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EXHIBIT 1.1
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2,500,000 SHARES
CAPSTONE CAPITAL CORPORATION
Common Stock
UNDERWRITING AGREEMENT
November 20, 1996
XXXXX XXXXXX INC.
PAINEWEBBER INCORPORATED
X.X. XXXXXXXX & CO.
XXXXX & COMPANY
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Capstone Capital Corporation, a Maryland corporation (the "Company")
qualified for federal income tax purposes as a real estate investment trust
pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended (the "Code"), proposes to issue and sell certain securities of the
Company identified in Schedule I hereto (the "Firm Securities") to the several
Underwriters named in Exhibit A to Schedule I hereto (the "Underwriters"). The
Company also proposes to sell to the Underwriters, upon the terms and conditions
set forth in Section 2 hereof, certain additional securities identified in
Schedule I hereto (the "Additional Securities") to cover over-allotments, if
any. The Firm Securities and the Additional Securities are hereinafter
collectively referred to as the "Securities."
The Company wishes to confirm as follows its agreements with you in
connection with the several purchases of the Securities by the Underwriters.
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, the "Act"), a registration statement (the file number of which
is set forth in Schedule I hereto) on Form S-3 under the Act (the "registration
statement"), including a prospectus subject to completion relating to the
Securities, and such amendments to such registration statement as may have been
required prior to the date hereof have been similarly prepared and have been
filed with the Commission. Such registration statement, as so amended,
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and any post-effective amendments thereto, have been declared by the Commission
to be effective under the Act. Such registration statement, as amended at the
date of this Agreement meets the requirements set forth in Rule 415(a)(1)(x)
under the Act and complies in all other material respects with said Rule. The
Company will next file with the Commission pursuant to Rule 424(b) under the
Act a final prospectus supplement to the basic prospectus included in such
registration statement, as so amended, describing the Securities and the
offering thereof, in such form as has been provided to or discussed with, and
approved by the Underwriters. The term "Registration Statement" as used in
this Agreement means the registration statement, as amended at the time it
became effective, as supplemented or amended prior to the execution of this
Agreement, including (i) all financial schedules and exhibits thereto and (ii)
all documents incorporated by reference or deemed to be incorporated by
reference therein. If it is contemplated, at the time this Agreement is
executed, that a post-effective amendment to the registration statement will be
filed and must be declared effective before the offering of the Securities may
commence, the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. The term
"Basic Prospectus" as used in this Agreement means the prospectus included in
the Registration Statement. The term "Prepricing Prospectus" as used in this
Agreement means any preliminary form of the prospectus (as defined herein)
specifically relating to the Securities, in the form first filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 of the Rules and
Regulations. The term "Prospectus Supplement" as used in this Agreement means
any prospectus supplement specifically relating to the Securities, in the form
first filed with, or transmitted for filing to, the Commission pursuant to Rule
424 under the Act. The term "Prospectus" as used in this Agreement means the
Basic Prospectus together with the Prospectus Supplement except that if such
Basic Prospectus is amended or supplemented on or prior to the date on which
the Prospectus Supplement was first filed pursuant to Rule 424, the term
"Prospectus" shall refer to the Basic Prospectus as so amended or supplemented
and as supplemented by the Prospectus Supplement. Any reference in this
Agreement to the registration statement, the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, any Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the
date of the registration statement, the Registration Statement, the Basic
Prospectus, such Prepricing Prospectus, such Prospectus Supplement or the
Prospectus, as the case may be, and any reference to any amendment or
supplement to the registration statement, the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, any Prospectus Supplement or the
Prospectus shall be deemed to refer to and include any documents filed after
such date under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") which, upon filing, are incorporated by reference therein, as required by
paragraph (b) of Item 12 of Form S-3. As used herein, the term "Incorporated
Documents" means the documents which at the time are incorporated by reference
in the registration statement, the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, any Prospectus Supplement, the
Prospectus, or any amendment or supplement thereto.
2. AGREEMENTS TO SELL AND PURCHASE. Subject to such adjustments
as you may determine in order to avoid fractional shares, the Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue and
sell to each Underwriter and, upon the basis of the representations, warranties
and agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price as set forth in Schedule I
hereto (the "purchase price per share"), the number of Firm Securities set forth
opposite the name of such Underwriter
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in Exhibit A hereto (or such number of Firm Securities increased as set forth
in Section 10 hereof).
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Underwriters shall
have the right to purchase from the Company, at the purchase price per share,
pursuant to an option (the "over-allotment option") which may be exercised at
any time prior to 9:00 P.M., New York City time, on the 30th day after the date
of the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), the Additional Securities from the Company as set forth in
Schedule I hereto. Additional Securities may be purchased only for the purpose
of covering overallotments made in connection with the offering of the Firm
Securities. Upon any exercise of the over-allotment option, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Securities (subject to such adjustments as you may determine in order
to avoid fractional shares) which bears the same proportion to the number of
Additional Securities to be sold by the Company as the number of Firm Securities
set forth opposite the name of such Underwriter in Exhibit A hereto (or such
number of Firm Securities increased as set forth in Section 10 hereof) bears to
the aggregate number of Firm Securities.
3. TERMS OF PUBLIC OFFERING. The Company has been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Securities as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Securities upon the terms set forth in the Prospectus.
4. DELIVERY OF THE SECURITIES AND PAYMENT THEREFOR. Delivery to
the Underwriters of and payment for the Firm Securities shall be made at the
office of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
10:00 A.M., New York City time, on the date set forth in Schedule I hereto (the
"Closing Date"). The place of closing for the Firm Securities and the Closing
Date may be varied by agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional
Securities to be purchased by the Underwriters shall be made at the
aforementioned office of Xxxxx Xxxxxx Inc. at such time on such date (the
"Option Closing Date"), which may be the same as the Closing Date but shall in
no event be earlier than the Closing Date nor earlier than two nor later than
ten business days after the giving of the notice hereinafter referred to, as
shall be specified in a written notice from you on behalf of the Underwriters to
the Company of the Underwriters' determination to purchase a number, specified
in such notice, of Additional Securities. The place of closing for any
Additional Securities and the Option Closing Date for such Securities may be
varied by agreement between you and the Company.
