1
EXHIBIT 1
U.S. HOME CORPORATION
8.875% Senior Subordinated Notes due 2009
UNDERWRITING AGREEMENT
Dated February 16, 1999
2
UNDERWRITING AGREEMENT
February 16, 1999
WARBURG DILLON READ LLC ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representative of the several
underwriters named in Schedule I hereof
Dear Sirs and Mesdames:
U.S. Home Corporation (hereinafter the "COMPANY"), proposes to sell to
you $125,000,000 aggregate principal amount of its 8.875% Senior Subordinated
Notes due 2009 (the " SENIOR SUBORDINATED NOTES"), to be issued pursuant to an
indenture (the "INDENTURE") dated as of February 19, 1999, between the Company
and IBJ Whitehall Bank & Trust Company, as trustee (the "TRUSTEE").
1. Representations and Warranties of the Company: The Company
represents and warrants to you, as representative of all of the underwriters,
that:
(a) the Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (collectively, the "ACT"), and has filed with the
Securities and Exchange Commission (the "COMMISSION") a registration
statement on such form, which has become effective, for the registration
under the Act of the Senior Subordinated Notes. Such registration
statement, as amended at the date of this Agreement, meets the requirements
set forth in Rule 415(a)(1)(x) under the Act and complies in all other
material respects with said Rule. The Company proposes to file with the
Commission pursuant to Rule 424(b) under the Act a supplement to the form
of prospectus included in such registration statement relating to the
Senior Subordinated Notes and the plan of distribution thereof and has
previously advised you of all further information (financial and other)
with respect to the Company to be set forth therein. Such registration
statement, including the exhibits thereto, as amended at the date of this
Agreement, is hereinafter called the "REGISTRATION STATEMENT"; the
prospectus dated February 25, 1998 is hereinafter called the "BASIC
3
PROSPECTUS"; and the Prospectus Supplement to the Basic Prospectus dated
February 16, 1999 in the form in which it shall be filed by the Company
with the Commission pursuant to Rule 424(b) (including the Basic Prospectus
as so supplemented) is hereinafter called the "FINAL PROSPECTUS". Any
reference herein to the Registration Statement, the Basic Prospectus, or
the Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein (the "INCORPORATED DOCUMENTS") pursuant
to Item 12 of Form S-3 which were filed under the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder
(collectively, the "EXCHANGE ACT") on or before the date of this Agreement,
or the issue date of the Basic Prospectus, or the Final Prospectus, as the
case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic
Prospectus, or the Final Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the date of this
Agreement, or the issue date of the Basic Prospectus, or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference;
(b) as of the date hereof, when the Final Prospectus is first filed
pursuant to Rule 424(b) under the Act, when, prior to the time of purchase,
any amendment to the Registration Statement becomes effective (including
the filing of any Incorporated Documents), when any supplement to the Final
Prospectus is filed with the Commission and at the time of purchase, (i)
the Registration Statement, as amended as of any such time, and the Final
Prospectus, as amended or supplemented as of any such time, and the
Indenture will comply in all material respects with the applicable
requirements of the Act, the Trust Indenture Act of 1939, as amended (the
"TRUST INDENTURE ACT"), and the Exchange Act and the respective rules
thereunder and (ii) neither the Registration Statement, as amended as of
any such time, nor the Final Prospectus, as amended or supplemented as of
any such time, will contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; provided, that the
Company makes no representations or warranties as to (i) that part of the
Registration Statement which constitutes the Statement of Eligibility and
Qualification of the Trustee (Form T-1) under the Trust Indenture Act or
(ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in
writing to the Company by you specifically for use in connection with the
preparation of the Registration Statement or the Final Prospectus;
2
4
(c) all of the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to (i) own its properties
and conduct its business as described in the Final Prospectus, (ii) execute
and deliver this Agreement and the Indenture and (iii) issue, sell and
deliver the Senior Subordinated Notes as herein contemplated;
(d) each of the Company and its subsidiaries (the "SUBSIDIARIES") is
duly qualified or licensed by and is in good standing in, each jurisdiction
in which it conducts its respective businesses and in which the failure,
individually or in the aggregate, to be so licensed or qualified would have
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and its
Subsidiaries taken as a whole; each of the Company and its Subsidiaries is
in compliance in all respects with the laws, orders, rules, regulations and
directives issued or administered by each such jurisdiction, except to the
extent the failure to so comply would not have a material adverse effect on
the condition (financial or other), business, properties, net worth or
results of operations of the Company and its Subsidiaries taken as a whole;
(e) neither the Company nor any Subsidiary is in breach of, or in
default under (nor has any event occurred which with notice, lapse of time
or both would constitute a breach of, or default under), its respective
charter, by-laws, partnership agreements, or other organizational documents
or in the performance or observance of any obligation, agreement, covenant
or condition contained in any license, indenture, mortgage, deed of trust,
bank loan or credit agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them is bound,
except to the extent such breach or default would not have a material
adverse effect on the condition (financial or other), business, properties,
net worth or results of operations of the Company and its Subsidiaries,
taken as a whole; and the execution, delivery and performance of this
Agreement and the Indenture, the issuance of the Senior Subordinated Notes
and the consummation of the transactions contemplated hereby and thereby
will not conflict with, or result in any breach of, or constitute a default
under (nor constitute an event which with notice, lapse of time or both
would constitute a breach of, or default under), any provisions of the
