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LNR PROPERTY CORPORATION
$100,000,000
10 1/2% Senior Subordinated Notes due 2009
UNDERWRITING AGREEMENT
January 20, 1999
BT ALEX. XXXXX INCORPORATED
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXXXXX & COMPANY, INC.
c/o BT Alex. Xxxxx Incorporated
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
LNR Property Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to you (collectively, the "Underwriters"), severally
and not jointly, $100,000,000 aggregate principal amount of the Company's
10 1/2% Senior Subordinated Notes due 2009 (the "Securities"). The respective
principal amounts of the Securities to be so purchased by the several
Underwriters are set forth opposite your names in Schedule I hereto. The
Securities are to be issued under an Indenture to be dated as of January 25,
1999 (the "Base Indenture") between the Company and The Bank of New York, as
trustee (the "Trustee"), as supplemented by a Supplemental Indenture to be dated
as of January 25, 1999 (the "Supplemental Indenture"). The Base Indenture as
supplemented by the Supplemental Indenture is referred to herein as the
"Indenture".
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the
Underwriters as follows:
(a) A registration statement on Form S-3 (File No. 333-67929),
including a basic prospectus relating to certain debt and equity securities to
be offered from time to time by the Company and a preliminary supplement to the
basic prospectus relating to the offering of the Securities, has been prepared
by the Company in conformity with the requirements of the Securities
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Act of 1933, as amended (the "Act"), and the Rules and Regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder and has been filed with the Commission. The Company has complied with
the conditions for the use of Form S-3. Copies of such registration statement,
including any amendments thereto, the preliminary prospectuses (meeting the
requirements of the Rules and Regulations) contained therein and the exhibits,
financial statements and schedules, as finally amended and revised, as well as
copies of any Preliminary Prospectuses (as defined below), have heretofore been
delivered by the Company to you. Such registration statement, which is herein
referred to as the "Registration Statement," has become effective under the Act
and no post-effective amendment to the Registration Statement has been filed as
of the date of this Agreement. The Company will hereafter file with the
Commission pursuant to Rule 424(b) a final supplement to the basic prospectus
included in the Registration Statement relating to the Securities and the
offering thereof. "Basic Prospectus" means the prospectus included in the
Registration Statement at the time it became effective under the Act.
"Prospectus" means the Basic Prospectus together with the final prospectus
supplement relating to the Securities first filed with the Commission pursuant
to Rule 424(b). Each preliminary prospectus supplement to the Basic Prospectus
which describes the Securities and the offering thereof and is used prior to the
filing of the Prospectus with the Commission, together with the Basic Prospectus
is herein referred to as a "Preliminary Prospectus." Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Prospectus or to
the Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein, and, in the case of any reference herein to
any Prospectus, also shall be deemed to include any documents incorporated by
reference therein, and any supplements or amendments thereto, filed with the
Commission after the date of filing of the Prospectus under Rule 424(b) or 430A,
and prior to the termination of the offering of the Securities by the
Underwriters.
(b) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate or other power and authority to own or lease its properties and
conduct its business as described in the Registration Statement. Each of the
Subsidiaries (as defined below) and the Investment Affiliates (as defined below)
has been duly organized and is validly existing as a corporation or partnership,
as applicable, in good standing under the laws of the jurisdiction of its
incorporation or formation, with corporate or other power and authority to own
or lease its properties and conduct its business as described in the
Registration Statement. Each of the Company, the Subsidiaries and the Investment
Affiliates is duly qualified to transact business in all jurisdictions in which
the conduct of its business requires such qualification, except where the
failure to be so qualified would not,
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individually or in the aggregate, have a material adverse effect on the
condition, financial or otherwise, of the Company and the Subsidiaries taken as
a whole or the business, management, properties, assets, rights, operations or
prospects of the Company and the Subsidiaries taken as a whole (a "Material
Adverse Effect"). The Subsidiaries listed on Exhibit 21 to the Company's Annual
Report on Form 10-K for the year ended November 30, 1997 constitute all the
Subsidiaries at November 30, 1997 other than Subsidiaries that, if considered in
the aggregate as a single subsidiary, would not have constituted a "significant
subsidiary" of the Company at that date, within the meaning of Rule 1-02(w) of
the Commission's Regulation S-X. There are no "significant subsidiaries" of the
Company other than the Designated Subsidiaries (as defined below) and Investment
Affiliates (as defined below), and, at the date of this Agreement, the
Subsidiaries other than the Designated Subsidiaries and the Investment
Affiliates, if considered in the aggregate as a single subsidiary, would not
constitute a "significant subsidiary" of the Company. LW Real Estate
Investments, L.P. and the Land Partnership (as defined below) constitute all the
Investment Affiliates. The outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company or another Subsidiary (except to the
extent set forth as "minority interests" on the consolidated condensed balance
sheet of LNR as of August 31, 1998 included in the Prospectus), free and clear
of all liens, encumbrances and equities and claims (other than liens created
pursuant to the Credit Agreement (as defined below)); and no options, warrants
or other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into shares of capital stock or ownership
interests in the Subsidiaries or the Investment Affiliates are outstanding. The
Company indirectly owns a 50% interest in Lennar Land Partners, a Florida
general partnership (the "Land Partnership"). Such interest in the Land
Partnership and the Company's interests in LW Real Estate Investments, L.P. have
been duly authorized and validly issued and are owned by the Company or a
Subsidiary indirectly wholly owned by the Company, free and clear of all liens,