Certificates for the Firm Securities and for any Additional Securities
to be purchased hereunder shall be registered in such names and in such
denominations as you shall request prior to 9:30 A.M., New York City time, on
the second business day preceding the Closing Date or any Option Closing Date,
as the case may be. Such certificates shall be made available to you in New
York City for inspection and packaging not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing Date or the Option Closing
Date, as the case may
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be. The certificates evidencing the Firm Securities and any Additional
Securities to be purchased hereunder shall be delivered to you on the Closing
Date or the Option Closing Date, as the case may be, against payment of the
purchase price therefor in immediately available funds.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the Securities
may commence, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible and will
advise you promptly and, if requested by you, will confirm such advice in
writing, when the Registration Statement or such post-effective amendment has
become effective.
(b) The Company will advise you promptly and, if requested
by you, will confirm such advice in writing: (i) of any request by the
Commission for amendment of or a supplement to the Registration Statement, any
Prepricing Prospectus, any Prospectus Supplement or the Prospectus or for
additional information; (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Securities for offering or sale in any jurisdiction or
the initiation of any proceeding for such purpose; and (iii) within the period
of time referred to in paragraph (f) below, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
(as then amended or supplemented) in order to state a material fact required by
the Act or the regulations thereunder to be stated therein or necessary in order
to make the statements therein not misleading, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented) to comply with the
Act or any other law. 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 of such order at the
earliest possible time.
(c) The Company will furnish to you, without charge (i)
five signed copies of the registration statement as originally filed with the
Commission and of each amendment thereto, including financial statements and
all exhibits to the registration statement, (ii) such number of conformed
copies of the registration statement as originally filed and of each amendment
thereto, but without exhibits, as you may request, (iii) such number of copies
of the Incorporated Documents, without exhibits, as you may request, and (iv)
five copies of the exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus or,
prior to the end of the period of time referred to in the first sentence in
subsection (f) below, file any document which, upon filing becomes an
Incorporated Document, of which you shall not previously have been advised or to
which, after you shall have received a copy of the document proposed to be
filed, you shall object.
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(e) Prior to the execution and delivery of this Agreement,
the Company has delivered to you, without charge, in such quantities as you have
requested, copies of each form of the Prepricing Prospectus and of each form of
the Prospectus Supplement. The Company consents to the use, in accordance with
the provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Securities are offered by the several Underwriters
and by dealers, prior to the date of the Prospectus, of each Prepricing
Prospectus and each Prospectus Supplement so furnished by the Company.
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period as in the
opinion of counsel for the Underwriters a prospectus is required by the Act to
be delivered in connection with sales by any Underwriter or dealer, the Company
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto) as
you may request. The Company consents to the use of the Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Securities are offered by the several Underwriters and by all dealers to whom
Securities may be sold, both in connection with the offering and sale of the
Securities and for such period of time thereafter as the Prospectus is required
by the Act to be delivered in connection with sales by any Underwriter or
dealer. If during such period of time any event shall occur that in the
judgment of the Company or in the opinion of counsel for the Underwriters is
required to be set forth in the Prospectus (as then amended or supplemented) or
should be set forth therein in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
is necessary to supplement or amend the Prospectus (or to file under the
Exchange Act any document which, upon filing, becomes an Incorporated Document)
in order to comply with the Act or any other law, the Company will forthwith
prepare and, subject to the provisions of paragraph (d) above, file with the
Commission an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof. In the event that the Company and you agree that the Prospectus
should be amended or supplemented, the Company, if requested by you, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and, if
applicable, with counsel for the Underwriters in connection with the
registration or qualification of the Securities for offering and sale by the
several Underwriters and by dealers under the securities or Blue Sky laws of
such jurisdictions as you may designate and will file such consents to service
of process or other documents necessary or appropriate in order to effect such
registration or qualification; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now
otherwise required to be so qualified or to take any action which would subject
it to service of process in suits, other than those arising out of the offering
or sale of the Securities, in any jurisdiction where it is not now so subject.
(h) The Company will make generally available to its
securityholders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months thereafter, as soon
as practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
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(i) During the period of five years hereafter, the Company
will furnish to you (i) as soon as available, a copy of each report of the
Company mailed to stockholders or filed with the Commission, and (ii) from time
to time such other information concerning the Company as you may request.
(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (otherwise than
pursuant to the second paragraph of Section 10 hereof or by notice given by you
terminating this Agreement pursuant to Section 10 or Section 11 hereof) or if
this Agreement shall be terminated by the Underwriters because of any failure
or refusal on the part of the Company to comply with the terms or fulfill any
of the conditions of this Agreement, the Company agrees to reimburse the
Underwriters for all out-of-pocket expenses (including fees and expenses of
counsel for the Underwriters) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale
of the Securities to be sold by it hereunder substantially in accordance with
the description thereof set forth in the Prospectus.
(l) The Company will timely file the Prospectus pursuant
to Rule 424(b) under the Act and will advise you of the time and manner of such
filing.
(m) If required, as set forth in Schedule I to this
Agreement, except as provided in this Agreement, the Company will not offer,
sell, contract to sell or otherwise dispose of any common stock or any
securities convertible into or exercisable or exchangeable for common stock or
grant any options or warrants to purchase common stock (except pursuant to the
grant or exercise of options under the Company's Stock Incentive or option
plan(s) and shares of Common Stock issuable upon conversion of the Company's 10
1/2% Convertible Subordinated Debentures due 2002) for the period of days after
the date of the Prospectus as is specified in Schedule I, without the prior
written consent of Xxxxx Xxxxxx Inc.
(n) If required, as set forth in Schedule I to this
Agreement, the Company has furnished or will furnish to you "lock-up" letters,
in form and substance satisfactory to you, signed by all of its current
officers, certain of its current directors and each of its stockholders
designated by you.