charter or by-laws of the Company or any of its Subsidiaries or under any
provision of any license,
3
5
indenture, mortgage, deed of trust, bank loan or credit agreement or other
agreement or instrument to which the Company or any Subsidiary is a party
or by which any of them or their respective properties may be bound or
affected, or under any federal, state, local or foreign law, regulation or
rule or any decree, judgment or order applicable to the Company or any
Subsidiary;
(f) the Indenture has been duly authorized by the Company and is a
legal, valid and binding agreement of the Company enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or affecting creditors' rights generally and general principles of
equity;
(g) the Senior Subordinated Notes have been duly authorized by the
Company and, when executed and authenticated in accordance with the terms
of the Indenture and delivered to and paid for by you, will constitute
legal, valid and binding obligations of the Company, enforceable in
accordance with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or affecting creditors' rights generally and general
principles of equity;
(h) this Agreement has been duly authorized, executed and delivered by
the Company;
(i) the Senior Subordinated Notes and the Indenture conform in all
material respects to the description thereof contained in the Final
Prospectus;
(j) no approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required in connection with the
issuance and sale of the Senior Subordinated Notes other than approvals,
authorizations, consents, orders or filings which have already been
obtained or made and registration of the Senior Subordinated Notes under
the Act, qualification of the Indenture and the Trustee under the Trust
Indenture Act, and any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Senior Subordinated
Notes are being offered by you;
(k) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, whose report on the consolidated financial
information of the Company is included in the Registration
4
6
Statement and Final Prospectus, are independent public accountants with
respect to the Company, as required by the Act and the applicable published
rules and regulations thereunder;
(l) each of the Company and its Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation
or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its respective business
except to the extent the absence thereof would not have a material adverse
effect on the condition (financial or other), business, properties,
prospects, net worth or results of operations of the Company and its
Subsidiaries taken as a whole; neither the Company nor any Subsidiary is in
violation of, or in default under, any such license, authorization, consent
or approval or any federal, state, local or foreign law, regulation or rule
or any decree, order or judgment applicable to the Company or any of its
Subsidiaries, the result of which would have a material adverse effect on
the condition (financial or other), business, net worth or results of
operations of the Company and its Subsidiaries taken as a whole;
(m) all legal or governmental proceedings, contracts or documents of a
character required to be described in the Registration Statement or the
Final Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required;
(n) except as set forth in the Final Prospectus, there are no actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries or any of their
respective properties, at law or in equity, or before or by any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority or agency that could result in a judgment, decree or order having
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and its
Subsidiaries taken as a whole;
(o) the audited financial statements included in the Registration
Statement and the Final Prospectus present fairly in all material respects
the consolidated financial position of the Company and its Subsidiaries as
of the dates indicated and the consolidated results of operations and cash
flows of the Company and its Subsidiaries for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the
periods involved;
5
7
(p) subsequent to the respective dates as of which information is
given in the Registration Statement and Final Prospectus, and except as may
be otherwise described or referred to in the Registration Statement or
Final Prospectus, there has not been (A) any material and adverse change in
the condition (financial or other), business, properties, net worth or
results of operations, regulatory environment, present or prospective of
the Company and its Subsidiaries taken as a whole, (B) any transaction,
which is material to the Company and its Subsidiaries taken as a whole,
contemplated or entered into by the Company or any of its Subsidiaries
except transactions entered into in the ordinary course of business or (C)
any obligation, contingent or otherwise, directly or indirectly, incurred
by the Company or any of its Subsidiaries that is material to the Company
and its Subsidiaries taken as a whole;
(q) there is no claim pending or, to the knowledge of the Company,
threatened or contemplated under any Environmental Law (as defined below)
against the Company or any of its Subsidiaries which, if adversely
determined, would have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and its Subsidiaries taken as a whole; there are
no past or present actions or conditions including, without limitation, the
release of any hazardous substance or waste regulated under any
Environmental Law that are likely to form the basis of any such claim under
existing law against the Company or any of its Subsidiaries which, if
adversely determined, would have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and its Subsidiaries taken as a whole. The term
"ENVIRONMENTAL LAW" means any federal, state, local or foreign law, rule or
regulation now in effect governing pollution or protection of the
environment; and
(r) the Company and its Subsidiaries have good title to all properties
and assets owned or leased by them, in each case free and clear of all
liens, security interests, pledges, charges, encumbrances, mortgages and
defects (other than those set forth in the Final Prospectus, including,
without limitation, the financial statements and the notes thereto or such
as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company
and its Subsidiaries) except to the extent that would not have a material
adverse effect on the condition (financial or other), business, properties,
net worth or results of operations of the Company and its Subsidiaries
taken as a whole.