encumbrances and equities and claims. For purposes of this Agreement, a
"Subsidiary" means a direct or indirect "subsidiary" of the Company, as such
term is defined in Rule 405 under the Act. For purposes of this Agreement, the
following Subsidiaries are "Designated Subsidiaries": Leisure Colony Management
Corp., LNR Affordable Housing, Inc., Lennar Capital Services, Inc., Lennar
Securities Holdings, Inc., Nevada Securities Holdings, Inc., LNR Land Partners
SUB, Inc., LFS Asset Corp., Lennar Commercial Properties, Inc., Lennar MBS,
Inc., and LNR Florida Funding, Inc. For purposes of this Agreement, an
"Investment Affiliate" means any entity in which LNR, directly or indirectly,
has an ownership interest, (i) the financial results of which are not
consolidated under generally accepted accounting principles with the financial
results of LNR on the consolidated financial statements of LNR and (ii) which is
a "significant subsidiary" of LNR, as such term is defined within Rule 1-02(w)
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of the Commission's Regulations S-X. For purposes of this Agreement, the "Credit
Agreement" means the Amended and Restated Revolving Credit Agreement dated as of
March 27, 1998 among LNR, certain Subsidiaries, the parties thereto in their
capacities as lenders thereunder and Bank of America National Trust and Savings
Association, as agent, as amended.
(c) The information set forth under the caption "Capitalization" in the
Prospectus is true and correct as of its date. The outstanding shares of Common
Stock and the Company's Class B Common Stock, par value $.10 per share ("Class B
Common Stock"), have been duly authorized and validly issued and are fully paid
and non-assessable; and no preemptive rights of stockholders exist with respect
to the capital stock or any other securities of the Company or the issue and
sale thereof. Neither the filing of the Registration Statement nor the offering
or sale of the Securities as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied, for or relating to
the registration of securities of the Company.
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Securities. The
Securities, when issued, will be in the form contemplated by the Indenture. The
Securities have each been duly and validly authorized by the Company and, when
executed by the Company and authenticated by the Trustee in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will have been duly executed,
issued and delivered and will constitute valid and legally binding obligations
of the Company (assuming the due authorization, execution and delivery of the
Indenture by the Trustee and the due authorization and delivery of the
Securities by the Trustee in accordance with the Indenture), entitled to the
benefits of the Indenture, and enforceable against the Company in accordance
with their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The Indenture
has been duly qualified under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The Indenture has been duly and validly authorized by
the Company, and the Base Indenture (assuming the due authorization, execution
and delivery by the Trustee) has been duly executed and delivered and
constitutes a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except that the enforcement
thereof may be
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subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in equity
or at law). When the Supplemental Indenture is executed and delivered by the
Company (assuming the due authorization, execution and delivery by the Trustee),
the Supplemental Indenture will have been duly executed and delivered and the
Indenture will constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is considered in
a proceeding in equity or at law).
(f) Each of the Indenture and the Securities conforms in all material
respects to the description thereof in the Prospectus as supplemented or
amended.
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.
(h) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Securities nor
instituted proceedings for that purpose. The Registration Statement complies,
and the Prospectus and any amendments or supplements thereto will comply, in all
material respects with the requirements of the Act and the Rules and Regulations
and the Trust Indenture Act. The documents incorporated by reference in the
Prospectus, at the time filed with the Commission complied in all material
respects with the requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") or the Act, as applicable, and the rules and regulations of the
Commission thereunder. The Registration Statement and any amendment thereto do
not contain, and will not contain, any untrue statement of a material fact and
do not omit, and will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus and any amendments and supplements thereto do not contain, and will
not contain, any untrue statement of material fact; and do not omit, and will
not omit, to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading;
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provided, however, that the Company makes no representations or warranties as to
information contained in or omitted from the Registration Statement or the
Prospectus, or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
any Underwriter specifically for use in the preparation thereof.
(i) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules, as incorporated by
reference in the Prospectus, present fairly the financial position and the
results of operations and cash flows of the Company and the consolidated
Subsidiaries, at the indicated dates and for the indicated periods. Such
financial statements and related schedules have been prepared in accordance with
generally accepted accounting principles, consistently applied throughout the
periods involved, except as disclosed therein, and all adjustments necessary for
a fair presentation of results for such periods have been made. The summary
financial and statistical data included or incorporated by reference in the
Prospectus presents fairly the information shown therein and such data has been
compiled on a basis consistent with the financial statements presented therein
and the books and records of the Company. The pro forma financial statements and
other pro forma financial information included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the information
shown therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements, have been properly
compiled on the pro forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(j) Deloitte & Touche LLP has certified certain of the financial
statements filed with the Commission and included and incorporated by reference
in the Registration Statement and the Prospectus and is an independent public
accountant as required by the Act and the Rules and Regulations.
