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EXHIBIT 1.1
UNITED INVESTORS REALTY TRUST
(A TEXAS REAL ESTATE INVESTMENT TRUST)
COMMON SHARES OF BENEFICIAL INTEREST
UNDERWRITING AGREEMENT
DATED: , 1998
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UNITED INVESTORS REALTY TRUST
UNDERWRITING AGREEMENT
XXXXXX XXXXXX & COMPANY, INC.
XXXX XXXXXXXX, INC.
XXXXX & XXXXXXXXXXXX, INC.
SOUTHWEST SECURITIES, INC.
As Representatives of the Several
Underwriters Named in Schedule A hereto
c/o Xxxxxx Xxxxxx & Company, Inc.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
United Investors Realty Trust, a Texas real estate investment trust
(the "Company"), proposes to issue and sell to the underwriters named in
Schedule A (collectively, the "Underwriters") an aggregate of 7,600,000 common
shares (collectively, the "Firm Shares") of beneficial interest, no par value
per share (the "Common Shares"), of the Company. The Firm Shares are to be
sold to each Underwriter, acting severally and not jointly, in such amounts as
are set forth in Schedule A opposite the name of such Underwriter.
The Company also grants to the Underwriters, severally and not
jointly, the option described in Section 2 to purchase, on the same terms as
the Firm Shares, up to 1,140,000 additional Common Shares (collectively, the
"Option Shares") solely to cover over-allotments. The number of Option Shares
to be purchased by each Underwriter shall be the same percentage of the total
number of Option Shares to be purchased by the several Underwriters as such
Underwriter is purchasing of the Firm Shares, subject to such adjustments as
the Representatives in their absolute discretion shall make to eliminate any
fractional shares. The Firm Shares, together with all or any part of the
Option Shares, are collectively herein called the "Shares."
Section 1. Representations and Warranties of the Company. The
Company represents and warrants to and agrees with each of the Underwriters
that:
(a) A registration statement on Form S-11 (File No.
333-29475) with respect to the Shares, including a preliminary form of
prospectus, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "1933
Act"), and the applicable rules and regulations (the "1933 Act
Regulations") of the Securities and Exchange Commission (the
"Commission"), and has been filed with the Commission; and such
amendments to such registration statement as may have been required
prior to the date hereof have been filed with the Commission, and such
amendments have been similarly prepared. Copies of such registration
statement and amendment or amendments and of each related preliminary
prospectus, and the exhibits, financial statements and schedules, as
finally amended and revised, have been delivered to you. The Company
has prepared in the same manner, and proposes so to file with the
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Commission, one of the following: (i) prior to effectiveness of such
registration statement, a further amendment thereto, including the
form of final prospectus, (ii) if the Company does not rely on Rule
434 of the 1933 Act, a final prospectus in accordance with Rules 430A
and 424(b) of the 1933 Act Regulations or, (iii) if the Company relies
on Rule 434 of the 1933 Act Regulations, a term sheet relating to the
Shares that shall identify the preliminary prospectus that it
supplements containing such information as is required or permitted by
Rules 434, 430A and 424(b) of the 1933 Act Regulations. The Company
also may file a related registration statement with the Commission
pursuant to Rule 462(b) of the 1933 Act Regulations for the purpose of
registering certain additional Common Shares, which registration
statement will be effective upon filing with the Commission. As
filed, such amendment, any registration statement filed pursuant to
Rule 462(b) of the 1933 Act Regulations and any term sheet and form of
final prospectus, or such final prospectus, shall include all Rule
430A Information (as defined below) and, except to the extent that you
shall agree in writing to a modification, shall be in all respects in
the form furnished to you prior to the date and time that this
Agreement was executed and delivered by the parties hereto, or, to the
extent not completed at such date and time, shall contain only such
specific additional information and other changes (beyond that
contained in the latest preliminary prospectus) as the Company shall
have previously advised you in writing would be included or made
therein.
The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration
statement becomes effective and, in the event any post-effective
amendment thereto becomes effective prior to the Closing Time (as
hereinafter defined), shall also mean such registration statement as
so amended; provided, however, that such term shall also include all
Rule 430A Information contained in any Prospectus and any Term Sheet
(as hereinafter defined) and deemed to be included in such
registration statement at the time such registration statement becomes
effective as provided by Rule 430A of the 1933 Act Regulations. The
term "Preliminary Prospectus" as used in this Agreement shall mean any
preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the
time it becomes effective that omits Rule 430A Information. The term
"Prospectus" as used in this Agreement shall mean, (a) if the Company
relies on Rule 434 of the 1933 Act Regulations, the Term Sheet
relating to the Shares that is first filed pursuant to Rule 424(b)(7)
of the 1933 Act Regulations, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements or, (b) if the
Company does not rely on Rule 434 of the 1933 Act Regulations, the
prospectus relating to the Shares in the form in which it is first
filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations or, if no filing pursuant to Rule 424(b) of the 1933 Act
Regulations is required, shall mean the form of final prospectus
included in the Registration Statement at the time such Registration
Statement becomes effective. The term "Rule 430A Information" as used
in this Agreement shall mean information with respect to the Shares
and the offering thereof permitted pursuant to Rule 430A of the 1933
Act Regulations to be omitted from the Registration Statement when it
becomes effective. The term "462(b) Registration Statement" as used
in this Agreement shall mean any registration statement filed with the
Commission pursuant to Rule 462(b) of the 1933 Act Regulations
(including the Registration Statement and any Preliminary Prospectus
or
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Prospectus incorporated therein at the time such registration
statement becomes effective). The term "Term Sheet" as used in this
Agreement shall mean any term sheet that satisfies the requirements of
Rule 434 of the 1933 Act Regulations. Any reference to the "date" of
a Prospectus that includes a Term Sheet shall mean the date of such
Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any 462(b) Registration Statement, any
Preliminary Prospectus, the Prospectus, any Term Sheet or any
amendment or supplement to the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data
Gathering Analysis and Retrieval system ("XXXXX").
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and no
proceedings for that purpose have been instituted or, to the knowledge
of the Company, threatened by the Commission or the state securities
or blue sky authority of any jurisdiction, and each Preliminary
Prospectus and any amendment or supplement thereto, at the time of
filing thereof, conformed in all material respects to the requirements
of the 1933 Act and the 1933 Act Regulations, and did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter expressly for use in the Registration Statement, any
462(b) Registration Statement, any Preliminary Prospectus or the
Prospectus. Each Preliminary Prospectus delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(c) When the Registration Statement and any 462(b)
Registration Statement shall become effective, or any Term Sheet that
is part of the Prospectus is filed with the Commission pursuant to
Rule 434 of the 1933 Act Regulations, when the Prospectus is first
filed pursuant to Rule 424(b) of the 1933 Act Regulations, when any
amendment to the Registration Statement or any 462(b) Registration
Statement becomes effective, and when any supplement to the Prospectus
or any Term Sheet is filed with the Commission and at the Closing Time
and Date of Delivery (as hereinafter defined), (i) the Registration
Statement, the 462(b) Registration Statement, the Prospectus, the Term
Sheet and any amendments thereof and supplements thereto will conform
in all material respects with the applicable requirements of the 1933
Act and the 1933 Act Regulations, and (ii) neither the Registration
Statement, the 462(b) Registration Statement, the Prospectus, any Term
Sheet nor any amendment or supplement thereto will contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter expressly for use in the Registration
Statement, any 462(b) Registration Statement, any Preliminary
Prospectus or the Prospectus. The Prospectus delivered to the
Underwriters for use in connection with this offering was identical to
the electronically
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transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(d) The Company has been duly organized and is validly
existing as a real estate investment trust under the laws of the state
of Texas, with all requisite power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus. The Company is duly
qualified to transact business and is in good standing in each of the
jurisdictions in which the ownership or leasing of its properties or
the nature or conduct of its business as described in the Registration
Statement and the Prospectus requires such qualification, except where
the failure to do so would not have a material adverse effect on the
condition (financial or other), business, properties, net worth or
results of operations of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole (a "Material Adverse Effect").
(e) All of the Company's subsidiaries are named on an
exhibit to the Registration Statement (each a "Subsidiary" and
collectively the "Subsidiaries"). Each of the Subsidiaries has been
duly organized and is validly existing and in good standing under the
laws of the state of its organization, with all requisite power and
authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and the
Prospectus. Each such entity is duly qualified to do business and is
in good standing in each other jurisdiction in which the ownership or
leasing of its properties or the nature or conduct of its business as
described in the Registration Statement and the Prospectus requires
such qualification, except where the failure to do so would not have a
Material Adverse Effect.
(f) The Company has full right, power and authority to
enter into this Agreement, to issue, sell and deliver the Shares as
provided herein and to consummate the transactions contemplated
herein. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement
of the Company, enforceable in accordance with its terms, except to
the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other laws of general
applicability relating to or affecting creditors' rights, or by
general principles of equity whether considered at law or at equity
and except to the extent enforcement of the indemnification provisions
set forth in Section 6 of this Agreement may be limited by federal or
state securities laws or the public policy underlying such laws
(collectively, the "Remedies Exceptions").
(g) Each consent, approval, authorization, order,
license, certificate, permit, registration, designation or filing by
or with any governmental agency or body necessary for the valid
authorization, issuance, sale and delivery of the Shares, the
execution, delivery and performance of this Agreement and the
consummation by the Company of the transactions contemplated hereby
has been made or obtained and is in full force and effect, except as
may be required under applicable state securities laws.
(h) Neither the issuance, sale and delivery by the
Company of the Shares, nor the execution, delivery and performance of
this Agreement, nor the consummation of the
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transactions contemplated hereby will conflict with or result in a
breach or violation of any of the terms and provisions of, or (with or
without the giving of notice or the passage of time or both)
constitute a default under, the organizational documents or bylaws of
the Company or any of the Subsidiaries, or under any indenture,
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or to which the Company or any of the
Subsidiaries or any of their respective properties or other assets is
subject; or any applicable statute, judgment, decree, order, rule or
regulation of any court or governmental agency or body applicable to
any of the foregoing or any of their respective properties; or result
in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or any of the
Subsidiaries.
