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EXHIBIT 1.1
DRAFT OF MARCH 5, 1998
$75,000,000
SILVERLEAF RESORTS, INC.
____% SENIOR SUBORDINATED NOTES DUE 2008
UNDERWRITING AGREEMENT
__________, 1998
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
c/o Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. 10010-3629
Dear Sirs:
1. Introductory. Silverleaf Resorts, Inc., a Texas corporation
(the "Company"), proposes, subject to the terms and conditions stated herein,
to issue and sell to Credit Suisse First Boston Corporation and ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation (the "Underwriters") U.S. $75,000,000
principal amount of its ___% Senior Subordinated Notes due 2008 ("Offered
Securities") to be issued under an indenture, dated as of _______________ 1998
(the "Indenture"), among the Company, the Subsidiary Guarantors (as defined
below) and Norwest Bank Minnesota, N.A., as Trustee (the "Trustee"). The
Company's obligations under the Offered Securities will be fully and
unconditionally guaranteed on a joint and several senior basis by all of the
existing subsidiaries of the Company listed on the signature page hereto (each
such subsidiary being a "Subsidiary Guarantor" and all such subsidiaries being,
collectively, the "Subsidiary Guarantors"), pursuant to and to the extent set
forth in the Indenture (the "Subsidiary Guarantees"). The Company and the
Subsidiary Guarantors hereby agree with the several Underwriters as follows:
2. Representations and Warranties of the Company and the
Subsidiary Guarantors. Each of the Company and each Subsidiary Guarantor
jointly and severally represents and warrants to, and agrees with, the several
Underwriters that:
(a) A registration statement (No. 333- ) relating
to the Offered Securities, including a form of prospectus, has been
filed with the Securities and Exchange Commission ("Commission") and
either (i) has been declared effective under the Securities Act of
1933, as amended ("Act"), and is not proposed to be amended or (ii) is
proposed to be amended by amendment or post-effective amendment. If
such registration statement ("initial registration statement") has
been declared effective, either (i) an additional registration
statement ("additional
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registration statement") relating to the Offered Securities may have
been filed with the Commission pursuant to Rule 462(b) ("Rule 462(b)")
under the Act and, if so filed, has become effective upon filing
pursuant to such Rule and the Offered Securities all have been duly
registered under the Act pursuant to the initial registration
statement and, if applicable, the additional registration statement or
(ii) such an additional registration statement is proposed to be filed
with the Commission pursuant to Rule 462(b) and will become effective
upon filing pursuant to such Rule and upon such filing the Offered
Securities will all have been duly registered under the Act pursuant
to the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial
registration statement or if an additional registration statement has
been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has
been filed with the Commission prior to the execution and delivery of
this Agreement, the most recent amendment (if any) to each such
registration statement has been declared effective by the Commission
or has become effective upon filing pursuant to Rule 462(c) ("Rule
462(c)") under the Act or, in the case of the additional registration
statement, Rule 462(b). For purposes of this Agreement, "Effective
Time" with respect to the initial registration statement or, if filed
prior to the execution and delivery of this Agreement, the additional
registration statement means (i) if the Company has advised the
Underwriters that it does not propose to amend such registration
statement, the date and time as of which such registration statement,
or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (ii) if the Company has advised the
Underwriters that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of
which such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by
the Commission. If an additional registration statement has not been
filed prior to the execution and delivery of this Agreement but the
Company has advised the Underwriters that it proposes to file one,
"Effective Time" with respect to such additional registration
statement means the date and time as of which such registration
statement is filed and becomes effective pursuant to Rule 462(b).
"Effective Date" with respect to the initial registration statement or
the additional registration statement (if any) means the date of the
Effective Time thereof. The initial registration statement, as amended
at its Effective Time, including all information contained in the
additional registration statement (if any) and deemed to be a part of
the initial registration statement as of the Effective Time of the
additional registration statement pursuant to the General Instructions
of the Form on which it is filed and including all information (if
any) deemed to be a part of the initial registration statement as of
its Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the
Act, is hereinafter referred to as the "Initial Registration
Statement". The additional registration statement, as amended at its
Effective Time, including the contents of the initial registration
statement incorporated by reference therein and including all
information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are herein referred to collectively as the
"Registration Statements" and individually as a "Registration
Statement". The form of prospectus relating to the Offered Securities,
as first filed with the Commission pursuant to and in accordance with
Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter
referred to as the "Prospectus". No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement:
(i) on the Effective Date of the Initial Registration Statement, the
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Initial Registration Statement conformed in all respects to the
requirements of the Act, the Trust Indenture Act of 1939 ("Trust
Indenture Act") and the rules and regulations of the Commission
("Rules and Regulations") and did not include any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, (ii) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed, or will
conform, in all respects to the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations and did not include, or
will not include, any untrue statement of a material fact and did not
omit, or will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading and (iii) on the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of this
Agreement, the Additional Registration Statement each conforms, and at
the time of filing of the Prospectus pursuant to Rule 424(b) or (if no
such filing is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act, the Trust Indenture Act and
the Rules and Regulations, and neither of such documents includes, or
will include, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. If the
Effective Time of the Initial Registration Statement is subsequent to
the execution and delivery of this Agreement: on the Effective Date of
the Initial Registration Statement, the Initial Registration Statement
and the Prospectus will conform in all respects to the requirements of
the Act, the Trust Indenture Act and the Rules and Regulations,
neither of such documents will include any untrue statement of a
material fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and no Additional Registration Statement has been or will
be filed. The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or the Prospectus based upon
written information furnished to the Company by any Underwriter
through the Underwriters specifically for use therein, it being
understood and agreed that the only such information is that described
as such in Section 7(b) hereof.
(c) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Texas, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification.
(d) Each Subsidiary Guarantor has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus; and each Subsidiary Guarantor is duly qualified to
do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification; all of the issued
and outstanding capital stock of each Subsidiary Guarantor has been
duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each Subsidiary Guarantor
owned by the Company, directly or through subsidiaries, is owned free
from liens, encumbrances and defects. The Company has no direct or
indirect subsidiaries other than the Subsidiary Guarantors.
