UPDATED AS OF
JANUARY 27, 1997
2,865,000 SHARES(1)
GOLF TRUST OF AMERICA, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
February ___, 1997
XXXXXXXXX, XXXXXXXX & COMPANY LLC
WHEAT, FIRST SECURITIES, INC.
As Representatives of the several Underwriters
c/x Xxxxxxxxx, Xxxxxxxx & Company LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies/Gentlemen:
Golf Trust of America, Inc., a Maryland corporation (the "Company")
intending to qualify for federal income tax purposes as a real estate investment
trust pursuant to Section 856 through 860 of the Internal Revenue Code of 1986,
as amended (the "Code"), and Golf Trust of America, L.P., a Delaware limited
partnership of which a wholly owned subsidiary of the Company acts as the
general partner (the "Operating Partnership"), address you as the
Representatives of each of the persons, firms and corporations listed in
Schedule A hereto (herein collectively called the "Underwriters") and hereby
confirm their agreement with the several Underwriters as follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and sell 2,865,000
shares of its authorized and unissued Common Stock, par value $0.01 per share
(the "Firm Shares"), to the several Underwriters. The Company also proposes to
grant to the Underwriters an option to purchase up to 429,750 additional shares
of the Company's Common Stock, par value $0.01 per share (the "Option Shares"),
as provided in Section 8 hereof. As used in this Agreement, the term "Shares"
shall include the Firm Shares and the Option Shares. All shares of Common
Stock, par value $0.01 per share, of the Company to be outstanding after
____________________________
1 Plus an option to purchase up to 429,750 additional shares from the Company
to cover over-allotments.
giving effect to the sales contemplated hereby, including the Shares, are
hereinafter referred to as "Common Stock."
2. THE FORMATION. It is understood that substantially contemporaneously
with the offering and sale of the Firm Shares to the Underwriters, the Company,
the Operating Partnership, the prior owners of the Golf Courses (as defined in
the Prospectus defined herein) (the "Prior Owners") and certain entities
affiliated with the Prior Owners (the "Initial Lessees") will enter into a
series of transactions collectively described in the Prospectus as the
"Formation Transactions." Such transactions are referred to herein as the
"Formation." The documents required to be executed and delivered in order to
consummate the Formation, including, without limitation, the documents listed on
Schedule B attached hereto, are hereinafter collectively referred to as the
"Formation Documents," and each Formation Document constituting an agreement is
hereinafter referred to as a "Formation Agreement."
For purposes of this Agreement and unless the context requires otherwise,
each of the Operating Partnership, GTA GP, Inc., a Maryland corporation ("GTA
GP"), and GTA LP, Inc., a Maryland corporation ("GTA LP"), is deemed a
"Subsidiary" of the Company.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY GTA GP, GTA
LP AND THE OPERATING PARTNERSHIP.
Each of the Company, GTA GP, GTA LP and the Operating Partnership,
jointly and severally, represents and warrants to and agrees with each
Underwriter that:
(a) A registration statement on Form S-11 (File No. 333-15965)
with respect to the Shares, including a prospectus subject to completion, has
been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the applicable rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Act and has been filed with the
Commission; such amendments to such registration statement, such amended
prospectuses subject to completion and such abbreviated registration statements
pursuant to Rule 462(b) of the Rules and Regulations as may have been required
prior to the date hereof have been similarly prepared and filed with the
Commission; and the Company will file such additional amendments to such
registration statement, such amended prospectuses subject to completion and such
abbreviated registration statements as may hereafter be required. Copies of
such registration statement and amendments, of each related prospectus subject
to completion (the "Preliminary Prospectuses"), and of any abbreviated
registration statement pursuant to Rule 462(b) of the Rules and Regulations have
been delivered to you.
If the registration statement relating to the Shares has been declared
effective under the Act by the Commission, the Company will prepare and promptly
file with the Commission the information omitted from the registration statement
pursuant to Rule 430A(a) or, if Xxxxxxxxx, Xxxxxxxx & Company LLC, on behalf of
the several Underwriters, shall agree to the utilization of Rule 434 of the
Rules and Regulations, the
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information required to be included in any term sheet filed pursuant to Rule
434(b) or (c), as applicable, of the Rules and Regulations pursuant to
subparagraph (1), (4) or (7) of Rule 424(b) of the Rules and Regulations or as
part of a post-effective amendment to the registration statement (including a
final form of prospectus). If the registration statement relating to the Shares
has not been declared effective under the Act by the Commission, the Company
will prepare and promptly file an amendment to the registration statement,
including a final form of prospectus, or, if Xxxxxxxxx, Xxxxxxxx & Company LLC,
on behalf of the several Underwriters, shall agree to the utilization of Rule
434 of the Rules and Regulations, the information required to be included in any
term sheet filed pursuant to Rule 434(b) or (c), as applicable, of the Rules and
Regulations. The term "Registration Statement" as used in this Agreement shall
mean such registration statement, including financial statements, schedules and
exhibits, in the form in which it became or becomes, as the case may be,
effective (including, if the Company omitted information from the registration
statement pursuant to Rule 430A(a) or files a term sheet pursuant to Rule 434 of
the Rules and Regulations, the information deemed to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
or Rule 434(d) of the Rules and Regulations) and, in the event of any amendment
thereto or the filing of any abbreviated registration statement pursuant to Rule
462(b) of the Rules and Regulations relating thereto after the effective date of
such registration statement, shall also mean (from and after the effectiveness
of such amendment or the filing of such abbreviated registration statement) such
registration statement as so amended, together with any such abbreviated
registration statement. The term "Prospectus" as used in this Agreement shall
mean the prospectus relating to the Shares as included in such Registration
Statement at the time it becomes effective (including, if the Company omitted
information from the Registration Statement pursuant to Rule 430A(a) of the
Rules and Regulations, the information deemed to be a part of the Registration
Statement at the time it became effective pursuant to Rule 430A(b) of the Rules
and Regulations); PROVIDED, HOWEVER, that if in reliance on Rule 434 of the
Rules and Regulations and with the consent of Xxxxxxxxx, Xxxxxxxx & Company LLC,
on behalf of the several Underwriters, the Company shall have provided to the
Underwriters a term sheet pursuant to Rule 434(b) or (c), as applicable, prior
to the time that a confirmation is sent or given for purposes of Section
2(10)(a) of the Act, the term "Prospectus" shall mean the "prospectus subject to
completion" (as defined in Rule 434(g) of the Rules and Regulations) last
provided to the Underwriters by the Company and circulated by the Underwriters
to all prospective purchasers of the Shares (including the information deemed to
be a part of the Registration Statement at the time it became effective pursuant
to Rule 434(d) of the Rules and Regulations). Notwithstanding the foregoing, if
any revised prospectus shall be provided to the Underwriters by the Company for
use in connection with the offering of the Shares that differs from the
prospectus referred to in the immediately preceding sentence (whether or not
such revised prospectus is required to be filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Underwriters for such use. If in reliance on Rule 434 of the Rules and
Regulations and with the consent of Xxxxxxxxx, Xxxxxxxx & Company LLC, on behalf
of the several Underwriters, the Company shall have provided to the Underwriters
a term sheet pursuant
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to Rule 434(b) or (c), as applicable, prior to the time that a confirmation is
sent or given for purposes of Section 2(10)(a) of the Act, the Prospectus and
the term sheet, together, will not be materially different from the prospectus
in the Registration Statement.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or instituted proceedings for
that purpose, and each such Preliminary Prospectus has conformed in all material
respects to the requirements of the Act and the Rules and Regulations and, as of
its date, has not included any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and at the time
the Registration Statement became or becomes, as the case may be, effective and
at all times subsequent thereto up to and on the Closing Date (hereinafter
defined) and on any later date on which Option Shares are to be purchased,
(i) the Registration Statement and the Prospectus, and any amendments or
supplements thereto, contained and will contain all material information
required to be included therein by the Act and the Rules and Regulations and
will in all material respects conform to the requirements of the Act and the
Rules and Regulations, (ii) the Registration Statement, and any amendments or
supplements thereto, did not and will not include any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (iii) the
Prospectus, and any amendments or supplements thereto, did not and will not
include any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; PROVIDED, HOWEVER, that none of the
representations and warranties contained in this subparagraph (b) shall apply to
information contained in or omitted from the Registration Statement or
Prospectus, or any amendment or supplement thereto, in reliance upon, and in
conformity with, written information relating to any Underwriter furnished to
the Company by such Underwriter specifically for use in the preparation thereof.
(c) The Company, each Subsidiary, each Initial Lessee and each
Prior Owner is a corporation, limited partnership or limited liability company
duly organized or formed, as the case may be, validly existing and in good
standing under the laws of its jurisdiction of incorporation or formation; each
such entity and has full corporate, partnership or limited liability company
power and authority to own, lease and operate its properties or properties to be
acquired in the Formation and to conduct its business as described in the
Prospectus; each such entity is duly qualified to do business as a foreign
corporation, limited partnership or limited liability company, as applicable,
and is in good standing in each jurisdiction, if any, in which the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects (a "Material
Adverse Effect") of the Company and the Subsidiaries considered as one
enterprise or any Initial Lessee; no proceeding has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification
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of any such entity, each such entity is in possession of and operating in
compliance with all authorizations, licenses, certificates, consents, orders and
permits from state, federal and other regulatory authorities which are material
to the conduct of its business, all of which are valid and in full force and
effect; no such entity is in violation of its respective charter, bylaws or
other organizational documents or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
material bond, debenture, note or other evidence of indebtedness, or in any
material lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other agreement or instrument to which such entity is a party
or by which it or any of such entity's subsidiaries or their respective
properties may be bound; and no such entity is in material violation of any law,
order, rule, regulation, writ, injunction, judgment or decree of any court,
government or governmental agency or body, domestic or foreign, having
jurisdiction over such entity or over its respective properties of which it has
knowledge. The Company does not own or control, directly or indirectly, any
corporation, partnership, association or other entity other than the
Subsidiaries.
(d) Each of the Company, GTA GP, GTA LP and the Operating
Partnership has full legal right, power and authority to enter into this
Agreement and perform the transactions contemplated hereby. This Agreement has
been duly authorized, executed and delivered by the Company, GTA GP, GTA LP and
the Operating Partnership and is a valid and binding agreement on the part of
the Company, GTA GP, GTA LP and the Operating Partnership, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles; the performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a material breach or
violation of any of the terms and provisions of, or constitute a default under,
(i) any bond, debenture, note or other evidence of indebtedness, or under any
lease, contract, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which it or any of the Subsidiaries or their
respective properties may be bound, (ii) the charter, bylaws, certificate of
limited partnership or partnership agreement of the Company or any of the
Subsidiaries, or (iii) any law, order, rule, regulation, writ, injunction,
judgment or decree of any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of the
Subsidiaries or over their respective properties. No consent, approval,
authorization or order of or qualification with any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over the
Company or any of the Subsidiaries or over their respective properties is
required for the execution and delivery of this Agreement and the consummation
by the Company or any of the Subsidiaries of the transactions herein
contemplated, except such as may be required under the Act or under state or
other securities or Blue Sky laws.