(i) The Shares to be issued and sold to the Underwriters
hereunder have been validly authorized by the Company. When issued
and delivered against payment therefor as provided in this Agreement,
the Shares will be duly and validly issued, fully paid and
nonassessable. Upon payment of the purchase price and delivery of the
Shares in accordance herewith, each of the Underwriters will receive
good, valid and marketable title to the Shares, free and clear of all
liens, security interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting trusts, equities or claims of any
nature whatsoever. No preemptive rights of shareholders exist with
respect to any of the Shares which have not been satisfied or waived.
No person or entity holds a right to require or participate in the
registration under the 1933 Act of the Shares pursuant to the
Registration Statement which has not been satisfied or waived; and,
except as set forth in the Prospectus, no person holds a right to
require registration under the 1933 Act of any Common Shares of the
Company at any other time which has not been satisfied or waived.
(j) The Company's authorized, issued and outstanding
shares of beneficial interest are as disclosed in the Prospectus. All
of the issued shares of beneficial interest of the Company have been
duly authorized and validly issued, are fully paid and nonassessable
and conform to the description of the Company's shares of beneficial
interest contained in the Prospectus. No shares of beneficial
interest of the Company are reserved for any purpose except for Common
Shares reserved for issuance upon conversion of the Company's
outstanding 9% redeemable convertible subordinated notes, Common
Shares reserved for issuance upon conversion of the Company's 9%
redeemable preferred shares of beneficial interest, and Common Shares
reserved for issuance pursuant to the Company's incentive compensation
plan, in each case as described in the Prospectus, and, except for
such reserved shares, no person has any right or option to acquire any
shares of beneficial interest of the Company.
(k) All of the issued shares of capital stock or other
ownership interests of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and
are owned directly, or indirectly through another Subsidiary, by the
Company (in the amounts described in the Prospectus), free and clear
of all liens, security interests, pledges, charges, encumbrances,
defects, shareholders' agreements, voting trusts, equities or claims
of any nature whatsoever. No shares of capital stock or other
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ownership interests of any Subsidiary are reserved for any purpose,
and no person has any right or option to acquire any such shares or
other ownership interests. Other than the Subsidiaries and as
described in the Prospectus, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any other
corporation or any ownership interest in any partnership, joint
venture or other association.
(l) Except as disclosed in the Prospectus, there are no
outstanding (i) securities or obligations of the Company or any of the
Subsidiaries convertible into or exchangeable for any shares of
beneficial interest of the Company or capital stock or other ownership
interests of any such Subsidiary, (ii) warrants, rights or options to
subscribe for or purchase from the Company any shares of beneficial
interest or from any such Subsidiary any such capital stock or other
ownership interests or any such convertible or exchangeable securities
or obligations, or (iii) obligations of the Company to issue any
shares of beneficial interest or of any such Subsidiary to issue any
shares of capital stock or other ownership interests, any such
convertible or exchangeable securities or obligation, or any such
warrants, rights or options. None of the outstanding shares of
beneficial interest or other securities of the Company or any
Subsidiary were issued in violation of the 1933 Act, or any other
federal, state, local, municipal, foreign, international,
multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty
(each, a "Legal Requirement"). Based upon the opinion of Xxxxx,
Xxxxxxx & Xxxxxxxx, P.C., dated February 23, 1998, and addressed to
the Company and the Underwriters, a signed original copy of which has
been delivered to the Underwriters, the Company believes that the
distributions by the Company to its shareholders of shares of capital
stock of Ivy Realty Trust, an affiliate of the Company ("Ivy"), did
not violate the 1933 Act (as interpreted in Staff Legal Bulletin No. 4
issued by the Division of Corporation Finance of the Securities and
Exchange Commission) or any other Legal Requirement.
(m) The Company and the Subsidiaries have and, upon
completion of the acquisition of Town 'N Country Plaza, will have good
and indefeasible title in fee simple to all real property and good
title to all personal property owned by them, in each case free and
clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are disclosed in
the Prospectus or such as do not materially and adversely affect the
value of such property and do not interfere with the use made or
proposed to be made of such property by the Company and the
Subsidiaries; and any real property and buildings held under lease by
the Company or any Subsidiary are held under valid, existing and
enforceable leases, except to the extent that enforceability may be
limited by the Remedies Exceptions, with such exceptions as are
disclosed in the Prospectus or are not material and do not interfere
with the use made or proposed to be made of such property and
buildings by the Company or such Subsidiary. No person has an option
or right of first refusal to purchase all or part of any property held
and, upon completion of the acquisition of Town 'N Country Plaza, to
be held by the Company or any Subsidiary or any interest therein.
Each of the properties held and, upon completion of the acquisition
of Town 'N Country Plaza, to be held by the Company and the
Subsidiaries complies with all applicable codes, laws and regulations
(including, without limitation, building and zoning codes, laws and
regulations and laws relating to access to
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such properties), except if and to the extent disclosed in the
Prospectus and except for such failures to comply that would not,
individually or in the aggregate, have a Material Adverse Effect. The
Company has no knowledge of any pending or threatened condemnation
proceedings, zoning change, or other proceeding or action that will in
any manner affect the size of, use of, improvements on, construction
on or access to such properties, except such proceedings or actions
that would not, either individually or in the aggregate, have a
Material Adverse Effect. Except as described in the Prospectus, none
of the Company, any Subsidiary, any third party seller or tenant of
any of the properties held and, upon completion of the acquisition of
Town 'N Country Plaza, to be held by the Company or any Subsidiary is
in default under any of the leases pursuant to which the Company or
any Subsidiary, as lessor, leases such property (and the Company has
no knowledge of any event which, but for the passage of time or the
giving of notice, or both, would constitute a default under any of
such leases) other than such defaults that would not, either
individually or in the aggregate, have a Material Adverse Effect.
(n) Except as disclosed in the Prospectus, (A) each
property held and, upon completion of the acquisition of Town 'N
Country Plaza, to be held by the Company and the Subsidiaries,
including, without limitation, the Environment (as defined below)
associated with such property, is free of any Hazardous Substance (as
defined below), except for Hazardous Substances that would not have a
Material Adverse Effect, (B) none of the Company or any Subsidiary has
caused or suffered to occur any Release (as defined below) of any
Hazardous Substance into the Environment on, in, under or from any
such property, and no condition exists on, in, under or, to the
knowledge of the Company, adjacent to any such property that could
result in the incurrence of material liabilities or any material
violations of any Environmental Law (as defined below), give rise to
the imposition of any Lien (as defined below) under any Environmental
Law, or cause or constitute a health, safety or environmental hazard
to any property, person or entity; (C) none of the Company or any
Subsidiary is engaged in or intends to engage in any manufacturing or
any other operations at such properties that (1) require the use,
handling, transportation, storage, treatment or disposal of any
Hazardous Substance or (2) require permits or are otherwise regulated
pursuant to any Environmental Law; (D) none of the Company or any
Subsidiary has received any notice of a claim under or pursuant to any
Environmental Law or under common law pertaining to Hazardous
Substances on or originating from any such property; (E) none of the
Company or any Subsidiary has received any notice from any
Governmental Authority (as defined below) claiming any violation of
any Environmental Law; (F) no such property is included or, to the
knowledge of the Company or any Subsidiary, proposed for inclusion on
the National Priorities List issued pursuant to CERCLA (as defined
below) by the United States Environmental Protection Agency (the
"EPA") or on the Comprehensive Environmental Response, Compensation,
and Liability Information System database maintained by the EPA, and
has not otherwise been identified by the EPA as a potential CERCLA
removal, remedial or response site or included or, to the knowledge of
the Company or any Subsidiary, proposed for inclusion on, any similar
list of potentially contaminated sites pursuant to any other
Environmental Law and (G) there are no underground storage tanks
located on or in any such property.
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As used herein, "Hazardous Substance" shall include, without
limitation, any hazardous substance, hazardous waste, toxic or
dangerous substance, pollutant, solid waste or similarly designated
materials, including, without limitations oil, petroleum or any
petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCBs, pesticides, explosives, radioactive materials,
dioxins, urea formaldehyde insulation or any constituent of any such
substance, pollutant or waste, including any such substance, pollutant
or waste identified or regulated under any Environmental Law
(including, without limitation, materials listed in the United States
Department of Transportation Optional Hazardous Material Table, 49
C.F.R. Section 172.101, as the same may now or hereafter be amended,
or in the EPA's List of Hazardous Substances and Reportable
Quantities, 40 C.F.R. Part 302, as the same may now or hereafter be
amended); "Environment" shall mean any surface water, drinking water,
ground water, land surface, subsurface strata, river sediment,
buildings, structures, and ambient, workplace and indoor air;
"Environmental Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Section 9601 et seq.) ("CERCLA"), the Resource Conservation
and Recovery Act of 1976, as amended (42 U.S.C. Section 6901, et
seq.), the Clean Air Act, as amended (42 U.S.C. Section 7401, et
seq.), the Clean Water Act, as amended (33 U.S.C. Section 1251, et
seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section
2601, et seq.), the Occupational Safety and Health Act of 1970, as
amended (29 U.S.C. Section 651, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), and
all other federal, state and local laws, ordinances, regulations,
rules, orders, decisions and permits relating to the protection of the
environment or of human health from environmental effects;
"Governmental Authority" shall mean any federal, state or local
governmental office, agency or authority having the duty or authority
to promulgate, implement or enforce any Environmental Law, "Lien"
shall mean, with respect to any property held by the Company or any
Subsidiary, any mortgage, deed of trust, pledge, security interest,
lien, encumbrance, penalty, fine, charge, assessment, judgment or
other liability in, on or affecting such property, and "Release" shall
mean any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, emanating or
disposing of any Hazardous Substance into the Environment, including,
without limitations the abandonment or discard of barrels, containers,
tanks (including, without limitation, underground storage tanks) or
other receptacles containing or previously containing any Hazardous
Substance or any release, emission, discharge or similar term, as
those terms are defined or used in any Environmental Law.
