Series A Notes in such jurisdictions. Each Initial Purchaser
understands that no action has been taken to permit a public offering
in any jurisdiction outside the United States where action would be
required for such purpose.
The Initial Purchasers acknowledge that the Company and the Guarantors
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel for the Company and the Guarantors and
counsel for the Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations and hereby consents to such reliance.
6 Indemnification.
(a) The Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless (i) each Initial Purchaser, (ii)
each person, if any, who controls any Initial Purchaser within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Initial Purchaser or any controlling
person to the fullest extent lawful, from and against any and all
losses, liabilities, claims, damages and expenses whatsoever
(including, but not limited to, reasonable attorneys' fees and any and
all reasonable expenses whatsoever incurred in investigating, preparing
or defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever, and any and all reasonable amounts
paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the
Offering Memorandum, or in any supplement thereto or amendment thereof,
or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the
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statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that (A) neither the
Company nor any Guarantor will be liable in any such case to the
extent, but only to the extent, that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company and the
Guarantors in writing by or on behalf of the Initial Purchasers
expressly for use therein, and (B) neither the Company nor any
Guarantor shall be liable to the extent, but only to the extent, that
any such loss, claim, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Preliminary Offering Memorandum if an
Initial Purchaser failed to deliver the Offering Memorandum that was
made available by the Company for delivery to the person or persons
asserting the claim which is the basis of indemnification and such
Offering Memorandum cured such defect. This indemnity agreement will be
in addition to any liability which the Company may otherwise have,
including under this Agreement.
(b) Each Initial Purchaser, severally and not jointly, agrees
to indemnify and hold harmless (i) the Company and the Guarantors, (ii)
each person, if any, who controls the Company or any of the Guarantors
within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, and (iii) the officers, directors, partners, employees,
representatives and agents of the Company and the Guarantors, against
any losses, liabilities, claims, damages and expenses whatsoever
(including, but not limited to, reasonable attorneys' fees and any and
all reasonable expenses whatsoever incurred in investigating, preparing
or defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever and any and all reasonable amounts
paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the
Offering Memorandum, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case
to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company and the
Guarantors in writing by or on behalf of any Initial Purchaser
expressly for use therein; provided, however, that in no case shall any
Initial Purchaser be liable or responsible for any amount in excess of
the discounts and commissions received by such Initial Purchaser, as
set forth in the Section entitled "Plan of Distribution" of the
Offering Memorandum. This indemnity will be in addition to any
liability which any Initial Purchaser may otherwise have, including
under this Agreement.
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(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
each party against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve it from any liability which it may have under
this Section 6 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but
the reasonable fees and expenses of such counsel shall be at the
expense of such indemnified party or parties unless (i) the employment
of such counsel shall have been authorized in writing by the
indemnifying parties in connection with the defense of such action,
(ii) the indemnifying parties shall not have employed counsel to take
charge of the defense of such action within a reasonable time after
written notice of commencement of the action, or (iii) such indemnified
party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional
to those available to one or all of the indemnifying parties (in which
case the indemnifying party or parties shall not have the right to
direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such reasonable fees and expenses of
counsel shall be borne by the indemnifying parties; provided, however,
that the indemnifying party under subsection (a) or (b) above, shall
only be liable for the legal expenses of one counsel (in addition to
any local counsel) for all indemnified parties in which any claim or
action is brought. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its prior written
consent; provided, however, that such consent was not unreasonably
withheld.
7 Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 6 is for any reason held to
be unavailable from an indemnifying party or is insufficient to hold harmless a
party indemnified thereunder, the Company and the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, liabilities, claims, damages and expenses suffered by the
Company or any Guarantor, any contribution received by the Company and the
Guarantors from persons, other than the Initial Purchasers, who may also be
liable for contribution, including persons who control the Company or any of the
Guarantors within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act) to which the Company, the Guarantors and any Initial Purchaser may
be subject, in such proportion as is
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appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Series A Notes or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 6, in such
proportion as is appropriate to reflect not only the relative benefits referred
to above but also the relative fault of the Company and the Guarantors, on the
one hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, shall be deemed to be in the same
proportion as (i) the total proceeds from the offering of Series A Notes (net of
discounts but before deducting expenses) received by the Company and the
Guarantors and (ii) the discounts and commissions received by the Initial
Purchasers, respectively. The relative fault of the Company and the Guarantors,
on the one hand, and of the Initial Purchasers, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, any Guarantor or
the Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7, (i) in no case shall any Initial Purchaser be
required to contribute any amount in excess of the amount by which the discounts
and commissions applicable to the Series A Notes purchased by such Initial
Purchaser pursuant to this Agreement exceeds the amount of any damages which
such Initial Purchaser has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) 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. For purposes of this Section 7, (A)
each person, if any, who controls any Initial Purchaser within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and (B) the
respective officers, directors, partners, employees, representatives and agents
of any Initial Purchaser or any controlling person shall have the same rights to
contribution as such Initial Purchaser, and each person, if any, who controls
the Company or any Guarantor within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
the Company and the Guarantors, subject in each case to clauses (i) and (ii) of
this Section 7. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section 7, notify in writing such party or parties from
whom contribution may be sought, but the failure to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 7 or
otherwise. No party shall be liable for contribution with respect to any action
or claim settled without its prior written consent.
