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EXHIBIT 1
1,000,000 Shares
XXXXX EQUITY, INC.
Common Stock
par value $.01 per share
UNDERWRITING AGREEMENT
March 24, 1998
Wheat, First Securities, Inc.
Riverfront Plaza
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Xxxxx Equity, Inc., a Florida corporation (the "Company"), proposes to
issue and sell 1,000,000 shares of common stock of the Company, par value $.01
per share (the "Shares"), to Wheat First Securities, Inc. (you or the
"Underwriter"). The shares of common stock, par value $.01 per share, of the
Company to be outstanding after giving effect to the sale contemplated hereby
are hereinafter referred to as shares of the "Common Stock."
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(collectively called the "Act"), registration statements on Form S-3
(Registration Nos. 33-55179 and 333-37919) relating to the registration
of the Shares and such other securities which may be offered from time
to time by the Company in accordance with Rule 415 under the Act. Such
registration statements (as amended,) have been declared effective by
the Commission on October 7, 1994, and November 19, 1997, respectively.
Such registration statements (as amended), on the one hand, and the
prospectus constituting a part thereof and two prospectus supplements
relating to the offering of the Shares provided to the Underwriter by
the Company for use (whether or
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not such prospectus supplements are required to be filed with the
Commission by the Company pursuant to the Act) (together the
"Prospectus Supplement"), on the other hand, including all documents
incorporated therein by reference, as from time to time amended or
supplemented pursuant to the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively called the "Exchange Act") and the Act are referred to
herein as the "Registration Statement" and the "Prospectus,"
respectively; provided, however, that a prospectus supplement shall be
deemed to have supplemented the Prospectus only with respect to the
offering of the Shares to which it relates. Any registration statement
(including any amendment or supplement thereto or information which is
deemed part thereof) filed by the Company under Rule 462(b) of the Act
(a "Rule 462(b) Registration Statement") shall be deemed to be part of
the "Registration Statement" as defined herein and any prospectus or
any term sheet as contemplated by Rule 434 of the Act (a "Term Sheet")
(including any amendment or supplement thereto or information which is
deemed part thereof) included in such registration statement shall be
deemed to be part of the "Prospectus," as defined herein. All
references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "described" or
"stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is
deemed to be incorporated by reference in the Registration Statement or
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the
Prospectus shall be deemed to mean and include, without limitation,
even though not specifically stated, any document filed under the
Exchange Act which is or is deemed to be incorporated by reference in
the Registration Statement or the Prospectus, as the case may be.
Capitalized terms used, but not otherwise defined herein, shall have
the meanings given to those terms in the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms
and conditions, the Company agrees to issue and sell the Shares and the
Underwriter agrees to purchase from the Company at a price per share of
$20.246875 (the "Purchase Price"), the Shares.
3. Terms of the Offering. The Company is advised by the Underwriter that
it proposes (i) to sell the Shares to Xxx Xxxxxx American Capital,
which intends to deposit the Shares directly with the Trustee of the
Wheat First Union REIT Income & Growth Trust, Series 1 (the "Trust"), a
registered unit investment trust under the Investment Company Act of
1940, as amended (the "Offering"), as soon after the execution and
delivery hereof as in its judgment is advisable and (ii) initially to
offer the Shares upon the terms set forth in the Prospectus.
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4. Delivery and Payment. Delivery to the Underwriter of certificates for,
and payment of the Purchase Price for the Shares shall be made, subject
to Section 9, at 10:00 A.M., New York City time, on March 27, 1998, or
such other time not later than ten business days after such date as
shall be agreed upon by the Underwriter and the Company (such time and
date of payment and delivery being herein called the "Closing Date") at
such place as you shall designate. The Closing Date and the location
of, delivery of and the form of payment for the Shares may be varied by
agreement between you and the Company.
Certificates for the Shares shall be registered in such names
and issued in such denominations as you shall request in writing not later than
two full business days prior to the Closing Date. Such certificates shall be
made available to you for inspection not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing Date. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date, with any transfer taxes thereon duly paid by the Company, for the account
of the Underwriter, against payment of the Purchase Price therefor by intra-bank
transfer or wire transfer of same day funds to such account as may be designated
by the Company at least two business days prior to the Closing Date.
5. Agreements of the Company. The Company agrees with you as follows:
a. In respect of the offering of the Shares, the Company will (i)
prepare a Prospectus Supplement setting forth the number of
Shares covered thereby and their terms not otherwise specified
in the Prospectus pursuant to which the Shares are being
issued, the name of the Underwriter and the number of Shares
which the Underwriter has agreed to purchase, the price at
which the Shares are to be purchased by the Underwriter from
the Company, the initial offering price, and such other
information as the Underwriter and the Company deem
appropriate in connection with the offering of the Shares, and
(ii) file the Prospectus Supplement in a form approved by you
pursuant to Rule 424(b) under the Act no later than the
Commission's close of business on the second business day
following the date of the determination of the offering price
of the Shares The Company will furnish to the Underwriter and
to such dealers as you shall specify as many copies of the
Prospectus Supplement as the Underwriter shall reasonably
request for the purposes contemplated by the Act or the
Exchange Act.