(o) The financial statements of the Company and its
consolidated Subsidiaries included in the Registration Statement and
Prospectus present fairly the financial position of the Company and
its consolidated Subsidiaries as of the dates indicated and the
results of operations and cash flows for the Company and its
consolidated Subsidiaries for the periods specified, all in conformity
with generally accepted accounting principles applied on a consistent
basis. The financial statement schedules included in the Registration
Statement and the amounts in the Prospectus under the captions
"Prospectus Summary -- Summary Financial Data" and "Selected Pro Forma
and Historical Financial and Properties Information" fairly present
the information shown therein and have been compiled on a basis
consistent with the financial statements included in the Registration
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Statement and the Prospectus. The unaudited pro forma financial
information (including the related notes) included in the Prospectus
or any Preliminary Prospectus complies as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations, and management of the Company believes
that the assumptions underlying the pro forma adjustments are
reasonable. Such pro forma adjustments have been properly applied to
the historical amounts in the compilation of the information and such
information fairly presents, with respect to the Company and the
Subsidiaries, the financial position, results of operations and other
information purported to be shown therein at the respective dates and
for the respective periods specified. No other financial statements
or schedules of the Company and its consolidated Subsidiaries are
required to be included in the Registration Statement or Prospectus.
Except as reflected or disclosed in the financial statements included
in the Registration Statement and the Prospectus, or otherwise set
forth in the Prospectus, neither the Company nor any of the
Subsidiaries are subject to any material indebtedness, obligation or
liability, contingent or otherwise.
(p) Ernst & Young LLP, who have examined and are
reporting upon the audited financial statements and schedules included
in the Registration Statement, are, and were during the periods
covered by their reports included in the Registration Statement and
the Prospectus, independent public accountants within the meaning of
the 1933 Act and the rules and regulations of the Commission
thereunder.
(q) None of the Company or the Subsidiaries has
sustained, since December 31, 1997, any material loss or interference
with its business from fire, explosion, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor
dispute or arbitrators' or court or governmental action, order or
decree; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
otherwise stated in the Registration Statement and Prospectus, there
has not been (i) any material change in the shares of beneficial
interest, long-term debt, obligations under capital leases or
short-term borrowings of the Company or the Subsidiaries, (ii) any
repurchase of shares of beneficial interest of the Company by the
Company or any declaration or payment of any dividend or distribution
of any kind on its shares of beneficial interest, or (iii) any
material adverse change, or any development which could reasonably be
expected to have a Material Adverse Effect.
(r) Neither the Company nor any of the Subsidiaries is in
violation of its respective organizational documents or bylaws, and no
default exists, and no event has occurred, nor state of facts exists,
which, with notice or after the lapse of time to cure or both, would
constitute a default in the due performance and observance of any
obligation, agreement, term, covenant, consideration or condition
contained in any indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which any such entity
is a party or to which any such entity or any of its properties is
subject which could reasonably be expected to have a Material Adverse
Effect. None of the Company or the Subsidiaries is in violation of,
or in default with respect to, any statute, rule, regulation, order,
judgment or decree, except as may be properly described
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in the Prospectus or such as individually or in the aggregate do not
now have and will not in the future have a Material Adverse Effect.
(s) There is not pending or, to the knowledge of the
Company, threatened any action, suit, proceeding, inquiry or
investigation against the Company, any of the Subsidiaries or any of
their respective officers and trust managers or directors or to which
the properties, assets or rights of any such entity or Town 'N Country
Plaza are subject, before or brought by any court or governmental
agency or body or board of arbitrators that is required to be
described in the Registration Statement or the Prospectus but is not
described as required or that, considered in the aggregate, is
material to the business, prospects, properties, assets, results of
operations or condition (financial or other) of the Company or the
Subsidiaries.
(t) The descriptions in the Registration Statement and
the Prospectus of the contracts, leases and other legal documents
therein described present fairly the information required to be shown,
and there are no contracts, leases, or other documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
which are not described or filed as required.
(u) No labor dispute with the employees of the Company or
any Subsidiary exists or, to the knowledge of the Company, is
imminent.
(v) The Company and each of the Subsidiaries owns,
possesses or has obtained all material permits, licenses, franchises,
certificates, consents, orders, approvals and other authorizations of
governmental or regulatory authorities or other entities as are
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as presently conducted, or as
contemplated in the Prospectus to be conducted, and neither the
Company nor any Subsidiary has received any notice of proceedings
relating to revocation or modification of any such licenses, permits,
franchises, certificates, consents, orders, approvals or
authorizations.
(w) The Company owns or possesses adequate license or
other rights to use all patents, trademarks, service marks, trade
names, copyrights, software and design licenses, trade secrets,
manufacturing processes, other intangible property rights and know-how
(collectively "Intangibles") necessary to entitle the Company to
conduct its business as described in the Prospectus, and the Company
has not received notice of infringement of or conflict with (and knows
of no such infringement of or conflict with) asserted rights of others
with respect to any Intangibles which could have a Material Adverse
Effect.
(x) Each of the Company's and the Subsidiaries'
respective systems of internal accounting controls taken as a whole is
sufficient to meet the broad objectives of internal accounting control
insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts that would be material in relation
to the Company's or the Subsidiaries' financial statements; and none
of the Company, the Subsidiaries, or any employee or agent thereof,
has made any payment of funds of the Company or the Subsidiaries, or
received or retained any funds and no funds of the Company or the
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Subsidiaries, have been set aside to be used for any payment, in each
case in violation of any law, rule or regulation.
(y) Each of the Company and the Subsidiaries has filed on
a timely basis all necessary federal, state, local and foreign income
and franchise tax returns required to be filed through the date hereof
and have paid all taxes shown as due thereon; and no tax deficiency
has been asserted against any such entity, nor does any such entity
know of any tax deficiency which is likely to be asserted against any
such entity which if determined adversely to any such entity, could
have a Material Adverse Effect. All tax liabilities are adequately
provided for on the respective books of such entities.
(z) Each of the Company and the Subsidiaries maintain
insurance (issued by insurers of recognized financial responsibility)
of the types and in the amounts generally deemed adequate for their
respective businesses and consistent with insurance coverage
maintained by similar companies in similar businesses, including, but
not limited to, insurance covering real and personal property owned or
leased and, upon completion of the acquisition of Town 'N Country
Plaza, to be owned by the Company and its Subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect.
(aa) Each of the Company, the Subsidiaries, and their
officers, trust managers or directors or affiliates has not taken and
will not take, directly or indirectly, any action designed to, or that
might reasonably be expected to, cause or result in or constitute the
stabilization or manipulation of any security of the Company or to
facilitate the sale or resale of the Shares.
(ab) The Company is not, will not become as a result of
the transactions contemplated hereby, or will not conduct its
respective businesses in a manner in which the Company would become,
"an investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended.
(ac) None of the Subsidiaries currently is prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such Subsidiary's capital stock or
other ownership interests, from repaying to the Company any loans or
advances to such Subsidiary from the Company or from transferring any
of such Subsidiary's property or assets to the Company or any of the
other Subsidiaries, except as disclosed in the Prospectus.
(ad) The Company has been organized in conformity with the
requirements for qualification as a real estate investment trust
("REIT") for federal income tax purposes for the taxable year ended
December 31, 1989, and has continued to satisfy the requirements for
qualification as a REIT through the date hereof, and its anticipated
investments and its plan of operation (which plan includes complying
with all of the REIT requirements described in the Prospectus) will
enable it to continue to satisfy the requirements for qualification as
a REIT for federal income tax purposes.
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(ae) The Company has complied in all material respects
with all provisions of Article 6138A of the Texas Revised Civil
Statutes Annotated.
(af) The Common Shares have been approved for inclusion on
the Nasdaq National Market System, subject to notice of issuance.
(ag) The Advisory Agreement, as amended effective as of
June 9, 1997, between the Company and FCA Corp is in full force and
effect and is enforceable in accordance with its terms, except to the
extent that enforceability may be limited by the Remedies Exceptions.
(ah) The Option Agreement dated October 15, 1997 and
amended by letter dated November 25, 1997 between the Company and Town
'N Country Plaza of Tampa, Ltd. constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by the
Remedies Exceptions.
Section 2. Sale and Delivery of the Shares to the Underwriters;
Closing.
(a) On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the
Underwriters the Firm Shares, and each Underwriter agrees, severally
and not jointly, to purchase from the Company the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule A
(the proportion which each Underwriter's share of the total number of
the Firm Shares bears to the total number of Firm Shares is
hereinafter referred to as such Underwriter's "underwriting obligation
proportion"), at a purchase price of $____________ per share.
(b) In addition, on the basis of the representations and
warranties herein contained, and subject to the terms and conditions
herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an
additional 1,140,000 Option Shares at the same purchase price as shall
be applicable to the Firm Shares, less an amount per share equal to
any dividends or distributions declared by the Company and payable on
the Firm Shares but not payable on the Option Shares. The option
hereby granted will expire if not exercised within the thirty (30) day
period after the date of the Prospectus by giving written notice to
the Company. The option granted hereby may be exercised in whole or
in part, only for the purpose of covering over-allotments that may be
made in connection with the offering and distribution of the Firm
Shares. The notice of exercise shall set forth the number of Option
Shares as to which the several Underwriters are exercising the option,
and the time and date of payment and delivery thereof. Such time and
date of delivery (the "Date of Delivery") shall be determined by you
but shall not be later than three full business days after the
exercise of such option, nor in any event prior to the Closing Time.
If the option is exercised as to all or any portion of the Option
Shares, the Option Shares as to which the
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option is exercised shall be purchased by the Underwriters, severally
and not jointly, in their respective underwriting obligation
proportions.