(e) Each of the Master Club, Hill Country Resort Club,
▇▇▇▇▇ Lake Resort Club, Piney Shores Resort Club, Villages Resort
Club, The Villages Club, Holiday Hills Resort Club,
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Ozark Mountain Resort Club, Holiday Hills Condominium Association,
Inc., The Bluffs at Holiday Hills Condominium Association, Inc., The
Lakes at Holiday Hills Condominium Association, Inc., the Oaks at
Holiday Hills Condominium Association, Inc., The Pinnacle at Holiday
Hills Condominium Association, Inc., Ozark Mountain Condominium
Association, Inc., The Coves at Waters Bluff Condominium Association,
Inc., Streamside at Ozark Mountain Condominium Association, Inc.,
Waters Bluff at Ozark Mountain Condominium Association, Inc., ▇▇▇▇▇
Lake Ranch Association, The Villages Home Owners' Association, Inc.,
Holiday Hills Property Owners Association, Inc., The Ozark Mountain
Boat Dock Association, Timber Creek Resort Club, Fox River Resort
Club, Oak N' Spruce Resort Club, Oak N' Spruce Club and Silverleaf Las
Vegas Resort Club (collectively, the "Clubs") has been duly formed and
is an existing nonprofit corporation or unincorporated association and
is in good standing under the laws of the jurisdiction of its
formation, with power and authority to own its properties and conduct
its business as described in the Prospectus; and each Club is duly
qualified to do business and in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification.
(e) The Indenture has been duly authorized and, if the
Effective Time of a Registration Statement is prior to the execution
and delivery of this Agreement, has been or otherwise upon such
Effective Time will be duly qualified under the Trust Indenture Act
with respect to the Offered Securities registered thereby; the Offered
Securities have been duly authorized; and when the Offered Securities
are delivered and paid for pursuant to this Agreement on each Closing
Date (as defined below), the Indenture will have been duly executed
and delivered, such Offered Securities will have been duly executed,
authenticated, issued and delivered and will conform to the
description thereof contained in the Prospectus and the Indenture and
such Offered Securities will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(f) The Subsidiary Guarantees have been duly and validly
authorized by the Subsidiary Guarantors and, when delivered in
accordance with the terms of the Indenture, will have been duly
executed, authenticated and delivered and will constitute valid and
legally binding obligations of the Subsidiary Guarantors, enforceable
against each of them in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and general equity principles.
(g) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or
any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(h) The Offered Securities, the Subsidiary Guarantees and
the Indenture when delivered, will conform in all material respects to
the descriptions thereof in the Prospectus.
(i) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this
Agreement in connection with the issuance and sale of the Offered
Securities by the Company or the issuance of the Subsidiary Guarantees
by the Subsidiary Guarantors except such
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as have been obtained and made under the Act and the Trust Indenture
Act and such as may be required under state securities laws.
(j) The execution, delivery and performance of the
Indenture, the Subsidiary Guarantees, and this Agreement and the
issuance and sale of the Offered Securities and compliance with the
terms and provisions thereof will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under,
any statute, any rule, regulation or order of any governmental agency
or body or any court, domestic or foreign, having jurisdiction over
the Company, any Subsidiary Guarantor, any Club or any of their
properties, or any agreement or instrument to which the Company, any
such Subsidiary Guarantor or any Club is a party or by which the
Company, any such Subsidiary Guarantor or any such Club is bound or to
which any of the properties of the Company, any such Subsidiary
Guarantor or any such Club is subject, or the charter or by-laws of
the Company, any such Subsidiary Guarantor or any such Club, and the
Company has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by this Agreement and each
Subsidiary Guarantor has full power and authority to authorize and
issue the Subsidiary Guarantees as contemplated by this Agreement.
(k) This Agreement has been duly authorized, executed and
delivered by the Company and the Subsidiary Guarantors and constitutes
the valid and legally binding obligation of the Company and the
Subsidiary Guarantors, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles and except to the extent that indemnification from
liability in connection with the Federal securities laws or the basis
of allocation contained in the contribution provisions herein may be
unenforceable.
(l) Except as disclosed in the Prospectus, the Company,
the Subsidiary Guarantors and the Clubs have good and marketable title
to all real properties and all other properties and assets owned by
them, in each case free from liens, encumbrances and defects that
would materially affect the value thereof or materially interfere with
the use made or to be made thereof by them; and except as disclosed in
the Prospectus, the Company, the Subsidiary Guarantors and the Clubs
hold any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the use
made or to be made thereof by them.
(m) The Company, the Subsidiary Guarantors and the Clubs
possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct the
business now operated by them and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Company, any of the Subsidiary Guarantors or the Clubs, would
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(n) No labor dispute with the employees of the Company,
any Subsidiary Guarantor or any Club exists or, to the knowledge of
the Company or any Subsidiary Guarantor, is imminent that might have a
material adverse effect on the Company and its subsidiaries taken as a
whole.
(o) The Company, the Subsidiary Guarantors and the Clubs
own, possess or can acquire on reasonable terms, adequate trademarks,
trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
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(collectively, "intellectual property rights") necessary to conduct
the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property
rights that, if determined adversely to the Company, any of the
Subsidiary Guarantors or the Clubs, would individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(p) Except as disclosed in the Prospectus, none of the
Company, any of the Subsidiary Guarantors nor any Club is in violation
of any statute, any rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), owns or operates any real
property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole; and the Company and the Subsidiary
Guarantors are not aware of any pending investigation which might lead
to such a claim.
(q) Except as disclosed in the Prospectus, there are no
pending actions, suits, proceedings, inquiries, arbitrations,
investigations, litigation or governmental proceedings against or
affecting the Company, any of the Subsidiary Guarantors, any of the
Clubs or any of their respective properties that, if determined
adversely to the Company, any of the Subsidiary Guarantors or any of
the Clubs, would individually or in the aggregate have a material
adverse effect on the condition (financial or other), business,
properties or results of operations of the Company and its
subsidiaries taken as a whole, or would materially and adversely
affect the ability of the Company or the Subsidiary Guarantors to
perform their obligations under the Indenture or this Agreement or
which are otherwise material in the context of the sale of the Offered
Securities or the issuing of the Subsidiary Guarantees; and no such
actions, suits, proceedings, inquiries, arbitrations, investigations,
litigation or governmental proceedings are threatened or, to the
Company's or any of the Subsidiary Guarantor's knowledge,
contemplated. None of the Company, any of the Subsidiary Guarantors
or any of the Clubs is a party or subject to the provisions of any
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body which would
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(r) The financial statements included in each
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the
periods shown, and such financial statements have been prepared in
conformity with the generally accepted accounting principles in the
United States applied on a consistent basis; and the schedules
included in each Registration Statement present fairly the information
required to be stated therein and the assumptions used in preparing
the pro forma financial information included in each Registration
Statement and the Prospectus provide a reasonable basis for presenting
the significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
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(s) Except as disclosed in the Prospectus, since the date
of the latest audited financial statements included in the Prospectus
there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole, and,
except as disclosed in or contemplated by the Prospectus, there has
been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(t) The Company is not an open-end investment company,
unit investment trust face-amount certificate company, or any other
investment company that is or is required to be registered under
Section 8 of the United States Investment Company Act of 1940 (the
"Investment Company Act"); and the Company is not and, after giving
effect to the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the Prospectus,
will not be an "investment company" as defined in the Investment
Company Act.