b. At any time when the Prospectus is required to be delivered
under the Act or the Exchange Act in connection with sales of
Shares, the Company will advise you promptly and, if requested
by you, confirm such advice in writing, of (i) the
effectiveness of any amendment to the Registration Statement,
(ii) the transmittal to the Commission for filing of any
Prospectus or other supplement or amendment to the Prospectus
to be filed pursuant to the Act, (iii) the receipt of
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any comments from the Commission relating to the Registration
Statement, any preliminary prospectus, the Prospectus or any
of the transactions contemplated by this Agreement, (iv) any
request by the Commission for post-effective amendments to the
Registration Statement or amendments or supplements to the
Prospectus or for additional information, (v) the issuance by
the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such
purposes, and (vi) the happening of any event as a result of
which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading. The
Company will make every reasonable effort to prevent the
issuance of any stop order, and if at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable
effort to obtain the withdrawal or lifting of such order at
the earliest possible time.
c. The Company will furnish to you without charge, one conformed
copy of the Registration Statement as first filed with the
Commission and of each amendment to it, including all
exhibits, and furnish to you such number of other conformed
copies of the Registration Statement as so filed and of each
amendment to it as you may reasonably request. If applicable,
the copies of the Registration Statement and each amendment
thereto furnished to the Underwriter will be identical to the
electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
d. At any time when the Prospectus is required to be delivered
under the Act or the Exchange Act in connection with sales of
Shares, the Company will not file any amendment to the
Registration Statement or any Rule 462(b) Registration
Statement or make any amendment or supplement to the
Prospectus or any Term Sheet, if applicable, of which you
shall not previously have been advised or to which you or your
counsel shall reasonably object; and the Company will prepare
and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement, Rule
462(b) Registration Statement, Term Sheet, or amendment or
supplement to the Prospectus which, in the opinion of your
counsel, may be necessary in connection with the distribution
of the Shares by you, and will use its best efforts to cause
the same to become promptly effective. If applicable, the
Prospectus and any amendments or supplements thereto furnished
to the Underwriter will be identical to the electronically
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transmitted copies thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
e. If, at any time when the Prospectus is required to be
delivered under the Act or the Exchange Act in connection with
sales of Shares, any event shall occur as a result of which,
in the opinion of counsel for the Underwriter, it becomes
necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the circumstances
existing when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the
Prospectus to comply with any law, the Company will forthwith
prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus (in form and substance
reasonably satisfactory to counsel for the Underwriter) so
that the statements in the Prospectus, as so amended or
supplemented, will not contain an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances existing when it is so delivered, not
misleading, or so that the Prospectus will comply with any
law, and to furnish to the Underwriter and to such dealers as
you shall specify, such number of copies thereof as the
Underwriter or dealers may reasonably request.
f. The Company will use its best efforts, in cooperation with the
Underwriter, to qualify, register or perfect exemptions for
the Shares for offer and sale by the Underwriter under the
applicable state securities or Blue Sky laws and real estate
syndication laws of such jurisdictions as you may reasonably
request; provided, however, the Company will not be required
to qualify as a foreign corporation, file a general consent to
service of process in any such jurisdiction, subject itself to
taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject, or provide any
undertaking or make any change in its charter or by-laws that
the Board of Directors of the Company reasonably determines to
be contrary to the best interests of the Company and its
stockholders. In each jurisdiction in which the Shares have
been so qualified or registered, the Company will use all
reasonable efforts to file such statements, reports and other
documents as may be required by the laws of such jurisdiction,
to continue such qualification or registration in effect for
so long a period as the Underwriter may reasonably request for
the distribution of the Shares.
g. To make generally available to the Company's stockholders as
soon as reasonably practicable but not later than sixty (60)
days after the close of the period covered thereby (ninety
(90) days in the event the close of such period is the close
of the Company's fiscal year), an earnings statement (in form
complying with the provisions of Rule 158 of the Act) covering
a period of at least twelve months
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after the effective date of the Registration Statement (but in
no event commencing later than ninety (90) days after such
date) which shall satisfy the provisions of Section 11(a) of
the Act, and, if required by Rule 158 of the Act, to file such
statement as an exhibit to the next periodic report required
to be filed by the Company under the Exchange Act covering the
period when such earnings statement is released.
h. During the period of five years after the date of this
Agreement, to furnish to you as soon as available a copy of
each regular and periodic report, financial statement or other
publicly available information of the Company and any of its
subsidiaries mailed to the holders of the Shares or filed with
the Commission or any securities exchange, and any such
publicly available information concerning the Company or any
of its subsidiaries as you may reasonably request.
i. During the period when the Prospectus is required to be
delivered under the Act or the Exchange Act in connection with
sales of the Shares, to file all documents required to be
filed by it with the Commission pursuant to Section 13, 14 or
15 of the Exchange Act within the time periods required by the
Exchange Act.
j. To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act
of the Registration Statement and any amendment thereto
(including financial statements and exhibits), each
preliminary prospectus, the Prospectus and all amendments and
supplements to any of them prior to or during the period
specified in Section 5(b), (ii) the printing and delivery of
this Agreement and the Blue Sky Memorandum (including the
reasonable disbursements of counsel for the Underwriter
relating to the printing and delivery of the Blue Sky
Memorandum), (iii) the qualification of registration of the
Shares for offer and sale under the securities, Blue Sky laws
or real estate syndication laws of the several states in
accordance with Section 5(f) hereof, (iv) the fee of and the
filings and clearance, if any, with the National Association
of Securities Dealers, Inc. (the "NASD") in connection with
the Offering, (v) the fee of and the listing of the Shares on
the American Stock Exchange, Inc. ("ASE"), (vi) furnishing
such copies of the Registration Statement, the Prospectus and
all amendments and supplements thereto as may be requested for
use in connection with the offering or sale of the Shares by
the Underwriter, (vii) the preparation, issuance and delivery
of certificates for the Shares to the Underwriter, (viii) the
costs and charges of any transfer agent or registrar, (ix) any
transfer taxes imposed on the sale by the Company of the
Shares to the Underwriter and (x) the fees and disbursements
of the Company's counsel and accountants.