6
8
2. Sale and Purchase: (a) Upon the basis of the warranties and
representations and the other terms and conditions herein set forth, the
Company agrees to sell to you and you agree to purchase from the Company,
the aggregate principal amount of the Senior Subordinated Notes at a
purchase price of 97.690% of the principal amount thereof. You shall
release the Senior Subordinated Notes for public sale promptly after this
Agreement becomes effective. You may from time to time increase or decrease
the public offering price after the initial public offering to such extent
as you may determine.
(b) The Company hereby confirms its engagement of Warburg Dillon LLC
Read ("WARBURG") as, and Warburg hereby confirms its agreement with the
Company to render services as, a "qualified independent underwriter",
within the meaning of Section (b)(15) of Rule 2720 of the National
Association of Securities Dealers, Inc. (the "NASD") with respect to the
offering and sale of the Senior Subordinated Notes. Warburg, solely in its
capacity as the qualified independent underwriter and not otherwise, is
referred to herein as the "QIU". The price at which the Senior Subordinated
Notes will be sold to the public shall not be higher than the maximum price
recommended by the QIU.
3. Payment and Delivery: Payment of the purchase price for the Senior
Subordinated Notes shall be made to the Company by wire transfer of
immediately available funds to an account or accounts designated by the
Company against delivery of the certificates for the Senior Subordinated
Notes to you or for your account. Such payment and delivery shall be made
at 10:00 A.M., New York City time, on February 19, 1999 (unless another
time shall be agreed to by you and the Company). The time at which such
payment and delivery are actually made is hereinafter sometimes called the
"TIME OF PURCHASE." The Senior Subordinated Notes shall be issued to you in
book-entry form in such names and in such denominations as you shall
specify.
4. Certain Covenants of the Company: The Company hereby agrees:
(a) to furnish such information as may be required and otherwise
to qualify the Senior Subordinated Notes for offering and sale under
the securities or blue sky laws of such states as you may designate
and to maintain such qualifications in effect as long as required for
the distribution of the Senior Subordinated Notes; provided that the
Company shall not be required to qualify as a foreign corporation or
to consent to the service of process under the laws of any such state
(except service of process with respect to the offering and sale of
the Senior Subordinated Notes); to advise you promptly of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the
7
9
Senior Subordinated Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and to
make every reasonable effort to obtain the withdrawal of any order or
suspension at the earliest practicable moment;
(b) to furnish to you and your counsel, as many copies of the
Final Prospectus and any amendments thereof and supplements thereto as
you may reasonably request;
(c) to advise you promptly within the time during which a
prospectus to the Senior Subordinated Notes is required to be
delivered under the Act, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the
Registration Statement or Final Prospectus or for additional
information with respect thereto, or of notice of institution of
proceedings for, or the entry of a stop order suspending the
effectiveness of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible; and to advise
you promptly within the time during which a prospectus relating to the
Senior Subordinated Notes is required to be delivered under the Act of
any proposal to amend or supplement the Registration Statement or
Basic Prospectus, including by filing any Incorporated Documents, and
to file no such amendment or supplement to which you shall reasonably
object in writing;
(d) to furnish to you for the period when the Senior Subordinated
Notes are outstanding (i) copies of any reports or other
communications that the Company shall send to its stockholders
generally or holders of the Senior Subordinated Notes or shall from
time to time publish or publicly disseminate and (ii) copies of all
annual, quarterly and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar form as may be
designated by the Commission;
(e) to advise you promptly of the happening of any event known to
the Company within the time during which a prospectus relating to the
Senior Subordinated Notes is required to be delivered under the Act
which would, in the reasonable judgment of the Company, require the
making of any change in the Final Prospectus, as then supplemented,
then being used, or in the information incorporated therein by
reference, so that the Final Prospectus would not include an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, and,
8
10
during such time, to prepare and furnish, at the Company's expense, to
you promptly such amendments or supplements to such Final Prospectus as
may be necessary to reflect any such change and to furnish to you a
copy of such proposed amendment or supplement before filing any such
amendment or supplement with the Commission;
(f) to make generally available to its holders of Senior
Subordinated Notes, and to deliver to you, an earnings statement of
the Company (which will satisfy the provisions of Section 11(a) of the
Act) covering a period of twelve months beginning after the date of
this Agreement as soon as is reasonably practicable after the
termination of such twelve-month period but not later than 15 months
thereafter;
(g) to furnish to each of you and your counsel signed copies of
the Registration Statement (in such quantities as you may reasonably
request), as initially filed with the Commission, all amendments
thereto (including the exhibits thereto) and all documents
incorporated by reference therein;
(h) to furnish to you as early as practicable prior to the time
of purchase, but no later than two business days prior thereto, a copy
of the latest available unaudited interim consolidated financial
statements, if any, of the Company and its Subsidiaries that have been
read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(c) of
this Agreement;
(i) to apply the net proceeds from the sale of the Senior