(c) Payment of the purchase price for and delivery of
certificates in definitive form representing the Firm Shares shall be
made at the offices of Xxxxxx Xxxxxx & Company, Inc., 00 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxx 00000 or at such other place as shall be agreed upon
by the Company and you, at 10:00 a.m. on the third (fourth, if the
pricing occurs after 4:30 p.m. on any given day) full business day
after the execution of this Agreement (unless postponed pursuant to
the terms hereof), or such other time not later than ten business days
after such date as shall be agreed upon by you and the Company (such
date and time of payment and delivery being herein called the "Closing
Time"). In addition, in the event that any or all of the Option Shares
are purchased by the Underwriters, payment of the purchase price for
and delivery of certificates in definitive form representing the Option
Shares shall be made at the offices of Xxxxxx Xxxxxx & Company, Inc. in
the manner set forth above, or at such other place as the Company and
you shall determine, on the Date of Delivery as specified in the notice
from you to the Company. Payment for the Firm Shares and the Option
Shares shall be made to the Company by wire transfer in same-day funds
to the accounts designated to the Underwriters in writing by the
Company against delivery to you for the respective accounts of the
Underwriters of the Shares to be purchased by them. It is understood
that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Firm Shares and the Option Shares, if any,
which it has agreed to purchase. Each of the Representatives,
individually and not as representatives of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the
Firm Shares or the Option Shares, if any, to be purchased by any
Underwriter whose funds have not been received by the Closing Time or
the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) The certificates representing the Shares to be
purchased by the Underwriters shall be in such denominations and
registered in such names as you may request in writing at least two
full business days before the Closing Time or the Date of Delivery, as
the case may be. The certificates representing the Shares will be made
available at the offices of Xxxxxx Xxxxxx & Company, Inc. or at such
other place as Xxxxxx Xxxxxx & Company, Inc. may designate for
examination and packaging not later than 10:00 a.m. at least one full
business day prior to the Closing Time or the Date of Delivery, as the
case may be.
(e) After the Registration Statement becomes effective,
you intend to offer the Shares to the public as set forth in the
Prospectus, but after the initial public offering of such Shares you
may in your discretion vary the public offering price.
Section 3. Certain Covenants of the Company. The Company
covenants and agrees with each Underwriter as follows:
(a) The Company will use its best efforts to cause the
Registration Statement to become effective (if not yet effective at
the date and time that this Agreement is
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executed and delivered by the parties hereto). If the Company elects
to rely upon Rule 430A of the 1933 Act Regulations or the filing of
the Prospectus is otherwise required under Rule 424(b) of the 1933 Act
Regulations, the Company will comply with the requirements of Rule
430A and will file the Prospectus, properly completed, pursuant to the
applicable provisions of Rule 424(b), or a Term Sheet pursuant to and
in accordance with Rule 434, within the time period prescribed. If
the Company elects to rely upon Rule 462(b), the Company shall file a
462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to
the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such
fee. The Company will notify you immediately, and confirm the notice
in writing (or provide you with a copy of any correspondence from the
Commission), (i) when the Registration Statement, 462(b) Registration
Statement or any post-effective amendment to the Registration
Statement, shall have become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of
the receipt of any comments from the Commission, (iii) of any request
by the Commission to amend the Registration Statement or 462(b)
Registration Statement or amend or supplement the Prospectus or for
additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or any 462(b) Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or the
suspension of the qualification of the Shares for offering or sale in
any jurisdiction, or of the institution or threatening of any
proceeding for any such purposes. The Company will use every
reasonable effort to prevent the issuance of any such stop order or of
any order preventing or suspending such use and, if any such order is
issued, to obtain the withdrawal thereof at the earliest possible
moment.
(b) The Company will not at any time file or make any
amendment to the Registration Statement, or any amendment or
supplement (i) to the Prospectus, if the Company has not elected to
rely upon Rule 430A, (ii) if the Company has elected to rely upon Rule
430A, to either the Prospectus included in the Registration Statement
at the time it becomes effective or to the Prospectus filed in
accordance with Rule 424(b) or any Term Sheet filed in accordance with
Rule 434, or (iii) if the Company has elected to rely upon Rule
462(b), to any 462(b) Registration Statement in any case if you shall
not have previously been advised and furnished a copy thereof a
reasonable time prior to the proposed filing, or if you or counsel for
the Underwriters shall reasonably object to such amendment or
supplement.
(c) The Company has furnished or will furnish to you, at
its expense, as soon as available, three copies of the Registration
Statement as originally filed and of all amendments thereto, whether
filed before or after the Registration Statement becomes effective,
copies of all exhibits and documents filed therewith and signed copies
of all consents and certificates of experts, as you may reasonably
request, and has furnished or will furnish to each Underwriter one
conformed copy of the Registration Statement as originally filed and
of each amendment thereto. The copies of the Registration Statement
and each amendment thereto furnished to you will be identical to the
electronically
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transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(d) The Company will deliver to each Underwriter, at the
Company's expense, from time to time, as many copies of each
Preliminary Prospectus as such Underwriter may reasonably request, and
the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will deliver to each
Underwriter, at the Company's expense, as soon as the Registration
Statement shall have become effective and thereafter from time to time
as requested during the period when the Prospectus is required to be
delivered under the 1933 Act, such number of copies of the Prospectus
(as supplemented or amended) as each Underwriter may reasonably
request. The Company will comply to the best of its ability with the
1933 Act and the 1933 Act Regulations so as to permit the completion
of the distribution of the Shares as contemplated in this Agreement
and in the Prospectus. If the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of
issue of the Prospectus or any Term Sheet in connection with the
offering or sale of the Shares and if at such time any events shall
have occurred as a result of which the Prospectus or any Term Sheet as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made when such Prospectus or any Term Sheet is delivered not
misleading, or if for any reason it shall be necessary during such
same period to amend or supplement the Prospectus or any Term Sheet in
order to comply with the 1933 Act or the rules and regulations
thereunder, the Company will notify you and upon your request prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as you may from time to time reasonably
request of an amended Prospectus or any Term Sheet or a supplement to
the Prospectus or any Term Sheet or an amendment or supplement to any
such incorporated document which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of
the Shares at any time nine months or more after the time of issue of
the Prospectus or any Term Sheet, upon your request but at the expense
of such Underwriter, the Company will prepare and deliver to such
Underwriter as many copies as you may request of an amended or
supplemented Prospectus or any Term Sheet complying with Section
10(a)(3) of the 1933 Act.
(e) The Company will use commercially reasonable efforts
to qualify the Shares for offering and sale under the applicable
securities laws of such states and other jurisdictions as you may
designate and to maintain such qualifications in effect for as long as
may be necessary to complete the distribution of the Shares; provided,
however, that the Company shall not be obligated to file any general
consent to service of process or to qualify to do business in any
jurisdiction in which it is not so qualified or to make any
undertakings in respect of doing business in any jurisdiction in which
it is not otherwise so subject. The Company will file such statements
and reports as may be required by the laws of each jurisdiction in
which the Shares have been qualified as above provided.
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(f) The Company will make generally available to its
security holders as soon as practicable, but in any event not later
than the end of the fiscal quarter first occurring after the first
anniversary of the "effective date of the Registration Statement" (as
defined in Rule 158(c) of the 1933 Act Regulations), an earnings
statement (in reasonable detail but which need not be audited)
complying with the provisions of Section 11(a) of the 1933 Act and
Rule 158 thereunder and covering a period of at least 12 months
beginning after the effective date of the Registration Statement.
(g) The Company will use the net proceeds received by it
from the sale of the Shares substantially in the manner specified in
the Prospectus under the caption "Use of Proceeds."
(h) The Company will furnish to its securityholders, as
soon as practicable after the end of each respective period, annual
reports (including financial statements audited by independent public
accountants) and unaudited quarterly reports of operations for each of
the first three quarters of the fiscal year. During a period of three
years after the date hereof, the Company will furnish to you: (i)
concurrently with furnishing such reports to its securityholders,
statements of operations of the Company for each of the first three
quarters in the form furnished to the Company's securityholders; (ii)
concurrently with furnishing to its securityholders, a balance sheet
of the Company as of the end of such fiscal year, together with
statements of operations, of cash flows and of securityholders' equity
of the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of independent public accountants; (iii)
as soon as they are available, copies of all reports (financial or
otherwise) mailed to securityholders; (iv) as soon as they are
available, copies of all reports and financial statements furnished to
or filed with the Commission, any securities exchange or the National
Association of Securities Dealers, Inc. (the "NASD"); (v) every
material press release in respect of the Company or its affairs which
is released by the Company; and (vi) any additional information of a
public nature concerning the Company or its business that you may
reasonably request. During such three-year period, the foregoing
financial statements shall be on a consolidated basis to the extent
that the accounts of the Company are consolidated with any
subsidiaries, and shall be accompanied by similar financial statements
for any significant subsidiary that is not so consolidated.
(i) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, the Company will not, without the prior written consent of
Xxxxxx Xxxxxx & Company, Inc., offer, pledge, issue, sell, contract to
sell, grant any option for the sale of, or otherwise dispose of, or
announce any offer, pledge, sale, grant of any option to purchase or
other disposition, directly or indirectly, any Common Shares or
securities convertible into, exercisable or exchangeable for, Common
Shares, except as provided in Section 2 of this Agreement and other
than pursuant to the conversion of the Company's outstanding 9%
redeemable convertible subordinated notes, the conversion of the
Company's 9% redeemable preferred shares of beneficial interest, or
the Company's incentive compensation plan.
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(j) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of organization of the Company, a
registrar (which may be the same entity as the transfer agent) for its
Common Shares.
(k) The Company will cause the Shares to be included,
subject to notice of issuance, on the Nasdaq National Market System
and will maintain the inclusion of the Shares on the Nasdaq National
Market System.
(l) The Company is familiar with the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder, and
has in the past conducted its affairs, and will in the future conduct
its affairs, in such a manner so as to ensure that the Company was not
and will not be an "investment company" or an entity "controlled" by
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
(m) The Company will not, and will use commercially
reasonable efforts to cause its officers, trust managers and
affiliates not to, (i) take, directly or indirectly, prior to
termination of the underwriting syndicate contemplated by this
Agreement, any action designed to stabilize or manipulate the price of
any security of the Company, or which may cause or result in, or which
might in the future reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the
Company, to facilitate the sale or resale of any of the Shares, (ii)
sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of the Shares or (iii) pay or agree to pay to any person any
compensation for soliciting any order to purchase any other securities
of the Company.