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(e) Each Formation Agreement will be duly authorized, executed
and delivered by each party thereto on or prior to the Closing Date, and will
constitute a valid and binding agreement on the part of each of the parties
thereto, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, moratorium or other
similar laws relating to or affecting creditors' rights general or by general
equitable principles; the performance of each of the Formation Agreements by
each of the parties thereto and the consummation of the transactions therein
contemplated will not result in a material breach or violation of any of the
terms and provisions of, or constitute a default under, (i) any bond, debenture,
note or other evidence of indebtedness, or under any lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument to which any of such parties is a party or by which any of such
parties or their respective properties may be bound, (ii) the charter, bylaws or
organizational documents of any of such parties, or (iii) any law, order, rule,
regulation, writ, injunction, judgment or decree of any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over any
of such parties or over their respective properties. No consent, approval,
authorization or order of or qualification with any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over any
of such parties or over their respective properties is required for the
execution and delivery of the Formation Agreements and the consummation by such
parties of the transactions therein contemplated.
(f) Except as described in the Prospectus, there is not any
pending or, to the best of the Company's knowledge, threatened action, suit,
claim or proceeding against the Company, any of the Subsidiaries, the Prior
Owners, the Initial Lessees or any of their respective officers or any of their
respective properties, assets or rights before any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over the
Company, any of the Subsidiaries, any Prior Owner, or any Initial Lessee or over
their respective officers or properties or otherwise which (i) might have a
Material Adverse Effect on the Company and the Subsidiaries considered as one
enterprise or any Initial Lessee or on their respective properties, assets or
rights, (ii) might prevent consummation of the transactions contemplated hereby
or (iii) is required to be disclosed in the Registration Statement or Prospectus
and is not so disclosed; and there are no agreements, contracts, leases or
documents of a character required to be described or referred to in the
Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement by the Act or the Rules and Regulations which have not
been accurately described in all material respects in the Registration Statement
or Prospectus or filed as exhibits to the Registration Statement.
(g) All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, were
not issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities, and the authorized and outstanding
capital stock of the Company is as set forth in the Prospectus under the caption
"Capitalization" and conforms in all material respects to the
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statements relating thereto contained in the Registration Statement and the
Prospectus (and such statements correctly state the substance of the instruments
defining the capitalization of the Company); the Firm Shares and the Option
Shares have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and delivered by the Company against
payment therefor in accordance with the terms of this Agreement, will be duly
and validly issued and fully paid and nonassessable, and will be sold free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest; and no preemptive right, co-sale right, registration right, right of
first refusal or other similar right of shareholders exists with respect to any
of the Firm Shares or Option Shares or the issuance and sale thereof other than
those that have been expressly waived prior to the date hereof and those that
will automatically expire upon and will not apply to the consummation of the
transactions contemplated on the Closing Date. No further approval or
authorization of any shareholder, the Board of Directors of the Company or
others is required for the issuance and sale or transfer of the Shares except as
may be required under the Act or under state or other securities or Blue Sky
laws. All issued and outstanding shares of capital stock of each Subsidiary
(exclusive of the Operating Partnership) have been duly authorized and validly
issued and are fully paid and nonassessable, and were not issued in violation of
or subject to any preemptive rights or other rights to subscribe for or purchase
securities and are owned by the Company free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest. Except as
disclosed in the Prospectus and the financial statements of the Company and the
related notes thereto included in the Prospectus, neither the Company nor any
Subsidiary has outstanding any options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted and
exercised thereunder, set forth in the Prospectus accurately and fairly presents
the information required to be shown with respect to such plans, arrangements,
options and rights.
(h) As of the Closing Date, (i) all of the outstanding OP Units
of the Operating Partnership, and partnership interests or membership interests
in the Initial Lessees will be validly issued or created under the agreements
forming the Operating Partnership and the Initial Lessees and will be owned or
held by the persons in the percentage amounts set forth and in the manner
described in the Prospectus, and (ii) the Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, and the organizational or
formation documents and the Initial Lessees will each be in full force and
effect. GTA GP is the sole general partner of the Operating Partnership, and,
upon completion of the Formation, will own a 0.2% general partnership interest
in the Operating Partnership. Upon completion of the Formation, GTA LP will own
an approximate 40.7% limited partnership interest in the Operating Partnership.
Except as described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), there are no outstanding options, warrants or
other rights calling for the issuance of, or any commitment, plan or arrangement
to issue, any equity interests in the Operating Partnership,
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or any membership or equity interests in the Initial Lessees or any security
convertible into, or exchangeable or exercisable for, any such interests in the
Operating Partnership or the Initial Lessees.
(i) Each of Price Waterhouse LLP, BDO Xxxxxxx, LLP, Coopers &
Xxxxxxx L.L.P. and Xxxxx, Xxxxxx and Company LLP (collectively, the
"Accountants"), which have examined the financial statements and the related
schedules filed with the Commission as a part of the Registration Statement,
which are included in the Prospectus, are independent accountants within the
meaning of the Act and the Rules and Regulations; the audited consolidated
financial statements, together with the related schedules and notes, and the
unaudited consolidated financial information, forming part of the Registration
Statement and Prospectus, fairly present the financial position and the results
of operations of the Company, the Golf Courses and the Prior Owners at the
respective dates and for the respective periods to which they apply; and all
audited consolidated financial statements, together with the related schedules
and notes, and the unaudited consolidated financial information, filed with the
Commission as part of the Registration Statement, have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved except as may be otherwise stated therein. The
selected and summary financial and statistical data included in the Registration
Statement present fairly the information shown therein and have been compiled on
a basis consistent with the audited financial statements presented therein. The
pro forma financial statements of the Company and the Initial Lessees included
in the Registration Statement and the Prospectus comply in all material respects
with the applicable requirements of Rule 11-02 of Regulation S-X of the
Commission, and the pro forma adjustments have been made based upon management's
reasonable good faith estimates of the pro forma adjustments and have been
properly applied to the audited historical amounts in the compilation of such
statements. No other financial statements or schedules are required to be
included in the Registration Statement.
(j) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, there has not been
(i) any material adverse change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and the
Subsidiaries considered as one enterprise, (ii) any transaction material to the
Company and the Subsidiaries considered as one enterprise, except transactions
entered into in the ordinary course of business, (iii) any obligation, direct or
contingent, that is material to the Company and the Subsidiaries considered as
one enterprise, incurred by the Company or the Subsidiaries, except obligations
incurred in the ordinary course of business, (iv) any change in the capital
stock or outstanding indebtedness of the Company or any of the Subsidiaries that
is material to the Company and the Subsidiaries considered as one enterprise,
(v) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company or any of the Subsidiaries, or (vi) any loss or
damage (whether or not insured) to the property of the Company or any of the
Subsidiaries which has been sustained or will have been sustained which has a
Material Adverse Effect on the Company and the Subsidiaries considered as one
enterprise.
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(k) The purchase agreements or contribution agreements pursuant
to which the Operating Partnership will acquire the Golf Courses, the forms of
which or actual copies of which have been filed as exhibits to the Registration
Statement (collectively, the "Contribution Agreements"), have been duly
authorized, executed and delivered by each of the parties thereto. The
Contribution Agreements give the Operating Partnership the right (subject only
to customary closing deliveries and other immaterial closing conditions), upon
payment of the consideration provided in the Contribution Agreements, to acquire
the Golf Courses. Such Contribution Agreements and all deeds, assignments of
leases and other documents delivered or to be delivered in connection therewith
are legally sufficient to effect the sale to the Operating Partnership of all
right, title and interest in and to the Golf Courses upon payment of the amounts
provided for in the Contribution Agreements. Upon the consummation of the
Formation Transactions, the Operating Partnership will have good and marketable
title in fee simple to each of the items of real property and good and
marketable title to each of the items of personal property which are included in
the Golf Courses or are referred to in the Registration Statement and the
Prospectus or are reflected in the financial statements referred to in
Section 3(i) hereof as being owned by the Prior Owners or the Operating
Partnership, as the case may be, and valid and enforceable leasehold interests
in each of the items of real and personal property which are included in the
Golf Courses or are referred to in the Registration Statement and the Prospectus
as being leased by the Prior Owners or the Operating Partnership, as the case
may be, in each case free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest other than those described in the
Registration Statement and the Prospectus. All leases pursuant to which the
Operating Partnership will lease any items of real or personal property included
in the Golf Courses, including, without limitation, all ground leases with
respect to the real property underlying certain of the Golf Courses, are valid,
binding and enforceable leases. Such leases conform in all material respects to
the description thereof set forth in the Registration Statement and no notice
has been given or material claim asserted by anyone adverse to the rights of the
Prior Owners under any of such leases or affecting the Operating Partnership's
right to continued possession of any leased property.
(l) The Company, each of the Subsidiaries and each of the
Initial Lessees will have timely filed all necessary federal, state and foreign
income and franchise tax returns and have paid all taxes shown thereon as due,
and there is no tax deficiency that has been or, to the best of the Company's
knowledge, might be asserted against the Company, any of the Subsidiaries or the
Initial Lessees that might have a Material Adverse Effect on the Company and the
Subsidiaries considered as one enterprise, or any Initial Lessee; and all tax
liabilities are adequately provided for on the books of the Company, the
Subsidiaries and the Initial Lessees.
(m) As of the Closing Date and after giving effect to the
Formation, the Company, the Subsidiaries and the Initial Lessees will maintain
insurance with 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
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real and personal property owned or leased by the Company, the Subsidiaries or
the Initial Lessees against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against, all of which insurance is in full
force and effect; neither the Company, any Subsidiary nor any Initial Lessee has
been refused any insurance coverage sought or applied for; and neither the
Company, any Subsidiary nor any Initial Lessee has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect on the Company and the Subsidiaries considered as one enterprise
or any Initial Lessee.
(n) The offers and sales of OP Units prior to the date hereof
are exempt from the registration statements of the Act and applicable state
securities and blue sky laws.
(o) To the best of Company's knowledge, no labor disturbance by
the employees of the Company, any of the Subsidiaries or the Initial Lessees
exists or is imminent; and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers that might
be expected to result in a material adverse change in the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company and the Subsidiaries considered as one enterprise or any Initial Lessee.
No collective bargaining agreement exists with any of the Company's employees
and, to the best of the Company's knowledge, no such agreement is imminent.
(p) As of the Closing Date and after giving effect to the
Formation, (i) each of the Company, the Operating Partnership, each of the other
Subsidiaries and each of the Initial Lessees has all permits, licenses,
franchises and authorizations of governmental and regulatory authorities
("permits") as are necessary to own or lease its respective properties and to
conduct its business in the manner described in the Prospectus, (ii) each of the
Company, the Operating Partnership, each other Subsidiary and each Initial
Lessee has fulfilled and performed all its obligations with respect to such
permits, and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such permit, subject in
each case to such qualification as may be set forth in the Prospectus, and (iii)
except as described in the Prospectus, none of such permits contains any
restriction that is materially burdensome to the Company, the Operating
Partnership, any of the other Subsidiaries or any Initial Lessee.