Subordinated Notes in the manner set forth under the caption "Use of
Proceeds" in the Final Prospectus;
(j) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement otherwise becomes
effective or is terminated, to pay all out-of-pocket expenses, fees
and taxes (other than (x) any transfer taxes and (y) fees and
disbursements of your counsel, except as set forth under Section 5
hereof) in connection with (i) the preparation and filing of the
Registration Statement, the Final Prospectus, and any amendments or
supplements thereto, and the printing and furnishing of copies of each
thereof to you (including costs of mailing and shipment), (ii) the
preparation, issuance, execution, authentication and delivery of the
Senior Subordinated Notes, (iii) the word processing and/or printing
of this Agreement, and the Indenture and the reproduction and/or
printing and furnishing of copies of each thereof to you (including
costs of mailing and shipment), (iv) the qualification of the Senior
Subordinated
9
11
Notes for offering and sale under state laws and the determination of
their eligibility for investment under state law as aforesaid
(including, if any, the legal fees, filing fees and other disbursements
of your counsel) and the printing and furnishing of copies of any blue
sky surveys or legal investment surveys to you, (v) any registration of
the Senior Subordinated Notes under the Exchange Act, (vi) obtaining an
investment rating for the Senior Subordinated Notes (including fees
payable to investment rating agencies), (vii) any filing for review of
the public offering of the Senior Subordinated Notes by the NASD and
(viii) the performance of the Company's other obligations hereunder;
(k) to furnish to you, contemporaneously with any filing with the
Commission subsequent to the effective date of the Registration
Statement and during the period referred to in paragraph (e) above, a
copy of any document filed pursuant to Sections 13, 14 or 15(d) of the
Exchange Act; and
(l) until the time of purchase, not to sell, contract to sell,
grant any option to sell or otherwise dispose of, directly or
indirectly, any debt securities of the Company which mature more than
one year following the time of purchase and which are substantially
similar to the Senior Subordinated Notes, without your prior written
consent.
5. Reimbursement of Underwriter's Expenses: If the Senior
Subordinated Notes are not delivered for any reason other than as a result of a
default by you of your obligations hereunder, the Company shall reimburse you
for all of your out-of-pocket expenses, including the reasonable fees and
disbursements of your counsel but without any further obligation on the part of
the Company for loss of profits or otherwise.
6. Conditions of Underwriter's Obligations: Your obligations
hereunder are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase, unless
previously waived, the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) The Company shall furnish to you at the time of purchase an
opinion of ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, LLP, counsel for
the Company, addressed to you and dated as of the time of purchase and
in form reasonably satisfactory to your counsel, ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, stating that:
10
12
(i) the Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of
Delaware. The Company has corporate power and authority to (A)
own its properties and conduct its business as described in the
Final Prospectus and (B) execute and deliver this Agreement and
the Indenture and to issue, sell and deliver the Senior
Subordinated Notes as described in the Final Prospectus;
(ii) U.S. Home Mortgage Corporation ("U.S. HOME MORTGAGE")
has been duly incorporated and is validly existing and in good
standing under the laws of the State of Florida. U.S. Home
Mortgage has corporate power and authority to own its properties
and to conduct its business as described in the Final Prospectus;
(iii) the Company and U.S. Home Mortgage are duly qualified
as foreign corporations and are in good standing in each
jurisdiction set forth in a schedule to such opinion;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Indenture has been duly authorized by the Company
and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditors' rights in
general and to general principles of equity (regardless whether
considered in a proceeding at law or in equity);
(vi) the Senior Subordinated Notes have been duly authorized
by the Company and, when executed and authenticated in accordance
with the terms of the Indenture and delivered to and paid for by
you in accordance with the terms of this Agreement, will be
legal, valid and binding obligations of the Company, enforceable
in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws relating to or affecting the enforcement of
creditors' rights in general and to general principles of equity
(regardless whether considered in a proceeding at law or in
equity);
(vii) the Senior Subordinated Notes and the Indenture
conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Final Prospectus
11
13
(except that in so opining such counsel need not express an
opinion as to any financial or statistical data included in the
description thereof);
(viii) the Registration Statement and the Final Prospectus
(except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by
reference therein and the Trustee's Statement of Eligibility on
Form T-1, as to which such counsel need not express an opinion)
comply as to form in all material respects with the requirements
of the Act and the Trust Indenture Act;
(ix) the Registration Statement has become effective under
the Act and, to the best of such counsel's knowledge, no stop
order proceedings with respect thereto are pending or threatened
by the Commission;
(x) except for approvals, authorizations, consents and
filings which have been made and obtained, no approval,
authorization, consent or order of or filing with any federal,
state or local governmental or regulatory commission, board,
body, authority or agency is required for the valid issue or sale
of the Senior Subordinated Notes as contemplated hereby, other
than compliance with the rules and regulations promulgated by the
NASD, registration of the Senior Subordinated Notes under the Act