(o) Except as stated in this Agreement and in the
Prepricing Prospectus, Prospectus Supplement and Prospectus, the Company has
not taken, nor will it take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(p) If required as set forth in Schedule I hereto, the
Company will use its best efforts to have the Securities that it agrees to sell
under this Agreement listed, subject to notice of issuance, on the New York
Stock Exchange or such other exchange designated on Schedule I hereto on or
before the Closing Date.
(q) The Company will use its best efforts to continue to
qualify as a real estate investment trust ("REIT") under Sections 856 through
860 of the Code.
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(r) The Company will not file any registration statement
with the Commission for the registration of any securities of the Company for a
period of 30 days after the date of the Prospectus Supplement without the prior
written consent of Xxxxx Xxxxxx Inc.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) No order preventing or suspending the use of any
Prepricing Prospectus Supplement has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission or the securities
authority of any state or other jurisdiction. 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 threatened by the
Commission or the securities authority of any state or other jurisdiction.
(b) The execution and delivery of, and the performance by
the Company of its obligations under, this Agreement, have been duly authorized
by all necessary corporate action of the Company, and, at the Closing Date or
the related Option Closing Date (as the case may be), this Agreement will have
been duly executed and delivered by the Company, and this Agreement will
constitute a valid and binding instrument of the Company enforceable against
the Company in accordance with its respective terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity, except as
rights to indemnity and contribution hereunder may be limited by federal or
state securities laws.
(c) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(d) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. The
registration statement in the form in which it became or becomes effective and
also in such form as it may be when any post-effective amendment thereto shall
become effective and the Prospectus and any supplement or amendment thereto,
including the Prospectus Supplement, when filed with the Commission under Rule
424(b) under the Act, complied or will comply in all material respects with the
provisions of the Act and did not or will not at any such times contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except that this representation and warranty does not apply to
statements in or omissions from the registration statement or the Prospectus or
any supplement or amendment thereto made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in
writing by or on behalf of any Underwriter through you expressly for use
therein.
(e) The Incorporated Documents heretofore filed, when
they were filed (or, if any amendment with respect to any such document was
filed, when such amendment was filed), conformed in all material respects with
the requirements of the Act, the Exchange Act and the
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respective rules and regulations thereunder; any further Incorporated Documents
so filed will, when they are filed, conform in all material respects with the
requirements of the Act, the Exchange Act and the respective rules and
regulations thereunder; no such document when it was filed (or, if an amendment
with respect to any such document was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and no such further document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading.
(f) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the distribution
of the Securities, will not distribute any offering material in connection with
the offering and sale of the Securities other than the Registration Statement,
the Prepricing Prospectus, the Prospectus Supplement, the Prospectus or other
materials, if any, permitted by the Act.
(g) All outstanding capital stock of the Company has been
duly authorized and validly issued, is fully paid and nonassessable and is free
of any preemptive or similar rights; the Securities to be issued and sold by the
Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable and free of any preemptive or
similar rights; and the capital stock of the Company conforms to the description
thereof in the Registration Statement and the Prospectus.
(h) Except as disclosed in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance of, nor
any commitment, plan or arrangement to issue, any shares of capital stock of
the Company or any security convertible into or exchangeable or exercisable for
capital stock of the Company.
(i) No holder of any security of the Company or any other
person has the right, contractual or otherwise, which right has not been waived
by the holder thereof, (A) to cause the Company to sell or otherwise issue to
them, or to permit them to underwrite the sale of, the Securities, or (B) as a
result of the filing of the registration statement, to require registration
under the Act of any shares of Common Stock or other securities of the Company.
(j) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of Maryland with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as presently conducted and as disclosed in the
Registration Statement and the Prospectus, and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not and will not have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries (as hereinafter defined) taken as
a whole (a "Material Adverse Effect"). The term "Subsidiary" or "Subsidiaries"
means (A) a corporation, a majority of the voting or capital stock of which is,
at the time, directly or indirectly owned by the Company and (B) any other
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or other entity (other than a corporation)
(collectively, a "Person") in which the Company, directly or indirectly, (i)
owns a majority of the equity interest thereof and (ii) has the
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power to elect or direct the election of a majority of the members of the
governing body of such Person or otherwise has control over such Person (e.g.,
as the general or managing partner of a partnership).
(k) The Company is organized and operates in a manner so
as to qualify as a REIT under the Code; the Company elected to be taxed as a
REIT commencing with the Company's taxable year ended December 31, 1994 and will
continue to so elect.
(l) Each Subsidiary is duly organized, validly existing
and in good standing in the jurisdiction of its incorporation, if a corporation,
and is legally formed and validly existing under the laws of the jurisdiction of
its organization, if a partnership, association or business organization, with
full corporate or organizational power and authority to own, lease and operate
its properties and to conduct its business as presently conducted. Each
Subsidiary is duly registered and qualified to conduct its business (and, if a
corporation, is in good standing) in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not and
will not have a Material Adverse Effect; all the outstanding shares of capital
stock of each Subsidiary that is a corporation have been duly authorized and
validly issued, are fully paid and nonassessable, and all ownership interests in
each Subsidiary that is not a corporation have been validly created pursuant to
the partnership or other agreements or organizational documents of each such
Subsidiary, and the shares or other interests owned by the Company are owned by
the Company directly, or indirectly through one of the other Subsidiaries, free
and clear of any lien, adverse claim, security interest, equity or other
encumbrance.
(m) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened, against the Company or any of
the Subsidiaries, or to which the Company or any of the Subsidiaries, or to
which any of their respective properties is subject, that are required to be
disclosed in the Registration Statement or the Prospectus but are not disclosed
as required, and there are no agreements, indentures, leases or other
instruments that are required to be disclosed in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not disclosed or filed as required by the Act or
the Exchange Act.
(n) Neither the Company nor any of the Subsidiaries is
(i) in violation of its certificate or articles of incorporation, by-laws,
partnership agreements, or other organizational documents, or (ii) in violation
of any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of the Subsidiaries, including any lending or
banking law, governmental rule or regulation, or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries, or (iii) in default in any material respect in the performance of
any obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any material agreement, indenture,
lease, mortgage or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound.