(n) If at any time during the 30-day period after the
Registration Statement becomes effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which in your reasonable opinion the market price of the Common Shares
has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus) and after written notice from you
advising the Company to the effect set forth above, the Company agrees
to forthwith prepare, consult with you concerning the substance of,
and disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor,
publication or event.
(o) The Company will timely and accurately report the use
of proceeds received by it from the sale of the Shares in accordance
with Rule 463 of the Commission under the 1933 Act or any successor
provision.
Section 4. Payment of Expenses. The Company will pay and bear all
costs, fees and expenses incident to the performance of its obligations under
this Agreement (excluding fees and expenses of counsel for the Underwriters,
except as specifically set forth below), including (a) the preparation,
printing and filing of the Registration Statement (including financial
statements and exhibits), as originally filed and as amended, the Preliminary
Prospectuses, the Prospectus and any Term Sheet and any amendments or
supplements thereto, and the cost of furnishing copies
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thereof to the Underwriters, (b) the preparation, printing and distribution of
this Agreement, the certificates representing the Shares, the Blue Sky
Memoranda and any instruments relating to any of the foregoing, (c) the
issuance and delivery of the Shares to the Underwriters, including any transfer
taxes payable upon the sale of the Shares to the Underwriters (other than
transfer taxes on resales by the Underwriters), (d) the fees and disbursements
of the Company's counsel and accountants, (e) the qualification of the Shares
under the applicable securities laws in accordance with the terms of this
Agreement, including filing fees and fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the Blue Sky
Memoranda (which fees and disbursements of counsel shall not exceed $5,000),
(f) all costs, fees and expenses in connection with the notification to the New
York Stock Exchange of the proposed issuance of the Shares, (g) filing fees
relating to the review of the offering by the NASD, (h) the transfer agent's
and registrar's fees and all miscellaneous expenses referred to in Part II of
the Registration Statement, (i) costs related to travel and lodging incurred by
the Company and its representatives relating to meetings with and presentations
to prospective purchasers of the Shares reasonably determined by the
Underwriters to be necessary or desirable to effect the sale of the Shares to
the public, and (j) all other costs and expenses incident to the performance of
the Company's obligations hereunder (including costs incurred in closing the
purchase of the Option Shares, if any) that are not otherwise specifically
provided for in this section. The Company, upon your request, will provide
funds in advance for filing fees in connection with "blue sky" qualifications.
If the sale of the Shares provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 5 hereof is not satisfied, because of any termination pursuant to
Section 8 hereof or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision hereof
other than by reason of default by any of the Underwriters, the Company will
reimburse the Underwriters severally on demand for all reasonable out-of-pocket
expenses, including fees and disbursements of Underwriters' counsel, reasonably
incurred by the Underwriters in reviewing the Registration Statement and the
Prospectus, and in investigating and making preparations for the marketing of
the Shares, which shall not exceed $100,000 in the aggregate.
Section 5. Conditions of Underwriters' Obligations. The obligations
of the Underwriters to purchase and pay for (i) the Firm Shares that they have
respectively agreed to purchase pursuant to this Agreement (and any Option
Shares as to which the option granted in Section 2 has been exercised and the
Date of Delivery determined by you is the same as the Closing Time) at the
Closing Time and (ii) the Option Shares at the Date of Delivery of the Option
Shares, are subject to the accuracy of the representations and warranties of
the Company contained herein as of the Closing Time or the Date of Delivery, as
the case may be, and to the accuracy of the representations and warranties of
the Company contained in certificates of any officer of the Company delivered
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 p.m. on the date of this Agreement or,
with your consent, at a later time and date not later, however, than
5:30 p.m. on the first business day following the date hereof, or at
such later time or on such later date as you may agree to in writing;
if the Company has elected to rely upon Rule 462(b), the 462(b)
Registration Statement shall have become
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effective by 10:00 p.m. on the date of this Agreement; and at the
Closing Time no stop order suspending the effectiveness of the
Registration Statement or any 462(b) Registration Statement shall have
been issued under the 1933 Act and no proceedings for that purpose
shall have been instituted or shall be pending or, to your knowledge
or the knowledge of the Company, shall be contemplated by the
Commission, and any request on the part of the Commission for
additional information shall have been complied with to the
satisfaction of counsel for the Underwriters. If the Company has
elected to rely upon Rule 430A, a Prospectus or a Term Sheet
containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A).
(b) At the Closing Time, you shall have received a
favorable opinion of Liddell, Sapp, Zivley, Hill & XxXxxx, LLP,
counsel for the Company, dated as of the Closing Time, together with
signed or reproduced copies of such opinion for each of the other
Underwriters, in form and substance reasonably satisfactory to counsel
for the Underwriters, to the effect that:
(i) The Company has been duly organized and is
validly existing as a real estate investment
trust under the laws of the State of Texas.
The Company has the power and authority to
own, lease and operate its properties and to
conduct its business as described in the
Registration Statement and the Prospectus.
The Company is qualified to transact business
and is in good standing in each of the
jurisdictions in which the ownership or
leasing of the Company's properties or the
nature or conduct of its business requires
such qualification, except where the failure
to do so would not have a Material Adverse
Effect.
(ii) Each of the Subsidiaries has been duly
organized and is validly existing and in good
standing under the laws of the state of its
organization. Each such entity has all
requisite power and authority to own, lease
and operate its properties and conduct its
business as described in the Registration
Statement and the Prospectus. Each such
entity is duly qualified to do business and
is in good standing in each other
jurisdiction in which the ownership or
leasing of its properties or the nature or
conduct of its business requires such
qualification, except where the failure to do
so would not have a Material Adverse Effect.
(iii) The Company has the power and authority to
enter into this Agreement, to issue, sell and
deliver the Shares as provided herein and to
consummate the transactions contemplated
herein. This Agreement has been duly
authorized, executed and delivered by the
Company. Assuming due authorization,
execution and delivery by the Underwriters,
this Agreement constitutes a valid and
binding
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agreement of the Company, enforceable in
accordance with its terms, except to the
extent enforceability may be limited by the
Remedies Exceptions.
(iv) Each consent, approval, authorization, order,
license, certificate, permit, registration,
designation or filing by or with any
governmental agency or body necessary for the
valid authorization, issuance, sale and
delivery of the Shares, the execution,
delivery and performance of this Agreement
and the consummation by the Company of the
transactions contemplated hereby has been
made or obtained and is in full force and
effect, except such as may be necessary under
state securities laws or required by the NASD
in connection with the purchase and
distribution of the Shares by the
Underwriters, as to which such counsel need
express no opinion.
(v) Neither the issuance, sale and delivery by
the Company of the Shares, nor the execution,
delivery and performance of this Agreement,
nor the consummation of the transactions
contemplated hereby will conflict with or
result in a breach or violation of any of the
terms and provisions of, or (with or without
the giving notice or the passage of time or
both) constitute a default under, the
organizational documents or bylaws of the
Company or the Subsidiaries or under any
indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or
instrument filed as an exhibit to the
Registration Statement to which the Company
or any of the Subsidiaries is a party or to
which the Company or any of the Subsidiaries
or any of their respective properties or
other assets is subject; or, to such
counsel's knowledge, any applicable statute,
judgment, decree, order, rule or regulation
of any court or governmental agency or body;
or to such counsel's knowledge, result in the
creation or imposition of any lien, charge,
claim or encumbrance upon any property or
asset of the Company or any of the
Subsidiaries.
(vi) The Common Shares conform in all material
respects as to legal matters to the
description thereof contained in the
Registration Statement and the Prospectus
under the heading "Description of Shares of
Beneficial Interest."
(vii) The Shares to be issued and sold to the
Underwriters hereunder have been validly
authorized by the Company. When issued and
delivered against payment therefor as
provided in this Agreement, such shares will
be validly issued, fully paid and
nonassessable. Upon payment of the purchase
price and delivery of the Shares in
accordance herewith, each of the Underwriters
will receive valid legal title to the Shares,
free and clear of all liens, security
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interests, pledges, charges, encumbrances,
defects, shareholders' agreements, voting
trusts, equities or claims of any nature
whatsoever. To such counsel's knowledge, no
preemptive rights of shareholders exist with
respect to any of the Shares which have not
been satisfied or waived. To such counsel's
knowledge, no person or entity holds a right
to require or participate in the registration
under the 1933 Act of the Shares pursuant to
the Registration Statement which has not been
satisfied or waived; and, except as set forth
in the Prospectus, no person holds a right to
require registration under the 1933 Act of
any Common Shares of the Company at any other
time which has not been satisfied or waived.
The form of certificates evidencing the
Shares complies with all applicable
requirements of Texas law.
(viii) The Company has an authorized capital stock
as set forth in the Prospectus under the
caption "Capitalization." All of the issued
shares of beneficial interest of the Company
have been duly authorized and validly issued
and are fully paid and nonassessable. None
of the issued shares of beneficial interest
of the Company has been issued in violation
of any preemptive rights of shareholders.
(ix) All of the issued shares of capital stock or
other ownership interests of each of the
Subsidiaries have been duly authorized and
validly issued, are fully paid and
nonassessable and are owned directly, or
indirectly through another Subsidiary, by the
Company (in the amounts described in the
Prospectus), free and clear of all liens,
security interests, pledges, charges,
encumbrances, defects, shareholders'
agreements, voting trusts, equities or claims
of any nature whatsoever. Other than the
Subsidiaries and as described in the
Prospectus, the Company does not own,
directly or indirectly, any capital stock or
other equity securities of any other
corporation or any ownership interest in any
partnership, joint venture or other
association.
(x) Except as disclosed in the Prospectus, there
are no outstanding (i) securities or
obligations of the Company or any of the
Subsidiaries convertible into or exchangeable
for any shares of beneficial interest of the
Company or capital stock or other ownership
interests of any such Subsidiary, (ii)
warrants, rights or
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options to subscribe for or purchase from the
Company any shares of beneficial interest or
from any such Subsidiary any such capital
stock or other ownership interests or any
such convertible or exchangeable securities
or obligations, or (iii) obligations of the
Company to issue any shares of beneficial
interest or of any such Subsidiary to issue
any shares of capital stock or other
ownership interests, any such convertible or
exchangeable securities or obligation, or any
such warrants, rights or, except as described
in the Town 'N Country agreement and
amendments thereto filed as Exhibits 10.18
and 10.20 to the Registration Statement,
options.