(u) Except as disclosed in the Prospectus, the Company,
the Subsidiary Guarantors and the Clubs have and maintain liability,
property and casualty insurance (insured by insurers of recognized
financial responsibility) in favor of the Company, the Subsidiary
Guarantors and the Clubs with respect to each of the timeshare resorts
operated by the Company, including the New Resorts (as defined in the
Prospectus) (collectively, the "Resorts") in an amount and on such
terms as is reasonable and customary for businesses of the type
proposed to be conducted by the Company, the Subsidiary Guarantors and
the Clubs, including, among other things, insurance against theft,
damage, destruction and acts of vandalism. None of the Company, any
of the Subsidiary Guarantors or any of the Clubs has received from any
insurance company notice of any material defects or deficiencies
affecting the insurability of any such Resort.
(v) Title insurance in favor of the Company, is in force
with respect to those portions of each of the Resorts specified in
Section 6(h)(ii) in an amount previously disclosed to the
Underwriters.
(w) Except as disclosed in the Prospectus, all
entitlements necessary for development of the Resorts have been
obtained, and no further governmental or regulatory approvals are
necessary for additional development of the Resorts.
(x) The mortgages and deeds of trust encumbering the
Resorts are not convertible and such mortgages and deeds of trust are
not cross-defaulted or cross-collateralized to any Resort not owned
directly or indirectly by the Company.
(y) No environmental engineering firm which prepared
Phase I environmental assessment reports (or other similar reports)
with respect to the Resorts as set forth in the Registration Statement
was employed for such purpose on a contingent basis or has any
substantial interest in the Company, any of the Subsidiary Guarantors
or any Club.
(z) Except as disclosed in the Prospectus, the Company,
the Subsidiary Guarantors and the Clubs are in compliance with all
federal, state, local and foreign laws and regulations regarding the
marketing, advertising, offers to sell and sales of vacation intervals
in each state in which the Company, the Subsidiary Guarantors and the
Clubs are doing business or offering or selling vacation intervals,
including but not limited to the Federal Trade Commission Act,
Regulation Z (the truth-in-lending act), Equity Opportunity Credit Act
and Regulation B, Interstate Land Sales Full Disclosure Act, Real
Estate Standards Practices Act, Telephone
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Consumer Protection Act, Telemarketing and Consumer Fraud and Abuse
Prevention Act, Fair Housing Act and Civil Rights Acts of 1964 and
1968, in each case except as would not have a material adverse effect
on the Company and its subsidiaries taken as a whole. Except as
disclosed in the Prospectus, the Company, the Subsidiary Guarantors
and the Clubs have filed all required documents and supporting
information in compliance with federal, state, local and foreign laws
and regulations, and the Company, the Subsidiary Guarantors and the
Clubs are in compliance with all licensure, anti-fraud, telemarketing,
price, gift and sweepstakes and labor laws to which they are or may
become subject, in each case except as would not have a material
adverse effect on the Company and its subsidiaries taken as a whole.
The Company, the Subsidiary Guarantors and the Clubs have all permits
and licenses which are required to sell vacation intervals in each
state and foreign jurisdiction where they conduct business, in each
case except as would not have a material adverse effect on the Company
and its subsidiaries taken as a whole.
(aa) The timeshare interests sold by the Company
("Vacation Intervals") do not constitute "securities" under the Act.
Neither the offer, the sale nor the issuance of Vacation Intervals by
the Company or any of the Subsidiary Guarantors required registration
under the Act or under the securities laws of the state of Texas,
Missouri, Illinois, Massachusetts, Nevada or New York or under any
other state securities laws nor does the fact that such interests are
outstanding require registration under the Exchange Act.
(ab) The execution, delivery, and performance of each of
the documents relating to the purchases (the "New Property Purchases")
of the properties in Galveston, Texas, De ▇▇▇▇, Missouri, Sheridan,
Illinois, Berkshire, Massachusetts, Las Vegas, Nevada (the "New
Properties") was duly and validly authorized by the Company, and each
such document relating to the New Property Purchases was duly executed
and delivered by the Company and constitutes the legally valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms. The execution, delivery and performance of
the documents relating to the New Property Purchases by the Company
and the consummation of the transactions contemplated thereby (A) did
not require 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
or conflict with or constitute a breach of, or a default under, the
certificate or articles of incorporation, bylaws, or other
organizational documents, of the Company and (B) did not conflict with
or constitute a breach of, or a default under, any material agreement,
indenture, lease or other instrument to which the Company is a party
or by which the Company or any of its properties may be bound, or
violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any of its
properties, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
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.
(ac) No person has an option or right of first refusal to
purchase all or part of any of the Resorts or any interest therein.
Each of the Resorts complies with all applicable codes, laws and
regulations (including, without limitation, building and zoning codes
and laws relating to handicapped access), except as would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole. Except as disclosed in the Prospectus, the Company has no
knowledge of any pending or threatened condemnation proceedings,
zoning changes, or other proceedings or actions that will in any
manner affect the size of, number of vacation intervals planned for,
the use of any improvements on, or access to, the Resorts.
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(ad) The Company will apply the net proceeds from the
offering of the Offered Securities in the manner set forth under "Use
of Proceeds" in the Prospectus.
(ae) The consolidated capitalization as of December 31,
1997, of the Company is as set forth in the Prospectus under the
caption "Capitalization." The consolidated capitalization as of
December 31, 1997, of the Company as adjusted for this offering and
the Equity Offering (as defined in the Prospectus) is as set forth in
the Prospectus under the caption "Capitalization." All of the issued
and outstanding shares of capital stock of the Company and each of its
subsidiaries have been duly authorized and are validly issued, fully
paid and nonassessable. The Company owns, either directly or
indirectly, all of the outstanding capital stock of each of its
subsidiaries, free and clear of any liens, restrictions on transfer,
agreements, voting trusts or other defects of title whatsoever. The
issuance of the Offered Securities will not be subject to preemptive
or other similar rights. Except as disclosed in the Prospectus and
other than grants of stock options to employees of the Company
pursuant to existing employee stock option plans approved by the Board
of Directors of the Company, there are no outstanding subscriptions,
rights, warrants, options, calls, convertible or exchangeable
securities or commitments of sale related to or entitling any person
to purchase or otherwise to acquire any shares of the capital stock
of, or other ownership interests in, the Company or any of its
subsidiaries.
(af) The Company and the Subsidiary Guarantors (i) make
and keep in reasonable detail accurate books and records and (ii)
maintain internal accounting controls which provide reasonable
assurance that: (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals.