(q) The Company, the Subsidiaries and the Initial Lessees, upon
the consummation of the Formation Transactions, will own or possess adequate
rights to use all patents, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names and copyrights (the "Intangible Rights")
which are necessary to conduct the business of the Golf Courses as described in
the Registration Statement and Prospectus; the expiration of any Intangible
Rights would not have a Material Adverse Effect on the Company and the
Subsidiaries considered as one enterprise or any Initial Lessee; the
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Company has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of the Company, any Subsidiary,
any Initial Lessee or any Prior Owner by others with respect to any Intangible
Rights; and the Company has not received any notice of, and has no knowledge of,
any infringement of or conflict with asserted rights of others with respect to
any Intangible Rights, which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a material adverse effect on
the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and the Subsidiaries considered as one
enterprise or any of the Initial Lessees.
(r) The Common Stock has been approved for listing on the
American Stock Exchange, subject to official notice of issuance.
(s) The Company, the Subsidiaries and the Initial Lessees are
not now and after the sale of the Shares to be sold hereunder and application of
the net proceeds from such sale as described in the Prospectus under the caption
"Use of Proceeds," none of them will be, an "investment company", or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(t) The Company has not distributed and will not distribute
prior to the later of (i) the Closing Date, or any date on which Option Shares
are to be purchased, as the case may be, and (ii) completion of the distribution
of the Shares, any offering material in connection with the offering and sale of
the Shares other than any Preliminary Prospectuses, the Prospectus, the
Registration Statement and other materials, if any, permitted by the Act.
(u) Neither the Company nor any of the Subsidiaries has at any
time during the last five years (i) made any unlawful contribution to any
candidate for foreign office or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.
(v) The Company 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 stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(w) Xxxxx X. Xxxxx and each officer of the Company has agreed in
writing that such person will not, for a period of 30 months from the date that
the Registration Statement is declared effective by the Commission (the "Lock-up
Period"), offer to sell, contract to sell, or otherwise sell, dispose of, loan,
or grant any rights with respect to (collectively, a "Disposition") any shares
of Common Stock, any options or warrants to purchase any shares of Common Stock
or any securities convertible into, exercisable for or
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exchangeable for shares of Common Stock (collectively, "Securities") now owned
or hereafter acquired directly by such person or any affiliate or with respect
to which such person has or hereafter acquires the power of Disposition,
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a distribution
to partners or shareholders of such person, provided that the distributees
thereof agree in writing to be bound by the terms of this restriction, (iii)
with respect to up to 85% of such Securities, in connection with pledges to
secure obligations for borrowed money, or (iv) with the prior written consent of
Xxxxxxxxx, Xxxxxxxx & Company LLC; provided, that after the expiration of the
18-month period following the effective date of the Registration Statement, the
Disposition of up to 50% of the Securities held by such persons shall be
permitted. The foregoing restriction has been expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition of
Securities during the Lock-up Period, even if such Securities would be disposed
of by someone other than such holder. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from
Securities. Furthermore, such person has also agreed and consented to the entry
of stop transfer instructions with the Company's transfer agent against the
transfer of the Securities held by such person except in compliance with this
restriction. The Company has provided to counsel for the Underwriters a
complete and accurate list of all securityholders of the Company and the number
and type of securities held by each securityholder. The Company has provided to
counsel for the Underwriters true, accurate and complete copies of all of the
agreements pursuant to which Xx. Xxxxx and the Company's officers have agreed to
such or similar restrictions (the "Lock-up Agreements") presently in effect or
effected hereby. The Company hereby represents and warrants that it will not
release any of its officers or Xx. Xxxxx from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of Xxxxxxxxx,
Xxxxxxxx & Company LLC.
(x) The Company and each of the Subsidiaries maintains and will
continue to maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(y) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers or
directors of the
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Company or any of the members of the families of any of them, except as
disclosed in the Registration Statement and the Prospectus.
(z) Except as described in the Prospectus, no person or entity
has any right to require the registration of any shares of Common Stock or any
other securities of the Company because of the filing of the Registration
Statement or sale of the Shares contemplated by this Agreement.
(aa) The Company and the Subsidiaries are organized and intend to
operate in the manner described in the Registration Statement so that the
Company will meet the requirements for qualification as a real estate investment
trust under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the rules and regulations thereunder as currently in
effect, commencing with the year ending December 31, 1997. The Operating
Partnership will be treated as a partnership, and not as an association taxable
as a corporation or a publicly traded partnership, for federal income tax
purposes.
(bb) As of the Closing Date and after giving effect to the
Formation, the Operating Partnership will have obtained ALTA Extended Coverage
Owner's Policies of Title Insurance from title insurers of recognized financial
responsibility on each of the Golf Courses in the amounts set forth in SCHEDULE
3(ab), and such title insurance shall be in full force and effect.
(cc) (i) No lessee, licensee or concessionaire of any
portion of any of the Golf Courses is in default under any of the leases or
licenses governing such properties and there is no event which, but for the
passage of time or the giving of notice, or both, would constitute a
default under any of such leases or licenses, except such defaults that
would not, upon consummation of the Formation Transactions, singly or in
the aggregate, have a Material Adverse Effect on the Company and the
Subsidiaries considered as one enterprise.
(ii) Except as set forth in the Prospectus, all such
leases or licenses are assignable without consent, or approval has been
obtained to assign any such lease or license, to the Company, the Operating
Partnership, the Subsidiaries or the Initial Lessees, as applicable, on the
Closing Date. Other than payments set forth in the Purchase Agreements,
none of the Company, any Subsidiary nor any Initial Lessee will be required
to make any payments to, or on behalf of, any of the Prior Owners or any
other parties other than taxing authorities in connection with the
acquisition of the Golf Courses.
(dd) Each of the Golf Courses, the Company, the Subsidiaries
and the Initial Lessees, (i) is and will be, as of the Closing Date and upon
consummation of the Formation Transactions, in compliance in all material
respects with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
-13-
contaminants ("Environmental Laws"), (ii) has received, or will have received,
as of the Closing Date and upon consummation of the Formation Transactions, as
the case may be, all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective business and (iii) is,
and will be as of the Closing Date and upon consummation of the Formation
Transactions, in material compliance with all terms and conditions of any such
permit, license or approval.
(ee) (i) Except as may be specifically disclosed in the
"Phase I" environmental assessment reports referred to in the Prospectus
(the "Environmental Reports"), the Company, the Subsidiaries, the Initial
Lessees and the Prior Owners have not at any time, and, to the knowledge of
the Company, no other party has at any time, handled, buried, stored,
retained, refined, transported, processed, manufactured, generated,
produced, spilled, allowed to seep, leak, escape or xxxxx, or be pumped,
poured, emitted, emptied, discharged, injected, dumped, transferred or
otherwise disposed of or dealt with, Hazardous Materials (as hereinafter
defined) on, to or from the Golf Courses. The Company, the Subsidiaries
and the Initial Lessees do not intend to use the Golf Courses or any
subsequently acquired properties for the purpose of handling, burying,
storing, retaining, refining, transporting, processing, manufacturing,
generating, producing, spilling, seeping, leaking, escaping, leaching,
pumping, pouring, emitting, emptying, discharging, injecting, dumping,
transferring or otherwise disposing of or dealing with Hazardous Materials,
except for such Hazardous Materials as may be customarily required in golf
course operations, stored and used in the quantities customary for such
uses and in compliance with applicable Environmental Laws.
(ii) Except as disclosed in the Environmental Reports,
to the knowledge of the Company, there has been no seepage, leak, escape,
xxxxx, discharge, injection, release, emission, spill, pumping, pouring,
emptying or dumping of Hazardous Materials into waters on or adjacent to
the Golf Courses or onto lands from which such hazardous or toxic waste of
substances might seep, flow or drain into such waters.
(iii) Except as disclosed in the Environmental Reports,
neither the Company, any Subsidiary, any Initial Lessee nor any Prior Owner
has received notice of any occurrence or circumstance which, with notice or
passage of time or both, would give rise to, any claim under or pursuant to
any Environmental Law pertaining to hazardous or toxic waste or substances
on or originating from the Golf Courses or arising out of the conduct of
any such party, including, without limitation, pursuant to any
Environmental Law.
(iv) No environmental engineering firm which prepared
the Environmental Reports (or amendments thereto) or physical condition
(engineering) reports with respect to the Golf Courses was employed for
such purpose on a
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contingent basis or has any substantial interest in the Company, the
Subsidiaries, the Initial Lessees or any Prior Owner.
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related
materials, asbestos or any material as defined by any Federal, state or local
environmental law, ordinance, rule, or regulation including, without limitation,
Environmental Laws, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. Section 9601, ET SEQ.) ("CERCLA"),
the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801,
ET SEQ.), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 9601, ET seq.) and in the regulations adopted and publications
promulgated pursuant to each of the foregoing or by any Federal, state or local
governmental authority having or claiming jurisdiction over the Golf Courses as
described in the Prospectus.
(ff) To the knowledge of the Company, all physical condition
(engineering) reports obtained for the Golf Courses in connection with the
Formation Transactions are materially true and correct. The Company will set
aside annually, as a cash reserve account for capital expenditures, an amount
equal to 2 to 3% of total gross golf revenues for each of the Golf Courses.
Other than as described in the Prospectus, neither the Company nor any of the
Subsidiaries nor, to the knowledge of the Company, any Initial Lessee nor any
Prior Owner is aware of any material capital expenditures (other than
expenditures for maintenance in the ordinary course of business) which will be
required in connection with any of the Golf Courses prior to the fifth
anniversary of this Agreement.
(gg) The statements set forth in the Prospectus under the
caption "Federal Income Tax Considerations," insofar as they purport to describe
the provisions of the laws and documents referred to therein, are accurate and
complete.
(hh) The assets of the Company and the Subsidiaries do not, and
as of the Closing Date and after giving effect to the Formation will not
constitute, "plan assets" under the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
4. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $_____ per share, the
respective number of Firm Shares as hereinafter set forth. The obligation of
each Underwriter to the Company shall be to purchase from the Company that
number of Firm Shares which is set forth opposite the name of such Underwriter
in Schedule A hereto (subject to adjustment as provided in Section 11).