(xi) To such counsel's knowledge, there is not
pending or threatened any action, suit,
proceeding, inquiry or investigation against
the Company, the Subsidiaries or any of their
respective officers and trust managers or
directors or to which the properties, assets
or rights of any such entity or Town 'N
Country Plaza are subject, before or brought
by any court or governmental agency or body
or board of arbitrators, that is required to
be described in the Registration Statement or
the Prospectus but is not described as
required that, considered in the aggregate,
is material to the business, prospects,
properties, assets, results of operations or
condition (financial or other) of the Company
or the Subsidiaries.
(xii) The descriptions in the Registration
Statement and the Prospectus of the
contracts, leases and other legal documents
therein described present fairly the
information required to be shown and there
are no contracts, leases or other documents
known to such counsel of a character required
to be described in the Registration Statement
or the Prospectus or to be filed as exhibits
to the Registration Statement which are not
described or filed as required.
(xiii) The Common Shares have been approved for
inclusion on the Nasdaq National Market
System, subject to notice of issuance.
(xiv) The Registration Statement and any 462(b)
Registration Statement have become effective
under the 1933 Act and, to the knowledge of
such counsel, no stop order suspending the
effectiveness of the Registration Statement
or any 462(b) Registration Statement has been
issued and no proceeding for that purpose has
been instituted or is pending or contemplated
under the 1933 Act. Other than financial
statements and other financial and operating
data and schedules contained therein, as to
which counsel need express no opinion, the
Registration Statement, any 462(b)
Registration Statement, all Preliminary
Prospectuses, the Prospectus and any
amendment or supplement thereto, appear on
their face to conform
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as to form in all material respects with the
requirements of the 1933 Act and the rules
and regulations thereunder.
(xv) The Company is not, or solely as a result of
the consummation of the transactions
contemplated hereby will not become, an
"investment company," or a company
"controlled" by an "investment company,"
within the meaning of the Investment Company
Act of 1940, as amended.
(xvi) The descriptions in the Prospectus of
statutes, regulations, legal or governmental
proceedings are accurate and present fairly a
summary of the information required to be
shown under the 1933 Act and the 1933 Act
Regulations. The information in the
Prospectus under the caption "Shares
Available for Future Sale" to the extent that
it constitutes matters of law or legal
conclusions, has been reviewed by such
counsel, is correct in all material respects
and presents fairly the information required
to be disclosed therein under the 1933 Act
and the 1933 Act Regulations.
(xvii) Except as disclosed in the Prospectus, none
of the Subsidiaries currently is prohibited,
directly or indirectly, from paying any
dividends to the Company, from making any
other distribution on such Subsidiary's
capital stock or other ownership interests,
from repaying to the Company any loans or
advances to such Subsidiary from the Company
or from transferring any of such Subsidiary's
property or assets to the Company or any of
the other Subsidiaries.
(xviii) The Company has been organized in conformity
with the requirements for qualification as a
REIT for federal income tax purposes for the
taxable year ended December 31, 1989, and has
continued to satisfy the requirements for
qualification as a REIT through the date of
the opinion, and its anticipated investments
and its plan of operation (which plan includes
complying with all of the REIT requirements
described in the Prospectus), as described in
the Prospectus, will enable it to continue to
satisfy the requirements for qualification as
a REIT for federal income tax purposes.
(xix) The information in the Prospectus under the
caption "Federal Income Tax Considerations"
fairly summarizes the federal income tax
considerations that are likely to be material
to a holder of Shares and, to the extent that
it constitutes matters of law or legal
conclusions, has been reviewed by such
counsel, is correct in all material respects
and presents fairly the information required
to be disclosed therein.
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(xx) The Company has complied in all material
respects with all provisions of Article 6138A
of the Texas Revised Civil Statutes
Annotated.
Such counsel also shall state that they have no reason to
believe that the Registration Statement, any 462(b) Registration
Statement or any further amendment thereto made prior to the Closing
Time or the Date of Delivery, as the case may be, on its effective
date and as of the Closing Time or the Date of Delivery, as the case
may be, contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or
that the Prospectus, or any amendment or supplement thereto made prior
to the Closing Time or the Date of Delivery, as the case may be, as of
its issue date and as of the Closing Time or the Date of Delivery, as
the case may be, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (provided that such counsel
need express no belief regarding the financial statements and related
schedules and other financial data contained in the Registration
Statement, any 462(b) Registration Statement, any amendment thereto,
or the Prospectus, or any amendment or supplement thereto).
In rendering the opinions set forth above, such counsel may
rely on the following:
(A) as to matters involving the
application of laws other than the laws of
the United States and jurisdictions in which
they are admitted, to the extent such counsel
deems proper and to the extent specified in
such opinion, upon an opinion or opinions (in
form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel
familiar with the applicable laws, and
(B) as to matters of fact, to the
extent they deem proper, on certificates of
responsible officers of the Company and
certificates or other written statements of
officers or departments of various
jurisdictions, having custody of documents
respecting the existence or good standing of
the Company, provided that copies of all such
opinions, statements or certificates shall be
delivered to Underwriters' counsel. The
opinion of counsel for the Company shall
state that the opinion of any other counsel,
or certificate or written statement, on which
such counsel is relying is in form
satisfactory to such counsel and that you and
they are justified in relying thereon.
(c) At the Closing Time, you shall have received a
favorable opinion from Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., counsel for
the Underwriters, dated as of the Closing Time, with respect to the
matters set forth in (i) (first sentence only), (iii) (second sentence
only), (vi), (vii) (first, second and sixth sentences only) and (xvii)
of Section 5(b) and a statement similar to the statement referred to
in the penultimate paragraph of
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Section 5(b) above. In giving its opinion, Xxxxxxxx Xxxxxxxx & Xxxxxx
P.C. may rely, (A) as to matters of fact, upon certificates and
written statements of officers and employees of and accountants for
each of the Company and the Subsidiaries, and (B) as to the
qualification and good standing of the Company to do business in any
state or jurisdiction, upon certificates of appropriate government
officials or opinions of counsel in such jurisdictions, which opinions
shall be in form and substance satisfaction to counsel for the
Underwriters. The Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling
them to pass on such matters.
(d) At the Closing Time, (i) the Registration Statement,
any 462(b) Registration Statement, and the Prospectus, as they may
then be amended or supplemented, shall contain all statements that are
required to be stated therein under the 1933 Act and the 1933 Act
Regulations and in all material respects shall conform to the
requirements of the 1933 Act and the 1933 Act Regulations; the Company
shall have complied in all material respects with Rule 430A (if it
shall have elected to rely thereon) and neither the Registration
Statement, any 462(b) Registration Statement, nor the Prospectus, as
they may then be amended or supplemented, shall contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (ii) there shall not have been, since the respective dates
as of which information is given in the Registration Statement, any
material adverse change in the business, prospects, properties,
assets, results of operations or condition (financial or otherwise) of
the Company, whether or not arising in the ordinary course of
business, (iii) no action, suit or proceeding at law or in equity
shall be pending or, to the best of Company's knowledge, threatened
against the Company that would be required to be set forth in the
Prospectus other than as set forth therein and no proceedings shall be
pending or, to the best knowledge of the Company, threatened against
the Company before or by any federal, state or other commission, board
or administrative agency wherein an unfavorable decision, ruling or
finding could materially adversely affect the business, prospects,
assets, results of operations or condition (financial or otherwise) of
the Company, other than as set forth in the Prospectus, (iv) the
Company shall have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to
the Closing Time, and (v) the representations and warranties of the
Company set forth in Section 1 shall be accurate as though expressly
made at and as of the Closing Time. At the Closing Time, you shall
have received a certificate executed by the President and Chief
Financial Officer of the Company dated as of the Closing Time, to such
effect and with respect to the following additional matters: (A) the
Registration Statement has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement
or preventing or suspending the use of the Prospectus has been issued,
and no proceedings for that purpose have been instituted or are
pending or, to the best of their knowledge, threatened under the 1933
Act; and (B) they have reviewed the Registration Statement and the
Prospectus and, when the Registration Statement and any 462(b)
Registration Statement became effective and at all times subsequent
thereto up to the delivery of such certificate, the Registration
Statement, any 462(b) Registration Statement and the Prospectus and
any amendments or supplements thereto contained all statements and
information required to be included therein or necessary to make the
statements therein not misleading and neither the
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Registration Statement, any 462(b) Registration Statement, nor the
Prospectus nor any amendment or supplement thereto included any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and, since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in an amended or supplemented Prospectus that has not been so
set forth.