(ag) Neither the Company nor any of the Subsidiary
Guarantors has taken, nor will any of them take, directly or
indirectly, any action designed to materially violate or cause a
material violation of Regulation M under the Act with respect to the
offering of the Offered Securities hereby.
(ah) The Company and the Subsidiary Guarantors do not
intend to, nor do they believe that they will, incur debts beyond
their ability to pay such debts as they mature. Each of the Company
and the Subsidiary Guarantors believes that the present fair saleable
value of its assets exceeds the amount that will be required to be
paid on or in respect of the existing debts and other liabilities
(including contingent liabilities) of the Company and each Subsidiary
Guarantor, respectively, as they become absolute and matured. The
assets of each of the Company and each Subsidiary Guarantor do not
constitute unreasonably small capital to carry out the business of the
Company or such Subsidiary Guarantor, respectively, as conducted or as
proposed to be conducted. Each of the Company and the Subsidiary
Guarantors believes that upon the issuance of the Offered Securities
and the Guarantees the present fair saleable value of the assets of
the Company and each Subsidiary Guarantor will exceed the amount that
will be required to be paid on or in respect of the existing debts and
other liabilities (including contingent liabilities) of the Company or
the respective Subsidiary Guarantor as they become absolute and
matured. The Company and the Subsidiary Guarantors believe that upon
the issuance of the Offered Securities and the Subsidiary Guarantees,
the assets of the Company and each Subsidiary Guarantor will not
constitute unreasonably small capital to carry out its businesses as
now conducted, including the
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capital needs of the Company and the Subsidiary Guarantors, taking
into account the projected capital requirements and capital
availability.
(ai) Each certificate signed by any officer of the Company
or a Subsidiary Guarantor and delivered to the Underwriters or counsel
for the Underwriters at Closing hereunder shall be deemed to be a
representation and warranty by the Company or such Subsidiary
Guarantor to the Underwriters as to the matters covered thereby.
3. Purchase, Sale and Delivery of Offered Securities. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
sell to the Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Company, at a purchase price of % of the
principal amount thereof plus accrued interest from to the
Closing Date (as hereinafter defined) the respective principal amounts of the
Initial Securities set forth opposite the names of the several Underwriters in
Schedule A hereto.
The Company will deliver against payment of the purchase price the
Initial Securities to be offered and sold by the Underwriters in the form of
one or more permanent global Securities in definitive form (the "Global
Securities") deposited with the Trustee as custodian for The Depository Trust
Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent global Securities will be held only in book-entry
form through DTC, except in the limited circumstances described in the
Prospectus. Payment for the Initial Securities shall be made by the
Underwriters in Federal (same day) funds by official check or checks or wire
transfer to an account at a bank acceptable to Credit Suisse First Boston
Corporation ("CSFBC") drawn to the order of Silverleaf Resorts, Inc., account
number _____________, at the office of counsel for the Underwriters at 9:00
A.M. (New York time), on ________ __, 1998, or at such other time not later
than seven full business days thereafter as CSFBC and the Company determine,
such time being herein referred to as the "Closing Date", against delivery to
the Trustee as custodian for DTC of the Global Securities representing all of
the Offered Securities. The Global Securities will be made available for
checking at the above office of CSFBC at least 24 hours prior to the Closing
Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Subsidiary
Guarantors. Each of the Company and the Subsidiary Guarantors jointly and
severally agrees with the several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement,
the Company will file the Prospectus with the Commission pursuant to
and in accordance with subparagraph (1) (or, if applicable and if
consented to by CSFBC, subparagraph (4)) of Rule 424(b) not later than
the earlier of (A) the second business day following the execution and
delivery of this Agreement or (B) the fifteenth business day after the
Effective Date of the Initial Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and
an additional registration statement is necessary to register a
portion of the Offered Securities under the Act but the Effective Time
thereof has not occurred as of such execution and delivery, the
Company will file the additional registration statement or, if filed,
will file a post-effective amendment thereto with the Commission
pursuant to and in accordance with Rule 462(b) on or prior to 10:00
P.M., New York time, on the date of this Agreement or,
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11
if earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later
date as shall have been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any
proposal to amend or supplement the initial or any additional
registration statement as filed or the related prospectus or the
Initial Registration Statement, the Additional Registration Statement
(if any) or the Prospectus and will not effect such amendment or
supplementation without CSFBC's consent; and the Company will also
advise CSFBC promptly of the effectiveness of each Registration
Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation of
a Registration Statement or the Prospectus and of the institution by
the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the
Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, any event occurs
as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CSFBC of such event and
will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance.
Neither CSFBC's consent to, nor the Underwriters' delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of
the Additional Registration Statement) which will satisfy the
provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the
end of the fourth fiscal quarter following the fiscal quarter that
includes such Effective Date, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Company will furnish to the Underwriters copies
of each Registration Statement (three of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so
long as a prospectus relating to the Offered Securities is required to
be delivered under the Act in connection with sales by any Underwriter
or dealer, the Prospectus and all amendments and supplements to such
documents, in each case in such quantities as CSFBC requests. The
Prospectus shall be so furnished on or prior to 3:00 P.M., New York
time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial
Registration Statement. All other documents shall be so furnished as
soon as available. The Company will pay the expenses of printing and
distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as
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CSFBC designates and will continue such qualifications in effect so
long as required for the distribution.
(g) During the period of five years hereafter, the
Company will furnish to the Underwriters and, upon request, to each of
the other Underwriters, as soon as practicable after the end of each
fiscal year, a copy of its annual report to shareholders for such
year; and the Company will furnish to the Underwriters (i) as soon as
available, a copy of each report and any definitive proxy statement of
the Company filed with the Commission under the Securities Exchange
Act of 1934 or mailed to shareholders, and (ii) from time to time,
such other information concerning the Company as CSFBC may reasonably
request.
(h) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement and the Indenture,
for the fees and expenses of the Trustee and its professional
advisers, for any filing fees and other expenses (including fees and
disbursements of counsel) incurred in connection with qualification of
the Offered Securities for sale under the laws of such jurisdictions
as CSFBC designates and the printing of memoranda relating thereto,
for any fees charged by investment rating agencies for the rating of
the Offered Securities, for the filing fee incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the National Association of Securities
Dealers, Inc. of the Offered Securities, for any travel expenses of
the Company's officers and employees and any other expenses of the
Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities and for expenses
incurred in distributing preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) to the
Underwriters.