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k. The Company will use its best efforts to maintain the listing
of the Shares on the ASE for a period of three years after the
Closing Date and thereafter, unless the Company's Board of
Directors determines that it is no longer in the best
interests of the Company for the Shares to continue to be so
listed.
l. The Company will use its best efforts to do and perform all
things required to be done and performed under this Agreement
by the Company prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Shares.
m. The Company will use the net proceeds received by it from the
sale of the Shares in the manner specified in the Prospectus
Supplement under "Use of Proceeds."
n. The Company will prepare and file or transmit for filing with
the Commission in accordance with Rule 424(b) of the Act
copies of the Prospectus.
o. The Company will use its best efforts to ensure that the
Company continues to qualify as a "real estate investment
trust" ("REIT") under Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the "Code"), for a period of
three years after the date of this Agreement unless the
Company's Board of Directors determines that it is no longer
in the best interest of the Company to be so qualified.
p. The Company will not at any time, directly or indirectly, take
any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of
the price of the Shares to facilitate the sale or resale of
any Shares in violation of the Act.
6. Representations and Warranties of the Company. The Company represents
and warrants to the Underwriter as of the date hereof and the Closing
Date that:
a. Registration Statement No. 33-55179 became effective October
7, 1994, and Registration Statement No. 333-37919 became
effective on November 19, 1997. No stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Company,
threatened by the Commission or by the state securities
authority of any jurisdiction. No order preventing or
suspending the use of the Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the
knowledge of the Company, threatened by the Commission or by
the state securities authority of any jurisdiction.
b. The Registration Statement and the Prospectus, including the
financial statements,
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schedules and related notes included in the Prospectus or
incorporated therein by reference and, if applicable, any Term
Sheet to the Prospectus, as of the date hereof and at the time
the Registration Statement became effective, and when any
post-effective amendment to the Registration Statement or Rule
462(b) Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the
Commission, did or will comply in all material respects with
all applicable provisions of the Act and will contain all
statements required to be stated therein in accordance with
the Act. The Prospectus, including the financial statements,
schedules and related notes included in the Prospectus or
incorporated therein by reference, and if applicable, any Term
Sheet to the Prospectus, as of the date hereof and at the time
the Registration Statement became effective, and at the
Closing Date, and when any post-effective amendment to the
Registration Statement or Rule 462(b) Registration Statement
becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, did or will comply in
all material respects with all applicable provisions of the
Act and will contain all statements required to be stated
therein in accordance with the Act. On the date the
Registration Statement was declared effective, on the date
hereof, on the date of filing of any Rule 462(b) Registration
Statement and on the Closing Date, no part of the Registration
Statement or any amendment did or will contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein not misleading. On the date the
Registration Statement was declared effective, on the date
hereof, as of its date, on the date of filing of any Rule
462(b) Registration Statement and at the Closing Date, the
Prospectus and the Prospectus Supplement did not or will not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading. If a Rule 462(b) Registration Statement
is filed in connection with the offering and sale of the
Shares, the Company will have complied or will comply with the
requirements of Rule 111 under the Act relating to the payment
of filing fees therefor. The foregoing representations and
warranties in this Section 6(b) do not apply to any statements
or omissions made in reliance on and in conformity with
information relating to the Underwriter furnished in writing
to the Company by the Underwriter specifically for inclusion
in the Registration Statement or Prospectus or any amendment
or supplement thereto. The Company has not distributed any
offering material in connection with the offering or sale of
the Shares other than the Registration Statement, the
Prospectus or any other materials, if any, permitted by the
Act (which were disclosed to the Underwriter and Underwriter's
counsel).
c. Each 462(b) Registration Statement, if any, complied or will
comply when so
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filed in all material respects with all applicable provisions
of the Act; did not or will not contain an untrue statement of
a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made,
not misleading; and the Prospectus delivered to the
Underwriter for use in connection with the offering of the
Shares will, at the time of such delivery, be identical to the
electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
d. The documents incorporated or deemed to be incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3
under the Act, at the time they were, or hereafter are, filed
with the Commission, complied and will comply in all material
respects with the requirements of the Exchange Act, and, when
read together with other information in and incorporated by
reference in the Prospectus, at the time the Registration
Statement became effective, and as of the Closing Date, or
during the period specified in Section 5(b) did not and will
not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The foregoing representations and
warranties in this Section 6(d) do not apply to any statements
or omissions made in reliance on and in conformity with
information relating to the Underwriter furnished in writing
to the Company by the Underwriter specifically for inclusion
in the Registration Statement or Prospectus or any amendment
or supplement thereto.
e. The historical financial statements and the related notes
thereto, included or incorporated by reference in the
Registration Statement and the Prospectus, comply in all
material respects with the requirements of the Act and the
Exchange Act, as applicable, and present fairly the
consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the
results of their operations and the changes in their cash
flows for the periods specified; each statement of revenue and
certain expenses, together with related notes, incorporated by
reference in the Registration Statement or the Prospectus,
present fairly a summary of gross income and direct operating
expenses or a summary of gross income, as the case may be, for
the indicated periods; the foregoing financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, and the supporting
schedules included or incorporated by reference in the
Registration Statement present fairly the information required
to be stated therein; the pro forma financial information, and
the related notes thereto, included or incorporated by
reference in the Registration Statement and the Prospectus
comply in all material respects with the
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applicable requirements of the Act and the Exchange Act, as
applicable; the assumptions used in preparing such pro forma
information are reasonable and the adjustments used therein
are appropriate to give effect to the transactions referred to
therein; and the other financial and statistical information
and data set forth in the Registration Statement and the
Prospectus are accurately presented in all material respects
and prepared on a basis consistent with the books and records
of the Company and its consolidated subsidiaries.
f. Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there has
not been any material adverse change, or any development
involving a prospective material adverse change, in or
affecting the condition (financial or otherwise), business,
prospects, properties, net worth or results of operations of
the Company and their subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus;
and (ii) except as set forth or contemplated in the
Prospectus, neither the Company nor any of its subsidiaries
has entered into any transaction or agreement (whether or not
in the ordinary course of business) material to the Company
and its subsidiaries, taken as a whole.
g. The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state
of Florida, with corporate power and authority to own or lease
its properties and to conduct its business as described in the
Prospectus, and is duly qualified as a foreign corporation for
the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified
or in good standing would not (1) have a material adverse
effect on the condition (financial or otherwise), business,
prospects, properties, net worth or results of operations of
the Company and its subsidiaries, taken as a whole, (2)
adversely affect the issuance or validity of the Shares or (3)
adversely affect the consummation of any of the transactions
contemplated by this Agreement (each of (1), (2) and (3)
above, a "Material Adverse Effect"); except for investments in
their subsidiaries, in short-term investment securities and in
other securities as described in the Registration Statement or
Prospectus, the Company has no direct or indirect equity or
other interest in any corporation, partnership, trust or other
entity; other than its ownership of preferred stock in Xxxxx
Realty Services, Inc., each of the subsidiaries of the Company
is defined on Schedule I hereto and has been duly organized
and is validly existing as a corporation or limited
partnership, as the case may be, in good standing under the
laws of its jurisdiction of organization with corporate or
partnership power and authority, as the case may be, to own or
lease its properties and conduct its business as presently
conducted and as
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described in the Prospectus, and has been duly qualified as a
foreign corporation or foreign limited partnership, as the
case may be, for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be
so qualified or in good standing would not have a Material
Adverse Effect; all the outstanding shares of capital stock of
each subsidiary have been duly authorized and validly issued
and are fully paid and nonassessable; except as disclosed in
Schedule I hereto, all the outstanding shares of capital stock
and all partnership interests of each subsidiary are owned by
the Company, directly or indirectly, free and clear of all
liens, encumbrances, security interests and claims.
h. This Agreement has been duly authorized, executed and
delivered by the Company.
i. The Shares have been duly authorized and, when issued and
delivered to the Underwriter against payment therefor in
accordance with the terms hereof, will be validly issued,
fully paid and nonassessable and are listed for trading on the
ASE. The form of certificate for the Shares will comply with
all applicable legal and ASE requirements. The holders of
outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the
Shares, except as described in documents incorporated by
reference into the Prospectus and an attachment to this
Agreement. The capital stock of the Company conforms to the
description thereof in the Registration Statement and the
Prospectus.
j. Neither the Company nor any of its subsidiaries is, or with
the giving of notice or lapse of time or both would be, in
violation of or in default under (1) its Articles of
Incorporation, Certificate of Incorporation (in each case as
amended to the date of this Agreement), (2) its Bylaws (as
amended to the date of this Agreement) or (3) any indenture,
mortgage, deed of trust, loan agreement, or other agreement or
instrument or obligation to which the Company or any of it
subsidiaries is a party or by which it or any of its
properties is bound, except, with respect to clauses (2) and
(3), for violations and defaults which individually or in the
aggregate would not have a Material Adverse Effect; the issue
and sale of the Shares and the performance by the Company of
all of the obligations under this Agreement and the
consummation of the transactions herein contemplated will not
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, partnership agreement
or other material agreement or instrument to which the Company
or
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any of its subsidiaries is a party or by which the Company or
of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is
subject, except for such conflicts, breaches, defaults or
violations which individually or in the aggregate would not
have a Material Adverse Effect, nor will any such action
result in any violation of the provisions of the Articles of
Incorporation or the ByLaws of the Company or any applicable
law or statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the
Company or any of its properties, except for such violations
which individually or in the aggregate would not have a
Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for
the issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement,
except such consents, approvals, authorizations, orders,
registrations or qualifications (x) as have been obtained
under the Act and the Exchange Act, (y) as may be required
under state securities or Blue Sky laws or Sections 2710 and
2720 of the Conduct Rules of the NASD in connection with the
purchase and distribution of the Shares by the Underwriter or
(z) the failure to obtain which would not have a Material
Adverse Effect.
k. Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company
or its subsidiaries is or may be a party or to which any
property of the Company or its subsidiaries is or may be the
subject which, if determined adversely to the Company, could
individually or in the aggregate reasonably be expected to
have a Material Adverse Effect; there are no contracts or
other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus
which are not filed or described as required; and the
descriptions of the terms of all such contracts and documents
contained or incorporated by reference in the Registration
Statement or Prospectus are complete and correct in all
material respects.
l. The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, $.01 par value per share,
and 50,000,000 shares of preferred stock, $.01 par value per
share. All of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and
are fully paid and nonassessable.
m. The Company or its subsidiaries has good and marketable title
to each Property, in each case free of any lien, mortgage,
pledge, charge or encumbrance of any kind except those (i)
described in the Prospectus or (ii) which do not materially
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affect or detract from the value of such Property or interfere
with the use made and proposed to be made of such Property by
the Company and its subsidiaries and which individually and in
the aggregate are in an amount which is not material to the
Company.