(e) You shall have received from Ernst & Young LLP
letters dated, respectively, the date hereof (or, if the Registration
Statement has been declared effective prior to the execution and
delivery of this Agreement, dated such effective date and the date of
this Agreement) and the Closing Time and the Date of Delivery, in form
and substance satisfactory to you, to the effect that: (i) they are
independent public accountants with respect to the Company and its
consolidated subsidiaries as required by the 1933 Act and the 1933 Act
Regulations; (ii) it is their opinion that the financial statements
and supporting schedules included in the Registration Statement and
the Prospectus and covered by their opinions therein comply as to form
in all material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations; (iii) they have
performed limited procedures, not constituting an audit, including a
reading of the latest available interim financial statements of the
Company and its consolidated subsidiaries, a reading of the minute
books of the Company, inquiries of officials of the Company
responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, and on
the basis of such limited review and procedures nothing came to their
attention that caused them to believe that (A) the unaudited financial
statements and supporting schedules of the Company included in the
Registration Statement and the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations or are not in conformity
with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus, (B) the
unaudited operating data and balance sheet data of the Company set
forth in the Prospectus under the caption "Selected Pro Forma and
Historical Financial and Properties Information" were not determined
on a basis substantially consistent with that used in determining the
corresponding amounts in the audited financial statements included in
the Registration Statement and the Prospectus, (C) the pro forma
financial information included in the Registration Statement and the
Prospectus was not prepared in accordance with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations
with respect to pro forma financial information or was not determined
on a basis substantially consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus,
or (D) at a specified date not more than five days prior to the date
of this Agreement, there has been any change in the shareholders'
equity or debt of the Company or any increase in the debt of the
Company or any decrease in the net assets of the Company, as compared
with the amounts shown in the December 31, 1997 balance sheet of the
Company included in the Registration Statement and the Prospectus or,
during the period from December 31, 1997 to a specified date not more
than five days prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period in the preceding
year, in revenues, net income or funds from
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operations of the Company, except in all instances for changes,
increases or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur; and (iv) in addition
to the examination referred to in their opinions and the limited
procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect
to certain amounts, percentages and financial and statistical
information which are included in the Registration Statement and
Prospectus and which are specified by you and have found such amounts,
percentages and financial and statistical information to be in
agreement with the relevant accounting, financial and other records of
the Company identified in such letter. In the event that the letters
referred to in this subsection set forth any changes, decreases or
increases in the items specified in clause (iii)(D) above, it shall be
a further condition to the obligations of the Underwriters that (i)
such letters shall be accompanied by a written explanation by the
Company as to the significance thereof, unless the Underwriters deem
such explanation unnecessary, and (ii) such changes, decreases or
increases do not, in your sole judgment, make it impracticable or
inadvisable to proceed with the purchase, sale and delivery of the
Shares as contemplated by the Registration Statement, as amended as of
the date of such letter.
(f) At the Closing Time, you shall have received from
Ernst & Young LLP a letter, in form and substance satisfactory to you
and dated as of the Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e)
above, except that the specified date referred to shall be a date not
more than five days prior to the Closing Time.
(g) At the Closing Time, counsel for the Underwriters
shall have been furnished with all such documents, certificates and
opinions as they may reasonably request for the purpose of enabling
them to pass upon the issuance and sale of the Shares as contemplated
in this Agreement and the matters referred to in Section 5(c) and in
order to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company, the
performance of any of the covenants of the Company, or the fulfillment
of any of the conditions herein contained; and all proceedings taken
by the Company at or prior to the Closing Time in connection with the
authorization, issuance and sale of the Shares as contemplated in this
Agreement shall be reasonably satisfactory in form and substance to
you and to counsel for the Underwriters. The Company will furnish you
with such number of conformed copies of such opinions, certificates,
letters and documents as you shall reasonably request.
(h) You should have received from each person who is a
trust manager or executive officer of the Company and from FCA Corp
an agreement to the effect that during the period beginning from the
date hereof and continuing to and including the date 180 days after
the date of the Prospectus, such person will not, without the prior
written consent of Xxxxxx Xxxxxx & Company, Inc., offer, pledge,
issue, sell, contract to sell, grant any option for the sale of, or
otherwise dispose of, or announce any offer, pledge, sale, grant of
any option to purchase or other disposition, directly or indirectly,
any Common Shares or securities convertible into, exercisable or
exchangeable for, Common Shares.
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(i) The NASD, upon review of the terms of the public
offering of the Shares, shall not have objected to such offering, such
terms or the Underwriters' participation in the same.
(j) Subsequent to the date hereof, there shall not have
occurred any of the following: (i) if there has occurred or
accelerated any outbreak of hostilities or other national or
international calamity or crisis or change in economic or political
conditions the effect of which on the financial markets of the United
States is such as to make it, in your judgment, impracticable to
market the Shares or enforce contracts for the sale of the Shares, or
(ii) if trading in any securities of the Company has been suspended by
the Commission or by the New York Stock Exchange, or if trading
generally on the New York Stock Exchange or in the over-the-counter
market has been suspended, or limitations on prices for trading (other
than limitations on hours or numbers of days of trading) have been
fixed, or maximum ranges for prices for securities have been required,
by such exchange or the NASD or by order of the Commission or any
other governmental authority, or (iii) if there has been any
downgrading in the rating of any of the Company's debt securities or
preferred shares of beneficial interest by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the 1933 Act), or (iv) if a banking moratorium has been
declared by federal or New York or Tennessee authorities, or (v) any
federal or state statute, regulation, rule or order of any court or
other governmental authority has been enacted, published, decreed or
otherwise promulgated which in your reasonable opinion materially
adversely affects or will materially adversely affect the business or
operations of the Company and its Subsidiaries, taken as a whole, or
(vi) any action has been taken by any federal, state or local
government or agency in respect of its monetary or fiscal affairs
which in your reasonable opinion has a material adverse effect on the
securities markets in the United States.
(k) At the Closing Time, you shall have received a
favorable opinion of Xxxxx, Xxxxxxx & Xxxxxxxx, P.C., counsel for the
Company, dated as of the Closing Time, together with signed or
reproduced copies of such opinion for each of the other Underwriters.
In form and substance reasonably satisfactory to counsel for the
Underwriters to the effect that each of the distributions of the ivy
stock pro rata to the shareholders of the Company was exempt from the
registration provisions of the 1933 Act.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by you on notice to the Company at any time at or
prior to the Closing Time, and such termination shall be without liability of
any party to any other party, except as provided in Section 4. Notwithstanding
any such termination, the provisions of Section 6 shall remain in effect.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the satisfaction on and as of any Date of Delivery for
Option Shares of the conditions set forth in this Section 5, except that, if
any Date of Delivery for Option Shares is other than the Closing Time, the
certificates, opinions and letters referred to in paragraphs (b) and (c) shall
be revised to reflect the sale of Option Shares.
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Section 6. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject under the
1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (i) arise out of or are
based upon any breach of any warranty or covenant of the Company
herein contained, (ii) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
(A) any Preliminary Prospectus, the Registration Statement, any 462(b)
Registration Statement or the Prospectus, or any amendment or
supplement thereto, or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Shares under the securities
or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"),
or (iii) arise out of or are based upon the omission or alleged
omission to state in any Preliminary Prospectus, the Registration
Statement, any 462(b) Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any Application a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement, any
462(b) Registration Statement or the Prospectus, or any such amendment
or supplement, in reliance upon and in conformity with written
information furnished to the Company by any Underwriter expressly for
use therein. In addition to its other obligations under this Section
6(a), the Company agrees that, as an interim measure during the
pendency of any such claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, described in this Section 6(a), it
will reimburse the Underwriters on a monthly basis for all reasonable
legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's obligation to
reimburse the Underwriters for such expenses and the possibility that
such payments might later be held to have been improper by a court of
competent jurisdiction. Any such interim reimbursement payments that
are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the prime rate (or reference rate
or other commercial lending rate for borrowers of the highest credit
standing) published from time to time by The Wall Street Journal (the
"Prime Rate") from the date of such request. This indemnity agreement
shall be in addition to any liabilities that the Company may otherwise
have. The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any
judgment in any pending or threatened action or claim or related cause
of action or portion of such cause of action in respect of which
indemnification may be sought hereunder (whether or not such
Underwriter is a party to such action or claim),
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unless such settlement, compromise or consent includes an
unconditional release of such Underwriter from all liability arising
out of such action or claim (or related cause of action or portion
thereof).
The indemnity agreement in this Section 6(a) shall extend upon
the same terms and conditions to, and shall inure to the benefit of,
each person, if any, who controls any Underwriter within the meaning
of the 1933 Act to the same extent as such agreement applies to the
Underwriters.
(b) Each Underwriter, severally but not jointly, will
indemnify and hold harmless the Company against any losses, claims,
damages or liabilities to which the Company may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any breach of any warranty or covenant by such Underwriter herein
contained or any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement, any 462(b) Registration Statement or the
Prospectus, or any amendment 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 not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim,
damage, liability or action. In addition to its other obligations
under this Section 6(b), the Underwriters agree that, as an interim
measure during the pendency of any such claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement
or omission, or any alleged statement or omission, described in this
Section 6(b), they will reimburse the Company on a monthly basis for
all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of their
obligation to reimburse the Company for such expenses and the
possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. Any such interim
reimbursement payments that are not made to the Company within 30 days
of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request. This indemnity agreement shall be in
addition to any liabilities that the Underwriters may otherwise have.
No Underwriter will, without the prior written consent of the Company,
settle or compromise or consent to the entry of judgment in any
pending or threatened action or claim or related cause of action or
portion of such cause of action in respect of which indemnification
may be sought hereunder (whether or not the Company is a party to such
action or claim), unless such settlement, compromise or consent
includes an unconditional release of the Company from all liability
arising out of such action or claim (or related cause of action or
portion thereof).
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The indemnity agreement in this Section 6(b) shall extend upon
the same terms and conditions to, and shall inure to the benefit of,
each officer and trust manager of the Company and each person, if any,
who controls the Company within the meaning of the 1933 Act to the
same extent as such agreement applies to the Company.
(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 the indemnifying party in writing of the commencement thereof;
no indemnification provided for in subsection (a) or (b) shall be
available to any party who shall fail to give notice as provided in
this subsection (c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice, but the omission so
to notify the indemnifying party will not relieve the indemnifying
party from any liability that it may have to any indemnified party
otherwise than under Section 6. In case any such action shall be
brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, except that if
the indemnified party has been advised by counsel in writing that
there are one or more defenses available to the indemnified party
which are different from or additional to those available to the
indemnifying party, then the indemnified party shall have the right to
employ separate counsel and in that event the reasonable fees and
expenses of such separate counsel for the indemnified party shall be
paid by the indemnifying party; provided, however, that if the
indemnifying party is the Company, the Company shall be obligated to
pay only the reasonable fees and expenses of a single law firm (and
any reasonably necessary local counsel) employed by all of the
indemnified parties. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent,
but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in
Sections 6(a) and (b) hereof, including the amounts of any requested
reimbursement payments, the method of determining such amounts and the
basis on which such amounts shall be apportioned among the
indemnifying parties, shall be settled by arbitration conducted
pursuant to the Code of Arbitration Procedure of the National
Association of Securities Dealers, Inc. Any such arbitration must be
commenced by service of a written demand for arbitration or a written
notice of intention to arbitrate, therein electing the arbitration
tribunal. In the event the
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party demanding arbitration does not make such designation of an
arbitration tribunal in such demand or notice, then the party
responding to said demand or notice is authorized to do so. Any such
arbitration will be limited to the operation of the interim
reimbursement provisions contained in Sections 6(a) and (b) hereof and
will not resolve the ultimate propriety or enforceability of the
obligation to indemnify for expenses that is created by the provisions
of Sections 6(a) and (b).