(k) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company, any of the
Subsidiaries or Investment Affiliates before any court or administrative agency
or otherwise which if determined adversely to the Company, any of its
Subsidiaries or Investment Affiliates might result in any material adverse
change in the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
the Subsidiaries taken as a whole or might prevent the consummation of the
transactions contemplated hereby, except as set forth in the Prospectus.
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(l) The Company, the Subsidiaries and the Investment Affiliates have
good and marketable title to all of the properties and assets reflected in the
financial statements (or as described in the Registration Statement or the
Prospectus) hereinabove described, subject to no lien, mortgage, pledge, charge
or encumbrance of any kind except those reflected in such financial statements
(or as described in the Registration Statement or the Prospectus) or which are
not material in amount. The Company, the Subsidiaries and the Investment
Affiliates occupy their leased properties under valid and binding leases
conforming in all material respects to the description thereof set forth or
incorporated by reference in the Registration Statement or the Prospectus.
(m) The Company, the Subsidiaries and the Investment Affiliates have
timely filed all Federal, State, local and foreign tax returns which have been
required to be filed (taking into account any applicable extensions) and have
paid all taxes indicated by said returns and all assessments received by them or
any of them to the extent that such taxes have become due and are not being
contested in good faith and for which an adequate reserve for accrual has been
established in accordance with generally accepted accounting principles. All tax
liabilities of the Company and the Subsidiaries have been adequately provided
for in the consolidated financial statements of the Company, and the Company
does not know of any actual or proposed additional material tax assessments.
(n) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, as it has been amended or
supplemented, there has not been any material adverse change or any development
involving a prospective material adverse change in or otherwise materially
affecting the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise), or prospects of the Company and
its Subsidiaries taken as a whole, whether or not occurring in the ordinary
course of business, and there has not been any material transaction entered into
or any material transaction that is probable of being entered into by the
Company, the Subsidiaries or the Investment Affiliates, other than transactions
in the ordinary course of business and changes and transactions described in the
Prospectus, as it has been amended or supplemented. The Company, the
Subsidiaries and the Investment Affiliates have no material contingent
obligations which are not disclosed in the Company's financial statements which
are incorporated by reference in the Prospectus.
(o) Neither the Company, nor any of the Subsidiaries or Investment
Affiliates is or with the giving of notice or lapse of time or both, will be, in
violation of or in default under its Charter or By-Laws or other comparable
documents or under any agreement, lease, contract, indenture or other instrument
or obligation to which it is a party or by which it, or any of its properties,
is bound, which default is of material significance in
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respect of the condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole or the business, management, properties, assets,
rights, operations, condition (financial or otherwise) or prospects of the
Company and the Subsidiaries taken as a whole. The execution and delivery of
this Agreement, the Indenture and the Securities and the consummation of the
transactions herein and therein contemplated and the fulfillment of the terms
hereof and thereof will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under (or an event which with
the giving of notice or lapse of time or both would constitute a default under),
or result in the imposition or creation of (or the obligation to create or
impose) a lien on any property or assets of the Company, any Subsidiary or
Investment Affiliate with respect to, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company, any Subsidiary or Investment
Affiliate is a party, or of the Charter or By-Laws or other comparable documents
of the Company, any Subsidiary or Investment Affiliate or any order, rule or
regulation applicable to the Company, any Subsidiary or Investment Affiliate of
any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction. Any and all indebtedness incurred by the
Company or its subsidiaries subsequent to March 24, 1998, the date of original
issuance of the Company's 9-3/8% Senior Subordinated Notes due 2008, was, and
the Company covenants that any such indebtedness incurred after the date hereof
and prior to the date of original issuance of the Securities will be, incurred
in accordance with the terms of the indenture relating to such notes and did not
and will not constitute "Permitted Indebtedness" as defined under such
indenture.
(p) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement, the Indenture and the Securities and the consummation
of the transactions herein and therein contemplated (except such additional
steps as may be required by the Commission, the National Association of
Securities Dealers, Inc. (the "NASD") or such additional steps as may be
necessary to qualify the Securities for public offering by the Underwriters
under state securities or Blue Sky laws) has been obtained or made and is in
full force and effect.
(q) Each of the Company, the Subsidiaries and the Investment Affiliates
holds all material licenses, certificates and permits (collectively, "Permits")
from governmental authorities which are necessary to the conduct of its
businesses, and has fulfilled and performed in all material respects its
obligations with respect to the Permits; and neither the Company nor any of the
Subsidiaries or Investment Affiliates has infringed any patents, patent rights,
trade names, trademarks or copyrights, which infringement is material to the
business of the Company and the Subsidiaries taken as a whole. The Company knows
of no material infringement by others of patents, patent rights, trade names,
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trademarks or copyrights owned by or licensed to the Company or any of the
Subsidiaries or Investment Affiliates.
(r) Neither the Company, nor to the Company's knowledge, any of its
affiliates, has taken or will take, directly or indirectly, any action designed
to cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Securities to facilitate the sale or resale of the Securities. The Company
acknowledges that the Underwriters may engage in stabilizing transactions in the
Securities in accordance with Regulation M under the Exchange Act.
(s) Neither the Company nor any Subsidiary is an "investment company"
within the meaning of such term under the Investment Company Act of 1940, as
amended (the "Investment Company Act") and the rules and regulations of the
Commission thereunder.