and qualification of the Trustee and the Indenture under the
Trust Indenture Act and those required under state securities or
"blue sky" laws in connection with the purchase and distribution
of the Senior Subordinated Notes by you;
(xi) the execution, delivery and performance of this
Agreement and the Indenture and the issuance of the Senior
Subordinated Notes and the consummation of the transactions
contemplated hereby and thereby do not and will not result in any
breach of, or constitute a default under (nor constitute any
event which with notice, lapse of time, or both would constitute
a breach of, or default under), any provisions of the charter or
by-laws of the Company or U.S. Home Mortgage or under any
provision of any license, indenture, mortgage, deed of trust,
bank loan or credit agreement or other agreement or instrument to
which the Company or U.S. Home Mortgage is a party or by which
any of them or their respective properties may be bound,
identified in a schedule to such opinion, or under any law,
regulation or rule of any
12
14
governmental authority of the State of New York or the federal
government of the United States of America or any decree,
judgment or order applicable to the Company or U.S. Home
Mortgage, identified in a schedule to such opinion; provided,
however, that no opinion will be expressed with respect to the
rules and regulations promulgated by the NASD;
(xii) to the best of such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a
character which are required to be filed as exhibits to the
Registration Statement or to be summarized or described in the
Final Prospectus which have not been so filed, summarized or
described;
(xiii) to the best of such counsel's knowledge, there are no
actions, suits or proceedings pending or threatened against the
Company or any of its Subsidiaries or any of their respective
properties, at law or in equity or before or by any federal,
state, local or foreign governmental or regulatory commission,
board, body, authority or agency which are required to be
described in the Final Prospectus but are not so described;
(xiv) the Indenture has been duly qualified under the Trust
Indenture Act; and
(xv) the Incorporated Documents, when they were filed (or,
if an amendment with respect to any such document was filed, when
such amendment was filed), complied as to form in all material
respects with the Exchange Act (except as to the financial
statements and schedules and other financial and statistical data
contained or incorporated by reference therein as to which such
counsel need express no opinion).
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company
and your representatives at which the contents of the Registration Statement and
Final Prospectus were discussed and, although such counsel is not passing upon
and does not assume responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or Final Prospectus, on
the basis of the foregoing, nothing has come to the attention of such counsel
that causes them to believe that the Registration Statement or any amendment
thereto at the time such Registration Statement or amendment became effective
contained an untrue statement of a material fact or omitted to state a material
fact required to
13
15
be stated therein or necessary to make the statements therein not misleading, or
that the Final Prospectus or any supplement thereto at the date of such Final
Prospectus or such supplement, and at all times thereafter up to and including
the time of purchase, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief with respect to the financial statements and schedules and other
financial and statistical data included in the Registration Statement or Final
Prospectus or with respect to the Trustee's Statement of Eligibility and
Qualification on Form T-1).
In rendering their opinion, such counsel may rely, as to factual
matters, on certificates of public officials and officers of the Company;
provided that copies of such certificates shall be forwarded to you and provided
further, that in the case of any such reliance (other than reliance on the
certificates of governmental authorities), such counsel shall state that it
believes the sources for such certificates are appropriate and that such counsel
has no actual knowledge that any factual matters set forth in any certificates
are false.
(b) The Company shall furnish to you at the time of purchase an
opinion of ▇▇▇▇▇▇ ▇▇▇▇, Director -- Legal of the Company, addressed to you
and dated as of the time of purchase, and in form reasonably satisfactory
to your counsel, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, stating that:
(i) the Company and U.S. Home Mortgage are duly qualified or
licensed or in good standing, by or in each jurisdiction in which they
conduct their respective businesses and in which the failure to be so
licensed or qualified or in good standing could have a material
adverse effect on the condition (financial or other), business,
properties, net worth, or results of operations of the Company and
U.S. Home Mortgage taken as a whole;
(ii) to the best of such counsel's knowledge, neither the Company
nor U.S. Home Mortgage is in breach of, or in default under (nor has
any event occurred which with notice, lapse of time, or both would
constitute a breach of, or default under), any license, indenture,
mortgage, deed of trust, bank loan or credit agreement or any other
agreement or instrument to which the Company or U.S. Home Mortgage is
a party or by which either of them or their respective properties may
be bound or affected or under any law, regulation or rule or any
decree, judgment or order applicable to the Company or any of its
Subsidiaries except for such matters as could not have a material
adverse effect on the condition (financial
14
16
or other), business, properties, net worth or results of operations of
the Company and U.S. Home Mortgage, individually or taken as a whole;
and
(iii) the execution, delivery and performance of this Agreement
and the Indenture and the issuance of the Senior Subordinated Notes
and the consummation of the transactions contemplated hereby and
thereby do not and will not result in any breach of, or constitute a
default under any law, regulation or rule or any decree, judgment or
order applicable to the Company or U.S. Home Mortgage.