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8 Conditions of Initial Purchasers' Obligations. The obligations of
each Initial Purchaser to purchase and pay for the Series A Notes, as provided
herein, shall be subject to the satisfaction of the following conditions:
(a) All of the representations and warranties of the Company
and the Guarantors contained in this Agreement shall be true and
correct in all material respects on the date hereof and on the Closing
Date with the same force and effect as if made on and as of the date
hereof and the Closing Date, respectively. For purposes of this Section
8(a) representations and warranties which are qualified by "material,"
"Material Adverse Effect" or "in all material respects" or the like
shall be true and correct in all material respects. The Company and
each Guarantor shall have performed or complied in all material
respects with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 2:00 p.m., New
York City time, on the day following the date of this Agreement or at
such later date and time as to which the Initial Purchasers may agree,
and no stop order suspending the qualification or exemption from
qualification of the Series A Notes or the Guarantees thereof in any
jurisdiction referred to in Section 4(e) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or, to the knowledge of the Company, threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the
issuance of the Series A Notes or the Guarantees thereof; no action,
suit or proceeding shall have been commenced and be pending against or
affecting or, to the best knowledge of the Company and the Guarantors,
threatened against, the Company or any of its subsidiaries before any
court or arbitrator or any governmental body, agency or official that,
if adversely determined, could reasonably be expected to result in a
Material Adverse Effect; and no stop order shall have been issued
preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or which could reasonably be expected to have a
Material Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum, (i) there shall not have been any material adverse
change, or any development that is reasonably likely to result in a
material adverse change, in the capital stock or the long-term debt, or
material increase in the short-term debt, of the Company or any of its
subsidiaries from that set forth in the Offering Memorandum, (ii) other
than as set forth or contemplated in the Offering Memorandum, no
dividend or distribution of any kind shall have been declared, paid or
made by the Company or any of its subsidiaries on any class of its
capital stock, except for dividends paid by the Company to Watermark to
enable Watermark to pay the subordinated notes of Watermark held by
Communities Finance Company, LLC and (iii) none of the Company or any
of its subsidiaries shall have incurred any liabilities or obligations
other than in the ordinary course of business consistent with past
practice, direct or contingent, that are material, individually or in
the aggregate, to the Company and its subsidiaries, taken as a whole,
and that are required to
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be disclosed on a balance sheet or notes thereto in accordance with
generally accepted accounting principles and are not disclosed on the
latest balance sheet or notes thereto included in the Offering
Memorandum. Since the date hereof and since the dates as of which
information is given in the Offering Memorandum, there shall not have
occurred any material adverse change, or any development that is
reasonably likely to result in a material adverse change, in the
business, financial condition or results of operation of the Company
and its subsidiaries, taken as a whole.
(e) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed on behalf of the Company and each
Guarantor, in form and substance satisfactory to the Initial
Purchasers, confirming, as of the Closing Date, the matters set forth
in paragraphs (a), (b), (c) and (d) of this Section 8 and that, as of
the Closing Date, the obligations of the Company and such Guarantor, as
the case may be, to be performed hereunder on or prior thereto have
been duly performed in all material respects.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers, of each of Xxxxxxx Xxxxxxx & Xxxxxxxx, Xxxxxxxx & Xxxxxxx,
and Xxxxxx Xxxxxxxx, Esq., counsel for the Company and the Guarantors,
substantially to the effect set forth in Exhibits E, F and G,
respectively, hereto.
(g) At the time this Agreement is executed and at the Closing
Date, the Initial Purchasers shall have received from
PricewaterhouseCoopers LLC and KPMG LLP, independent public
accountants, customary comfort letters addressed to the Initial
Purchasers dated as of the date of this Agreement and as of the Closing
Date, and in form and substance satisfactory to the Initial Purchasers
and counsel for the Initial Purchasers with respect to the financial
statements and certain financial information of the Company and its
subsidiaries contained in the Offering Memorandum.