n. Except as disclosed in the Prospectus, each entity identified
in the Prospectus as a tenant of any property of the Company,
or a subtenant thereof, has entered into a lease or a
sublease, if applicable, for the possession of such property;
except as disclosed in the Prospectus, each such lease is in
full force and effect and neither the Company nor any of its
subsidiaries has notice of any defense to the obligations of
the tenant thereunder or any claim asserted or threatened by
any person or entity, which claim, if sustained, would have a
Material Adverse Effect; and except as disclosed in the
Prospectus, the lessor under each lease has complied with its
obligations under such lease in all material respects and
neither the Company nor any of its subsidiaries has notice of
any default by the tenant under such lease which, individually
or in the aggregate with other such defaults, would have a
Material Adverse Effect.
o. The mortgages and deeds of trust encumbering the properties of
the Company are not (i) cross- defaulted to any indebtedness
other than indebtedness of the Company or any of its
subsidiaries or (ii) cross-collateralized to any property not
owned by the Company or its subsidiaries.
p. Each of the Company and its subsidiaries are insured by
insurers of recognized financial responsibility against such
losses and risks and in such amounts as are customary in the
business in which they are engaged and such insurance is
adequate for the value of their properties; all policies of
insurance insuring the Company or its subsidiaries or their
respective businesses, assets, employees, officers, trustees
and directors, as the case may be, are in full force and
effect; each of the Company and its subsidiaries is in
compliance with the terms of such policies in all material
respects and there are no claims by the Company or by its
subsidiaries under any such policy as to which any insurance
company is denying liability or defending under a reservation
of rights clause, other than claims which individually or in
the aggregate would not have a Material Adverse Effect.
q. The Company has filed all federal, state and foreign income
tax returns which have been required to be filed and have paid
all taxes indicated by said returns and all assessments
received by it to the extent that such taxes have become due
and are not being contested in good faith.
r. Each of the Company and each of its subsidiaries owns,
possesses and has
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obtained all material licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and
has made all material declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other
tribunals necessary to own or lease, as the case may be, and
to operate its properties and to carry on its business as
conducted as of the date hereof, except in each case where the
failure to obtain licenses, permits, certificates, consents,
orders, approvals and other authorizations, or to make all
declarations and filings, would not have a Material Adverse
Effect, and neither of the Company nor any of its subsidiaries
has received any notice of any proceeding relating to
revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization,
except as described in the Prospectus and except, in each
case, where such revocation or modification would not have a
Material Adverse Effect; and the Company and each of its
subsidiaries are in compliance with all laws, rules and
regulations relating to the conduct of their respective
businesses as conducted as of the date hereof, except where
noncompliance with such laws, rules or regulations would not
have a Material Adverse Effect.
s. To the knowledge of the Company, its independent accountants
who have certified certain of the financial statements filed
with the Commission as part of, or incorporated by reference
in, the Registration Statement or the Prospectus, are
independent public accountants as required by the Act.
t. To the knowledge of the Company, no relationship, direct or
indirect, exists between or among any of the Company or its
subsidiaries on the one hand, and the directors, trustees,
officers, stockholders, customers or suppliers of any of the
Company or its subsidiaries on the other hand, which is
required by the Act to be described in the Registration
Statement and the Prospectus which is not so described except
as described in an attachment to this Underwriting Agreement.
u. The Company has never been, is not now, and immediately after
giving effect to the sale of the Shares under this Agreement
will not be, an "investment company" or entity "controlled" by
an "investment company," within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company
Act").
v. With respect to all tax periods regarding which the Internal
Revenue Service is or will be entitled to assert any claim
against the Company, the Company has met the requirements for
qualification as a REIT under Sections 856 through 860 of the
Code, and the present and contemplated operations, assets and
income of the Company and its subsidiaries, taken as a whole,
continue to meet such requirements.
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w. The conditions for the use by the Company of a registration
statement on Form S-3 set forth in the General Instructions to
Form S-3 have been satisfied and the Company is entitled to
use such form for the transactions contemplated herein.
x. Other than as disclosed in the Prospectus, the Company has no
knowledge of (a) the unlawful presence of any hazardous
substances, hazardous materials, toxic substances or waste
materials (collectively, "Hazardous Materials") on any of the
Properties or (b) any unlawful spills, releases, discharges or
disposals of Hazardous Materials that have occurred or are
presently occurring on or from the Properties, which presence
or occurrence would individually or in the aggregate have a
Material Adverse Effect.
y. Other than as disclosed in the Prospectus, the Company and its
subsidiaries (i) are in compliance with any and all applicable
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such
permits, licenses or approvals would not individually or in
the aggregate have a Material Adverse Effect.
z. In the ordinary course of business, the Company engages
environmental consultants and other experts to conduct reviews
of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries,
in the course of which the Company identify and evaluate
associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for
cleanup, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential
liabilities to third parties). On the basis of such reviews
and other than as described in the Prospectus, the Company has
reasonably concluded that such associated costs and
liabilities would not, individually or in the aggregate, have
a Material Adverse Effect.