(t) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(u) Neither the Company nor any of the Subsidiaries nor any agent
acting on their behalf has taken or will take any action that might cause this
Agreement or the sale of the Securities to violate Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System, in each case as in effect,
or as the same may hereafter be in effect, on the Closing Date.
(v) Except as described in the Prospectus or as would not have a
Material Adverse Effect, (i) each of the Company, the Subsidiaries and the
Investment Affiliates is in compliance with and not subject to liability under
applicable Environmental Laws (as defined below), (ii) each of the Company, the
Subsidiaries and the Investment Affiliates has made all filings and provided all
notices required under any applicable Environmental Law, and has and is in
compliance with all Permits required under any applicable Environmental Laws and
each of them is in full force and effect, (iii) there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for information
pending or, to the knowledge of the Company, threatened against the Company, any
Subsidiary or Investment Affiliates under any Environmental Law, (iv) no lien,
charge, encumbrance or restriction has been recorded under any Environmental Law
with respect to any assets, facility or
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property owned, operated, leased or controlled by the Company, any Subsidiary or
Investment Affiliates, (v) neither the Company, nor any Subsidiary or Investment
Affiliate has received notice that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ("CERCLA"), or any comparable state law
and (vi) no property or facility of the Company or any Subsidiary or Investment
Affiliates is (A) listed or, to the knowledge of the Company, proposed for
listing on the National Priorities List under CERCLA or (B) listed in the
Comprehensive Environmental Response, Compensation, Liability Information System
List promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or threatened releases of
hazardous materials into the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (iii) underground
and aboveground storage tanks, and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(w) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company, the Subsidiaries or the Investment Affiliate which
is pending or, to the knowledge of the Company, threatened, which would have a
Material Adverse Effect.
(x) The Company, its Subsidiaries and the Investment Affiliates carry,
or are covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
industries.
(y) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
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Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
(z) To the best of the Company's knowledge, there are no affiliations
or associations between any member of the NASD and any of the Company's
officers, directors or 5% or greater security holders, except as set forth in
the Registration Statement.
2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase the aggregate principal amount of Securities set forth
opposite the name of each Underwriter in Schedule I hereof, subject to
adjustments in accordance with Section 9 hereof, at a purchase price of 96.235%
of such aggregate principal amount.
(b) Payment for the Securities to be sold hereunder is to be made by
wire transfer of Federal (same day) funds to the order of the Company against
delivery of certificates therefor to the Underwriters. Such payment and delivery
are to be made through the facilities of The Depository Trust Company, New York,
New York at 10:00 a.m., New York time, on the third business day after the date
of this Agreement (or, if the Underwriters determine the price of the Securities
after 4:30 p.m., New York time, on the date hereof, the fourth business day) or
at such other time and date not later than five business days thereafter as you
and the Company shall agree upon, such time and date being herein referred to as
the "Closing Date." (As used herein, "business day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and are not permitted by law or executive order to be closed.) The
certificates for the Securities in definitive form will be delivered in such
denominations and in such registrations as the Underwriters request in writing
not later than the second full business day prior to the Closing Date, and will
be made available for inspection by the Underwriters at least one business day
prior to the Closing Date.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a
public offering of the Securities as soon as the Underwriters deem it advisable
to do so. The Securities are to be initially offered to the public at the
initial public offering price set forth in the Prospectus. The Underwriters may
from time to time thereafter change the public offering price and other selling
terms.
BT Alex. Xxxxx Incorporated ("BT Alex. Xxxxx") will act
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as a "qualified independent underwriter" within the meaning of Rule 2720 of the
NASD's Conduct Rules with respect to the offering of the Securities.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the several Underwriters
that:
(a) The Company will (A) use its best efforts to prepare and timely
file with the Commission under Rule 424(b) of the Rules and Regulations a
Prospectus in a form approved by the Underwriters, and (B) not file any
amendment to the Registration Statement or supplement to the Prospectus or
document incorporated by reference therein of which the Underwriters shall not
previously have been advised and furnished with a copy or to which the
Underwriters shall have reasonably objected in writing or which is not in
compliance with the Rules and Regulations and (C) file on a timely basis all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission subsequent to the date of the Prospectus and
prior to the termination of the offering of the Securities by the Underwriters.
(b) The Company will advise the Underwriters promptly (A) when any
post-effective amendment to the Registration Statement shall have become
effective, (B) of receipt of any comments from the Commission relating to the
Registration Statement, the Prospectus or any documents incorporated by
reference therein, (C) of any request of the Commission for amendment of the
Registration Statement or for supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of the
Prospectus or of the institution of any proceedings for that purpose. The
Company will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(c) The Company will cooperate with the Underwriters in endeavoring to
qualify the Securities for sale under the securities laws of such jurisdictions
as the Underwriters may reasonably have designated in writing and will make such
applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to file
such a consent. The Company will, from time to time, prepare and file such
statements, reports, and other documents, as are or may be required to continue
such qualifications in effect for so long a period as the Underwriters may
reasonably request for distribution of the Securities.