(o) Neither the issuance and sale of the Securities, the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the
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Securities under the Act and the Exchange Act and compliance with the securities
or Blue Sky laws of various jurisdictions, all of which have been or will be
effected in accordance with this Agreement) or conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under, the
certificate or articles of incorporation, bylaws, partnership agreements, or
other organizational documents, of the Company or any of the Subsidiaries or
(ii) conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, any agreement, indenture, lease, mortgage or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound, or
violates or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any of the Subsidiaries
or any of their respective properties, or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to the terms of any agreement or
instrument to which any of them is a party or by which any of them may be bound
or to which any of the property or assets of any of them is subject.
(p) The accountants, KPMG Peat Marwick LLP, who have
certified or shall certify the financial statements included or incorporated by
reference in the Registration Statement and the Prospectus (or any amendment or
supplement thereto) are independent public accountants as required by the Act,
the Exchange Act and the respective rules and regulations thereunder.
(q) The financial statements, together with related
schedules and notes, included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), present
fairly the consolidated financial position, results of operations and changes in
financial position of the Company and the Subsidiaries on the basis stated in
the Registration Statement at the respective dates or for the respective periods
to which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
or incorporated by reference in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) are accurately presented and prepared
on a basis consistent with such financial statements and the books and records
of the Company and the Subsidiaries. The pro forma financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) and other pro forma
financial information included in or incorporated therein comply in all material
respects with the applicable accounting requirements of Rule 11-02 of Regulation
S-X of the Commission and the pro forma adjustments have been properly applied
to the historical amounts in the compilation of that data and the assumptions
used in the preparation thereof are reasonable; and the other financial and
statistical information and data included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) are accurately presented
and prepared on a basis consistent with such financial statements and the books
and records of the Company and the Subsidiaries.
(r) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the capital
stock, or material increase in the short-term debt or long-term
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debt, of the Company or any of the Subsidiaries, or any material adverse
change, or any development involving or which may reasonably be expected to
involve, a prospective material adverse change in the condition (financial or
other), business, prospects, properties, net worth or results of operation of
the Company and the Subsidiaries taken as a whole.
(s) The Company or the Subsidiaries has good and
marketable title to all of the property (real and personal) disclosed in the
Prospectus as being owned by them, free and clear of all liens, claims, security
interests or other encumbrances except such as are disclosed in the Registration
Statement and the Prospectus or in any other document previously made available
to the Underwriters or to their counsel or such as do not materially affect the
value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company or the Subsidiaries, and all
the property disclosed in the Prospectus as being held under lease by the
Company and each of the Subsidiaries is held by it under valid, subsisting and
enforceable leases, free and clear of all liens, claims, security interests and
other encumbrances.
(t) The Company and the Subsidiaries have title insurance
on all real properties described in the Prospectus as owned or leased by them
(collectively, the "Properties"), in an amount at least equal to the aggregate
acquisition price paid by the Company or the Subsidiaries for such Properties
and the cost of construction of the improvements located on such properties.
(u) The Company and the Subsidiaries have title insurance
on each Mortgage Loan (as defined in the Prospectus) in an amount at least
equal to the aggregate principal amount of each such Mortgage Loan.
(v) The mortgages and deeds of trust encumbering the
Properties are not cross-defaulted or cross-collateralized to any property not
owned directly or indirectly by the Company.
(w) The Company and each of the Subsidiaries has such
permits, licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties and to
conduct its business as presently conducted and in the manner disclosed in the
Prospectus, including the necessary lending or banking law permits, subject to
such qualifications as may be set forth in the Prospectus; the Company and each
of the Subsidiaries has fulfilled and performed all its material 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, except as disclosed in the Prospectus, none of such permits
contains any restriction that is materially burdensome to the Company or any of
the Subsidiaries.
(x) Except as disclosed in the Prospectus, the Company and
the Subsidiaries own or possess all patents, trademarks, trademark
registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights disclosed in the
Prospectus as being owned by them or any of them or necessary for the conduct of
their respective businesses, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company and
the Subsidiaries with respect to the foregoing.
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(y) Insurance, including property and casualty insurance,
in favor of the Company or the Subsidiaries, as the case may be, is in effect
and will be maintained with respect to the Properties, with insurers of
recognized financial responsibility, against such losses and risks in an amount
and on such terms as is reasonable and customary for business of the type
conducted by the Company, the Subsidiaries or lessees, sub-lessees or mortgagors
of the Properties, as the case may be; all policies of insurance insuring the
Company, the Subsidiaries, and lessees, sub-lessees or mortgagors of the
Properties, as the case may be, or their respective businesses, assets
(including the property and casualty insurance on the Properties), employees,
officers and directors are in full force and effect; the Company, each of the
Subsidiaries, and, to the best knowledge of the Company, each lessee, sub-lessee
and mortgagor of the Properties is in compliance with the terms of such policies
and instruments in all material respects; neither the Company nor any of the
Subsidiaries, or, to the best knowledge of the Company, no lessee, sub-lessee or
mortgagor of the Properties has received from any insurance company written
notice of any material defects or deficiencies affecting the insurability of any
of the Properties; and there are no claims by the Company, any of the
Subsidiaries or, to the best knowledge of the Company, any lessee, sub-lessee or
mortgagor under any such policy or instrument as to which any insurance company
is denying liability or defending under a reservation of rights clause.
(z) The Company and the Subsidiaries 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 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.
(aa) Neither the Company nor any of its Subsidiaries nor
any employee or agent of the Company or any Subsidiary has made any payment of
funds of the Company or any Subsidiary or received or retained any funds in
violation of any law, rule or regulation.
(ab) The Company and each of the Subsidiaries have filed
all tax returns required to be filed, which returns are complete and correct,
and neither the Company nor any Subsidiary is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto.
(ac) No holder of any security of the Company has any right
to require registration of shares of Common Stock or any other security of the
Company because of the consummation of the transactions contemplated by this
Agreement.