(c) You shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, a letter dated
as of the date of this Agreement and addressed to you in the form
heretofore approved by you.
(d) You shall have received at the time of purchase an opinion from
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ in form and substance reasonably satisfactory to you.
(e) The Final Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act not later than 5:00 P.M., New York
City time, on the second full business day after the date of this
Agreement.
(f) Prior to the time of purchase, (i) no stop order with respect to
the effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of the
Act, (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(iii) the Final Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain any untrue statement of a
material fact or omit to state a material fact or necessary to make the
statements therein, in the light of the circumstances under which they are
made, not misleading.
(g) Between the time of execution of this Agreement and the time of
purchase, there has not been (i) any material and adverse change in the
condition (financial or other), business, properties, net worth or results
of operations, present or prospective, of the Company and its Subsidiaries
taken as a whole, other than as described or referred to in the
Registration Statement and the Final Prospectus, (ii) any transaction that
is material to
15
17
the Company and its Subsidiaries, taken as a whole, contemplated or entered
into by the Company or any of its Subsidiaries, other than as described or
referred to in the Registration Statement and the Final Prospectus or (iii)
any obligation, contingent or otherwise, directly or indirectly incurred by
the Company or any of its Subsidiaries that is material to the Company and
its Subsidiaries taken as a whole, other than as described or referred to
in the Registration Statement and the Final Prospectus.
(h) The Company will, at the time of purchase, deliver to you a
certificate of two of its executive officers to the effect that the
representations and warranties of the Company set forth in this Agreement
are, in all material respects, true and correct as of such date and the
conditions set forth in paragraph (f) and paragraph (g) of this Section 6
have been met.
(i) The Company shall have furnished to you such other documents
and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Final Prospectus as of the time
of purchase as you may reasonably request.
(j) The Company shall perform such of its obligations under this
Agreement as are to be performed by the terms hereof at or before the
time of purchase.
(k) Between the time of execution of this Agreement and the time
of purchase, there shall not have occurred any downgrading, nor shall
any notice have been given of (i) any intended or potential
downgrading or (ii) any review or possible change that does not
indicate an improvement or maintenance, in the rating, if any,
accorded any securities of the Company by any "nationally recognized
statistical rating organization", as that term is defined in Rule
436(g)(2) promulgated under the Act.
7. Effective Date of Agreement; Termination: This Agreement shall
become effective when the parties hereto have executed and delivered this
Agreement.
Your obligations hereunder shall be subject to termination in your
absolute discretion if, at any time prior to the time of purchase, trading in
securities on the New York Stock Exchange shall have been suspended or minimum
prices shall have been established on the New York Stock Exchange, or if a
banking moratorium shall have been declared either by the United States or New
York State authorities, or if the United States shall have declared war in
accordance
16
18
with its constitutional processes or there shall have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on the financial markets of
the United States, as in your judgment, to make it impracticable to market the
Senior Subordinated Notes.
If you elect to terminate this Agreement as provided in this Section 7,
you will promptly notify the Company by letter or telegram.
If the sale to you of the Senior Subordinated Notes, as contemplated by
this Agreement, is not carried out by you for any reason permitted under this
Agreement or if such sale is not carried out because the Company shall be unable
to comply with any of the terms of this Agreement, the Company shall not be
under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(j), 5 and 8 hereof), and you shall be under no obligation
or liability to the Company under this Agreement (except to the extent provided
in Section 8 hereof).
