EXHIBIT 1.1
EXECUTION COPY
$250,000,000
▇.▇. ▇▇▇▇▇▇, INC.
5.625% SENIOR NOTES DUE 2014
UNDERWRITING AGREEMENT
September 14, 2004
UBS Securities LLC
Wachovia Capital Markets, LLC
c/o UBS Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇.▇. ▇▇▇▇▇▇, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell $250,000,000 aggregate principal amount of its 5.625% Senior
Notes due 2014 (the "Notes") to UBS Securities LLC and Wachovia Capital Markets,
LLC ("you" or the "Underwriters"). The Notes are to be issued pursuant to the
provisions of an Indenture dated as of June 9, 1997 as supplemented (the "Base
Indenture") and a supplemental indenture to be dated as of September 21, 2004
(the "Supplemental Indenture" and together with the Base Indenture, the
"Indenture") among the Company, certain subsidiaries of the Company and American
Stock Transfer and Trust Company, as Trustee (the "Trustee"). The Company's
obligations under the Indenture and the Notes will be unconditionally guaranteed
(the "Guarantees"), jointly and severally, by each of the subsidiaries of the
Company listed on the signature pages hereof (the "Guarantors"). The Company and
the Guarantors are collectively referred to herein as the "Issuers" and the
Notes and the Guarantees are collectively referred to herein as the
"Securities."
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the published rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 (No.
333-117531), including a base prospectus relating to the Securities. The
registration statement as amended at the time it became effective on August 12,
2004, including information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the Act, is
hereinafter referred to as the "Registration Statement"; and the base prospectus
dated August 12, 2004 (the "Base Prospectus"), as
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supplemented by the prospectus supplement relating to the Securities in the form
first used to confirm sales of Securities (the "Prospectus Supplement"), is
hereinafter referred to as the "Prospectus." Any reference herein to the
Registration Statement, a preliminary prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the effective date of the
Registration Statement or the date of such preliminary prospectus or the
Prospectus (the "Incorporated Documents"), and, except as otherwise indicated,
when reference is made to information "in" (including by use of the terms "set
forth in," "described in" and similar terms) the Prospectus or the Registration
Statement, such reference shall be deemed to include information incorporated by
reference in the Prospectus or the Registration Statement, as the case may be.
2. Agreements To Sell and Purchase. The Company agrees to issue
and sell, and, on the basis of the representations and warranties contained in
this Underwriting Agreement (the "Agreement") and subject to its terms and
conditions, each of the Underwriters agrees, severally and not jointly, to
purchase from the Company the aggregate principal amount of the Notes set forth
opposite such Underwriter's name on Schedule A hereto. The aggregate purchase
price shall be 98.987% of the principal amount thereof ($247,467,500), plus
accrued interest, if any, from September 21, 2004 to the date of payment and
delivery (the "Purchase Price").
3. Terms of Public Offering. The Company is advised by the
Underwriters that the Underwriters propose to make a public offering of the
Securities as soon after the execution and delivery of this Agreement as in
judgment of the Underwriters is advisable on the basis set forth in the
Prospectus Supplement.
4. Delivery and Payment. Delivery to the Underwriters of and
payment for the Securities shall be made at 10:00 A.M., New York City time, on
September 21, 2004 (the "Closing Date"), at such place as you shall designate.
The Closing Date and the location of delivery of and the form of payment for the
Securities may be varied by agreement between you and the Company.
Certificates for the Securities shall be registered in such names
and issued in such denominations as you shall request in writing not later than
two full business days prior to the Closing Date. Such certificates shall be
made available to you for inspection not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing Date. Certificates in
definitive form evidencing the Securities shall be delivered to you on the
Closing Date with any transfer taxes thereon duly paid by the Company, for the
account of the Underwriters, against payment of the Purchase Price therefor by
wire or certified or official bank checks payable in Federal funds to the order
of the Company. If the Securities will be issued in book-entry form, the Company
shall deposit the global certificate(s) representing the Securities with the
Depository Trust Company ("DTC"), or its designated custodian, on the Closing
Date, and the Company will deliver such global certificate(s) to the
Underwriters by
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causing DTC to credit the Securities to the accounts of the Underwriters at DTC
against payment therefor as set forth above.
5. Agreements of the Issuers. The Issuers, jointly and severally,
agree with each Underwriter as follows:
(a) The Issuers will, if necessary or required by law, file an
amendment to the Registration Statement or, if necessary pursuant to Rule
430A under the Act, a post-effective amendment to the Registration
Statement, as soon as practicable after the execution and delivery of this
Agreement, and will use their best efforts to cause the Registration
Statement or such post-effective amendment to become effective at the
earliest possible time. The Company will comply fully and in a timely
manner with the applicable provisions of Rule 424 and Rule 430A under the
Act.