(h) The Initial Purchasers shall have received an opinion,
dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchasers, of Xxxxxx & Xxxxxxx, counsel for the Initial
Purchasers, covering such matters as are customarily covered in such
opinions.
(i) Xxxxxx & Xxxxxxx shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 8 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any
of the representations, warranties or conditions herein contained.
(j) Prior to the Closing Date, the Company and the Guarantors
shall have furnished to the Initial Purchasers such further
information, certificates and documents as the Initial Purchasers may
reasonably request.
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(k) The Company, the Guarantors and the Trustee shall have
entered into the Indenture and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
(l) The Company, the Guarantors and the Initial Purchasers
shall have entered into the Registration Rights Agreement and the
Initial Purchasers shall have received counterparts, conformed as
executed, thereof.
(m) The Company and the Guarantors shall have entered into Tax
Allocation Agreements (as defined in the Offering Memorandum), in form
and substance reasonably satisfactory to the Initial Purchasers and
their counsel, and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(n) The Company shall have received all consents or waivers
required under the Senior Facility all in form and substance reasonably
satisfactory to the Initial Purchasers.
(o) The Company shall have received all consents required
under the Investor's Agreement dated as of November 30, 1998, as
amended, all in form and substance reasonably satisfactory to the
Initial Purchasers.
(p) The Company shall have received all consents or waivers
required, if any, under the iStar Loan (as defined in the "Description
of Notes" section of the Offering Memorandum), all in form and
substance reasonably satisfactory to the Initial Purchasers.
(q) The Company shall have entered into a subordination
agreement with respect to the Watermark Subordinated Debt as defined in
the "Description of Notes" section of the Offering Memorandum between
Watermark Communities Inc. ("WATERMARK") and The Bank of New York, in
form and substance reasonably satisfactory to the Initial Purchasers
and their counsel, and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(r) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any
notice have been given of any potential or intended downgrading,
suspension or withdrawal of, or of any review (or of any potential or
intended review) for a possible change that does not indicate the
direction of the possible change in, any rating of the Company or any
Guarantor or any securities of the Company or any Guarantor (including,
without limitation, the placing of any of the foregoing ratings on
credit watch with negative or developing implications or under review
with an uncertain direction) by any "nationally recognized statistical
rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended
change, in the outlook for any rating of the Company or any Guarantor
or any securities of the Company or any Guarantor by any such rating
organization and (iii) no such rating organization shall have given
notice that it has
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assigned (or is considering assigning) a lower rating to the Notes than
that on which the Notes were marketed.
(s) The Notes shall have been approved for trading on PORTAL.
(t) All opinions, certificates, letters and other documents
required by this Section 8 to be delivered by the Company and the
Guarantors will be in compliance with the provisions hereof only if
they are reasonably satisfactory in form and substance to the Initial
Purchasers. The Company and the Guarantors shall furnish the Initial
Purchasers with such conformed copies of such opinions, certificates,
letters and other documents as it shall reasonably request.
9 Initial Purchasers' Information. The Company and the Guarantors
acknowledge that the statements with respect to the offering of the Series A
Notes set forth in the fifth paragraph of the Section entitled "Plan of
Distribution" in the Offering Memorandum constitute the only information
relating to any of the Initial Purchasers furnished to the Company and the
Guarantors in writing by or on behalf of the Initial Purchasers expressly for
use in the Offering Memorandum.
10 Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchasers, the Company and
the Guarantors contained in this Agreement, including, but not limited to, the
agreements contained in Sections 4(f) and 11(d), the indemnity agreements
contained in Section 6 and the contribution agreements contained in Section 7,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Initial Purchasers, any controlling
person thereof, or by or on behalf of the Company, the Guarantors or any
controlling person thereof, and shall survive delivery of and payment for the
Series A Notes to and by the Initial Purchasers. The agreements contained in
Sections 4(f), 6, 7 and 11(d) shall survive the termination of this Agreement,
including any termination pursuant to Section 11.