Delivery of definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 4 shall be made against
payment of the purchase price
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therefor by the several Underwriters by wire transfer of same-day funds, payable
to the order of the Company, at the offices of O'Melveny & Xxxxx, LLP, 000
Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000 (or at such other place as may
be agreed upon among the Representatives and the Company), at 7:00 A.M., San
Francisco time (a) on the third (3rd) full business day following the day that
this Agreement is executed, provided it is executed prior to 1:30 p.m. San
Francisco time, (b) if this Agreement is executed and delivered after 1:30 P.M.,
San Francisco time, the fourth (4th) full business day following the day that
this Agreement is executed and delivered or (c) at such other time and date not
later than seven (7) full business days following the first day that Shares are
traded as the Representatives and the Company may mutually determine (or at such
time and date to which payment and delivery shall have been postponed pursuant
to Section 10 hereof), such time and date of payment and delivery being herein
called the "Closing Date;" PROVIDED, HOWEVER, that if the Company has not made
available to the Representatives copies of the Prospectus within the time
provided in Section 5(d) hereof, the Representatives may, in their sole
discretion, postpone the Closing Date until no later than two (2) full business
days following delivery of copies of the Prospectus to the Representatives. The
certificates for the Firm Shares to be so delivered will be made available to
you at such office or such other location including, without limitation, in New
York City, as you may reasonably request for checking at least one (1) full
business day prior to the Closing Date and will be in such names and
denominations as you may request, such request to be made at least two (2) full
business days prior to the Closing Date. If the Representatives so elect,
delivery of the Firm Shares may be made by credit through full fast transfer to
the accounts at The Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment of the purchase price on behalf of any Underwriter or Underwriters
whose check or checks shall not have been received by you prior to the Closing
Date for the Firm Shares to be purchased by such Underwriter or Underwriters.
Any such payment by you shall not relieve any such Underwriter or Underwriters
of any of its or their obligations hereunder.
After the Registration Statement becomes effective, the several
Underwriters intend to make an initial public offering (as such term is
described in Section 12 hereof) of the Firm Shares at an initial public offering
price of $_____ per share. After the initial public offering, the several
Underwriters may, in their discretion, vary the public offering price.
The information set forth in the last paragraph on the front cover
page (insofar as such information relates to the Underwriters), on the inside
front cover concerning stabilization and over-allotment by the Underwriters, and
under the _____ and _____ paragraphs under the caption "Underwriting" in any
Preliminary Prospectus and in the Prospectus constitutes the only information
furnished by the Underwriters to the Company for inclusion in any Preliminary
Prospectus, the Prospectus or the Registration Statement and you, on behalf of
the respective Underwriters, represent and warrant to the Company and
-16-
the Operating Partnership that the statements made therein do not include 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 the light of
the circumstances under which they were made, not misleading.
5. FURTHER AGREEMENTS OF THE COMPANY, GTA GP, GTA LP AND THE OPERATING
PARTNERSHIP. Each of the Company and the Operating Partnership, jointly and
severally, agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto, to
become effective as promptly as possible; the Company will use its best efforts
to cause any abbreviated registration statement pursuant to Rule 462(b) of the
Rules and Regulations as may be required subsequent to the date the Registration
Statement is declared effective to become effective as promptly as possible; the
Company will notify you, promptly after it shall receive notice thereof, of the
time when the Registration Statement, any subsequent amendment to the
Registration Statement or any abbreviated registration statement has become
effective or any supplement to the Prospectus has been filed; if the Company
omitted information from the Registration Statement at the time it was
originally declared effective in reliance upon Rule 430A(a) of the Rules and
Regulations, the Company will provide evidence satisfactory to you that the
Prospectus contains such information and has been filed, within the time period
prescribed, with the Commission pursuant to subparagraph (1) or (4) of
Rule 424(b) of the Rules and Regulations or as part of a post-effective
amendment to such Registration Statement as originally declared effective which
is declared effective by the Commission; if the Company files a term sheet
pursuant to Rule 434 of the Rules and Regulations, the Company will provide
evidence satisfactory to you that the Prospectus and term sheet meeting the
requirements of Rule 434(b) or (c), as applicable, of the Rules and Regulations,
have been filed, within the time period prescribed, with the Commission pursuant
to subparagraph (7) of Rule 424(b) of the Rules and Regulations; if for any
reason the filing of the final form of Prospectus is required under
Rule 424(b)(3) of the Rules and Regulations, it will provide evidence
satisfactory to you that the Prospectus contains such information and has been
filed with the Commission within the time period prescribed; it will notify you
promptly of any request by the Commission for the amending or supplementing of
the Registration Statement or the Prospectus or for additional information;
promptly upon your request, it will prepare and file with the Commission any
amendments or supplements to the Registration Statement or Prospectus which, in
the opinion of counsel for the several Underwriters ("Underwriters' Counsel"),
may be necessary or advisable in connection with the distribution of the Shares
by the Underwriters; it will promptly prepare and file with the Commission, and
promptly notify you of the filing of, any amendments or supplements to the
Registration Statement or Prospectus which may be necessary to correct any
statements or omissions, if, at any time when a prospectus relating to the
Shares is required to be delivered under the Act, any event shall have occurred
as a result of which the Prospectus or any other prospectus relating to the
Shares as then in effect would include any untrue
-17-
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; in case any Underwriter is required to deliver a
prospectus nine (9) months or more after the effective date of the Registration
Statement in connection with the sale of the Shares, it will prepare promptly
upon request, but at the expense of such Underwriter, such amendment or
amendments to the Registration Statement and such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section 10(a)(3)
of the Act; and it will file no amendment or supplement to the Registration
Statement or Prospectus, which shall not previously have been submitted to you a
reasonable time prior to the proposed filing thereof or to which you shall
reasonably object in writing, subject, however, to compliance with the Act and
the Rules and Regulations and the provisions of this Agreement.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge, of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose; and it will promptly
use its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued.
(c) The Company will use its best efforts to qualify the
Shares for offering and sale under the securities laws of such jurisdictions as
you may designate and to continue such qualifications in effect for so long as
may be required for purposes of the distribution of the Shares, except that the
Company shall not be required in connection therewith or as a condition thereof
to qualify as a foreign corporation or to execute a general consent to service
of process in any jurisdiction in which it is not otherwise required to be so
qualified or to so execute a general consent to service of process. In each
jurisdiction in which the Shares shall have been qualified as above provided,
the Company will make and file such statements and reports in each year as are
or may be required by the laws of such jurisdiction.
(d) The Company will furnish to you, as soon as available,
and, in the case of the Prospectus and any term sheet or abbreviated term sheet
under Rule 434, in no event later than the first (1st) full business day
following the first day that Shares are traded, copies of the Registration
Statement (three of which will be signed and which will include all exhibits),
each Preliminary Prospectus, the Prospectus and any amendments or supplements to
such documents, including any prospectus prepared to permit compliance with
Section 10(a)(3) of the Act, all in such quantities as you may from time to time
reasonably request. Notwithstanding the foregoing, if Xxxxxxxxx, Xxxxxxxx &
Company LLC, on behalf of the several Underwriters, shall agree to the
utilization of Rule 434 of the Rules and Regulations, the Company shall provide
to you copies of a Preliminary Prospectus updated in all respects through the
date specified by you in such quantities as you may from time to time reasonably
request.
-18-
(e) The Company will make generally available to its
securityholders as soon as practicable, but in any event not later than the
forty-fifth (45th) day following the end of the fiscal quarter first occurring
after the first anniversary of the effective date of the Registration Statement,
an earnings statement (which will be in reasonable detail but need not be
audited) complying with the provisions of Section 11(a) of the Act and covering
a twelve (12) month period beginning after the effective date of the
Registration Statement.
(f) During a period of five (5) years after the date hereof,
the Company will furnish to its shareholders as soon as practicable after the
end of each respective period, annual reports (including financial statements
audited by independent certified public accountants) and unaudited quarterly
reports of operations for each of the first three quarters of the fiscal year,
and will furnish to you and the other several Underwriters hereunder, upon
request (i) concurrently with furnishing such reports to its shareholders,
statements of operations of the Company for each of the first three (3) quarters
in the form furnished to the Company's shareholders, (ii) concurrently with
furnishing to its shareholders, a balance sheet of the Company as of the end of
such fiscal year, together with statements of operations, of shareholders'
equity, and of cash flows of the Company for such fiscal year, accompanied by a
copy of the certificate or report thereon of independent certified public
accountants, (iii) as soon as they are available, copies of all reports
(financial or other) mailed to shareholders, (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. ("NASD"), (v) every material press release and every material news
item or article in respect of the Company or its affairs which was generally
released to shareholders or prepared by the Company or any of the Subsidiaries,
and (vi) any additional information of a public nature concerning the Company or
the Subsidiaries, or its business which you may reasonably request. During such
five (5) year period, if the Company shall have active subsidiaries, the
foregoing financial statements shall be on a consolidated basis to the extent
that the accounts of the Company and the Subsidiaries are consolidated, and
shall be accompanied by similar financial statements for any significant
subsidiary which is not so consolidated.
(g) The Company will apply the net proceeds from the sale of
the Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common Stock.
(i) The Company will file Form SR in conformity with the
requirements of the Act and the Rules and Regulations.
-19-
(j) If the transactions contemplated hereby are not
consummated by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its parts to be performed hereunder or to
fulfill any condition of the Underwriters' obligations hereunder, or if the
Company shall terminate this Agreement pursuant to Section 12(a) hereof, or if
the Underwriters shall terminate this Agreement pursuant to Section 12(b)(i),
the Company will reimburse the several Underwriters for all out-of-pocket
expenses (including fees and disbursements of Underwriters' Counsel) incurred by
the Underwriters in investigating or preparing to market or marketing the
Shares.
(k) If at any time during the ninety (90) 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
opinion the market price of the Common Stock 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), the Company will,
after written notice from you advising the Company to the effect set forth
above, 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.
(l) During the 180-day period following the Closing Date, the
Company will not, without the prior written consent of Xxxxxxxxx Xxxxxxxx &
Company LLC, effect the Disposition of, directly or indirectly, any Securities
other than the sale of the Firm Shares and the Option Shares hereunder and the
Company's issuance of options or Common Stock under the Company's presently
authorized Employee Stock Option Plan and Non-Employee Directors' Stock Option
Plan (the "Option Plans") and the issuance of OP Units in connection with the
acquisition of additional golf courses.
(m) During a period of ninety (90) days from the effective
date of the Registration Statement, the Company will not file a registration
statement registering shares under the Option Plans or other employee benefit
plan.
6. EXPENSES.
(a) Each of the Company and the Operating Partnership, jointly
and severally, agrees with each Underwriter that:
(i) The Company will pay and bear all costs and
expenses in connection with the preparation, electronic conversion,
printing and filing of the Registration Statement (including any
abbreviated Registration Statement pursuant to Rule 462(b) of the Act)
(including financial statements, schedules and exhibits), Preliminary
Prospectuses and the Prospectus and any amendments or supplements thereto;
the printing and delivery of this Agreement, the Blue Sky Survey and any
instruments related to any of the foregoing; the issuance and delivery of
the Shares hereunder to the several
-20-
Underwriters, including transfer taxes, if any, the cost of all
certificates representing the Shares and transfer agents' and registrars'
fees; the fees and disbursements of counsel for the Company and the
Operating Partnership; all fees and other charges of the Company's
independent certified public accountants; the cost of furnishing to the
several Underwriters copies of the Registration Statement (including
appropriate exhibits), Preliminary Prospectus and the Prospectus, and any
amendments or supplements to any of the foregoing; NASD filing fees and the
cost of qualifying the Shares under the laws of such jurisdictions as you
may designate (including filing fees and fees and disbursements of
Underwriters' Counsel in connection with such NASD filings and Blue Sky
qualifications); and all other expenses directly incurred by the Company
and the Subsidiaries in connection with the performance of their
obligations hereunder.