aa. Subsequent to the respective dates as of which information is
given in the Prospectus, (i) the Company has not purchased any
of its outstanding shares of capital stock, or declared, paid
or otherwise made any dividend or distribution of
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any kind on its shares of capital stock other than regular
periodic dividends on such shares; and (ii) there has not been
any material change in the shares of capital stock of the
Company or any material change in the short-term debt or
long-term debt of the Company and its subsidiaries on a
consolidated basis, except as described in or contemplated by
the Prospectus. Other than as described in or contemplated by
the Prospectus, including documents incorporated therein by
reference, there are no outstanding warrants or options to
purchase or rights to acquire any shares of capital stock of
the Company and there are no restrictions upon the voting or
transfer of, or the declaration or payment of any dividend or
distribution on, any shares of capital stock of the Company
pursuant to the Company's Articles of Incorporation or Bylaws,
any agreement or other instrument to which the Company is a
party or by which the Company is bound, or any order, law,
rule, regulation or determination of any court, governmental
agency or body (including, without limitation, any banking or
insurance regulatory agency or body), or arbitrator having
jurisdiction over the Company except for options to purchase
447,500 shares of the Common Stock recently granted to
employees and a future employee. Except as described in the
Prospectus and the documents incorporated therein by
reference, no holders of securities of the Company or of
securities convertible into or exchangeable for securities of
the Company have rights to the registration of such securities
of the Company under the Registration Statement.
bb. The Company and its subsidiaries and affiliates have not taken
and will not take, directly or indirectly, any action designed
to, or that might be reasonably expected to, cause or result
in stabilization or manipulation of the price of the Shares,
and the Company and its subsidiaries and affiliates have not
distributed and agree not to distribute any prospectus or
other offering material in connection with the offering and
sale of the Shares other than the Prospectus or other material
permitted by the Act.
cc. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
dd. There is (i) no significant unfair labor practice complaint
pending against the
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Company or its subsidiaries or, to the knowledge of the
Company, threatened against any of them, before the National
Labor Relations Board or any state or local labor relations
board, and no significant grievance or more significant
arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against any of the Company
or its subsidiaries or, to the knowledge of the Company,
threatened against any of them, and (ii) no significant
strike, labor dispute, slowdown or stoppage pending against
any of the Company or its subsidiaries or, to the knowledge of
the Company, threatened against it or any of its subsidiaries
except for such actions specified in clause (i) or (ii) above
which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
ee. No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or
document required by this Agreement to be delivered to the
Underwriter is, or will be, when made, inaccurate, untrue or
incorrect in any material respect; it being understood that no
representation is made under this Section 6(ee) with respect
to the Registration Statement or the Prospectus which are the
subject of representations contained in other paragraphs in
this Section 6.
ff. Any certificate or other document signed by any officer or
authorized representative of the Company or any of its
subsidiaries, and delivered to the Underwriter or to counsel
for the Underwriter in connection with the sale of the Shares
shall be deemed a representation and warranty by such entity
or person, as the case may be, to the Underwriter as to the
matters covered thereby.
7. Indemnification.
a. The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, expenses, liabilities and judgments
caused by or resulting from any untrue statement or alleged
untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by or resulting
from any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as
such losses, claims, damages, expenses, liabilities or
judgments are caused by or result from any such untrue
statement or omission or alleged untrue statement or omission
based upon and in conformity with information relating to the
Underwriter furnished in writing to the Company
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by or on behalf of the Underwriter through you expressly for
use therein, provided, that this indemnity agreement with
respect to any preliminary prospectus shall not inure to the
benefit of the Underwriter from whom the person asserting any
such losses, liabilities, claims, damages or expenses
purchased Shares, or any person controlling the Underwriter,
if a copy of the prospectus (as then amended or supplemented
if the Company shall have furnished any such amendments or
supplements thereto) was not sent or given by or on behalf of
the Underwriter to such person, if such is required by law, at
or prior to the written confirmation of the sale of such
Shares to such person and if the Prospectus (as so amended or
supplemented) would have corrected the defect giving rise to
such loss, liability, claim, damage or expense.
b. In case any action shall be brought against the Underwriter or
any person controlling the Underwriter, based upon the
Registration Statement or the Prospectus or any amendment or
supplement thereto and with respect to which indemnity may be
sought against any of the Company, the Underwriter shall
promptly notify the Company in writing and the Company may, at
its election, assume the defense thereof, including the
employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses. The
Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses
of such counsel shall, if the Company has assumed the defense
as indicated above, be at the expense of the Underwriter or
such controlling person unless (i) the employment of such
counsel shall have been specifically authorized in writing by
the Company, (ii) the Company shall have failed to assume the
defense and employ counsel or (iii) the named parties to any
such action (including any impleaded parties) include both the
Underwriter or such controlling person and the Company and the
Underwriter or such controlling person shall have been advised
by such counsel that there may be one or more legal defenses
available to it which are different from or additional to
those available to the Company (in which case the Company
shall not have the right to assume the defense of such action
on behalf of the Underwriter or such controlling person, it
being understood, however, that the Company shall not, in
connection with any one such action or separate but
substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (in addition to any local
counsel) for the Underwriter and controlling persons, which
firm shall be designated in writing by the Underwriter and
that all such fees and expenses shall be reimbursed as they
are incurred). The Company shall not be liable for any
settlement of any such action effected without its written
consent, but if settled with its written consent, the Company
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agrees to indemnify and hold harmless the Underwriter and any
such controlling person from and against any loss or liability
by reason of such settlement to the extent required by this
Section 7. Notwithstanding the immediately preceding sentence,
if in any case where the fees and expenses of counsel are at
the expense of the indemnifying party and an indemnified party
shall have requested the indemnifying party to reimburse the
indemnified party for such fees and expenses of counsel as
incurred, such indemnifying party agrees that it shall be
liable for any settlement of any action effected without its
written consent, if (i) such settlement is entered into more
than forty business days after the receipt by such
indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the
indemnified party in accordance with such request for
reimbursement prior to the date of such settlement; provided,
however, that if it is determined by a final non appealable
order of a court of competent jurisdiction that the Company
has no indemnification obligation under this Section 7, all
fees and expenses paid by the Company pursuant to this
sentence shall be returned to them upon demand. No
indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such
indemnified party from all liability on claims that are the
subject matter of such proceeding.