(b) The Issuers will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of the effectiveness of any
amendment to the Registration Statement; (ii) of the transmission to the
Commission for filing of any supplement to the Prospectus (including any
document that would as a result of such filing become an Incorporated
Document) and to furnish you with copies thereof; (iii) of the receipt of
any comments from the Commission that relate to the Registration Statement
or of any request by the Commission for amendment of or a supplement to
the Registration Statement or the Prospectus or for additional
information; (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of the Prospectus or of the suspension of
qualification of the Securities for offering or sale in any jurisdiction
or the initiation or the threatening of any proceeding for such purpose;
and (v) within the period of time referred to in paragraph (e) below, of
any change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of the
happening of any event, which makes any statement of a material fact made
in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus (as then amended
or supplemented) in order to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Prospectus (as
then amended or supplemented) to comply with the Act or any other law. If
at any time any stop order suspending the effectiveness of the
Registration Statement or any order preventing or suspending the use of
the Prospectus or suspending any such qualification shall be issued, the
Issuers will promptly use their best efforts to obtain the withdrawal of
such order at the earliest possible time.
(c) The Issuers will furnish to you, without charge, (i) five
copies of the registration statement as originally filed with the
Commission and of each amendment
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thereto, including all exhibits thereto, (ii) the Prospectus and any
amendment or supplement thereto, (iii) such number of copies of the
registration statement as originally filed and of each amendment thereto,
but without exhibits, as you may request, (iv) such number of copies of
the Incorporated Documents, without exhibits, as you may request, and (v)
five copies of the exhibits to the Incorporated Documents.
(d) The Issuers will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus or, prior
to the end of the period of time referred to in paragraph (e) below, file
any document which, upon filing becomes an Incorporated Document, of which
you shall not previously have been advised or to which, after you shall
have received a copy of the document proposed to be filed, you shall
reasonably object.
(e) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the
opinion of counsel for the Underwriters a prospectus is required by the
Act to be delivered in connection with sales by any Underwriter or any
dealer, the Issuers will expeditiously deliver to each Underwriter and
each dealer, without charge, as many copies of the Prospectus (and of any
amendment or supplement thereto) as you may reasonably request. The
Issuers consent to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and with
the securities or Blue Sky laws of the jurisdictions in which the
Securities are offered by any Underwriter and by all dealers to whom
Securities may be sold, both in connection with the offering and sale of
the Securities and for such period of time thereafter as the Prospectus is
required by the Act to be delivered in connection with sales by any
Underwriter or any dealer.
(f) If during the period of time referred to in paragraph (e)
above any event shall occur as a result of which, in the judgment of the
Issuers or in the opinion of counsel for the Underwriters, it becomes
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with the Act or any other
law, the Issuers will forthwith prepare and, subject to the provisions of
paragraph (d) above, file with the Commission an appropriate amendment or
supplement to the Prospectus so that the statements in the Prospectus, as
so amended or supplemented, will not, in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to the Underwriters and to such dealers as
you shall specify such number of copies thereof as the Underwriters or
such dealers may reasonably request. In the event that the Issuers and you
agree that the Prospectus should be amended or supplemented, the Issuers,
if requested by you, will promptly issue a press release, in compliance
with applicable securities laws, announcing or disclosing the matters to
be covered by the proposed amendment or supplement.
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(g) The Issuers will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the
Securities for offering and sale by any Underwriter and by dealers under
the securities or Blue Sky laws of such jurisdictions as you may designate
and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or
qualification; provided, however, that in no event shall any Issuer be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action which would subject it to service
of process in suits, other than those arising out of the offering or sale
of the Securities, in any jurisdiction where it is not now so subject.
(h) The Issuers will make generally available to its security
holders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the date of the Prospectus
and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder, and will advise you in writing when such statement has been
made available.
(i) During the period of five years hereafter, the Issuers will
furnish to you as soon as available, a copy of all public materials
furnished by the Company to its stockholders and all public reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the common stock of the Company may be
listed pursuant to requirements of or agreements with such exchange or to
the Commission.
(j) The Company will apply the net proceeds from the sale of the
Securities in accordance with the description set forth in the Prospectus
under the caption "Use of Proceeds."
(k) Neither the Company nor any of its subsidiaries has taken, or
will take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation
of the price of the Securities to facilitate the sale or resale of the
Securities.
(l) The Issuers will pay all costs, expenses, fees and taxes
incident to (i) the preparation, printing, filing and distribution under
the Act of the Registration Statement (including financial statements and
exhibits), and all amendments and supplements thereto prior to or during
the period specified in paragraph (e) above, (ii) the preparation of the
Indenture, the issuance of the Notes and the fees of the Trustee; (iii)
the printing and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Prospectus and
all amendments or supplements thereto during the period specified in
paragraph (e) above, (iv) the printing and
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delivery of this Agreement, the Preliminary and Supplemental Blue Sky
Memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection with the offering of the
Securities (including in each case any disbursements of counsel for the
Underwriters relating to such printing and delivery), (v) the registration
or qualification of the Securities for offer and sale under the securities
or Blue Sky laws of the several states (including in each case the
reasonable fees and disbursements of counsel for the Underwriters relating
to such registration or qualification and memoranda relating thereto),
(vi) filings and clearance with the National Association of Securities
Dealers, Inc. in connection with the offering, (vii) the listing, if any,
of the Securities on any national securities exchange and (viii)
furnishing such copies of the Registration Statement, the Prospectus and
all amendments and supplements thereto as may be requested for use in
connection with the offering or sale of the Securities by any Underwriter
or by dealers to whom Securities may be sold.