(ii) In addition to its other obligations under
Section 9(a) hereof, the Company and the Subsidiaries agree, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding described in Section 9(a) hereof, to reimburse the
Underwriters on a monthly basis for all reasonable legal or 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 and the Subsidiaries' 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.
To the extent that any such interim reimbursement payment is so held to
have been improper, the Underwriters shall promptly return such payment to
the Company or the Subsidiaries together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate
for borrowers of the highest credit standing) listed from time to time in
The Wall Street Journal which represents the base rate on corporate loans
posted by a substantial majority of the nation's thirty (30) largest banks
(the "Prime Rate"). Any such interim reimbursement payments which are not
made to the Underwriters within thirty (30) days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.
(b) In addition to their other obligations under Section 9(b)
hereof, the Underwriters severally and not jointly agree that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding described in Section 9(b) hereof, they will reimburse the
Company on a monthly basis for all reasonable legal or 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
Underwriters' obligation to reimburse the Company for such expenses and the
possibility that such payments might
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later be held to have been improper by a court of competent jurisdiction. To
the extent that any such interim reimbursement payment is so held to have been
improper, the Company shall promptly return such payment to the Underwriters
together with interest, compounded daily, determined on the basis of the Prime
Rate. Any such interim reimbursement payments which are not made to the Company
within thirty (30) days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request.
(c) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in
Sections 6(a)(ii) and 6(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 reimbursing parties, shall be
settled by arbitration conducted under the provisions of the Constitution and
Rules of the Board of Governors of the New York Stock Exchange, Inc. or pursuant
to the Code of Arbitration Procedure of the NASD. 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 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)(ii)
and 6(b) hereof and will not resolve the ultimate propriety or enforceability of
the obligation to indemnify for expenses which is created by the provisions of
Sections 9(a) and 9(b) hereof or the obligation to contribute to expenses which
is created by the provisions of Section 9(d) hereof.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Shares as provided herein shall
be subject to the accuracy, as of the date hereof and the Closing Date and any
later date on which Option Shares are to be purchased, as the case may be, of
the representations and warranties of the Company, GTA GP, GTA LP and the
Operating Partnership herein, to the performance by the Company, GTA GP, GTA LP
and the Operating Partnership of their respective obligations hereunder and to
the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 2:00 P.M., San Francisco time, on the date following the date of this
Agreement, or such later date as shall be consented to in writing by you; and no
stop order suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge of
the Company or any Underwriter, threatened by the Commission, and any request of
the Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to the
satisfaction of Underwriters' Counsel.
(b) All corporate and partnership proceedings and other legal
matters in connection with this Agreement, the form of Registration Statement
and the Prospectus, and the registration, authorization, issue, sale and
delivery of the Shares, shall
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have been reasonably satisfactory to Underwriters' Counsel, and such counsel
shall have been furnished with such papers and information as they may
reasonably have requested to enable them to pass upon the matters referred to in
this Section.
(c) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, or any later date on which Option Shares are to
be purchased, as the case may be, there shall not have been any change in the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and the Subsidiaries considered as one enterprise from
that set forth in the Registration Statement or Prospectus, which, in your sole
judgment, is material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus.
(d) You shall have received on the Closing Date and on any
later date on which Option Shares are to be purchased, as the case may be, the
following opinion of counsel for the Company, the Operating Partnership, the
Prior Owners affiliated with Xxxxx X. Xxxxx (the "Legends Prior Owners") and the
Initial Lessees affiliated with Xxxxx X. Xxxxx (the "Legends Initial Lessees"),
dated the Closing Date or such later date on which Option Shares are to be
purchased addressed to the Underwriters and with reproduced copies or signed
counterparts thereof for each of the Underwriters, to the effect that:
(i) The Company, each Subsidiary, each Initial Lessee
and each Legends Prior Owner is a corporation, limited partnership or
limited liability company duly organized or formed, as the case may
be, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation;
(ii) The Company, each Subsidiary, each Initial Lessee
and each Legends Prior Owner has the corporate, partnership or limited
liability company power and authority to own, lease and operate its
properties or properties to be acquired in the Formation and to
conduct its business as described in the Prospectus;
(iii) The Company, each Subsidiary, each Initial Lessee
and each Legends Prior Owner is duly qualified to do business as a
foreign corporation, limited partnership or limited liability company,
as applicable, and is in good standing in each jurisdiction, if any,
in which the ownership or leasing of its properties or the conduct of
its business requires such qualification, except where the failure to
be so qualified would not have a Material Adverse Effect on the
Company and its Subsidiaries considered as one enterprise or any
Initial Lessee. To such counsel's knowledge, the Company does not own
or control, directly or indirectly, any corporation, association or
other entity other than the Subsidiaries. GTA GP is the sole general
partner of the Operating Partnership and holds an approximately 0.2%
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interest in the Operating Partnership. GTA LP owns an approximately
40.7% interest in the Operating Partnership;
(iv) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under the
caption "Capitalization" as of the dates stated therein; the issued
and outstanding shares of Common Stock have been duly and validly
issued and are fully paid and nonassessable, and will not have been
issued in violation of or subject to any preemptive right, co-sale
right, registration right, right of first refusal or other similar
right granted under the laws of the State of Maryland or under the
Articles of Incorporation or Bylaws of the Company. To such counsel's
knowledge, except as disclosed in the Prospectus, there is no
outstanding option, covenant or other right calling for the issuance
of, and no commitment, plan or arrangement to issue, any shares of
capital stock of the Company or any security convertible into or
exchangeable for capital stock of the Company;
(v) All issued and outstanding shares of capital stock
of each Subsidiary of the Company (exclusive of the Operating
Partnership) have been duly authorized and validly issued and are
fully paid and nonassessable, and will not have been issued in
violation of or subject to any preemptive right, co-sale right,
registration right, right of first refusal or other similar right
granted under the laws of the State of Maryland or under the Articles
of Incorporation or Bylaws of the Company and are owned by the Company
free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest. To such counsel's knowledge, except as
disclosed in the Prospectus, there is no outstanding option, covenant
or other right calling for the issuance of, and no commitment, plan or
arrangement to issue, any shares of capital stock of any such
Subsidiary or any security convertible into or exchangeable for
capital stock of any such Subsidiary;
(vi) The Firm Shares or the Option Shares, as the case
may be, to be issued by the Company pursuant to the terms of this
Agreement have been duly authorized and, upon issuance and delivery
against payment therefor in accordance with the terms hereof, will be
duly and validly issued and fully paid and nonassessable, and will not
have been issued in violation of or subject to any preemptive right,
co-sale right, registration right, right of first refusal or other
similar right;
(vii) All of the outstanding OP Units of the Operating
Partnership, and partnership interests or membership interests in the
Legends Initial Lessees have been validly issued or created under the
agreements forming the Operating Partnership and the Legends Initial
Lessees and are owned or held by the persons in the percentage amounts
set forth and in the
-24-
manner described in the Prospectus; the Amended and Restated Agreement
of Limited Partnership of the Operating Partnership, and the
organizational or formation documents and the Legends Initial Lessees
are each in full force and effect. Except as described in the
Registration Statement and the Prospectus, to the knowledge of such
counsel, there are no outstanding options, warrants or other rights
calling for the issuance of, or any commitment, plan or arrangement to
issue, any equity interests in the Operating Partnership, or any
membership or equity interests in any Legends Initial Lessee or any
security convertible into, or exchangeable or exercisable for, any
such interests in the Operating Partnership or any Legends Initial
Lessee.
(viii) The Company has the corporate power and authority
to enter into this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it hereunder and to
consummate the transactions contemplated herein;
(ix) Each of GTA GP, GTA LP and the Operating
Partnership has the corporate or partnership power and authority to
enter into this Agreement and to consummate the transactions
contemplated herein;
(x) This Agreement has been duly authorized by all
necessary corporate or partnership action on the part of the Company,
GTA GP, GTA LP and the Operating Partnership, and has been duly
executed and delivered by the Company, GTA GP, GTA LP and the
Operating Partnership and, assuming due authorization, execution and
delivery by the Representatives, is a valid and binding agreement of
the Company, GTA GP, GTA LP and the Operating Partnership enforceable
in accordance with its terms, except insofar as indemnification
provisions may be limited by applicable law and except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally or by general equitable principles;
(xi) Each Formation Agreement to which the Company, any
Subsidiary, any Initial Lessee or any Legends Prior Owner is a party
has been duly authorized, executed and delivered by each of such
entities and, assuming the due authorization, execution and delivery
by each other party thereto, each Formation Agreement (other than the
Contribution Agreements) constitutes a valid and binding agreement on
the part of such entity, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general equitable
principles;
-25-
(xii) The Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Act;
(xiii) The Registration Statement and the Prospectus, and
each amendment or supplement thereto (other than the financial
statements (including supporting schedules) and financial data derived
therefrom as to which such counsel need express no opinion), as of the
effective date of the Registration Statement, complied as to form in
all material respects with the requirements of the Act and the
applicable Rules and Regulations;
(xiv) The information in the Prospectus under the
caption "Capital Stock," "Certain Provisions of Maryland Law and the
Company's Charter and Bylaws," "Risk Factors," "Federal Income Tax
Considerations" and "Shares Available for Future Sale," to the extent
that it constitutes matters of law or legal conclusions, has been
reviewed by such counsel and is a fair summary of such matters and
conclusions; and the form of certificates evidencing the Common Stock
and filed as an exhibit to the Registration Statement complies with
Maryland law;
(xv) To such counsel's knowledge, there are no
agreements, contracts, leases or documents to which the Company, any
Subsidiary, any Legends Initial Lessee or any Legends Prior Owner is a
party of a character required to be described or referred to in the
Registration Statement or Prospectus or to be filed as an exhibit to
the Registration Statement which are not described or referred to
therein or filed as required. The descriptions in the Registration
Statement and the Prospectus of the contracts, leases and other legal
documents therein described insofar as such descriptions constitute
summaries of legal matters or legal conclusions, present fairly the
information required to be shown; there are no statutes or regulations
applicable to the Company, any Subsidiary, any Legends Prior Owner or
any Legends Initial Lessee or certificates, permits or other
authorizations from governmental regulatory officials or bodies
required to be obtained or maintained by any such entity, known to
such counsel, of a character required to be disclosed in the
Registration Statement or Prospectus which have not been so disclosed
and properly described therein;
(xvi) The performance of this Agreement and the
consummation of the transactions herein contemplated will not
(a) result in any violation of the charter, bylaws, certificate of
limited partnership, or partnership agreement of the Company or any
Subsidiary (b) result in a material breach or violation of any of the
terms and provisions of, or
-26-
constitute a default under, any bond, debenture, note or other
evidence of indebtedness, or any lease, contract, indenture, mortgage,
deed of trust, loan agreement, joint venture or other agreement or
instrument required to filed as an exhibit to the Registration
Statement, or any applicable statute, rule or regulation known to such
counsel or, to such counsel's knowledge, any order, writ or decree of
any court, government or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, or over any
of their properties or operations;
(xvii) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or
body having jurisdiction over the Company or any of the Subsidiaries,