(d) The Company will deliver to, or upon the order of, the
Underwriters, from time to time, as many copies of any
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Preliminary Prospectus as the Underwriters may reasonably request. The Company
will deliver to, or upon the order of, the Underwriters during the period when
delivery of a Prospectus is required under the Act, as many copies of the
Prospectus in final form, or as thereafter amended or supplemented, as the
Underwriters may reasonably request. The Company will deliver to the
Underwriters at or before the Closing Date, three copies of the Registration
Statement and all amendments thereto including all exhibits filed therewith, and
will deliver to the Underwriters such number of copies of the Registration
Statement (including such number of copies of the exhibits filed therewith that
may reasonably be requested), including documents incorporated by reference
therein, and of all amendments thereto, as the Underwriters may reasonably
request.
(e) The Company will comply with the Act and the Rules and Regulations,
and the Exchange Act, and the rules and regulations of the Commission
thereunder, so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and the Prospectus. If during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Underwriters, it becomes necessary
to amend or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or, if it is necessary at any time to
amend or supplement the Prospectus to comply with any law, the Company promptly
will either (i) prepare and file with the Commission an appropriate amendment to
the Registration Statement or supplement to the Prospectus or (ii) prepare and
file with the Commission an appropriate filing under the Exchange Act which
shall be incorporated by reference in the Prospectus so that the Prospectus as
so amended or supplemented will not, in the light of the circumstances when it
is so delivered, be misleading, or so that the Prospectus will comply with the
law.
(f) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earning statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.
(g) Prior to the Closing Date, the Company will furnish to the
Underwriters, as soon as they have been prepared by or are available to the
Company, a copy of any unaudited interim financial statements of the Company for
any period subsequent to the period covered by the most recent financial
statements appearing in the Registration Statement and the Prospectus.
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(h) The Company shall apply the net proceeds of its sale of the
Securities as set forth in the Prospectus.
(i) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Securities in such a manner as
would require the Company or any of the Subsidiaries to register as an
investment company under the Investment Company Act.
(j) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Company; the cost of printing and delivering to, or as requested by, the
Underwriters copies of the Registration Statement, Preliminary Prospectuses, the
Prospectus and any supplements or amendments thereto, this Agreement, the
Underwriters' Invitation Letter, the Blue Sky Survey and any supplements or
amendments thereto; the filing fees of the Commission; the filing fees and
expenses (including legal fees and disbursements up to a maximum amount of
$10,000) incident to securing any required review by the NASD of the terms of
the sale of the Securities; and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Securities under State securities or Blue Sky laws. The
Company shall not, however, be required to pay for any of the Underwriters'
expenses (other than those related to qualification under NASD regulation and
State securities or Blue Sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Underwriters pursuant to Section 11
hereof, or by reason of any failure, refusal or inability on the part of the
Company to perform any undertaking or satisfy any condition of this Agreement or
to comply with any of the terms hereof on its part to be performed, unless such
failure to satisfy said condition or to comply with said terms shall be due to
the default or omission of any Underwriter, then the Company shall reimburse the
several Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Securities or in contemplation of
performing their obligations hereunder; but the Company shall not in any event
be liable to any of the several Underwriters for damages on account of loss of
anticipated profits from the sale by them of the Securities.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
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The several obligations of the Underwriters to purchase the
Securities on the Closing Date are subject to the accuracy, as of the Closing
Date, of the representations and warranties of the Company contained herein, and
to the performance by the Company of its covenants and obligations hereunder and
to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Underwriters and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, 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 and no
injunction, restraining order, or other order of any nature by a Federal or
state court of competent jurisdiction shall have been issued as of the Closing
Date which would prevent the issuance of the Securities.
(b) The Underwriters shall have received on the Closing Date, the
opinion of Xxxxxx & Xxxxx LLP, counsel for the Company, dated the Closing Date,
addressed to the Underwriters (and stating that it may be relied upon by counsel
to the Underwriters) to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own or lease its
properties and conduct its business as described in the Prospectus;
each of the Designated Subsidiaries and the Land Partnership has been
duly organized and is validly existing as a corporation or partnership,
as applicable, in good standing under the laws of the jurisdiction of
its incorporation or formation, with corporate or other power and
authority to own or lease its properties and conduct its business as
described in the Prospectus; the Company, each of the Designated
Subsidiaries and the Land Partnership are duly qualified to transact
business in all jurisdictions in which the conduct of their business
requires such qualification, except where such counsel has been
informed that the failure to qualify would not have a materially
adverse effect upon the business of the Company and the Subsidiaries
taken as a whole; and the outstanding shares of capital stock of each
of the Designated Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the
Company or a Subsidiary; and, to the best of such counsel's knowledge,
the outstanding
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shares of capital stock of each of the Designated Subsidiaries are
owned free and clear of all liens, encumbrances and equities and claims
(other than liens created pursuant to the Credit Agreement) and to the
best of such counsel's knowledge, except as set forth in the
Registration Statement, other than with regard to the Company's Class B
Common Stock, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into any shares of capital stock or of ownership interests
in the Designated Subsidiaries or the Land Partnership are outstanding.
The Company indirectly owns a 50% interest in the Land Partnership.