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Offered
Securities on the Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company and the Subsidiary
Guarantors contained herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company and the Subsidiary Guarantors of their respective obligations hereunder
and to the following additional conditions precedent:
(a) The Underwriters shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to
the registration statement to be filed shortly prior to such Effective
Time), of each 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 to
the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included or incorporated by
reference in the Registration Statements comply as to form in
all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(A) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in indebtedness of the Company and its
consolidated subsidiaries or,
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13
at the date of the latest available balance sheet
read by such accountants, there was any decrease in
consolidated total assets, as compared with amounts
shown on the latest balance sheet included in the
Prospectus; or
(B) for the period from the closing date of
the latest income statement included in the
Prospectus to the closing date of the latest
available income statement read by such accountants
there were any decreases, as compared with the
corresponding period of the previous year and with
the period of corresponding length ended the date of
the latest income statement included in the
Prospectus, in consolidated revenues or in the total
or per share amounts of consolidated net income,
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter;
(ii) they have read the unaudited pro forma
information included in the Registration Statement and made
inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified
procedures, and nothing came to their attention that caused
them to believe that the unaudited pro forma financial data
included in the Registration Statements do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation
of those statements; and
(iii) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration is subsequent to
such execution and delivery, "Registration Statements" shall mean the
Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the
post-effective amendment to be filed shortly prior to its Effective
Time, and (iii) "Prospectus" shall mean the prospectus included in the
Registration Statements.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this
Agreement, such Effective Time shall have occurred not later than
10:00 P.M., New York time, on the date of this Agreement or such later
date as shall have been
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14
consented to by CSFBC. If the Effective Time of the Additional
Registration Statement (if any) is not prior to the execution and
delivery of this Agreement, such Effective Time shall have occurred
not later than 10:00 P.M., New York time, on the date of this
Agreement or, if earlier, the time the Prospectus is printed and
distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by CSFBC. If the Effective Time
of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with
the Commission in accordance with the Rules and Regulations and
Section 5(a) of this Agreement. Prior to such Closing Date, no stop
order suspending the effectiveness of a Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Underwriters,
shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company or its subsidiaries which, in the judgment of a majority
in interest of the Underwriters, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities 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 of the Company (other than an
announcement with positive implications of a possible upgrading, and
no implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange or the Nasdaq Stock Market's National Market, or
any setting of minimum prices for trading on such exchange, or any
suspension of trading of any securities of the Company on any exchange
or in the over-the-counter market; (iv) any banking moratorium
declared by U.S. Federal, New York or Texas authorities; or (v) any
outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters, the effect of
any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities.
(d) The Underwriters shall have received an opinion,
dated Closing Date, of ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇,
L.L.P., counsel for the Company and the Subsidiary Guarantors, to the
effect that:
(i) The Company has been duly incorporated and is
an existing corporation in good standing under the laws of the
State of Texas, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification;
(ii) Each of the Subsidiary Guarantors has been
duly incorporated and is an existing corporation in good
standing under the laws of the state of its incorporation and
has the requisite corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus; and each Subsidiary Guarantor is
duly qualified to do business as a foreign corporation in good
standing in all other
14
15
jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification;
(iii) All of the issued and outstanding
shares of capital stock of the Subsidiary Guarantors have been
duly authorized and validly issued, and are fully paid and
nonassessable, and all outstanding shares of capital stock of
each such subsidiary are owned, directly or indirectly, by the
Company, free and clear of any liens; except as disclosed in
the Prospectus and to the best of such counsel's knowledge,
after due inquiry, there are no outstanding subscriptions,
rights, warrants, options, calls, convertible securities,
commitments of sale or liens related to or entitling any
person to purchase or otherwise to acquire any shares of
capital stock of, or other ownership interest in, any such
Subsidiary Guarantor;
(iv) Except as disclosed in the
Prospectus, there are no contracts, agreements or
understandings known to such counsel between the Company and
any person granting such person the right to require the
Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Act;
(v) The Company is not an open-end
investment company, unit investment trust, face-amount
certificate company or any other form of investment company
that is or is required to be registered under Section 8 of the
Investment Company Act; and the Company is not and, after
giving effect to the offering and sale of the Initial Offered
Securities and the application of the proceeds thereof as
described in the Prospectus, will not be (A) an "investment
company" as defined in the Investment Company Act or (B) a
closed-end investment company required to be registered, but
not registered under the Investment Company Act;
(vi) No consent, approval, authorization
or order of, or filing with, any governmental agency or body
or any court is required for the consummation of the
transactions contemplated by this Agreement or the Indenture
in connection with the issuance or sale of the Offered
Securities by the Company and issuance of the Subsidiary
Guarantees by the Subsidiary Guarantors, except such as have
been obtained and made under the Act and such as may be
required under state securities laws;
(vii) The execution, delivery and
performance of this Agreement, the Offered Securities, the
Indenture and the Subsidiary Guarantees (the "Operative
Documents") by the Company and the Subsidiary Guarantors and
the issuance and sale of the Offered Securities and the
Subsidiary Guarantees and compliance with the terms and
provisions thereof will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction
over the Company or any Subsidiary Guarantor or any of their
properties, or any agreement or instrument to which the
Company or any such Subsidiary Guarantor is a party or by
which the Company or any such Subsidiary Guarantor is bound or
to which any of the properties of the Company or any such
Subsidiary Guarantor is subject, or the charter or by-laws of
the Company or any such Subsidiary Guarantor and the Company
and each Subsidiary Guarantor have
15
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full power and authority to authorize, issue and sell the
Offered Securities and the Subsidiary Guarantees,
respectively, as contemplated by this Agreement;
(viii) The Initial Registration Statement was
declared effective under the Act as of the date and time
specified in such opinion, the Additional Registration
Statement (if any) was filed and became effective under the
Act as of the date and time (if determinable) specified in
such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b)
specified in such opinion on the date specified therein or was
included in the Initial Registration Statement or the
Additional Registration Statement (as the case may be), and,
to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of a Registration Statement or
any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated
under the Act, and each Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form
in all material respects with the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations; such
counsel have no reason to believe that any part of a
Registration Statement or any amendment thereto, as of its
effective date or as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto, as of its
issue date or as of such Closing Date, contained any untrue
statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; the descriptions in the Registration Statements
and Prospectus of statutes, rules, regulations, orders,
injunctions, decrees, judgments, legal and governmental
proceedings and contracts and other documents are accurate and
complete and fairly present the information required to be
shown; and such counsel do not know of any legal or
governmental proceedings required to be described in a
Registration Statement or the Prospectus which are not
described as required or of any contracts or documents of a
character required to be described in a Registration Statement