or over any of their properties or operations is necessary in
connection with the consummation by the Company or the Subsidiaries of
the transactions herein contemplated, except such as have been
obtained under the Act or such as may be required under state or other
securities or Blue Sky laws in connection with the purchase and the
distribution of the Shares by the Underwriters;
(xviii) The performance of each of the Formation
Agreements to which the Company, any Subsidiary, any Legends Prior
Owner or any Legends Initial Lessee is a party and the consummation of
the transactions therein contemplated will not (a) result in any
violation of the charter, bylaws, certificate of limited partnership,
partnership agreement or operating agreement of any such entity, or
(b) result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, any bond, debenture,
note or other evidence of indebtedness, or any lease, contract,
indenture, mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument required to be filed as an exhibit to
the Registration Statement, or any applicable statute, rule or
regulation known to such counsel or, to such counsel's knowledge, any
order, writ or decree of any court, government or governmental agency
or body having jurisdiction over any such entity, or over any of their
properties or operations;
(xix) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or
body having jurisdiction over the Company, any of the Subsidiaries,
any Legends Initial Lessee or any Legends Prior Owner, or over any of
their properties or operations is necessary in connection with the
consummation by any of such entities of the transactions contemplated
in any of the Formation Agreements to which it is a party;
(xx) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company,
any Subsidiary, any Legends Initial Lessee or any Legends Prior Owner
of a
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character required to be disclosed in the Registration Statement or
the Prospectus by the Act or the Rules and Regulations other than
those described therein;
(xxi) To such counsel's knowledge, neither the Company
nor any of the Subsidiaries is presently (a) in violation of its
respective charter, bylaws, certificate of limited partnership or
partnership agreement or (b) in material breach of any applicable
statute, rule or regulation known to such counsel or, to such
counsel's knowledge, any order, writ or decree of any court or
governmental agency or body having jurisdiction over the Company or
any of the Subsidiaries, or over any of their properties or
operations; and
(xxii) To such counsel's knowledge, except as set forth
in the Registration Statement and Prospectus, no holders of Common
Stock or other securities of the Company have registration rights with
respect to securities of the Company;
(xxiii) The Company is organized in conformity with the
requirements for qualification as a real estate investment trust
("REIT") pursuant to Sections 856 through 860 of the Code, and the
Company's method of operations enables it to meet the requirements for
qualification and taxation as a real estate investment trust under the
Code. The Operating Partnership will be treated as a partnership for
federal income purposes and not as a corporation or any association
taxable as a corporation; and
(xxiv) The offers and sales of OP Units by the Operating
Partnership, and the offers and sales by the Company of shares of
Common Stock prior to the effective date of the Registration Statement
and the Prospectus, are exempt from the registration requirements of
the Act and applicable blue sky laws.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company and the Operating Partnership, the Representatives, Underwriters'
Counsel and the independent certified public accountants of the Company, at
which such conferences the contents of the Registration Statement and Prospectus
and related matters were discussed, and although they have not verified the
accuracy or completeness of the statements contained in the Registration
Statement or the Prospectus, nothing has come to the attention of such counsel
which leads them to believe that, at the time the Registration Statement became
effective and at all times subsequent thereto up to and on the Closing Date and
on any later date on which Option Shares are to be purchased, the Registration
Statement and any amendment or supplement thereto (other than the financial
statements including supporting schedules and other financial and statistical
information derived therefrom, as to which such counsel need express no comment)
contained any untrue statement of a material fact or omitted to state a material
fact
-28-
required to be stated therein or necessary to make the statements therein not
misleading, or at the Closing Date or any later date on which the Option Shares
are to be purchased, as the case may be, the Registration Statement, the
Prospectus and any amendment or supplement thereto (except as aforesaid)
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States or the States of California and
New York upon opinions of local counsel, and as to questions of fact upon
representations or certificates of officers of the Company, the Subsidiaries,
the Legends Initial Lessees and the Legends Prior Owners and of government
officials, in which case their opinion is to state that they are so relying and
that they have no knowledge of any material misstatement or inaccuracy in any
such opinion, representation or certificate and that the form and scope of such
opinions are satisfactory to such counsel and that they have no reason to
believe that they and you are not justified in relying thereon. Copies of any
opinion, representation or certificate so relied upon shall be delivered to you,
as Representatives of the Underwriters, and to Underwriters' Counsel.
(e) You shall have received on the Closing Date and on any later date
on which Option Shares are to be purchased, as the case may be, an opinion of
Hunton & Xxxxxxxx, in form and substance satisfactory to you, with respect to
the sufficiency of all such corporate proceedings and other legal matters
relating to this Agreement and the transactions contemplated hereby as you may
reasonably require, and the Company, the Subsidiaries, the Prior Owners and the
Initial Lessees shall have furnished to such counsel such documents as they may
have requested for the purpose of enabling them to pass upon such matters.
(f) You shall have received on the Closing Date and on any later date
on which Option Shares are to be purchased, as the case may be, a letter from
each of the Accountants addressed to the Underwriters, dated the Closing Date or
such later date on which Option Shares are to be purchased, as the case may be,
confirming that such Accountants are independent certified public accountants
with respect to the Company and the Prior Owners within the meaning of the Act
and the applicable published Rules and Regulations and based upon the procedures
described in such letter delivered to you concurrently with the execution of
this Agreement (herein called the "Original Letters"), but carried out to a date
not more than five (5) business days prior to the Closing Date or such later
date on which Option Shares are to be purchased, as the case may be,
(i) confirming, to the extent true, that the statements and conclusions set
forth in the Original Letters are accurate as of the Closing Date or such later
date on which Option Shares are to be purchased, as the case may be, and
(ii) setting forth any revisions and additions to the statements and conclusions
set forth in the Original Letters which are necessary to reflect any changes in
the facts described in the Original Letters since the date of such letter, or to
reflect the availability of more recent financial statements, data or
information. The letters
-29-
shall not disclose any change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and the
Subsidiaries considered as one enterprise from that set forth in the
Registration Statement or Prospectus, which, in your sole judgment, is material
and adverse and that makes it, in your sole judgment, impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated by
the Prospectus. The Original Letter from each of the Accountants shall be
addressed to or for the use of the Underwriters in form and substance
satisfactory to the Underwriters and shall (i) represent, to the extent true,
that such Accountants are independent certified public accountants with respect
to the Company and the Prior Owners within the meaning of the Act and the
applicable published Rules and Regulations, (ii) state that, in such
Accountants' opinion, the consolidated financial statements of the Company (with
respect to Price Waterhouse LLP) and the Prior Owners (as applicable to each
Accountant) included in the Registration Statement and Prospectus comply as to
form in all material respects with the applicable accounting requirements of the
Act and the rules and regulations thereunder with respect to registration
statements on Form S-11, (iii) state that such Accountants have performed the
procedures set out in Statement on Auditing Standards No. 71 ("SAS 71") for a
review of interim financial information for each of the quarters in the three-
quarter period ended September 30, 1995 (the "Quarterly Financial Statements")
reviewed by Price Waterhouse LLP with respect to the Company and the other
Accountants with respect to the Prior Owners, (iv) state that in the course of
such review, nothing came to their attention that leads them to believe that any
material modifications need to be made to any of the Quarterly Financial
Statements reviewed by such Accountants in order for them to be in compliance
with generally accepted accounting principles consistently applied across the
periods presented, and (v) address other matters agreed upon by such Accountants
and you.
(g) You shall have received on the Closing Date and on any later date
on which Option Shares are to be purchased, a certificate of each of the
Company, the Operating Partnership, GTA GP and GTA LP, as applicable, dated the
Closing Date or such later date on which Option Shares are to be purchased,
signed by the Chief Executive Officer and Chief Financial Officer of the
Company, GTA GP and GTA LP, and the General Partner of the Operating
Partnership, as applicable, to the effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company, GTA GP,
GTA LP, and the Operating Partnership in this Agreement are true and
correct, as if made on and as of the Closing Date or any later date on
which Option Shares are to be purchased, as the case may be, and each
of the Company and the Operating Partnership has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date or any later
date on which Option Shares are to be purchased, as the case may be;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been
-30-
instituted or are pending or, to the knowledge of the Company,
threatened under the Act;
(iii) When the Registration Statement became effective and at
all times subsequent thereto up to the delivery of such certificate,
the Registration Statement and the Prospectus, and any amendments or
supplements thereto, contained all material information required to be
included therein by the Act and the Rules and Regulations and in all
material respects conformed to the requirements of the Act and the
Rules and Regulations be, the Registration Statement, and any
amendment or supplement thereto, did not and does not include any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, the Prospectus, and any amendment or
supplement thereto, did not and does not include any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, 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 which has not been so
set forth; and
(iv) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, there has not
been (a) any material adverse change in the condition (financial or
otherwise), earnings, operations, business or business prospects of
the Company and the Subsidiaries considered as one enterprise, (b) any
transaction that is material to the Company and the Subsidiaries
considered as one enterprise, except transactions entered into in the
ordinary course of business, (c) any obligation, direct or contingent,
that is material to the Company and the Subsidiaries considered as one
enterprise, incurred by the Company or the Subsidiaries, except
obligations incurred in the ordinary course of business, (d) any
change in the capital stock or outstanding indebtedness of the Company
or any of the Subsidiaries that is material to the Company and the
Subsidiaries considered as one enterprise, (e) any dividend or
distribution of any kind declared, paid or made on the capital stock
of the Company or any of the Subsidiaries, or (f) any loss or damage
(whether or not insured) to the property of the Company or any of the
Subsidiaries which has been sustained or will have been sustained
which has a Material Adverse Effect on the Company and the
Subsidiaries considered as one enterprise.
(h) The Company shall have obtained and delivered to you an
agreement from Xxxxx X. Xxxxx and each officer of the Company, in writing prior
to the date hereof that each such person will not, during the Lock-up Period,
effect the Disposition of any Securities now owned or hereafter acquired
directly by such person or with respect to which such person has or hereafter
acquires the power of disposition, otherwise than (i) as
-31-
a bona fide gift or gifts, provided the donee or donees thereof agree in writing
to be bound by this restriction, (ii) as a distribution to partners or
shareholders of such person, provided that the distributees thereof agree in
writing to be bound by the terms of this restriction, or (iii) with respect to
up to 85% of such Securities, in connection with pledges to secure obligations
for borrowed money, or (iv) with the prior written consent of Xxxxxxxxx,
Xxxxxxxx & Company LLC; provided, that after the expiration of the 18-month
period following the effective date of the Registration Statement, the
Disposition of up to 50% of the Securities held by such persons shall be
permitted. The foregoing restriction shall have been expressly agreed to
preclude the holder of the Securities from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result in
a Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than the such holder. Such prohibited
hedging or other transactions would include, without limitation, any short sale
(whether or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any
Securities or with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from Securities. Furthermore, such person will have also agreed and
consented to the entry of stop transfer instructions with the Company's transfer
agent against the transfer of the Securities held by such person except in
compliance with this restriction.