(e) In order to provide for just and equitable
contribution in circumstances under which the indemnity provided for
in this Section 6 is for any reason judicially determined (by the
entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the
right of appeal) to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, on the
one hand, and the Underwriters on the other shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the
nature contemplated by such indemnity incurred by the Company, and one
or more of the Underwriters, as incurred, in such proportions that (a)
the Underwriters are responsible pro rata for that portion represented
by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the public offering price
(before deducting expenses) appearing thereon, and (b) the Company is
responsible for the balance; provided, however, that no person guilty
of fraudulent misrepresentations (within the meaning of Section 11(f)
of the 0000 Xxx) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation; and provided,
further, that if the allocation provided above is not permitted by
applicable law, the Company, on the one hand, and the Underwriters, on
the other, shall contribute to the aggregate losses in such proportion
as is appropriate to reflect not only the relative benefits referred
to above but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other, in connection with the statements
or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
Relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information
supplied by the Company, on the one hand, or by the Underwriters, on
the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 6(e) were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this Section 6(e). The amount paid or payable by
a party as a result of the losses, claims, damages or liabilities
referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with
investigating or defending such action or claim. Notwithstanding the
provisions of this Section 6(e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
The Underwriters' obligations in this Section 6(e) to contribute are
several in proportion
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to their respective underwriting obligations and not joint. For
purposes of this Section 6(e), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as such Underwriter, and each
trust manager of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as the Company.
Section 7. Representations, Warranties and Agreements to Survive
Delivery. The representations, warranties, indemnities, agreements and other
statements of the Company or its officers set forth in or made pursuant to this
Agreement will remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company or any Underwriter or
controlling person, and with respect to an Underwriter or the Company will
survive delivery of and payment for the Shares or termination of this
Agreement.
Section 8. Effective Date of Agreement and Termination.
(a) This Agreement shall become effective immediately as
to Sections 4 and 6 and, as to all other provisions, (i) if at the
time of execution of this Agreement the Registration Statement has not
become effective, at 10:00 a.m., on the first full business day
following the effectiveness of the Registration Statement, or (ii) if
at the time of execution of this Agreement the Registration Statement
has been declared effective, at 10:00 a.m. on the first full business
day following the date of execution of this Agreement; but this
Agreement shall nevertheless become effective at such earlier time
after the Registration Statement becomes effective as you may
determine on and by notice to the Company or by release of any of the
Shares for sale to the public. For the purposes of this Section 8,
the Shares shall be deemed to have been so released upon the release
of publication of any newspaper advertisement relating to the Shares
or upon the release by you of telegrams (i) advising the Underwriters
that the Shares are released for public offering, or (ii) offering the
Shares for sale to securities dealers, whichever may occur first. By
giving notice before the time this Agreement becomes effective, you,
as representative of the several Underwriters, or the Company, may
prevent this Agreement from becoming effective, without liability of
any party to any other party, except that the Company shall remain
obligated to pay costs and expenses to the extent provided in Section
4 hereof.
(b) You may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Time (i) in accordance
with the last paragraph of Section 5 of this Agreement, or (ii) if
there has been since the respective dates as of which information is
given in the Registration Statement, any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the business, prospects, management, properties, assets,
results of operations or condition (financial or otherwise) of the
Company, whether or not arising in the ordinary course of business, or
(iii) if there has occurred or accelerated any material adverse change
in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other national or international
calamity or crisis or change or development involving a prospective
change
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in national financial, economic or political conditions, in each case
the effect of which is such as to make it, in your reasonable
judgment, impracticable to market the Shares or enforce contracts for
the sale of the Shares, or (iv) if trading in any securities of the
Company has been suspended by the Commission or by the Nasdaq National
Market System or if trading generally on the New York Stock Exchange
or the Nasdaq National Market System or in the over-the-counter market
has been suspended or materially limited, or limitations on prices for
trading (other than limitations on hours or numbers of days of
trading) have been fixed, or maximum ranges for prices for securities
have been required, by such exchange or by such system or the NASD or
by order of the Commission or any other governmental authority, or (v)
if there has been any downgrading in the rating of any of the
Company's debt securities or preferred shares of beneficial interest
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the 1933 Act), or (vi) if a
banking moratorium has been declared by federal or New York or
Tennessee authorities, or (vii) any federal or state statute,
regulation, rule or order of any court or other governmental authority
has been enacted, published, decreed or otherwise promulgated which in
your reasonable opinion materially adversely affects or will
materially adversely affect the business or operations of the Company,
or (viii) any action has been taken by any federal, state or local
government or agency in respect of its monetary or fiscal affairs
which in your reasonable opinion has a material adverse effect on the
securities markets in the United States.
(c) If this Agreement is terminated pursuant to this
Section 8, such termination shall be without liability of any party to
any other party, except to the extent provided in Section 4.
Notwithstanding any such termination, the provisions of Section 6
shall remain in effect.
Section 9. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at the Closing Time to purchase the Shares
that it or they are obligated to purchase pursuant to this Agreement (the
"Defaulted Securities"), you shall have the right, within 36 hours thereafter,
to make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms set forth
in this Agreement; if, however, you have not completed such arrangements within
such 36-hour period, then:
(a) If the aggregate number of Firm Shares which are
Defaulted Securities does not exceed 10% of the aggregate number of
Firm Shares to be purchased pursuant to this Agreement, the
non-defaulting Underwriters shall be obligated to purchase the full
amount thereof in the proportions that their respective underwriting
obligation proportions bear to the underwriting obligations of all
non-defaulting Underwriters, and
(b) If the aggregate number of Firm Shares which are
Defaulted Securities exceeds 10% of the aggregate number of Firm
Shares to be purchased pursuant to this Agreement, this Agreement
shall terminate without liability on the part of any non-defaulting
Underwriter.
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No action taken pursuant to this Section 9 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination
of this Agreement, either you or the Company shall have the right to postpone
the Closing Time for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus that
may thereby be made necessary. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9.
Section 10. Default by the Company. If the Company shall fail at the
Closing Time to sell and deliver the aggregate number of Firm Shares that it is
obligated to sell, then this Agreement shall terminate without any liability on
the part of any non-defaulting party, except to the extent provided in Section
4 and except that the provisions of Section 6 shall remain in effect.
No action taken pursuant to this Section shall relieve the Company
from liability, if any, in respect to such default.
Section 11. Information Furnished by the Underwriters. The Company
acknowledges that the statements set forth in (i) the paragraph immediately
following footnote 3 on the cover page of the Prospectus, (ii) the first,
fourth, sixth, seventh, eighth, ninth and twelfth paragraphs under the caption
"Underwriting" and (iii) the inside cover stabilization language in any
Preliminary Prospectus and in the Prospectus, constitute the only information
furnished by or on behalf of any Underwriter expressly for use in the
Registration Statement, any 462(b) Registration Statement, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto as such
information is referred to in Sections 1(b), 1(c), and 6 hereof.
Section 12. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed c/o Xxxxxx Xxxxxx & Company,
Inc., 00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx
(with a copy sent in the same manner to Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., 0000
Xxx Xxxxxx, 0000 Xxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000, Attention: Xxxxx X.
Xxxxxxxx, Esq.) and notices to the Company shall be directed to it at 0000 Xxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000, Attention: Xxxxx X. Xxxxxxx
(with a copy sent in the same manner to Liddell, Sapp, Zivley, Hill & XxXxxx,
L.L.P., 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Xxxxx X.
Xxxxxxx, Esq.).
Section 13. Parties. This Agreement is made solely for the benefit
of and is binding upon the Underwriters and the Company and, to the extent
provided in Section 6, any person controlling the Company or any of the
Underwriters, the officers and trust managers of the Company, and their
respective executors, administrators, successors and assigns and subject to the
provisions of Section 6, no other person shall acquire or have any right under
or by virtue
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of this Agreement. The term "successors and assigns" shall not include any
purchaser, as such purchaser, from any of the several Underwriters of the
Shares.
All of the obligations of the Underwriters hereunder are several and
not joint.
Section 14. Governing Law and Time. This Agreement shall be governed
by the laws of the State of Tennessee. Specified time of the day refers to
United States Eastern Time. Time shall be of the essence of this Agreement.
Section 15. Counterparts. This Agreement may be executed in one or
more counterparts and when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, and upon the
acceptance hereof by Xxxxxx Xxxxxx & Company, Inc., on behalf of each of the
Underwriters, this instrument will become a binding agreement among the Company
and the several Underwriters in accordance with its terms. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in the Master Agreement among Underwriters,
a copy of which shall be submitted to the Company for examination, upon
request, but without warranty on your part as to the authority of the signers
thereof.
Very truly yours,
UNITED INVESTORS REALTY TRUST
By:
-------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above:
XXXXXX XXXXXX & COMPANY, INC.
XXXX XXXXXXXX, INC.
XXXXX & XXXXXXXXXXXX, INC.
SOUTHWEST SECURITIES, INC.
By: Xxxxxx Xxxxxx & Company, Inc.
By:
-------------------------------
(Authorized Representative)
On behalf of each of the Underwriters
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SCHEDULE A
Number of
Firm Shares
Underwriter to be Purchased
----------- ---------------
Xxxxxx Xxxxxx & Company, Inc.
Xxxx Xxxxxxxx, Inc.
Xxxxx & Xxxxxxxxxxxx, Inc.
Southwest Securities, Inc.
---------
TOTAL 7,600,000
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