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11 Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the
Company from the Initial Purchasers, without liability (other than with
respect to Sections 6 and 7) on the Initial Purchasers' part to the
Company or any of the Guarantors if, on or prior to such date, (i) the
Company or any of the Guarantors shall have failed, refused or been
unable to perform in any material respect any agreement on its part to
be performed hereunder, (ii) any other condition to the obligations of
the Initial Purchasers hereunder as provided in Section 8 is not
fulfilled when and as required in any material respect, (iii) in the
reasonable judgment of the Initial Purchasers, any material adverse
change shall have occurred since the respective dates as of which
information is given in the Offering Memorandum in the condition
(financial or otherwise), business, properties, assets, liabilities,
net worth, results of operations or cash flows of the Company and its
subsidiaries, taken as a whole, other than as set forth in the Offering
Memorandum, or (iv)(A) any domestic or international event or act or
occurrence has materially disrupted, or in the opinion of the Initial
Purchasers will in the immediate future materially disrupt, the market
for the Company's or any Guarantor's securities or for securities in
general; or (B) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for securities shall have
been required, on such exchange or the Nasdaq National Market, or by
such exchange or other regulatory body or governmental authority having
jurisdiction; or (C) a banking moratorium shall have been declared by
federal or state authorities, or a moratorium in foreign exchange
trading by major international banks or persons shall have been
declared; or (D) there is an outbreak or escalation of armed
hostilities involving the United States on or after the date hereof, or
if there has been a declaration by the United States of a national
emergency or war, the effect of which shall be, in the Initial
Purchasers' judgment, to make it inadvisable or impracticable to
proceed with the offering or delivery of the Series A Notes on the
terms and in the manner contemplated in the Offering Memorandum; or (E)
there shall have been such a material adverse change in general
economic, political or financial conditions or if the effect of
international conditions on the financial markets in the United States
shall be such as, in the Initial Purchasers' judgment, makes it
inadvisable or impracticable to proceed with the delivery of the Series
A Notes as contemplated hereby.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone or facsimile and, in either case, confirmed in
writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to clause (iv) of
Section 11(b) or Section 11(e), in which case each party will be
responsible for its own expenses), or if the sale of the Series A
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Notes provided for herein is not consummated because any condition to
the obligations of the Initial Purchasers set forth herein is not
satisfied or because of any refusal, inability or failure on the part
of the Company or any Guarantor to perform any agreement herein or
comply with any provision hereof, the Company and the Guarantors shall
reimburse the Initial Purchasers for all reasonable out-of-pocket
expenses (including the reasonable fees and expenses of the Initial
Purchasers' counsel), incurred by the Initial Purchasers in connection
herewith.
(e) If on the Closing Date any one or more of the Initial
Purchasers shall fail or refuse to purchase the Series A Notes which it
or they have agreed to purchase hereunder on such date and the
aggregate principal amount of the Series A Notes which such defaulting
Initial Purchaser or Initial Purchasers, as the case may be, agreed but
failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Series A Notes to be purchased on
such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated severally, in the proportion which the
principal amount of the Series A Notes set forth opposite its name in
Exhibit B bears to the aggregate principal amount of the Series A Notes
which all the non-defaulting Initial Purchasers, as the case may be,
have agreed to purchase, or in such other proportion as UBS may
specify, to purchase the Series A Notes which such defaulting Initial
Purchaser or Initial Purchasers, as the case may be, agreed but failed
or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of the Series A Notes which any Initial
Purchaser has agreed to purchase pursuant to Section 3 hereof be
increased pursuant to this Section 11 by an amount in excess of
one-ninth of such principal amount of the Series A Notes without the
written consent of such Initial Purchaser. If on the Closing Date any
Initial Purchaser or Initial Purchasers shall fail or refuse to
purchase the Series A Notes and the aggregate principal amount of the
Series A Notes with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of the Series A Notes to be
purchased by all Initial Purchasers and arrangements satisfactory to
the Initial Purchasers and the Company for purchase of such the Series
A Notes are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting
Initial Purchaser and the Company. In any such case which does not
result in termination of this Agreement, either UBS or the Company
shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in
the Offering Memorandum or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Initial Purchaser from liability in respect of any default
of any such Initial Purchaser under this Agreement.
12 Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, telecopied and confirmed in writing or
sent by a nationally recognized overnight courier service guaranteeing delivery
on the next business day to UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Finance Department, telecopy number: (000) 000-0000,
with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxxx Xxx, telecopy number: (000) 000-0000; and if sent
to the Company and the Guarantors, shall be mailed, delivered, telecopied and
confirmed in
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writing or sent by a nationally recognized overnight courier service
guaranteeing delivery on the next business day to WCI Communities, Inc. 00000
Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx Xxxxxxx, XX 00000, Attention: Chief
Financial Officer, telecopy number: (000) 000-0000, with a copy to Xxxxxxx
Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxx Xxxxx, telecopy number: (000) 000-0000.