(ad) The Company is not now, and, after sale of the
Securities to be sold by the Company hereunder and application of the net
proceeds from such sale as described in the Prospectus under the caption "Use of
Proceeds," will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(ae) To the best of the Company's knowledge, except as
described in the Registration Statement and Prospectus, the Company and the
Subsidiaries (i) are in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment, hazardous or toxic substances or wastes,
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pollutants or contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals under applicable Environmental Laws
required in connection with their businesses, properties or assets as conducted
or contemplated to be conducted as described in the Registration Statement, 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, singly or in the aggregate, have a Material Adverse Effect.
(af) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of medical wastes
or hazardous substances by the Company or any of the Subsidiaries (or, to the
knowledge of the Company, any of its predecessors in interest) at, upon or from
any of the property, including the Properties, now or previously owned or leased
by the Company or the Subsidiaries, in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or of any
medical wastes or hazardous substances due to or caused by the Company or any of
the Subsidiaries or with respect to which the Company or the Subsidiaries had
knowledge, except for any such spill, discharge, leak, emission, injection,
escapes, dumpings or releases which would not have or would not be reasonably
likely to have, singularly or in the aggregate with all such spills, discharges,
leaks, emissions, injections, escapes, dumpings or releases, a Material Adverse
Effect; and the terms "hazardous substances" and "medical wastes" shall have the
meanings specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(ag) The Company has complied with all provisions of
Florida Statutes, Section 517.075, relating to issuers doing business with
Cuba.
(ah) The Company has filed all reports and other documents
required to be filed by it under the Exchange Act.
(ai) Each of the Subsidiaries constitutes either a
partnership for federal income tax purposes or a "qualified REIT subsidiary"
within the meaning of Section 856(i) of the Code.
(aj) None of the assets of the Company or the Subsidiaries
constitute, nor will such assets, as of the Closing Date, constitute "plan
assets," as such term is defined in the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").
(ak) Subject to the provisions of applicable law, none of
the Subsidiaries is currently prohibited, directly or indirectly, from paying
any dividends to the Company, from making any other distributions on such
Subsidiary's capital stock or from repaying to the Company any loans or advances
to such Subsidiary's property or assets to the Company.
(al) The information and disclosures regarding the
Company's directors and officers, contained in the Company's Proxy Statement for
the Annual Meeting of Stockholders held on May 1, 1996, (i) are accurate and
consistent with the information provided to the
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Company by each director and officer for that purpose and (ii) did not omit to
disclose any fact that should have been so disclosed under the rules and
regulations of the Exchange Act governing Proxy Statement disclosure
obligations.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or in
any Prospectus Supplement or in the Registration Statement or the Prospectus or
in any amendment or supplement thereto, or arising out of or based upon 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, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to such
Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any Prepricing Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Securities by such Underwriter to any person if a copy of the Prospectus shall
not have been delivered or sent to such person within the time required by the
Act and the regulations thereunder, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Prepricing Prospectus was corrected in the Prospectus, provided that the Company
has delivered the Prospectus to the several Underwriters in requisite quantity
on a timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Company may otherwise
have.
(b) If any action, suit or proceeding shall be brought
against any Underwriter or any person controlling any Underwriter in respect of
which indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company, and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the Company has agreed in writing to pay such fees and expenses, (ii)
the Company has failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include both such Underwriter or such controlling person and the
Company and such Underwriter or such controlling person shall have been advised
by its counsel that representation of such indemnified party and the Company by
the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Underwriter or such controlling
person). It is understood, however, that the Company shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate
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firm of attorneys (in addition to any local counsel) at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by Xxxxx Xxxxxx Inc., 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, suit or proceeding effected without its written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the Company
agrees to indemnify and hold harmless any Underwriter, to the extent provided in
the preceding paragraph, and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each Underwriter, but
only with respect to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus, any Prepricing Prospectus, any
Prospectus Supplement, or any amendment or supplement thereto. If any action,
suit or proceeding shall be brought against the Company, any of its directors,
any such officer, or any such controlling person based on the Registration
Statement, the Prospectus or any Prepricing Prospectus, any Prospectus
Supplement, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph (c),
such Underwriter shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officer, and any such controlling person shall
have the rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which any
Underwriter may otherwise have.
(d) If the indemnification provided for in this Section 7
is unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities, 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 Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, 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 Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to
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information supplied by the Company on the one hand or by the Underwriters on
the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by a pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
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 any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Securities underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 7 are several
in proportion to the respective numbers of Firm Securities set forth opposite
their names in Exhibit A hereto (or such numbers of Firm Securities increased as
set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or 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 action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 7 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any person
controlling the Company, (ii) acceptance of any Securities and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter or any person controlling any Underwriter, or to the Company, its
directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Securities hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the registration statement or a post-effective
amendment thereto to be declared effective before the offering of the Securities
may commence, the registration statement or such post-effective
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amendment shall have become effective not later than 5:30 P.M., New York City
time, on the date hereof, or at such later date and time as shall be consented
to in writing by you, and all filings, if any, required by Rules 424 and 430A
under the Act shall have been timely made; no stop order suspending the
effectiveness of the registration statement shall have been issued and no
proceeding for that purpose shall have been instituted 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 your
satisfaction.
(b) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
Company or the Subsidiaries not contemplated by the Prospectus, which in your
opinion, would materially adversely affect the market for the Securities, or
(ii) any event or development relating to or involving the Company or any
officer or director of the Company which makes any statement made in the
Prospectus untrue or which, in the opinion of the Company and its counsel or the
Underwriters and their counsel, requires the making of any addition to or change
in the Prospectus in order to state a material fact required by the Act or any
other law to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectus to reflect
such event or development would, in your opinion, materially adversely affect
the market for the Securities.
(c) You shall have received on the Closing Date, an
opinion of Sirote & Permutt, P.C., special counsel for the Company, dated the
Closing Date and addressed to you, to the effect that:
(i) The Company is a corporation duly incorporated
and validly existing in good standing under the laws of the State of Maryland
with full corporate power to own, lease and operate its properties and to
conduct its business as presently conducted and as disclosed in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), and is
duly registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify does not have a Material Adverse Effect;
(ii) To the best knowledge of such counsel, after
reasonable inquiry, the Company has no subsidiaries other than the Subsidiaries.