(i) All of the Formation Documents shall have been executed
and, if applicable, delivered contemporaneously with or prior to the sale of the
Firm Shares.
(j) Each of the Formation Transactions shall have been
consummated contemporaneously with or prior to the sale of the Firm Shares
hereunder.
(k) The Company shall have delivered to the Underwriters
satisfactory evidence of the following with respect to each Golf Course:
(i) a copy of an executed and recordable valid deed
therefor, naming the Operating Partnership as the grantee thereunder;
(ii) an enforceable assignment and assumption agreement
in respect of all leases and any lease guarantees being transferred to
the Operating Partnership in connection with the Formation;
(iii) an ALTA Extended Coverage Owner's Policy of Title
Insurance (or a commitment to issue such a policy) naming the
Operating Partnership as name insured and insuring (or committing to
insure) that the Operating Partnership owns fee title to the real
property in an amount at least equal to the amounts set forth on
SCHEDULE 3(ac), which policy (or commitment) shall be issued by a
title insurance company reasonably acceptable to the Underwriters (any
such person or persons, the "Title Company"), and contain as
exceptions to title only the exceptions described
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in the Formation Documents relating to the transfer of such Golf
Course or all the equity interests in the entity owning such hotel in
connection with the Formation or which counsel for the Underwriters
shall have approved (the "Permitted Exceptions") and any such
endorsements to such policy as the Underwriters may reasonably
require;
(iv) a survey of the Golf Course in form satisfactory
to the Underwriters and the Title Company in connection with the
issuance of an ALTA Extended Coverage Owner's Policy of Title
Insurance;
(v) policies or certificates of insurance relating to
such Golf Course evidencing coverages and in amounts customarily
obtained by owners of similar properties;
(vi) UCC, judgment and tax lien searches confirming
that the personal property comprising a part of such Golf Course is
subject to no Liens other than Permitted Exceptions;
(vii) copies of such affidavits, certificates and
instruments of indemnification as shall reasonably be required to
induce the Title Company to issue the policy (or commitment)
contemplated in subparagraph (iii) above;
(viii) a schedule or other written evidence of checks
payable to the appropriate public officials in payment of all
recording costs and transfer taxes (or checks or wire transfers to the
Title Company in respect of such amounts) due in respect of any
recording of instruments in connection with the Formation
Transactions, together with a check or wire transfer for the Title
Company in payment of the Title Company's premium, search and
examination charges, survey costs and any other amounts due in
connection with the issuance of its policy;
(ix) if such Golf Course is to remain subject after the
Formation to an existing indenture, mortgage, deed of trust, loan
agreement, bond debenture, note agreement or other evidence of
indebtedness ("Existing Indebtedness"), an agreement dated not earlier
than 30 days prior to the Closing Date from the holder of such
Existing Indebtedness together with any other necessary party
indicating such holder's consent to those Formation Transactions
requiring its consent and effecting any required modifications to the
documents evidencing such Existing Indebtedness;
A.W an engineering (structural) report from an
engineer or engineers and in a form reasonably satisfactory to you;
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(xi) all documentation necessary to effect the transfer
of all personal property in connection with such Golf Course to the
Operating Partnership, including a xxxx of sale for the furniture,
fixtures and equipment, together with checks payable to the
appropriate public officials in payment of all recording costs and
transfer taxes (including sales taxes) due in respect of the transfer
of such personal property; provided, that such payment may be made out
of the proceeds of the Offering; and
(xii) such other agreements, documents, instruments,
reports, articles or evidences of payments properly executed, where
applicable, as may be required pursuant to the Formation Documents to
effect the transfer of such Golf Course in connection with the
Formation.
(l) The Shares shall have been listed or approved for listing,
subject to notice of issuance, on the American Stock Exchange.
(m) The Company, GTA GP, GTA LP, the Operating Partnership and
each Initial Lessee shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as you shall
have reasonably requested.
(n) All such opinions, certificates, letters and documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory to Underwriters' Counsel. The Company will furnish you with such
number of conformed copies of such opinions, certificates, letters and documents
as you shall reasonably request.
8. OPTION SHARES.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants to the several Underwriters, solely for the
purpose of covering over-allotments in connection with the distribution and sale
of the Firm Shares only, a nontransferable option to purchase up to an aggregate
of 429,750 Option Shares at the purchase price per share for the Firm Shares set
forth in Section 4 hereof. Such option may be exercised by the Representatives
on behalf of the several Underwriters on one (1) or more occasions in whole or
in part during the period of thirty (30) days after the date on which the Firm
Shares are initially offered to the public, by giving written notice to the
Company. The number of Option Shares to be purchased by each Underwriter upon
the exercise of such option shall be the same proportion of the total number of
Option Shares to be purchased by the several Underwriters pursuant to the
exercise of such option as the number of Firm Shares purchased by such
Underwriter (set forth in Schedule A hereto) bears to the total number of Firm
Shares purchased by the several Underwriters (set forth in Schedule A hereto),
adjusted by the Representatives in such manner as to avoid fractional shares.
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Delivery of definitive certificates for the Option Shares to be
purchased by the several Underwriters pursuant to the exercise of the option
granted by this Section 8 shall be made against payment of the purchase price
therefor by the several Underwriters by wire transfer of same-day funds, payable
to the order of the Company. In the event of any breach of the foregoing, the
Company shall reimburse the Underwriters for the interest lost and any other
expenses borne by them by reason of such breach. Such delivery and payment
shall take place at the offices of O'Melveny & Xxxxx LLP, 000 Xxxxxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000 (or at such other place as may be agreed upon
among the Representatives and the Company), (i) on the Closing Date, if written
notice of the exercise of such option is received by the Company at least two
(2) full business days prior to the Closing Date, or (ii) on a date which shall
not be later than the third (3rd) full business day following the date the
Company receives written notice of the exercise of such option, if such notice
is received by the Company less than two (2) full business days prior to the
Closing Date.
The certificates for the Option Shares to be so delivered will be made
available to you at such office or such other location including, without
limitation, in New York City, as you may reasonably request for checking at
least one (1) full business day prior to the date of payment and delivery and
will be in such names and denominations as you may request, such request to be
made at least two (2) full business days prior to such date of payment and
delivery. If the Representatives so elect, delivery of the Option Shares may be
made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment of the purchase price on behalf of any Underwriter or Underwriters
whose check or checks shall not have been received by you prior to the date of
payment and delivery for the Option Shares to be purchased by such Underwriter
or Underwriters. Any such payment by you shall not relieve any such Underwriter
or Underwriters of any of its or their obligations hereunder.
(b) Upon exercise of any option provided for in Section 8(a)
hereof, the obligations of the several Underwriters to purchase such Option
Shares will be subject (as of the date hereof and as of the date of payment and
delivery for such Option Shares) to the accuracy of and compliance with the
representations, warranties and agreements of the Company, GTA GP, GTA LP and
the Operating Partnership herein, to the accuracy of the statements of the
Company and officers of the Company, GTA GP, GTA LP and the Operating
Partnership made pursuant to the provisions hereof, to the performance by the
Company, GTA GP, GTA LP and the Operating Partnership of their respective
obligations hereunder, to the conditions set forth in Section 7 hereof, and to
the condition that all proceedings taken at or prior to the payment date in
connection with the sale and transfer of such Option Shares shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and you
shall have been furnished with all such documents, certificates and opinions as
you may request in order to evidence the accuracy and completeness of any of
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the representations, warranties or statements, the performance of any of the
covenants or agreements of the Company or the satisfaction of any of the
conditions herein contained.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company, GTA GP, GTA LP and the Operating Partnership,
jointly and severally, agree to indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject (including, without limitation, in its
capacity as an Underwriter or as a "qualified independent underwriter" within
the meaning of Schedule E of the Bylaws of the NASD), under the Act, the
Exchange Act or otherwise, specifically including, but not limited to, losses,
claims, damages or liabilities (or actions in respect thereof) arising out of or
based upon (i) any breach of any representation, warranty, agreement or covenant
of the Company, GTA GP, GTA LP or the Operating Partnership herein contained,
(ii) any untrue statement or alleged untrue statement of any fact contained in
the Registration Statement or any amendment or supplement thereto, or the
omission or alleged omission to state therein a fact required to be stated
therein or necessary to make the statements therein not misleading, or (iii) any
untrue statement or alleged untrue statement of any fact contained in any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or the omission or alleged omission to state therein a fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each Underwriter for any legal or other expenses reasonably incurred
by it in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company, GTA GP, GTA LP
and the Operating Partnership shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, or any such amendment or supplement thereto, in reliance upon, and
in conformity with, written information relating to any Underwriter furnished to
the Company by such Underwriter, directly or through you, specifically for use
in the preparation thereof and, PROVIDED FURTHER, that the indemnity agreement
provided in this Section 9(a) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
losses, claims, damages, liabilities or actions based upon any untrue statement
or alleged untrue statement of fact or omission or alleged omission to state
therein a fact purchased Shares, if a copy of the Prospectus in which such
untrue statement or alleged untrue statement or omission or alleged omission was
corrected had not been sent or given to such person within the time required by
the Act and the Rules and Regulations, unless such failure is the result of
noncompliance by the Company with Section 5(d) hereof.
The indemnity agreement in this Section 9(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 Act or the Exchange
Act. This indemnity agreement shall be in addition to any liabilities which the
Company may otherwise have.
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(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company, GTA GP, GTA LP and the Operating Partnership
against any losses, claims, damages or liabilities, joint or several, to which
the Company, GTA GP, GTA LP and the Operating Partnership may become subject
under the Act or otherwise, specifically including, but not limited to, losses,
claims, damages or liabilities (or actions in respect thereof) arising out of or
based upon (i) any breach of any representation, warranty, agreement or covenant
of such Underwriter herein contained, (ii) any untrue statement or alleged
untrue statement of any fact contained in the Registration Statement or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any untrue statement or alleged
untrue statement of any fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or the omission or alleged
omission to state therein a fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
the case of subparagraphs (ii) and (iii) of this Section 9(b) to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Underwriter, directly or
through you, specifically for use in the preparation thereof, and agrees to
reimburse the Company, GTA GP, GTA LP and the Operating Partnership for any
legal or other expenses reasonably incurred by the Company, GTA GP, GTA LP and
the Operating Partnership in connection with investigating or defending any such
loss, claim, damage, liability or action.
The indemnity agreement in this Section 9(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each officer of
the Company, GTA GP and GTA LP who signed the Registration Statement and each
director of the Company, GTA GP and GTA LP and each person, if any, who controls
the Company, GTA GP, GTA LP or the Operating Partnership within the meaning of
the Act or the Exchange Act. This indemnity agreement shall be in addition to
any liabilities which each Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 9, notify the indemnifying party in writing of the
commencement thereof but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 9. In case any such action is brought against
any indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it shall elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; PROVIDED, HOWEVER, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or
-37-
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of the indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with appropriate local counsel) approved by the
indemnifying party representing all the indemnified parties under Section 9(a)
or 9(b) hereof who are parties to such action), (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. In no event shall any indemnifying party be liable in
respect of any amounts paid in settlement of any action unless the indemnifying
party shall have approved the terms of such settlement; PROVIDED that such
consent shall not be unreasonably withheld. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnification could have
been sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability on all
claims that are the subject matter of such proceeding.