or the Prospectus or to be filed as exhibits to a Registration
Statement which are not described and filed as required; it
being understood that such counsel need express no opinion as
to the financial statements or other financial data contained
in the Registration Statements or the Prospectus;
(ix) The Company has the requisite corporate
power and authority to execute, deliver and perform its
obligations pursuant to this Agreement and the Indenture;
(x) Each of this Agreement, the Offered
Securities and the Indenture has been duly authorized,
executed and delivered by the Company;
(xi) Each of the Subsidiary Guarantors has the
requisite corporate power and authority to execute, deliver
and perform its obligations pursuant to this Agreement, the
Indenture and the Subsidiary Guarantees;
(xii) Each of this Agreement, the Indenture and
the Subsidiary Guarantees have been duly authorized, executed
and delivered by each of the Subsidiary Guarantors;
(xiii) Each of the Offered Securities, the
Indenture and the Subsidiary Guarantees conforms in all
material respects to the descriptions thereof contained in the
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Prospectus and none of the terms of any of the other Operative
Documents is inconsistent with the description thereof in the
Prospectus;
(xiv) Each of the Operative Documents
constitutes valid and legally binding obligations of the
Company and the Subsidiary Guarantors, respectively,
enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles;
(xv) The Indenture has been duly qualified
under the Trust Indenture Act;
(xvi) Except as disclosed in the Prospectus,
the Company, the Subsidiary Guarantors and the Clubs have
obtained the material approvals and permits from all federal,
state and local regulators necessary to offer for sale and
sell timeshare interests and offer purchase money financing in
connection with such sales in accordance with the applicable
laws and regulations governing the marketing and sale of
timeshare interests in real property;
(xvii) To such counsel's knowledge and based
upon such counsel's review of Reliance Certificates and
Letters (as defined below), all of the permits and/or
approvals issued by regulators of states other than the state
where each applicable Resort is located ("Foreign State") for
the offering for sale and sale of timeshare interests in such
Resort constitute the material approvals and permits necessary
to be issued by such Foreign State to permit the offering for
sale and sale of timeshare interests in such Resort in
accordance with the laws and regulations of the Foreign State
specifically governing the offering for sale and sale of
timeshare interests in real property located outside of the
Foreign State;
(xviii) Except as disclosed in the Prospectus, to
such counsel's knowledge and based upon its review of
certificates and letters from federal, state and local
regulators, the Company and other pertinent parties
(collectively, "Reliance Certificates and Letters"), except as
disclosed in the Prospectus, the Company has not received any
notice from any regulatory authority that it is in violation
of any applicable federal or state law or regulation regarding
the offering for sale and sale of timeshare interests in the
Resorts, the violation of which would have a material adverse
effect on the ownership or operation of the Resorts;
(xix) To such counsel's knowledge and based
upon such counsel's review of Reliance Certificates and
Letters, there are no real estate or timeshare related or
governmental actions, governmental suits or governmental
proceedings pending or threatened against the Company with
respect to the business and property relating to the Resorts
except (a) those which have been disclosed in the Registration
Statement and (b) those which would not have a material
adverse effect on the Company and its subsidiaries taken as a
whole;
(xx) The choice of law provisions set forth in
Section 13 hereof and in the Indenture will be recognized by
the courts of the State of Texas;
(xxi) The interest rate on the Offered
Securities will not be unlawful under any law, rule, or
regulation of the State of Texas; and
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(xxii) The vacation intervals do not constitute
"securities" under the Act. Neither the offer nor the sale of
timeshare interests by the Company or any Subsidiary Guarantor
required registration under the Act or under the securities
laws of the state of Texas or under the state securities laws
of any other state in which the Company is currently qualified
to do business, nor does the fact that such interests are
outstanding require registration under the Exchange Act.
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P. may rely
upon the opinion of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Schlafly & ▇▇▇▇▇ for
certain matters regarding Missouri law, on the opinion of
__________ for certain matters regarding Illinois law, on the
opinion of __________ for certain matters regarding
Massachusetts law, on the opinion of __________ for certain
matters regarding Nevada law and on the opinion of __________
for certain matters regarding New York law.
(e) The Underwriters shall have received an opinion,
dated the Closing Date, of ▇▇▇▇▇▇▇▇▇, Teasdale, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇, counsel for the Company, to the effect that:
(i) The execution, delivery and performance
of the Operative Documents and the issuance and sale of the
Offered Securities and the Subsidiary Guarantees will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any Missouri
statute, any rule, regulation or order of any governmental
agency or body or any court within the State of Missouri
having jurisdiction over the Company or any Subsidiary
Guarantor or any of their properties;
(ii) The Company, the Subsidiary Guarantors
and the Clubs have obtained the material approvals and permits
from all federal, state and local regulators necessary to
offer for sale and sell in Missouri timeshare interests and
offer purchase money financing in connection with such sales
in accordance with the applicable laws and regulations
governing the marketing and sale of timeshare interests in
real property;
(iii) All of the permits and/or approvals
issued by Missouri regulators for the offering for sale and
sale of timeshare interests in a Resort located outside of
Missouri constitute the material approvals and permits
necessary to permit the offering for sale and sale of
timeshare interests in such Resort in accordance with the laws
and regulations of Missouri specifically governing the
offering for sale and sale of timeshare interests in real
property located outside of Missouri;
(iv) To such counsel's knowledge and based
upon its review of Reliance Certificates and Letters, except
as disclosed in the Prospectus, the Company has not received
any notice from any regulatory authority that it is in
violation of any applicable federal or state law or regulation
regarding the offering for sale and sale of timeshare
interests in the Resorts, the violation of which would have a
material adverse effect on the ownership or operation of the
Resorts; and
(v) To such counsel's knowledge and based
upon such counsel's review of Reliance Certificates and
Letters, there are no real estate or timeshare related
governmental actions, governmental suits or governmental
proceedings pending or threatened against the Company with
respect to the business and property relating to the Resorts
except (a) those which have been disclosed in the Registration
Statement and (b)
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those which would not have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(f) The Underwriters shall have received an opinion,
dated the Closing Date, of ____________________, counsel for the
Company, to the effect that:
(i) The execution, delivery and performance
of the Operative Documents and the issuance and sale of the
Offered Securities and the Subsidiary Guarantees will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any Illinois
statute, any rule, regulation or order of any governmental
agency or body or any court within the State of Illinois
having jurisdiction over the Company or any Subsidiary
Guarantor or any of their properties;
(ii) The Company, the Subsidiary Guarantors
and the Clubs have obtained the material approvals and permits
from all federal, state and local regulators necessary to
offer for sale and sell in Illinois timeshare interests and
offer purchase money financing in connection with such sales
in accordance with the applicable laws and regulations
governing the marketing and sale of timeshare interests in
real property;
(iii) All of the permits and/or approvals
issued by Illinois regulators for the offering for sale and
sale of timeshare interests in a Resort located outside of
Illinois constitute the material approvals and permits
necessary to permit the offering for sale and sale of
timeshare interests in such Resort in accordance with the laws
and regulations of Illinois specifically governing the
offering for sale and sale of timeshare interests in real
property located outside of Illinois;
(iv) To such counsel's knowledge and based
upon its review of Reliance Certificates and Letters, except
as disclosed in the Prospectus, the Company has not received
any notice from any regulatory authority that it is in
violation of any applicable federal or state law or regulation
regarding the offering for sale and sale of timeshare
interests in the Resorts, the violation of which would have a
material adverse effect on the ownership or operation of the
Resorts; and
(v) To such counsel's knowledge and based
upon such counsel's review of Reliance Certificates and
Letters, there are no legal or governmental actions, suits or
proceedings pending or threatened against the Company with
respect to the business and property relating to the Resorts
except (a) those which have been disclosed in the Prospectus
and (b) those which would not have a material adverse effect
on the Company and its subsidiaries taken as a whole.