Such interest in the Land Partnership has been duly authorized and
validly issued and is owned by a Subsidiary which, to the best of such
counsel's knowledge, is indirectly wholly owned by the Company, free
and clear of all liens, encumbrances and equities and claims.
(ii) At August 31, 1998, the Company had authorized capital
stock as set forth under the caption "Capitalization" in the
Prospectus; the authorized shares of Common Stock and Class B Common
Stock have been duly authorized; the outstanding shares of the Common
Stock and Class B Common Stock have been duly authorized and validly
issued and are fully paid and non-assessable; and no preemptive rights
of stockholders exist with respect to the capital stock or any other
securities of the Company or the issue or sale thereof.
(iii) Except as described in the Prospectus, to the knowledge
of such counsel, no holder of any securities of the Company or any
other person has the right, contractual or otherwise, which has not
been satisfied or effectively waived, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of,
any of the Securities or the right to have any securities of the
Company included in the Registration Statement or the right, as a
result of the filing of the Registration Statement, to require
registration under the Act of any securities of the Company.
(iv) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Securities and the Indenture.
(v) The Indenture has been duly qualified under the Trust
Indenture Act; the Indenture has been duly and validly authorized,
executed and delivered by the Company, and (assuming the due
authorization, execution and delivery thereof by the Trustee)
constitutes the valid and legally binding agreement of
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the Company, enforceable against the Company in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(vi) The Securities are in the form contemplated by the
Indenture. The Securities have each been duly and validly authorized,
executed and delivered by the Company and, when paid for by the
Underwriters in accordance with the terms of this Agreement (assuming
the due authorization, execution and delivery of the Indenture by the
Trustee and due authentication and delivery of the Securities by the
Trustee in accordance with the Indenture), will constitute the valid
and legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(vii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby; this
Agreement and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by the
Company. This Agreement has been duly executed and delivered by the
Company.
(viii) The Indenture and the Securities conform as to legal
matters in all material respects to the descriptions thereof contained
in the Prospectus as supplemented or amended.
(ix) The Registration Statement has become effective under the
Act and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(x) The Registration Statement, the Prospectus
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and each amendment or supplement thereto and document incorporated by
reference therein comply as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the
applicable rules and regulations thereunder (except that such counsel
need express no opinion as to the financial statements and related
schedules included or incorporated by reference therein). The
conditions for the use of Form S-3, set forth in the General
Instructions thereto, have been satisfied.
(xi) The statements under the captions "Description of the
Notes" and "Description of Debt Securities" in the Prospectus and Item
15 of the Registration Statement, insofar as such statements constitute
a summary of documents referred to therein or matters of law, fairly
summarize in all material respects the information called for with
respect to such documents and matters.
(xii) Such counsel does not know of any contracts or documents
required to be filed as exhibits to or incorporated by reference in the
Registration Statement or described in the Registration Statement or
the Prospectus which are not so filed, incorporated by reference or
described as required, and such contracts and documents as are
summarized in the Registration Statement or the Prospectus are fairly
summarized in all material respects.
(xiii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries or Investment Affiliates except as set forth in the
Prospectus.
(xiv) The execution and delivery of this Agreement, the
Indenture and the Securities and the consummation of the transactions
herein and therein contemplated do not and will not conflict with or
result in a breach of any of the terms or provisions of, or constitute
a default under (or an event which with the giving of notice or lapse
of time or both would constitute a default under) or result in the
imposition or creation of (or the obligation to create or impose) a
lien on any property or assets of the Company, any Designated
Subsidiary or the Land Partnership with respect to, the Charter,
By-Laws or other comparable documents of the Company, any Designated
Subsidiary or the Land Partnership, or any material agreement or
instrument known to such counsel to which the Company, any of the
Designated Subsidiaries or the Land Partnership is a party or by which
the Company, any of the Designated Subsidiaries or the Land Partnership
may be bound or any order, rule
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or regulation known to such counsel to be applicable to the Company,
any Designated Subsidiary or the Land Partnership of any court or of
any regulatory body or administrative agency or other governmental body
having jurisdiction.
(xv) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution
and delivery of this Agreement, the Indenture and the Securities and
the consummation of the transactions herein and therein contemplated
(other than as may be required by the NASD or as required by State
securities and Blue Sky laws, as to which such counsel need express no
opinion) except such as have been obtained or made, specifying the
same.
(xvi) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by this Agreement,
and application of the net proceeds therefrom as described in the
Prospectus, required to register as an investment company under the
Investment Company Act.
(xvii) Neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance, execution or
delivery of the Securities will violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
In rendering such opinion, Xxxxxx & Xxxxx LLP may rely as to
matters governed by the laws of states other than New York, Delaware General
Corporation Law or Federal laws on local counsel in such jurisdictions, provided
that in each case Xxxxxx & Xxxxx LLP shall state that they believe that they and
the Underwriters are justified in relying on such other counsel. In addition to
the matters set forth above, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel which leads them
to believe that (i) the Registration Statement, at the time it became effective
under the Act (and at the time of filing of each document under the Exchange Act
that is incorporated by reference therein) and as of the Closing Date, 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, and (ii) the Prospectus, or any supplement thereto, on the date it
was filed pursuant to the Rules and Regulations and as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, Xxxxxx & Xxxxx
LLP may
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state that their belief is based upon the procedures set forth therein,
but is without independent check and verification (except with respect to the
matters addressed in subparagraph (x)).