Each of the Subsidiaries is duly organized, validly existing and in good
standing in the jurisdiction of its incorporation, if a corporation, and is
legally formed and validly existing under the laws of the jurisdiction of its
organization, if a partnership, association or business organization, with full
corporate or organizational power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as disclosed
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) and is duly registered and qualified to conduct its business
and is in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a Material Adverse Effect; all the outstanding shares of capital stock of each
Subsidiary that is a corporation have been duly authorized and validly issued
and are fully paid and nonassessable, and all ownership interests in each
Subsidiary that is not a corporation have been validly created pursuant to the
partnership or other agreements or
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organizational documents of each such Subsidiary. Except as described in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), all of such shares and interests in the Subsidiaries owned by the
Company are owned by the Company directly, or indirectly through one of the
other Subsidiaries, free and clear of any perfected security interest, or, to
the best knowledge of such counsel after reasonable inquiry, any other security
interest, lien, adverse claim, equity or other encumbrance;
(iii) The authorized and outstanding stock of the
Company is as set forth under the caption "Capitalization" in the Prospectus;
and the authorized stock of the Company conforms in all material respects as to
legal matters to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock";
(iv) All the shares of stock of the Company
outstanding prior to the issuance of the Securities to be issued and sold by the
Company hereunder, have been duly authorized and validly issued, are fully paid
and nonassessable and are free of any preemptive or similar rights;
(v) The Securities to be issued and sold to the
Underwriters by the Company hereunder (i) have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued, fully paid and nonassessable and
free of any preemptive, or to the best knowledge of such counsel, similar rights
that entitle or will entitle any person to acquire any Securities upon the
issuance thereof by the Company and (ii) conform in all material respects to the
descriptions thereof in the Prospectus and (iii) if Common Stock, have been duly
authorized for listing by the New York Stock Exchange upon official notice of
issuance;
(vi) The form of certificates for the Securities
conforms to the requirements of the Maryland General Corporation Law;
(vii) Except as disclosed in the Prospectus, there
are no outstanding options, warrants or other rights calling for the issuance
of, and such counsel does not know of, any commitment, plan or arrangement to
issue, any shares of stock of the Company or any security convertible into or
exchangeable or exercisable for stock of the Company;
(viii) No holder of any security of the Company or
any other person has the right, contractual or otherwise, which right has not
been waived by the holder thereof, (A) to cause the Company to sell or otherwise
issue to them, or to permit them to underwrite the sale of, the Securities or
(B) as a result of the filing of the Registration Statement, to require
registration under the Act of any shares of Common Stock or other securities of
the Company;
(ix) The Registration Statement and all
post-effective amendments, if any, have become effective under the Act and, to
the best knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose are pending before or contemplated by the Commission; and any required
filing of the Prospectus pursuant to Rule 424(b) has been made in accordance
with Rule 424(b);
(x) The Company has full corporate power to enter
into this Agreement and to issue, sell and deliver the Securities to be sold by
it to the Underwriters as
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provided herein, and this Agreement has been duly authorized, executed and
delivered by the Company and is a valid, legal and binding agreement of the
Company, enforceable against the Company in accordance with its respective
terms, subject to the qualification that the enforceability of the Company's
obligations hereunder and thereunder may be limited by bankruptcy, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights generally and by general equitable principles and except as enforcement
of rights to indemnity and contribution hereunder may be limited by federal or
state securities laws or principles of public policy;
(xi) Neither the Company nor any of the
Subsidiaries is (i) in violation of its respective certificate or articles of
incorporation, bylaws, partnership agreements, or other organizational
documents; or (ii) to the best knowledge of such counsel after reasonable
inquiry, is (A) in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note or other evidence
of indebtedness or in any material agreement, indenture, lease, or other
instrument known to such counsel to which such person is a party or by which any
of them or their respective properties may be bound, or (B) in violation of any
law, ordinance, administrative or governmental rule or regulation, including any
lending or banking law, governmental rule or regulation, applicable to the
Company or any Subsidiary or of any decree of any court or governmental agency
or body having jurisdiction over the Company or any of the Subsidiaries;
(xii) Neither the offer, sale or delivery of the
Securities, the execution, delivery or performance of this Agreement, compliance
by the Company with the provisions hereof nor consummation by the Company of the
transactions contemplated hereby conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, the certificate or articles
of incorporation, bylaws, partnership agreements or other organizational
documents, of the Company or any of the Subsidiaries or any agreement,
indenture, lease, mortgage or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their respective
properties is bound that is an exhibit to the Registration Statement or to any
Incorporated Document, or is known to such counsel after reasonable inquiry, or
will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of the Subsidiaries, nor will
any such action result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable state securities and Blue Sky laws),
judgment, injunction, order or decree known to such counsel after reasonable
inquiry, applicable to the Company, the Subsidiaries or any of their respective
properties;
(xiii) Except as disclosed in the prospectus (or any
supplement thereto), to the best knowledge of such counsel after due inquiry,
there are no legal or governmental proceedings pending or threatened against the
Company or any of the Subsidiaries, or to which the Company or any of the
Subsidiaries, or any of their property, is subject, which are required to be
disclosed in the Registration Statement or Prospectus (or any amendment or
supplement thereto);
(xiv) No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official is
required on the part of the Company (except as have been obtained under the Act,
the Exchange Act and under state securities or Blue Sky laws governing the
purchase and distribution of the Securities) for the valid issuance and sale of
the Securities to the Underwriters as contemplated by this Agreement;
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(xv) Such counsel does not know of any agreements,
indentures, leases or other instruments required to be disclosed in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not disclosed or filed as required, and such
agreements, indentures, lease or other instruments as are summarized in the
Registration Statement or the Prospectus are fairly summarized in all respects;
(xvi) The Registration Statement and the Prospectus