13 Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Initial Purchasers, the Company, the Guarantors and
the controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, 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 a purchaser, in its capacity as
such, of Notes from the Initial Purchasers.
14 Construction. This Agreement and the rights and duties of the
parties hereunder shall be governed by, and construed in accordance with, the
law of the State of New York.
15 Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
16 Counterparts. This Agreement may be executed in various counterparts
which together shall constitute one and the same instrument.
[Signature page to follow]
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If the foregoing correctly sets forth the understanding among the
Initial Purchasers, the Company and the Guarantors please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
WCI COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
BAY COLONY-GATEWAY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
FINANCIAL RESOURCES GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
FIRST FIDELITY TITLE, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
S-1
34
FLORIDA LIFESTYLE MANAGEMENT COMPANY
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXXXXXXX NAPLES, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXXXXXXX ROAD, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
PANTHER DEVELOPMENTS, LLC
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
SUN CITY CENTER GOLF PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
S-2
35
SUN CITY CENTER REALTY, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
WATERMARK REALTY, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
WI ULTRACORP OF FLORIDA, INC.
By: /s/ Xxxxxx X. Page
----------------------------------------------
Name: Xxxxxx X. Page
Title: Vice President
THE COLONY AT PELICAN LANDING GOLF CLUB, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vie President
COMMUNITIES AMENITIES, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
S-3
36
COMMUNITIES HOME BUILDERS, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
GATEWAY COMMUNICATIONS SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
JYC HOLDINGS, INC.
By: /s/ Xxxxxx X. Page
----------------------------------------------
Name: Xxxxxx X. Page
Title: President
MARBELLA AT PELICAN BAY, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
PELICAN LANDING GOLF RESORT VENTURES, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
S-4
37
SARASOTA TOWER, INC.
By: /s/ Xxxxxx X. Page
----------------------------------------------
Name: Xxxxxx X. Page
Title: President
TARPON COVE YACHT & RACQUET CLUB, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
TIBURON GOLF VENTURES, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
WATERMARK POOLS, INC.
By: /s/ Xxxxxx XxXxxx
----------------------------------------------
Name: Xxxxxx XxXxxx
Title: Secretary
WATERMARK REALTY REFERRAL, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
S-5
38
WCI COMMUNITIES PROPERTY MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
WCI GOLF GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
WCI REALTY, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
BAY COLONY REALTY ASSOCIATES, INC.
By: /s/ Xxxxxx X Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
BAY COLONY OF NAPLES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
X-0
00
XXXXX XXXXX COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
CORAL RIDGE PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
CORAL RIDGE REALTY, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
CORAL RIDGE REALTY SALES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
FLORIDA DESIGN COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
S-7
40
FLORIDA NATIONAL PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
GATEWAY COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
GATEWAY REALTY SALES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
HERON BAY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
HERON BAY GOLF COURSE PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
X-0
00
XXXXXXX XXX PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
PELICAN LANDING COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
PELICAN LANDING PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
PELICAN XXXXX PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
TARPON COVE REALTY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
S-9
42
WCI HOMES, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Vice President
COMMUNITIES FINANCE COMPANY, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
S-10
43
Accepted and agreed to as of
the date first above written:
UBS WARBURG LLC
By: _________________________________
Name:
Title:
BEAR, XXXXXXX & CO. INC.
By: _________________________________
Name:
Title:
FLEET SECURITIES, INC.
By: _________________________________
Name:
Title:
S-11
44
EXHIBIT A
GUARANTORS
Bay Colony-Gateway, Inc.
Financial Resources Group, Inc.
First Fidelity Title, Inc.
Florida Lifestyle Management Company
Xxxxxxxxxx Naples, Inc.
Xxxxxxxxxx Road, Inc.
Panther Developments, LLC
Sun City Center Golf Properties, Inc.
Sun City Center Realty, Inc.
Watermark Realty, Inc.
WI Ultracorp of Florida, Inc.
The Colony at Pelican Landing Golf Club, Inc.
Communities Amenities, Inc.
Communities Home Builders, Inc.
Gateway Communications Services, Inc.
JYC Holdings, Inc.
Marbella at Pelican Bay, Inc.
Pelican Landing Golf Resort Ventures, Inc.
Sarasota Tower, Inc.
Tarpon Cove Yacht & Racquet Club, Inc.
Tiburon Golf Ventures, Inc.