(d) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this Section 9
but it is 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 last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 9 provides for
indemnification in such case, all the parties hereto shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that the Underwriters
severally and not jointly are responsible pro rata for the portion represented
by the percentage that the underwriting discount bears to the initial public
offering price, and the Company, GTA GP, GTA LP and the Operating Partnership
are responsible for the remaining portion, PROVIDED, HOWEVER, that (i) no
Underwriter shall be required to contribute any amount in excess of the amount
by which the underwriting discount applicable to the Shares purchased by such
Underwriter exceeds the amount of damages which such Underwriter has otherwise
been required to pay and (ii) no person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. The contribution agreement in this Section 9(de) shall
extend upon the same terms and conditions to, and shall inure to the
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benefit of, each person, if any, who controls any Underwriter, the Company, GTA
GP, GTA LP or the Operating Partnership within the meaning of the Act or the
Exchange Act and each officer of the Company, GTA GP or GTA LP who signed the
Registration Statement and each director of the Company, GTA GP or GTA LP.
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 9, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 9 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act.
10. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties, covenants and agreements of the
Company, GTA GP, GTA LP, the Operating Partnership and the Underwriters herein
or in certificates delivered pursuant hereto, and the indemnity and contribution
agreements contained in Section 9 hereof shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter within the meaning of the
Act or the Exchange Act, or by or on behalf of the Company, GTA GP, GTA LP or
the Operating Partnership or any of their respective officers, directors or
controlling persons within the meaning of the Act or the Exchange Act, and shall
survive the delivery of the Shares to the several Underwriters hereunder or
termination of this Agreement.
11. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters
shall fail to take up and pay for the number of Firm Shares agreed by such
Underwriter or Underwriters to be purchased hereunder upon tender of such Firm
Shares in accordance with the terms hereof, and if the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters so agreed but failed to
purchase does not exceed 10% of the Firm Shares, the remaining Underwriters
shall be obligated, severally in proportion to their respective commitments
hereunder, to take up and pay for the Firm Shares of such defaulting Underwriter
or Underwriters.
If any Underwriter or Underwriters so defaults and the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters agreed
but failed to take up and pay for exceeds 10% of the Firm Shares, the remaining
Underwriters shall have the right, but shall not be obligated, to take up and
pay for (in such proportions as may be agreed upon among them) the Firm Shares
which the defaulting Underwriter or Underwriters so agreed but failed to
purchase. If such remaining Underwriters do not, at the Closing Date, take up
and pay for the Firm Shares which the defaulting Underwriter or Underwriters so
agreed but failed to purchase, the Closing Date shall be postponed for 24 hours
to allow the several Underwriters the privilege of substituting within 24 hours
(including non-business hours) another underwriter or underwriters (which may
include any nondefaulting
-39-
Underwriter) satisfactory to the Company. If no such underwriter or
underwriters shall have been substituted as aforesaid by such postponed Closing
Date, the Closing Date may, at the option of the Company, be postponed for a
further 24 hours, if necessary, to allow the Company the privilege of finding
another underwriter or underwriters, satisfactory to you, to purchase the Firm
Shares which the defaulting Underwriter or Underwriters so agreed but failed to
purchase. If it shall be arranged for the remaining Underwriters or substituted
underwriter or underwriters to take up the Firm Shares of the defaulting
Underwriter or Underwriters as provided in this Section 11, (i) the Company
shall have the right to postpone the time of delivery for a period of not more
than seven (7) full business days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement, supplements to the Prospectus or other
such documents which may thereby be made necessary, and (ii) the respective
number of Firm Shares to be purchased by the remaining Underwriters and
substituted underwriter or underwriters shall be taken as the basis of their
underwriting obligation. If the remaining Underwriters shall not take up and
pay for all such Firm Shares so agreed to be purchased by the defaulting
Underwriter or Underwriters or substitute another underwriter or underwriters as
aforesaid and the Company shall not find or shall not elect to seek another
underwriter or underwriters for such Firm Shares as aforesaid, then this
Agreement shall terminate.
In the event of any termination of this Agreement pursuant to the
preceding paragraph of this Section 11, neither the Company, GTA GP, GTA LP or
the Operating Partnership shall be liable to any Underwriter (except as provided
in Sections 6 and 9 hereof) nor shall any Underwriter (other than an Underwriter
who shall have failed, otherwise than for some reason permitted under this
Agreement, to purchase the number of Firm Shares agreed by such Underwriter to
be purchased hereunder, which Underwriter shall remain liable to the Company,
GTA GP, GTA LP and the Operating Partnership, and the other Underwriters for
damages, if any, resulting from such default) be liable to the Company, GTA GP,
GTA LP and the Operating Partnership (except to the extent provided in
Sections 6 and 9 hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section 11.
12. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at the earlier of (i) 6:30
A.M., San Francisco, California time, on the first full business day following
the effective date of the Registration Statement, or (ii) the time of the
initial public offering of any of the Shares by the Underwriters after the
Registration Statement becomes effective. The time of the initial public
offering shall mean the time of the release by you, for publication, of the
first newspaper advertisement relating to the Shares, or the time at which the
Shares are first generally offered by the Underwriters to the public by letter,
telephone, telegram or
-40-
telecopy, whichever shall first occur. By giving notice as set forth in
Section 12 before the time this Agreement becomes effective, you, as
Representatives of the several Underwriters, or the Company, may prevent this
Agreement from becoming effective without liability of any party to any other
party, except as provided in Sections 5(j), 6 and 9 hereof.
(b) You, as Representatives of the several Underwriters, shall have
the right to terminate this Agreement by giving notice as hereinafter specified
at any time on or prior to the Closing Date or on or prior to any later date on
which Option Shares are to be purchased, as the case may be, (i) if the Company
shall have failed, refused or been unable to perform any agreement on its part
to be performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled is not fulfilled, including, without
limitation, any change in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and the Subsidiaries
considered as one enterprise from that set forth in the Registration Statement
or Prospectus, which, in your sole judgment, is material and adverse, or (ii) if
additional material governmental restrictions, not in force and effect on the
date hereof, shall have been imposed upon trading in securities generally or
minimum or maximum prices shall have been generally established on the New York
Stock Exchange or on the American Stock Exchange or in the over the counter
market by the NASD, or trading in securities generally shall have been suspended
on either such exchange or in the over the counter market by the NASD, or if a
banking moratorium shall have been declared by federal, New York or California
authorities, or (iii) if the Company shall have sustained a loss by strike,
fire, flood, earthquake, accident or other calamity of such character as to
interfere materially with the conduct of the business and operations of the
Company regardless of whether or not such loss shall have been insured, or
(iv) if there shall have been a material adverse change in the general political
or economic conditions or financial markets as in your reasonable judgment makes
it inadvisable or impracticable to proceed with the offering, sale and delivery
of the Shares, or (v) if there shall have been an outbreak or escalation of
hostilities or of any other insurrection or armed conflict or the declaration by
the United States of a national emergency which, in the reasonable opinion of
the Representatives, makes it impracticable or inadvisable to proceed with the
public offering of the Shares as contemplated by the Prospectus. In the event
of termination pursuant to subparagraph (i) above, the Company shall remain
obligated to pay costs and expenses pursuant to Sections 5(j), 6 and 9 hereof.
Any termination pursuant to any of subparagraphs (ii) through (v) above shall be
without liability of any party to any other party except as provided in
Sections 6 and 9 hereof.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 12, you shall promptly
notify the Company by telephone, telecopy or telegram, in each case confirmed by
letter. If the Company shall elect to prevent this Agreement from becoming
effective, the Company shall promptly notify you by telephone, telecopy or
telegram, in each case, confirmed by letter.
13. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered,
-41-
telegraphed (and confirmed by letter) or telecopied (and confirmed by letter) to
you c/x Xxxxxxxxx, Xxxxxxxx & Company LLC, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, telecopier number (000) 000-0000, Attention:
General Counsel; if sent to the Company, such notice shall be mailed, delivered,
telegraphed (and confirmed by letter) or telecopied (and confirmed by letter) to
Golf Trust of America, Inc., 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx, 00000,
telecopier number (000) 000-0000, Attention: W. Xxxxxxx Xxxxx, XX, Chief
Executive Officer.
14. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters, the Company, GTA GP, GTA LP and the Operating
Partnership and their respective executors, administrators, successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person or entity, other than the parties hereto and
their respective executors, administrators, successors and assigns, and the
controlling persons within the meaning of the Act or the Exchange Act, officers
and directors referred to in Section 9 hereof, any legal or equitable right,
remedy or claim in respect of this Agreement or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective executors, administrators, successors and assigns and said
controlling persons and said officers and directors, and for the benefit of no
other person or entity. No purchaser of any of the Shares from any Underwriter
shall be construed a successor or assign by reason merely of such purchase.
In all dealings with the Company under this Agreement, you shall act
on behalf of each of the several Underwriters, and the Company shall be entitled
to act and rely upon any statement, request, notice or agreement made or given
by you jointly or by Xxxxxxxxx, Xxxxxxxx & Company LLC on behalf of you.
15. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
16. COUNTERPARTS. This Agreement may be signed in several counterparts,
each of which will constitute an original.
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If the foregoing correctly sets forth the understanding among the
Company, GTA GP, GTA LP, the Operating Partnership and the several Underwriters,
please so indicate in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement among the Company, GTA GP, GTA LP,
the Operating Partnership and the several Underwriters.
Very truly yours,
GOLF TRUST OF AMERICA, INC.
By
------------------------------
Its
------------------------------
GOLF TRUST OF AMERICA, L.P.
By GTA GP, INC.
General Partner
By
-------------------------
Its
-------------------------
GTA GP, INC.
By
------------------------------
Its
------------------------------
GTA LP, INC.
By
------------------------------
Its
------------------------------
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Accepted as of the date first above written:
XXXXXXXXX, XXXXXXXX & COMPANY LLC
WHEAT, FIRST SECURITIES, INC.
On their behalf and on behalf of each of the
several Underwriters named in Schedule A hereto.
XXXXXXXXX, XXXXXXXX & COMPANY LLC
By XXXXXXXXX, XXXXXXXX & COMPANY GROUP, L.L.C.
By
----------------------------------------
Authorized Signatory
-44-
SCHEDULE A
Underwriters Number of
---------------------------------- Firm Shares
To Be
Purchased
------------
Xxxxxxxxx, Xxxxxxxx & Company LLC
Wheat, First Securities, Inc. -
------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 2,865,000
------------
------------
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SCHEDULE B
FORMATION DOCUMENTS
[To Come]
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{RI-CS} T:\RobSteph\GolfTrus\UA.8
January 26, 1997
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