8. Indemnity by the Company and the Underwriter: (a) The Company
agrees to indemnify and hold harmless you, each person that controls you within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, your
agents, employees, officers and directors and the agents, employees, officers
and directors of any such controlling person (collectively, the "UNDERWRITER
INDEMNIFIED PARTIES") from and against any and all losses, claims, damages,
judgments, liabilities and expenses (including the reasonable fees and expenses
of counsel and other expenses in connection with investigating, defending or
settling any such action or claim) as they are incurred (and regardless of
whether the Underwriter indemnified party is a party to the litigation, if any)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement (as amended) or the
Final Prospectus (as amended or supplemented) or arising out of or based upon
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, judgments, liabilities or
expenses arise out of, or are based upon, any such untrue statement or omission
or alleged untrue statement or omission based upon and in conformity with
information concerning you and furnished in writing by you to the Company
expressly for use therein.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
Underwriter indemnified party, with respect to which indemnity may be sought
against the Company pursuant to this Section 8, such Underwriter indemnified
party shall promptly notify the Company in writing, and the Company shall
17
19
assume the defense thereof, including the employment of counsel satisfactory to
the Underwriter indemnified party and payment of all fees and expenses. A
Underwriter indemnified party shall have the right to employ separate counsel in
any such action or proceeding and to assume the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Underwriter
indemnified party unless (i) the employment of such counsel has been
specifically authorized in writing by the Company, (ii) the Company has failed
promptly to assume the defense and employ counsel satisfactory to the
Underwriter indemnified party, or (iii) the named parties to any such action or
proceeding (including any impleaded parties) include both a Underwriter
indemnified party and a Company indemnified party and such Underwriter
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it that are different from or additional to those
available to the Company (in which case the Company shall not have the right to
assume the defense of such action on behalf of such Underwriter indemnified
party), in any of which events, such fees and expenses shall be borne by the
Company and reimbursed as they are incurred. It is understood, however, that the
Company shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriter indemnified parties, which firm
shall be designated in writing by you, and that all such fees and expenses shall
be reimbursed as they are incurred. The Company shall not be liable for any
settlement of any such action effected without the written consent of the
Company (which consent shall not be unreasonably withheld or delayed), but if
settled with the written consent of the Company, or if there is a final judgment
with respect thereto, the Company agrees to indemnify and hold harmless each
Underwriter indemnified party from and against any loss or liability by reason
of such settlement or judgment.
(c) You agree to indemnify and hold harmless the Company, its
directors, its officers, its agents, and any person that controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and the agents, employees, officers and directors of any such controlling person
(collectively, the "COMPANY INDEMNIFIED PARTIES") to the same extent as the
foregoing indemnity from the Company to the Underwriter indemnified parties, but
only with respect to information concerning you and furnished in writing by you
to the Company expressly for use in the Registration Statement or the Final
Prospectus. In case any action shall be brought against any Company indemnified
party based on the Registration Statement or the Final Prospectus and in respect
of which indemnity may be sought against you pursuant to this Section 8(c), you
shall have the rights and duties given to the Company by Section 8(b) hereof
(except that if the Company shall have assumed the defense thereof you shall not
18
20
be required to do so, but may employ separate counsel therein and participate in
the defense thereof; provided that the fees and expenses of such separate
counsel shall be at your expense), and the Company indemnified parties shall
have the rights and duties given to the Underwriter indemnified parties by
Section 8(b) hereof.
(d) If the indemnification provided for in this Section 8 is
unavailable to any Underwriter indemnified party or any Company indemnified
party otherwise entitled thereto under Section 8(a) or 8(c), as the case may be,
then the party required to indemnify such indemnified party under this Section 8
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, judgments, liabilities and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and you on the other from the offering of the Senior Subordinated Notes, or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and you on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and you on the
other shall be deemed to be in the same proportions as the total net proceeds
from the offering (net of underwriting discounts and commissions, but before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by you, in each case as set forth in the
table on the cover page of the Final Prospectus. The relative fault of the
Company on the one hand and you on the other 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 by you, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, judgments, liabilities and expenses
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any claim or action.
The Company and you agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this subsection (d), no Underwriter
indemnified party shall be required to contribute any amount in excess of the
amount by which
19
21
the total price at which the Senior Subordinated Notes underwritten by you and
distributed to the public were offered to the public exceeds the amount of any
damages which you have otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person found
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 found
guilty of such fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in this
Section 8 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter indemnified party or
by or on behalf of any Company indemnified party, and shall survive any
termination of this Agreement or the issuance and delivery of the Senior
Subordinated Notes. Subject to paragraphs (b) and (c) of this Section 8, the
Company and you agree to promptly notify the other of the commencement of any
litigation or proceeding against it in connection with the issuance and sale of
the Senior Subordinated Notes or in connection with the Registration Statement
or Final Prospectus.