and any supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial and statistical data
included therein, as to which such counsel need not express any opinion) comply
as to form in all material respects with the requirements of the Act; and each
of the Incorporated Documents (except for the financial statements and the notes
thereto and the schedules and other financial and statistical data included
therein, as to which counsel need not express any opinion) when filed complied
as to form in all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder;
(xvii) The Company and each of the Subsidiaries are
duly licensed or authorized in each jurisdiction where they are required to be
so licensed or authorized to conduct their respective businesses; the Company
and each of the Subsidiaries have all other necessary orders, consents,
approvals, permits, licenses, franchises and authorizations of and from all
regulatory authorities to conduct their respective businesses as presently
conducted, including the necessary lending or banking law permits, and, to the
best of such counsel's knowledge after due inquiry, neither the Company nor any
of the Subsidiaries has received any notification from any regulatory authority
to the effect that any additional approval is required to be obtained by the
Company or any of the Subsidiaries;
(xviii) The statements in the Registration Statement
and Prospectus under the captions "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business,"
"Management," "Description of Debt Securities" and "Description of Capital
Stock," insofar as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(xix) The Company is not, and after the sale of the
Securities and the application of the net proceeds therefrom as disclosed in the
Prospectus under the caption "Use of Proceeds" will not be, an "investment
company" within the meaning of the 1940 Act;
(xx) The Company has filed all reports and other
documents required to be filed by it under the Exchange Act;
(xxi) None of the assets of the Company or the
Subsidiaries constitute "plan assets," as such term is defined in ERISA;
(xxii) The Company was and is organized in conformity
with the requirements for qualification as a REIT and its proposed method of
operation, as described in the Prospectus, permits it to meet the requirements
for qualification under the Code;
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(xxiii) The discussion in the Prospectus under the
caption "Federal Income Tax Considerations" is accurate in all material respects
and fairly summarizes the federal income tax considerations that are likely to
be material to holders of the Common Stock who are United States citizens or
residents or domestic corporations and who are not subject to special treatment
under the tax laws; and
(xxiv) Each of the Subsidiaries constitutes either a
partnership for federal income tax purposes or a "qualified REIT subsidiary"
within the meaning of Section 856(i) of the Code.
In addition, such counsel shall state that they have participated in
the preparation of the Registration Statement and the Prospectus, including
review and discussion of the contents thereof (including review and discussion
of the contents of all Incorporated Documents), and nothing has come to the
attention of such counsel that has caused them to believe that the Registration
Statement (including the Incorporated Documents), at the time the Registration
Statement became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as of its
date and as of the Closing Date or the Option Closing Date, as the case may be,
or that any amendment or supplement to the Prospectus, as of its respective
date, and as of the Closing Date or the Option Closing Date, as the case may be,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements herein,
in the light of the circumstances under which they were or are made, not
misleading (it being understood that such counsel need express no opinion with
respect to the financial statements and the notes thereto and the schedules and
other financial and statistical data included in the Registration Statement or
the Prospectus or any Incorporated Document).
Such counsel shall also reaffirm as of the Closing Date their opinion
filed as Exhibit 8 to the Registration Statement.
In rendering their opinion as aforesaid, counsel may rely upon an
opinion, dated the Closing Date, of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx with
respect to Maryland law and may rely upon other opinions, each dated the Closing
Date, of other counsel retained by them or the Company as to laws of any
jurisdiction other than the United States or the State of Alabama, provided that
(1) each such local counsel is acceptable to the Underwriters, (2) such reliance
is expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Underwriters and is in form and substance
satisfactory to them and their counsel, and (3) counsel shall state in their
opinion that they believe that they and the Underwriters are justified in
relying thereon.
(d) You shall have received on the Closing Date an
opinion of Xxxxx Xxxxxxxxxx, counsel for the Underwriters, dated the Closing
Date and addressed to you, with respect to the matters referred to in clauses
(v)(other than subclause (ii) and (iii) thereof), (ix), (x) and (xvi) of the
foregoing paragraph (c) and the third to last paragraph of the foregoing
paragraph (c), and such other related matters as you may request. In rendering
their opinion as aforesaid, such counsel may rely on the opinion, dated the
Closing Date and any Option Closing Date, of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx
with respect to Maryland law.
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(e) You shall have received letters addressed to
you and dated the date hereof and the Closing Date from KPMG Peat Marwick LLP,
independent certified public accountants, substantially in the forms heretofore
approved by you.
(f) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock of the Company nor any material
increase in the short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement thereto),
any material adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole; (iv) the Company and the Subsidiaries shall not
have any liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the Registration
Statement or the Prospectus (or any amendment or supplement thereto); and (v)
all the representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the chief executive
officer and the chief financial officer of the Company (or such other officers
as are acceptable to you), to the effect set forth in this Section 8(f) and in
Section 8(g) hereof.
(g) The Company shall not have failed at or prior
to the Closing Date to have performed or complied with any of its agreements
herein contained and required to be performed or complied with by it hereunder
at or prior to the Closing Date.
(h) Prior to the Closing Date, the Securities, as
set forth in Schedule I hereto, which the Company agrees to sell pursuant to
this Agreement shall have been listed, subject to notice of issuance, on the New
York Stock Exchange or such other exchange as may be designated in Schedule I.
(i) The Company shall have furnished or caused to
be furnished to you such further certificates and documents as you shall have
requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you, or to counsel for the Underwriters, shall be deemed a
representation and warranty by the Company to each Underwriter as to the
statements made therein.
The several obligations of the Underwriters to purchase Additional
Securities hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 8, except that, if any
Option Closing Date is other than the Closing Date, the certificates, opinions
and letters referred to in paragraphs (c) through (g) shall be dated the
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Option Closing Date in question and the opinions called for by paragraphs (c)
and (d) shall be revised to reflect the sale of Additional Shares.
9. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, each Prospectus
Supplement, the Prospectus, and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
registration statement, each Prepricing Prospectus, each Prospectus Supplement,
the Prospectus, the Incorporated Documents, and all amendments or supplements to
any of them, as may be reasonably requested for use in connection with the
offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp taxes in connection with the original issuance and sale of
the Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, the preliminary and supplemental Blue Sky Memoranda and all other
agreements or documents printed (or reproduced) and delivered in connection with
the offering of the Securities; (v) if applicable, the listing of the Securities
on the New York Stock Exchange; (vi) the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 5(g) hereof (including the reasonable
fees, expenses and disbursements of counsel relating to the preparation,
printing or reproduction, and delivery of the preliminary and supplemental Blue
Sky Memoranda and such registration and qualification); (vii) if applicable, the
filing fees and the fees and expenses of counsel for the Underwriters in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc.; (viii) the transportation and other expenses incurred
by or on behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; and (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto to be
declared effective before the offering of the Securities may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company, by notifying you, or by you, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse to purchase
Securities which it or they are obligated to purchase hereunder on the Closing
Date, and the aggregate number of Securities that such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Securities which the Underwriters are
obligated to purchase on the Closing Date, each non-defaulting Underwriter shall
be obligated, severally, in the proportion which the number of Firm Securities
set forth opposite its name in Exhibit A hereto bears to the aggregate number of
Firm Securities set forth opposite the names of all non-defaulting Underwriters
or in such other proportion as you may specify in accordance with Section 20 of
the Master Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to purchase the
Securities which such defaulting Underwriter or Underwriters are obligated, but
fail or refuse, to purchase. If any one or more of the Underwriters shall fail
or refuse to
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purchase Securities which it or they are obligated to purchase on the Closing
Date and the aggregate number of Securities with respect to which such default
occurs is more than one-tenth of the aggregate number of Securities which the
Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Company for the purchase of such Securities by one
or more non-defaulting Underwriters or other party or parties approved by you
and the Company are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any such default of any such Underwriter under this Agreement. The
term "Underwriter" as used in this Agreement includes, for all purposes of this
Agreement, any party not listed in Exhibit A hereto who, with your approval and
the approval of the Company, purchases Shares which a defaulting Underwriter is
obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company, by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Securities), as the case may be, (i) trading in the
Common Stock of the Company shall be suspended or subject to any restriction or
limitation not in effect on the date of this Agreement, (ii) trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market shall have been suspended or materially limited,
(iii) there shall have been any downgrading in the rating of any debt securities
or preferred stock of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance or
review its rating of any debt securities or preferred stock of the Company
(other than an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating), (iv) a general
moratorium on commercial banking activities in New York shall have been declared
by either federal or state authorities, or (v) there shall have occurred any
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions, the
effect of which on the financial markets of the United States is such as to make
it, in your judgment, impracticable or inadvisable to commence or continue the
offering of the Securities at the offering price to the public set forth on the
cover page of the Prospectus or to enforce contracts for the resale of the
Securities by the Underwriters. Notice of such termination may be given to the
Company by telegram, telecopy or telephone and shall be subsequently confirmed
by letter.
12. INFORMATION FURNISHED BY THE UNDERWRITERS. The only
Information furnished by or on behalf of the Underwriters through you (as such
information is referred to in Sections 6(b) and 7 hereof) shall be such
information as is specified in Schedule I hereto.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10
and 11 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be
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delivered (i) if to the Company, at the office of the Company at Capstone
Capital Corporation, 0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx
00000, Attention: Xxxx X. XxXxxxxxx, with a copy to Sirote & Permutt, P.C., 0000
Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxx X. Xxxxxx,
Esq.; or (ii) if to you, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking Division, with a
copy to Xxxxx Xxxxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the
term "successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Securities in his
status as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
CAPSTONE CAPITAL CORPORATION
By
---------------------------------
Name:
Title:
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Exhibit A
to Schedule I hereto.
XXXXX XXXXXX INC.
PAINEWEBBER INCORPORATED
X.X. XXXXXXXX & CO.
XXXXX & COMPANY
By XXXXX XXXXXX INC.
By
---------------------------------------
Name:
Title:
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SCHEDULE I
DESCRIPTION OF SECURITIES; TERMS OF OFFERING
1. Registration Statement:
File No. 33-97926
2. Underwriters:
Xxxxx Xxxxxx Inc.
PaineWebber Incorporated
X.X. Xxxxxxxx & Co.
Xxxxx & Company
3. Title of Securities:
Common Stock, par value $.001 per share
4. Aggregate Number of Firm Securities:
Common Stock: 2,500,000
5. Aggregate Number of Option Securities:
Common Stock: 375,000
6. Price to Public:
Common Stock: $20.875 per share
7. Purchase Price by Underwriters:
Common Stock: $19.78 per share
8. Specified Funds for Payment of Purchase Price or Wire:
Wire of $49,450,000
9. Lock-up Requirements:
The Company and each officer and director of the Company has agreed not
to offer, sell, contract to sell or otherwise dispose of any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or grant any option or warrants to
purchase Common Stock, except, in the case of the Company, pursuant to
the grant or exercise of options under the Stock Incentive Plan and
shares of Common Stock issuable upon conversion of the 10-1/2 per cent
Convertible Subordinated Debentures due 2002, for a period of 180 days
from the date of this Prospectus, without
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the prior written consent of Xxxxx Xxxxxx Inc., subject to certain
exceptions set forth in the Underwriting Agreement.
10. Information Furnished by the Underwriters:
The statements set forth in the last paragraph on the cover page, the
stabilization legend on the inside cover page, and the statements in
the first and third paragraphs under the caption "Underwriting" in the
Prepricing Prospectus and Prospectus Supplement.
11. Time of Delivery:
Closing - 10:00 a.m., November 26, 1996
12. Pre-Closing Location:
Xxxxx Xxxxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
13. Closing Location:
Xxxxx Xxxxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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EXHIBIT A
Capstone Capital Corporation
Number of Firm
Underwriter Shares to be Purchased
----------- ----------------------
Xxxxx Xxxxxx Inc. 625,000
PaineWebber Incorporated 625,000
X.X. Xxxxxxxx & Co. 625,000
Xxxxx & Company 625,000
2,500,000
Total
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