Watermark Pools, Inc.
Watermark Realty Referral, Inc.
WCI Communities Property Management, Inc.
WCI Golf Group, Inc.
WCI Realty, Inc.
Bay Colony Realty Associates, Inc.
Bay Colony of Naples, Inc.
Coral Ridge Communities, Inc.
Coral Ridge Properties, Inc.
Coral Ridge Realty, Inc.
Coral Ridge Realty Sales, Inc.
Florida Design Communities, Inc. (fka WCI Lifestyles Realty, Inc.)
Florida National Properties, Inc.
Gateway Communities, Inc.
Gateway Realty Sales, Inc.
Heron Bay, Inc.
Heron Bay Golf Course Properties, Inc.
Pelican Bay Properties, Inc.
Pelican Landing Communities, Inc.
Pelican Landing Properties, Inc.
Pelican Xxxxx Properties, Inc.
Tarpon Cove Realty, Inc.
WCI Homes, Inc.
Communities Finance Company, LLC
A-1
45
EXHIBIT B
Initial Purchasers Principal Amount
------------------ of Notes
--------
UBS Warburg LLC...................................................... $170,000,000
Bear, Xxxxxxx & Co. Inc.............................................. 40,000,000
Fleet Securities, Inc................................................ 40,000,000
------------
Total................................................................ $250,000,000
============
B-1
46
EXHIBIT C
WHOLLY-OWNED SUBSIDIARIES OF WCI COMMUNITIES, INC.
Bay Colony-Gateway, Inc.
Financial Resources Group, Inc.
First Fidelity Title, Inc.
Florida Lifestyle Management Company
Xxxxxxxxxx Naples, Inc.
Xxxxxxxxxx Road, Inc.
Panther Developments, LLC
Sun City Center Golf Properties, Inc.
Sun City Center Realty, Inc.
Watermark Realty, Inc.
WI Ultracorp of Florida, Inc.
WHOLLY-OWNED SUBSIDIARIES OF BAY COLONY-GATEWAY, INC.
Bay Colony Realty Associates, Inc.
Bay Colony of Naples, Inc.
The Colony at Pelican Landing Golf Club, Inc.
Communities Amenities, Inc.
Communities Finance Company, LLC
Communities Home Builders, Inc.
Coral Ridge Communities, Inc.
Coral Ridge Properties, Inc.
Coral Ridge Realty, Inc.
Coral Ridge Realty Sales, Inc.
Florida Design Communities, Inc.
Florida National Properties, Inc.
Gateway Communities, Inc.
Gateway Communications Services, Inc.
Gateway Realty Sales, Inc.
Heron Bay, Inc.
Heron Bay Golf Course Properties, Inc.
JYC Holdings, Inc.
Marbella at Pelican Bay, Inc.
Pelican Bay Properties, Inc.
Pelican Landing Communities, Inc.
Pelican Landing Golf Resort Ventures, Inc.
Pelican Landing Properties, Inc.
Pelican Xxxxx Properties, Inc.
Sarasota Tower, Inc.
Tarpon Cove Realty, Inc.
Tarpon Cove Yacht & Racquet Club, Inc.
Tiburon Golf Ventures, Inc.
Watermark Realty Referral, Inc.
WCI Communities Property Management, Inc.
WCI Golf Group, Inc.
C-1
47
WCI Homes, Inc.
WCI Realty, Inc.
Wildcat Run of Xxx County, Inc.
Notes:
-----
* Not-for-profit homeowner associations and clubs are not included in this list.
JOINT VENTURES AND PARTNERSHIP INTERESTS
Bighorn Development, L.P.
Gateway / Xxxxx Communications, Ltd.
*Xxxxxx Estates at Tiburon, Inc., the General Partner of Xxxxxx Estates
at Tiburon Limited Partnership, is owned 50/50 by Bay Colony-Gateway,
Inc. and Medallist Operations, Inc.
Xxxxxx Estates at Tiburon Limited Partnership
Pelican Isle Yacht Club Partners, Ltd.
Pelican Landing Golf Resort Venture Limited Partnership
Pelican Landing Timeshare Ventures Limited Partnership
Tiburon Golf Venture Limited Partnership
Xxxxxx Xxxxx Business Center, Ltd.
C-2
48
EXHIBIT E
Form of Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
X-0
00
XXXXXXX X
Form of Opinion of Xxxxxxxx & Xxxxxxx
F-1
50
EXHIBIT G
Form of Opinion of Xxxxxx Xxxxxxxx, Esq.
F-2