(g) The Underwriters shall have received an opinion,
dated the Closing Date, of ____________________, counsel for the
Company, to the effect that:
(i) The execution, delivery and performance
of the Operative Documents and the issuance and sale of the
Offered Securities and the Subsidiary Guarantees will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any
Massachusetts statute, any rule, regulation or order of any
governmental agency or body or any court within the State of
Massachusetts having jurisdiction over the Company or any
Subsidiary Guarantor or any of their properties;
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(ii) The Company, the Subsidiary Guarantors
and the Clubs have obtained the material approvals and permits
from all federal, state and local regulators necessary to
offer for sale and sell in Massachusetts timeshare interests
and offer purchase money financing in connection with such
sales in accordance with the applicable laws and regulations
governing the marketing and sale of timeshare interests in
real property;
(iii) All of the permits and/or approvals
issued by Massachusetts regulators for the offering for sale
and sale of timeshare interests in a Resort located outside of
Massachusetts constitute the material approvals and permits
necessary to permit the offering for sale and sale of
timeshare interests in such Resort in accordance with the laws
and regulations of Massachusetts specifically governing the
offering for sale and sale of timeshare interests in real
property located outside of Massachusetts;
(iv) To such counsel's knowledge and based
upon its review of Reliance Certificates and Letters, except
as disclosed in the Prospectus, the Company has not received
any notice from any regulatory authority that it is in
violation of any applicable federal or state law or regulation
regarding the offering for sale and sale of timeshare
interests in the Resorts, the violation of which would have a
material adverse effect on the ownership or operation of the
Resorts; and
(v) To such counsel's knowledge and based
upon such counsel's review of Reliance Certificates and
Letters, there are no legal or governmental actions, suits or
proceedings pending or threatened against the Company with
respect to the business and property relating to the Resorts
except (a) those which have been disclosed in the Prospectus
and (b) those which would not have a material adverse effect
on the Company and its subsidiaries taken as a whole.
(h) The Underwriters shall have received an opinion,
dated the Closing Date, of ____________________, counsel for the
Company, to the effect that:
(i) The execution, delivery and performance
of the Operative Documents and the issuance and sale of the
Offered Securities and the Subsidiary Guarantees will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any Nevada
statute, any rule, regulation or order of any governmental
agency or body or any court within the State of Nevada having
jurisdiction over the Company or any Subsidiary Guarantor or
any of their properties;
(ii) The Company, the Subsidiary Guarantors
and the Clubs have obtained the material approvals and permits
from all federal, state and local regulators necessary to
offer for sale and sell in Nevada timeshare interests and
offer purchase money financing in connection with such sales
in accordance with the applicable laws and regulations
governing the marketing and sale of timeshare interests in
real property;
(iii) All of the permits and/or approvals
issued by Nevada regulators for the offering for sale and sale
of timeshare interests in a Resort located outside of Nevada
constitute the material approvals and permits necessary to
permit the offering for sale and sale of timeshare interests
in such Resort in accordance with the laws and regulations of
Nevada specifically governing the offering for sale and sale
of timeshare interests in real property located outside of
Nevada;
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(iv) To such counsel's knowledge and based
upon its review of Reliance Certificates and Letters, except
as disclosed in the Prospectus, the Company has not received
any notice from any regulatory authority that it is in
violation of any applicable federal or state law or regulation
regarding the offering for sale and sale of timeshare
interests in the Resorts, the violation of which would have a
material adverse effect on the ownership or operation of the
Resorts; and
(v) To such counsel's knowledge and based
upon such counsel's review of Reliance Certificates and
Letters, there are no legal or governmental actions, suits or
proceedings pending or threatened against the Company with
respect to the business and property relating to the Resorts
except (a) those which have been disclosed in the Prospectus
and (b) those which would not have a material adverse effect
on the Company and its subsidiaries taken as a whole.
(i) The Underwriters shall have received an opinion,
dated the Closing Date, of ____________________, counsel for the
Company, to the effect that:
(i) The execution, delivery and performance
of the Operative Documents and the issuance and sale of the
Offered Securities and the Subsidiary Guarantees will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any New York
statute, any rule, regulation or order of any governmental
agency or body or any court within the State of New York
having jurisdiction over the Company or any Subsidiary
Guarantor or any of their properties;
(ii) The Company, the Subsidiary Guarantors
and the Clubs have obtained the material approvals and permits
from all federal, state and local regulators necessary to
offer for sale and sell in New York timeshare interests and
offer purchase money financing in connection with such sales
in accordance with the applicable laws and regulations
governing the marketing and sale of timeshare interests in
real property;
(iii) To such counsel's knowledge and based
upon its review of Reliance Certificates and Letters, except
as disclosed in the Prospectus, the Company has not received
any notice from any regulatory authority that it is in
violation of any applicable federal or state law or regulation
regarding the offering for sale and sale of timeshare
interests in the Resorts, the violation of which would have a
material adverse effect on the ownership or operation of the
Resorts; and
(iv) To such counsel's knowledge and based
upon such counsel's review of Reliance Certificates and
Letters, there are no legal or governmental actions, suits or
proceedings pending or threatened against the Company with
respect to the business and property relating to the Resorts
except (a) those which have been disclosed in the Prospectus
and (b) those which would not have a material adverse effect
on the Company and its subsidiaries taken as a whole.
(j) The Underwriters shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the incorporation of the Company,
the validity of the Offered Securities delivered on such Closing Date,
the Registration Statements, the Prospectus and other related matters
as the Underwriters may require, and the Company shall have furnished
to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In rendering such opinion,
▇▇▇▇▇▇
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& ▇▇▇▇▇▇▇ may rely as to the incorporation of the Company and all
other matters governed by Texas law upon the opinion of ▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P. referred to above.