(c) The Underwriters shall have received from Xxxxxxx Xxxx & Xxxxxxxxx,
counsel for the Underwriters, an opinion dated the Closing Date, with respect to
certain legal matters relating to this Agreement, and such other related matters
as the Underwriters may reasonably require. In rendering such opinion, Xxxxxxx
Xxxx & Xxxxxxxxx shall have received and may rely upon such certificates and
other documents and information as they may reasonably request to pass upon such
matters.
(d) The Underwriters shall have received at or prior to the Closing
Date from Xxxxxxx Xxxx & Xxxxxxxxx a memorandum or summary, in form and
substance satisfactory to the Underwriters, with respect to the qualification
for offering and sale by the Underwriters of the Securities under the State
securities or Blue Sky laws of such jurisdictions as the Underwriters may
reasonably have designated to the Company.
(e) You shall have received, on each of the date hereof and the Closing
Date, as the case may be, a letter dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to you, of Deloitte & Touche
LLP confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder and
stating that in their opinion the financial statements and schedules examined by
them and incorporated by reference in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act and the
related published Rules and Regulations; and containing such other statements
and information as is ordinarily included in accountants' "comfort letters" to
the Underwriters with respect to the financial statements and certain financial
and statistical information contained in the Registration Statement and
Prospectus.
(f) The Underwriters shall have received on the Closing Date, a
certificate or certificates of the Chief Executive Officer and the Chief
Financial Officer of the Company to the effect that, as of the Closing Date,
each of them severally represents on behalf of the Company as follows:
(i) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registrations
Statement has been issued, and no proceedings for such purpose have
been taken or are, to his knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct as of the Closing
Date;
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(iii) All filings which he has been advised by counsel are
required to have been made pursuant to Rule 424 or 430A under the Act
have been made;
(iv) He or she has carefully examined the Registration
Statement and the Prospectus and, in his or her opinion, as of the
effective date of the Registration Statement, the statements contained
in the Registration Statement were true and correct, and such
Registration Statement and Prospectus did not omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, and since the effective date of the
Registration Statement, no event has occurred which should have been
set forth in a supplement to or an amendment of the Prospectus which
has not been so set forth in such supplement or amendment; and
(v) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been
any material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole or the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and the
Subsidiaries taken as a whole, whether or not arising in the ordinary
course of business.
(g) The Company shall have furnished to the Underwriters such further
certificates and documents confirming the representations and warranties,
covenants and conditions contained herein and related matters as the
Underwriters may reasonably have requested.
(h) The Supplemental Indenture shall have been duly executed and
delivered by the Company and the Trustee, and the Securities shall have been
duly executed by the Company and duly authenticated by the Trustee.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects reasonably satisfactory to the Underwriters and to
Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Underwriters by notifying the Company of such termination in writing or
by telegram at or prior to the Closing Date.
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In such event, the Company and the Underwriters shall not be
under any obligation to each other (except to the extent provided in Sections 5
and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligation of the Company to sell and deliver the
Securities required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and in effect
or proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees:
(i) to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the
Act, against any losses, claims, damages or liabilities to which such
Underwriter or any such controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon (A) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto or (B) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission
in the Registration Statement, the Basic Prospectus, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement, made in
reliance upon and in conformity with written information furnished to
the Company by or through the Underwriters specifically for use in the
preparation thereof.
(ii) to indemnify and hold harmless BT Alex. Xxxxx and each
person, if any, who controls any BT Alex. Xxxxx within the meaning of
the Act, against any losses, claims, damages or liabilities to which BT
Alex. Xxxxx or any such controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon BT Alex. Xxxxx'x acting as a "qualified independent
underwriter" within the meaning of Rule 2720
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of the NASD's Conduct Rules with respect to the offering of the
Securities.
(iii) to reimburse each Underwriter and each such controlling
person upon demand for any legal or other out-of-pocket expenses
reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending any such loss, claim, damage
or liability, action or proceeding or in responding to a subpoena or
governmental inquiry related to the offering of the Securities, whether
or not such Underwriter or such controlling person is a party to any
action or proceeding. In the event that it is finally judicially
determined that any Underwriter was not entitled to receive payments
for legal and other expenses pursuant to this subparagraph, such
Underwriter will promptly return all sums that had been advanced
pursuant hereto.
(b) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors and officers and each person, if
any, who controls the Company within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer, or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus, the Prospectus or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Underwriters specifically for use in the preparation
thereof. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying
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party") in writing. No indemnification provided for in Section 8(a) or (b) shall
be available to any party who shall fail to give notice as provided in this
Section 8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, but the failure to give such notice shall
not relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than on
account of the provisions of Section 8(a) or (b). In case any such proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of presentation) the
fees and expenses of the counsel retained by the indemnified party in the event
(i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel reasonably acceptable to the indemnified party within a reasonable
period of time after notice of commencement of the action. It is understood that
the indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties, unless
indemnity is being sought pursuant to Section 8(a)(ii), in which case, the
indemnifying party shall be liable for the reasonable fees and expenses of
separate counsel for BT Alex. Xxxxx in addition to the reasonable fees and
expenses of the separate counsel for all other indemnified parties. Such firm
shall be designated in writing by you in the case of parties indemnified
pursuant to Section 8(a) and by the Company in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding)
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unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action
or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) 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 from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, (or actions or proceedings in respect thereof),
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 as amended or
supplemented. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Securities purchased by such Underwriter and (ii)
no person guilty
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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 in this Section 8(d)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having jurisdiction
over any other contributing party, agrees that process issuing from such court
may be served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 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 8 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 persons
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 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 8.