c. The Underwriter agrees to indemnify and hold harmless the
Company and each of its officers and directors who sign the
Registration Statement and any person controlling the Company
within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Underwriter, but only with
reference to and in conformity with information relating to
the Underwriter furnished in writing by or on behalf of the
Underwriter expressly for use in the Registration Statement or
the Prospectus. In case any action shall be brought against
the Company, any of their officers, directors, or any person
controlling the Company, based on the Registration Statement
or the Prospectus and in respect of which indemnity may be
sought against the Underwriter, the Underwriter shall have the
rights and duties given to the Company (except that if the
Company shall have assumed the defense thereof, the
Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense
thereof but the fees and expenses of such counsel shall,
except as otherwise provided herein, be at the expense of the
Underwriter), and the Company, its officers, directors, and
any person controlling the Company shall have the rights and
duties given to the Underwriter, by Section 7(b) hereof.
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d. If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses,
claims, damages, expenses, liabilities or judgments referred
to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result
of such losses, claims, damages, expenses, liabilities and
judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand
and the Underwriter on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the
Company, on the one hand, and the Underwriter, on the other
hand, in connection with the statements or omissions which
resulted in such losses, claims, damages, expenses,
liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by
the Company, on the one hand, and the Underwriter, on the
other hand, shall be deemed to be in the same proportion as
the total net proceeds from the Offering (before deducting
expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriter, bear to
the total price to the public of the Shares, in each case as
set forth in the table on the cover page of the Prospectus.
The relative fault of the Company, on the one hand, and the
Underwriter, on the other hand, shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the
Company or the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, expenses, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
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Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
e. The Underwriter confirms and the Company acknowledges that (i)
the statements with respect to the public offering of the
Shares by the Underwriter set forth on the cover page of the
Prospectus Supplement, (ii) the legend concerning
overallotments on page 2 of the Prospectus Supplement, (iii)
the first and last sentences of the second paragraph under the
caption "Underwriting" in the Prospectus Supplement are
correct and constitute the only information concerning the
Underwriter furnished in writing to the Company by or on
behalf of the Underwriter specifically for inclusion in the
Registration Statement and Prospectus.
8. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to purchase the Shares under this Agreement are subject to
the satisfaction of each of the following conditions:
a. All the representations and warranties of the Company
contained in this Agreement shall be true and correct, in all
material respects, on the Closing Date, with the same force
and effect as if made on and as of the Closing Date.
b. No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before
or threatened by the Commission to the knowledge, after due
inquiry, of the Company. No stop order suspending the
effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been
commenced or shall be pending before or threatened by the
state securities authority of any jurisdiction, to the
knowledge of the Company.
c. (i) Since the date of the latest balance sheet included or
incorporated by reference in the Registration Statement and
the Prospectus, there shall not have been any Material Adverse
Effect, (ii) other than as set forth in the Prospectus, no
proceedings shall be pending or, to the knowledge of the
Company, after due inquiry, threatened against the Company or
any Property before or by any federal, state or other
commission, board or administrative agency, where an
unfavorable decision, ruling or finding could reasonably be
expected to result in a Material Adverse Effect, and on the
Closing Date you shall have received a certificate dated the
Closing Date, signed by the Chief Executive Officer and the
Chief Financial Officer of the Company, in their capacities as
the Chief Executive Officer and Chief Financial Officer of the
Company and on behalf of the
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Company, confirming the matters set forth in paragraphs (a),
(b) and (c) of this Section 8.
d. You shall have received on the Closing Date opinions, dated
the Closing Date of Xxxxxx & XxXxxx, a professional
association, counsel for the Company, in the forms attached
hereto as Annex A.
e. You shall have received on the Closing Date an opinion, dated
the Closing Date, of Hunton & Xxxxxxxx, counsel for the
Underwriter, to the effect that:
i. the Shares have been duly authorized, and when issued
and delivered to the Underwriter against payment
therefor as provided by this Agreement, will have
been validly issued and will be fully paid and
nonassessable, and the issuance of such Shares is not
subject to any preemptive or similar rights;
ii. the Registration Statement has become effective under
the Act and, to the knowledge of such counsel, no
stop order suspending its effectiveness has been
issued and no proceedings for that purpose are
pending before or threatened by the Commission;
iii. this Agreement was duly and validly authorized,
executed and delivered by the Company; and
iv. the Registration Statement, at the time it became
effective, and the Prospectus, as of the date of the
Prospectus Supplement (in each case, other than
documents incorporated therein by reference and the
financial statements and supporting schedules and
other financial and statistical data included or
incorporated by reference therein, as to which no
opinion need be rendered) complied as to form in all
material respects with the requirements of the Act.