9. Indemnification of QIU. (a) The Company agrees to indemnify and hold
harmless the QIU, each person that controls the QIU within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, its agents, employees,
officers and directors and the agents, employees, officers and directors of any
such controlling person (collectively, the "QIU INDEMNIFIED PARTIES") from and
against any and all losses, claims, damages, judgments, liabilities and expenses
(including the reasonable fees and expenses of counsel and other expenses in
connection with investigating, defending or settling any such action or claim)
as they are incurred (and regardless of whether the QIU indemnified party is a
party to the litigation, if any) arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (as amended) or the Final Prospectus (as amended or
supplemented) or arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading except insofar as such losses,
claims, damages, judgments, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission or alleged untrue statement or
omission based upon and in conformity with information concerning the QIU and
furnished in writing by the QIU to the Company expressly for use therein.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
QIU indemnified party, with respect to which indemnity may be sought against the
Company pursuant to this Section 9, such QIU indemnified party shall
20
22
promptly notify the Company in writing, and the Company shall assume the defense
thereof, including the employment of counsel satisfactory to the QIU indemnified
party and payment of all fees and expenses. A QIU indemnified party shall have
the right to employ separate counsel in any such action or proceeding and to
assume the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such QIU indemnified party unless (i) the employment of such
counsel has been specifically authorized in writing by the Company, (ii) the
Company has failed promptly to assume the defense and employ counsel
satisfactory to the QIU indemnified party, or (iii) the named parties to any
such action or proceeding (including any impleaded parties) include both a QIU
indemnified party and a Company indemnified party and such QIU indemnified party
shall have reasonably concluded that there may be one or more legal defenses
available to it that are different from or additional to those available to the
Company (in which case the Company shall not have the right to assume the
defense of such action on behalf of such QIU indemnified party), in any of which
events, such fees and expenses shall be borne by the Company and reimbursed as
they are incurred. It is understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time
for all such QIU indemnified parties, which firm shall be designated in writing
by you, and that all such fees and expenses shall be reimbursed as they are
incurred. The Company shall not be liable for any settlement of any such action
effected without the written consent of the Company (which consent shall not be
unreasonably withheld or delayed), but if settled with the written consent of
the Company, or if there is a final judgment with respect thereto, the Company
agrees to indemnify and hold harmless each QIU indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(c) If the indemnification provided for in this Section 9 is
unavailable to any QIU indemnified party otherwise entitled thereto under
Section 9(a), then the Company shall, in lieu of indemnifying the QIU
indemnified party, contribute to the amount paid or payable by the QIU
indemnified party as a result of such losses, claims, damages, judgments,
liabilities and expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the QIU on the
other from the offering of the Senior Subordinated Notes, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the QIU on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits
21
23
received by the Company on the one hand and the QIU on the other shall be deemed
to be in the same proportions as the total net proceeds from the offering (net
of underwriting discounts and commissions, but before deducting expenses)
received by the Company as set forth in the table on the cover page of the Final
Prospectus bear to the fee received by QIU pursuant to Section 2(b) hereof. The
relative fault of the Company on the one hand and QIU on the other 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 by the QIU,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission and whether the
QIU's activities as QIU under its engagement pursuant to Section 2(b) hereof
involved any willful misconduct or gross negligence on the part of the QIU. The
amount paid or payable by a party as a result of the losses, claims, damages,
judgments, liabilities and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any claim or action.
The Company and the QIU agree that it would not be just and equitable
if contribution pursuant to this subsection (c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person found 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.
(d) The indemnity and contribution agreements contained in this Section
9 and the covenants, warranties and representations of the Company contained in
this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any QIU indemnified party, and shall
survive any termination of this Agreement or the issuance and delivery of the
Senior Subordinated Notes. Subject to paragraph (b) of this Section 9, the QIU
agrees to promptly notify the Company of the commencement of any litigation or
proceeding against it in connection with the issuance and sale of the Senior
Subordinated Notes or in connection with the Registration Statement or Final
Prospectus.
10. Notices: Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
you, shall be sufficient in all respects if delivered or sent to Warburg Dillon
Read LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: High
Yield Capital Markets and, if to the Company, shall be sufficient in all
respects if delivered to the Company at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇,
22
24
Attention: President, Co-Chief Executive Officer and Chief Operating Officer if
before March 1, 1999 and thereafter to the Company at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: President, Co-Chief
Executive Officer and Chief Operating Officer.
11. CONSTRUCTION: THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT HAVE BEEN INSERTED
AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF THIS AGREEMENT.
12. Parties at Interest: The Agreement herein set forth has been and
is made solely for the benefit of you, the Company, the other Underwriter
indemnified parties, the Company indemnified parties and the QIU indemnified
parties, and their respective successors, assigns, executors and administrators.
No other person, partnership, association or corporation (including a purchaser
of the Senior Subordinated Notes, as such purchaser) shall acquire or have any
right under or by virtue of this Agreement.
13. Counterparts: This Agreement may be signed by the parties in
counterparts, which together shall constitute one and the same Agreement
between the parties.
23
25
If the foregoing correctly sets forth the understanding between the
Company and you, please so indicate in the space provided below for the purpose,
whereupon this Agreement and your acceptance shall constitute a binding contract
between the Company and you.
24
26
Very truly yours,
U.S. HOME CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: V.P.-Corporate Finance &
Treasurer
Agreed to and accepted as of the date first above written:
WARBURG DILLON READ LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇
Title: Executive Director
WARBURG DILLON READ LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Associate Director
27
SCHEDULE I
NAME PRINCIPAL AMOUNT
Warburg Dillon Read LLC $ 93,750,000
Credit Lyonnais Securities (USA), 15,625,000
Inc.
First Chicago Capital Markets, Inc. 15,625,000
TOTAL $125,000,000