9. DEFAULT BY UNDERWRITERS.
If, on the Closing Date, any Underwriter shall fail to
purchase and pay for the portion of the Securities which such Underwriter has
agreed to purchase and pay for on such date (otherwise than by reason of any
default on the part of the Company), you shall use your reasonable efforts to
procure within 36 hours thereafter one or more of the other Underwriters, or any
others, to purchase from the Company in such respective amounts as may be agreed
upon and upon the terms set forth herein, the Securities which the defaulting
Underwriter or Underwriters failed to purchase. If during such 36 hours you
shall not have procured such other Underwriters, or any others, to purchase the
Securities agreed to be purchased by the defaulting Underwriter or Underwriters,
then (a) if the aggregate principal amount of Securities with respect to which
such default shall occur does not exceed 10% of the principal amount of the
Securities covered hereby, the other Underwriters shall be obligated, severally,
in
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proportion to the respective principal amounts which they are obligated to
purchase hereunder, to purchase the Securities which such defaulting Underwriter
or Underwriters failed to purchase, or (b) if the aggregate principal amount of
Securities with respect to which such default shall occur exceeds 10% of the
principal amount of the Securities covered hereby, the Company or you will have
the right, by written notice to the parties to this Agreement, to terminate this
Agreement without liability on the part of the non-defaulting Underwriters or of
the Company except to the extent provided in Section 8 hereof. In the event of a
default by any Underwriter or Underwriters, as set forth in this Section 9, the
Closing Date may be postponed for such period, not exceeding seven days, as you
may determine in order that the required changes in the Registration Statement
or in the Prospectus or in any other documents or arrangements may be effected.
The term "Underwriter" includes any person substituted for a defaulting
Underwriter. Any action taken under this Section 9 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to BT Alex. Xxxxx
Incorporated, One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxx X. Xxxxxx, Xx.; with a copy to BT Alex. Xxxxx
Incorporated, One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: General Counsel; if to the Company, to LNR Property
Corporation, 000 X.X. 000xx Xxxxxx, Xxxxx, Xxxxxxx 00000, Attention: President.
11. TERMINATION.
(a) This Agreement may be terminated by you by notice to the
Company at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and its Subsidiaries taken as
a whole or the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business; (ii) any outbreak or escalation of hostilities or declaration of
war or national emergency or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your judgment, make it impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities; (iii) suspension of
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trading in securities generally on the New York Stock Exchange or the American
Stock Exchange or limitation on prices (other than limitations on hours or
numbers of days of trading) for securities on either such Exchange; (iv) the
enactment, publication, decree or other promulgation of any statute, regulation,
rule or order of any court or other governmental authority which in your opinion
materially and adversely affects or may materially and adversely affect the
business or operations of the Company; (v) declaration of a banking moratorium
by United States or New York State authorities; (vi) any downgrading, or
placement on any watch list for possible downgrading, in the rating of the
Company's debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act); (vii) the
suspension of trading of any securities of the Company by the New York Stock
Exchange, the Commission, or any other governmental authority; or (viii) the
taking of any action by any governmental body or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
12. Successors.
This Agreement has been and is made solely for the benefit of
the Underwriters and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign merely because of such purchase.
13. Information Provided by THE Underwriters.
The Company and the Underwriters acknowledge and agree that
the only information furnished or to be furnished by any Underwriter to the
Company for inclusion in any Prospectus or the Registration Statement consists
of the information set forth in the last paragraph on the front cover page of
the prospectus supplement that is part of the Prospectus (insofar as such
information relates to the Underwriters), any legends required by Item 502(d) of
Regulation S-K under the Act and the information under the caption
"Underwriting" in such prospectus supplement.
14. Miscellaneous.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for the Securities
under this Agreement.
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This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
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If the foregoing letter is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicates hereof, whereupon it will become a binding agreement among the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
LNR PROPERTY CORPORATION
By: /s/ XXXXXX XXXXX
----------------------
Name: Xxxxxx Xxxxx
Title: Vice President
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
BT ALEX. XXXXX INCORPORATED
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXXXXX & COMPANY, INC.
By: BT Alex. Xxxxx Incorporated
By: /s/ XXXXXX X. XXXXX
----------------------------
Authorized Officer
31
SCHEDULE I
Schedule of Underwriters
Principal Amount
of Securities
Underwriter to be Purchased
----------- ---------------
BT Alex. Xxxxx Incorporated $70,000,000
NationsBanc Xxxxxxxxxx Securities LLC $15,000,000
Xxxxxxxxx & Company, Inc. $15,000,000
------------
Total $100,000,000
============
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