In addition, Hunton & Xxxxxxxx shall state that they have
participated in conferences with officers and other representatives of the
Company and representatives of the independent public accountants for the
Company and representatives of the Underwriter at which the contents of the
Prospectus and related matters were discussed and, although they are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus or the documents incorporated therein by reference, on the basis of
the foregoing (relying as to materiality to a large extent upon the opinions of
officers and other representatives of the Company), no facts
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have come to the attention of such counsel which lead them to believe that the
Registration Statement, including the documents incorporated therein by
reference, at the time the Company filed its Annual Report on Form 10-K for the
Year Ended December 31, 1997, or at the date of the Underwriting Agreement,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, including the documents incorporated
therein by reference, at the time the Prospectus was first provided to the
Underwriter for use in connection with the offering of the Shares or at the date
hereof, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no opinion with
respect to the financial statements and schedules and other financial or
statistical data included in the Registration Statement, the Prospectus or the
documents incorporated therein by reference).
f. On the date hereof, Deloitte & Touche shall have furnished to
the Underwriter a letter, dated the date of its delivery,
addressed to the Underwriter and in form and substance
satisfactory to the Underwriter (and to its counsel),
confirming that they are independent public accountants with
respect to the Company and its subsidiaries as required by the
Act and with respect to the financial and other statistical
and numerical information contained in the Registration
Statement. At the Closing Date, Deloitte & Touche shall have
furnished to the Underwriter a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the letter from
it, that nothing has come to its attention during the period
from the date of the letter referred to in the prior sentence
to a date (specified in the letter) not more than five days
prior to the Closing Date, which would require any change in
its letter dated the date hereof if it were required to be
dated and delivered at the Closing Date.
g. The Company and its subsidiaries shall not have failed at or
prior to the Closing Date, to perform or comply with any of
the agreements pursuant to Section 5 herein contained and
required to be performed or complied with by the Company at or
prior to the Closing Date.
h. At the Closing Date, Hunton & Xxxxxxxx shall have been
furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Shares, as herein
contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with
the issuance and sale of the Shares as herein contemplated
shall be reasonably satisfactory in form and substance to the
Underwriter and Hunton & Xxxxxxxx.
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9. Effective Date of Agreement and Termination. This Agreement shall
become effective upon the execution of this Agreement.
This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Company if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has been a Material Adverse
Effect, (ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and would, in your judgment, make it impracticable or
inadvisable (x) to commence or continue the offering of the shares to the public
or (y) to enforce contracts for the sale of the shares, (iii) the suspension or
material limitation of trading in securities on the American Stock Exchange or
material limitation on prices for securities on either of such exchanges, (iv)
(a) the downgrading of any of the debt securities of the Company or any of its
subsidiaries by any "nationally recognized statistical rating organization" or
the announcement by any such organization of an initial rating with respect to
any such securities that is below the ratings of other such organizations in
effect for such securities on the date hereof, or (b) the public announcement by
any such organization that it has under surveillance or review, with possible
negative implications, its rating of any of such securities, (v) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion would result in a Material Adverse Effect, (vi) the declaration of
a banking moratorium by either federal or New York State authorities or (vii)
the taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
10. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to
Xxxxx Equity, Inc., 0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx
00000, Attention: Xx. Xxxxxx X. Xxxxxx, Xx., Chairman of the Board, and
(b) if to you, to Wheat First Securities, Inc., Attention: Syndicate
Department, Riverfront Plaza, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000, or in any case to such other address as the person to be
notified may have requested in writing.
The provisions of Sections 5, 6 and 7 shall remain operative
and in full force and effect, and will survive delivery of and payment for the
Shares, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of the Underwriter or by or on behalf of the
Company, the officers or directors of the Company or any controlling person of
the Company and (ii) acceptance of the Shares and payment for them hereunder.
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In the event of termination of this Agreement, the provisions
of Sections 5(k) and 7 shall remain operative and in full force and effect.
If this Agreement shall be terminated by the Underwriter
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the Company, agrees
to reimburse the Underwriter for all out-of-pocket expenses (including the fees
and documented disbursements of counsel) reasonably incurred by the Underwriter.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon each of the Company and
the Underwriter, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from the Underwriter merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement among the parties hereto.
Very truly yours,
XXXXX EQUITY, INC.
By: s/Xxxxxx X. Xxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman of the Board
WHEAT, FIRST SECURITIES, INC.
By: s/Xxxx X. Xxxxxx, III
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Name: Xxxx X. Xxxxxx, III
Title: Vice President
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ATTACHMENT TO UNDERWRITING AGREEMENT
In connection with his employment as Executive Vice President and Chief
Financial Officer of the Company, the Company has entered into a three-year
employment contract with Xx. Xxxxx X. Xxxxx which provides for, among other
things, (i) an annual salary of $200,000 with a provision for bonuses, (ii) an
option to purchase up to 125,000 shares of Common Stock at an exercise price of
the fair market value on the date of grant, vesting over three years with a ten
year term, and (iii) certain supplemental retirement and medical benefits.
If the Company sells additional shares of Common Stock or such other
securities exercisable, exchangeable or convertible into shares of Common Stock,
Apollo Real Estate Investment Fund II, L.P. has the right to acquire from the
Company 25% of the sum of (1) the number of shares of Common Stock outstanding
and (2) if applicable, the number of shares of Common Stock issuable upon the
exercise, exchange or conversion of such other securities.
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SCHEDULE I
The following are the wholly owned subsidiaries of Xxxxx Equity, Inc.:
1. Southeast Properties Holding Corporation, a Florida
corporation
2. Xxxxx Real Estate Services, Inc., a Florida corporation
In addition, Xxxxx Equity, Inc. owns 100% of the outstanding preferred
stock of Xxxxx Realty Services, Inc., a Delaware corporation ("KRSI"), which
security holding represents 95% of the economic value of KRSI.