(k) The Underwriters shall have received a certificate,
dated as of such Closing Date, of the Chief Executive Officer and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to such Closing
Date; no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule
462(b), including payment of the applicable filing fee in accordance
with Rule 111(a) or (b) under the Act, prior to the time the
Prospectus was printed and distributed to any Underwriter; and,
subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Prospectus or as
described in such certificate.
(l) The Underwriters shall have received a letter, dated
the Closing Date, of Deloitte & Touche, LLP which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three business days prior to the Closing Date for the purposes of
this subsection.
(m) The Underwriters shall have received on or before the
Closing Date with respect to each Resort:
(i) A standard ALTA Owner's Title Insurance
Policy naming the Company or its predecessor-in-interest as
named insured and insuring such party that it owns fee title
to the real property described therein in an amount of the
original purchase price thereof, subject only to any material
exceptions to title as are described in the Prospectus, and
such exceptions which do not adversely affect the current or
potential use to be made of the Resort (the "Permitted
Exceptions");
(ii) A recent Title Commitment for a standard
ALTA Owner's Title Insurance Policy issued by a reputable
title insurance company reasonably acceptable to the
Underwriters (the "Title Company") and showing fee title to
the property described therein vested in the Company, subject
only to the Permitted Exceptions. Such Title Commitment(s)
for each of the Resorts shall cover at least the following
portions of each of the Resorts: amenity areas, current areas
under development and those areas of each of the Resorts which
the Company intends to develop and which are necessary to
construct the projected units described in the Prospectus;
(iii) Policies or certificates of insurance
relating to the Resort evidencing coverages and in amounts
customarily obtained by owners of similar Resorts, together
with a letter of opinion from a nationally or regionally
recognized insurance broker approved by the Underwriters
stating, in substance, that the coverage limits and
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companies underwriting such insurance for the Company are
within the realm of reasonableness given the Company's
business, operations and claims history;
(iv) UCC, judgment and tax lien searches
confirming that the personal property comprising a part of the
Resort is subject to no liens other than Permitted Exceptions;
(v) An opinion letter from an architectural
firm reasonably acceptable to the Underwriters stating in
substance that (1) such firm designed and has overseen the
construction of all improvements at the Resorts, (2) such firm
is generally aware of the condition of such improvements, (3)
except for ordinary wear and tear there are no existing
material structural defects to any of the improvements
(including foundation or roof) at the Resorts and (4) the
Company and the Improvements at the Resorts are in material
compliance with federal and state regulations relating to
access by the disabled, including the Americans with
Disabilities Act;
(vi) If such Resort is subject to a mortgage,
deed of trust or similar financing (an "Existing Mortgage")
which, as described in the Prospectus, is to be repaid with
the proceeds of the offering, a letter dated not earlier than
10 days prior to the Closing Date from the holder of such
Existing Mortgage indicating that the mortgagor or grantor
under such Existing Mortgage is not then in default and
indicating the principal amount required to satisfy all
amounts then secured by such Existing Mortgage and the
additional amount required for each day after the date of such
letter necessary to satisfy all obligations secured thereby,
together with all documentation and consents necessary to
permit the repayment of all amounts owed and the release of
the Existing Mortgage; and if such Resort is subject to an
Existing Mortgage which, as described in the Prospectus, is to
remain of record after the offering, a letter dated not
earlier than 10 days prior to the Closing Date from the holder
of such Existing Mortgage indicating that the mortgagor or
grantor under such Existing Mortgage is not then in default
and indicating the total principal amount due under the
Existing Mortgage; and
(vii) A recent Phase I Environmental Report in
form and substance acceptable to the Underwriters.
The Company will furnish the Underwriters with such conformed copies
of such opinions, certificates, letters and documents as the Underwriters
reasonably request. CSFBC may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder.
7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim,
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damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (b)
below.
(b) Each Underwriter will severally and not jointly
indemnify and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon 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 each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by
such Underwriter specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Underwriter consists of the following information
in the Prospectus furnished on behalf of each Underwriter: the third from last
paragraph at the bottom of the cover page concerning the terms of the offering
by the Underwriters, the legend concerning over-allotments and stabilizing on
the inside front cover page, and the information contained in the ______
paragraph under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under subsection (a) or (b) above. In
case any such action is brought against any indemnified party and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action 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 any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (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 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
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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 which resulted in such losses, claims, damages or
liabilities 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. 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 or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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 in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed a Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder and the
aggregate principal amount of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10%
of the total principal amount of Offered Securities that the Underwriters are
obligated to purchase, CSFBC may make arrangements satisfactory to the Company
for the purchase of such Offered Securities by other persons, including any of
the Underwriters, but if no such arrangements are made by the Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Offered Securities that
such defaulting Underwriters agreed but failed to purchase. If any Underwriter
or Underwriters so default and the aggregate principal amount of Offered
Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Offered Securities that the Underwriters are
obligated to purchase, and arrangements satisfactory to CSFBC and the Company
for the purchase of such Offered Securities by other persons 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, except
as provided in Section 9. As used in this Agreement, the term "Underwriter"
includes any person substituted for a Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the
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several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, the Company
or any of their respective representatives, officers or directors or any
controlling person, and will survive delivery of and payment for the Offered
Securities. If this Agreement is terminated pursuant to Section 8 or if for any
reason the purchase of the Offered Securities by the Underwriters is not
consummated, the Company shall remain responsible for the expenses to be paid
or reimbursed by it pursuant to Section 5 and the respective obligations of the
Company and the Underwriters pursuant to Section 7 shall remain in effect, and
if any Offered Securities have been purchased hereunder the representations and
warranties in Section 2 and all obligations under Section 5 shall also remain
in effect. If the purchase of the Offered Securities by the Underwriters is not
consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 8 or the occurrence of any event specified in
clause (C), (D) or (E) of Section 6(b)(ii), the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements
of counsel) reasonably incurred by them in connection with the offering of the
Offered Securities.
10. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to the Underwriters, c/o Credit Suisse First Boston Corporation,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, N.Y. 10010-3629, Attention: Investment
Banking Department - Transactions Advisory Group, or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, with a copy
to ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, Esq. ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇,
L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; provided, however,
that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and no
other person will have any right or obligation hereunder.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
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If the foregoing is in accordance with the Underwriters' understanding
of our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
SILVERLEAF RESORTS, INC.
By........................................
CONDOMINIUM BUILDER'S INC.
By........................................
DATA BASE RESEARCH, INC.
By........................................
SILVERLEAF HOTELS, INC.
By........................................
SILVERLEAF TRAVEL, INC.
By........................................
VILLAGES LAND, INC.
By........................................
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SILVERLEAF RESORT ACQUISITIONS, INC.
By....................................
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
By CREDIT SUISSE FIRST BOSTON CORPORATION
By.............................................
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