(m) The Issuers will not during the period beginning on the date
hereof and continuing to and including the Closing Date, offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company or any warrants, options or other rights to purchase or acquire
debt securities of the Company or any securities convertible into or
exchangeable for debt securities of the Company (other than (i) the
Securities and (ii) commercial paper issued in the ordinary course of
business), without the prior written consent of UBS Securities LLC.
(n) The Issuers will use their best efforts to do and perform all
things required or necessary to be done and performed under this Agreement
by the Issuers prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Securities.
6. Representations and Warranties of the Issuers. The Issuers,
jointly and severally, represent and warrant to each Underwriter that:
(a) Each preliminary prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied
when so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of
any preliminary prospectus.
(b) The Registration Statement has become effective and at the
date of the Prospectus (if different), including at the date of any
post-effective amendment or supplement, the Registration Statement will
comply in all material respects with the provisions of the Act, and will
not contain 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; the Prospectus (and any supplements or
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amendments thereto) will at all such times comply in all material respects
with the provisions of the Act and will not at any such time contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that no representation or warranty is made as to information
contained in or omitted from the Registration Statement or the Prospectus
in reliance upon and in conformity with written information furnished to
the Issuers with respect to the Underwriters specifically for inclusion
therein.
(c) The Incorporated Documents, at the time they were filed with
the Commission or, to the extent such documents were subsequently amended
prior to the date hereof, at the time so amended, complied in all material
respects with the requirements of the Act or the Securities Exchange Act
of 1934, as amended, and the published rules and regulations of the
Commission thereunder (collectively, the "Exchange Act"), as applicable,
and such documents do not on the date hereof and will not on the Closing
Date contain an untrue statement of a material fact and do not on the date
hereof and will not on the Closing Date omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(d) The financial statements (including the related notes and
supporting schedules) in the Registration Statement or the Prospectus
present fairly the consolidated financial position and results of
operations of the entities purported to be shown thereby, at the dates and
for the periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except for changes in accounting
principles described therein.
(e) Ernst & Young LLP, who have reported on the financial
statements of the Company, are independent public accountants with respect
to the Company and its subsidiaries as required by the Act and, to the
Company's knowledge, are not in violation of the auditor independence
requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act")
and the rules and regulations adopted pursuant thereto.
(f) The Company and each of its subsidiaries have been duly formed
and are validly existing in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do
business and are in good standing in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification except where the failure
to so qualify, singly or in the aggregate, would not have a material
adverse effect on the financial condition, results of operations, business
or prospects of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"), and have all power and authority
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necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged.
(g) The Company has an authorized capitalization as set forth in
the Prospectus; and all of the issued equity interests of each subsidiary
of the Company have been duly authorized and validly issued and, as to
shares of capital stock of any corporation constituting a subsidiary, are
fully paid and non-assessable and (except for directors' qualifying shares
as disclosed in the Registration Statement or the Prospectus or minority
interests in non-Guarantor subsidiaries) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims other than restrictions on transfer imposed by applicable
securities laws.
(h) The execution, delivery and performance of this Agreement, the
Indenture and the Securities by the Issuers, compliance by the Issuers of
all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any
of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the organizational documents of the Company
or any of its subsidiaries or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their property or assets; and
except for such consents, approvals, authorizations, registrations or
qualifications as may be required under the Act or applicable state or
foreign securities laws in connection with the purchase and distribution
of the Securities by any Underwriter, no consent, approval, authorization
or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Indenture and the Securities by the
Issuers, compliance by the Issuers of all the provisions hereof and
thereof and the consummation of the transactions contemplated hereby.
(i) This Agreement has been duly authorized, executed and
delivered by the Issuers and is a valid and binding agreement of the
Issuers enforceable in accordance with its terms (except as rights to
indemnity and contribution hereunder may be limited by applicable law).
(j) The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), and has been duly
authorized, executed and delivered by the Issuers and is a valid and
binding agreement of the Issuers, enforceable in accordance with its terms
except as (i) the enforceability thereof may be limited by
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bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(k) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to each of the Underwriters against payment therefor as provided
by this Agreement, will be entitled to the benefits of the Indenture, and
will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as (i) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(l) The Guarantees have been duly authorized and, upon endorsement
on the Notes by the Guarantors, execution and authentication of the Notes
in accordance with the provisions of the Indenture and delivery of the
Notes to each of the Underwriters against payment therefor as provided by
this Agreement, will be entitled to the benefits of the Indenture, and
will be valid and binding obligations of the Guarantors, enforceable in
accordance with their terms except as (i) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(m) The Securities and the Indenture conform to the description
thereof in the Prospectus.
(n) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements in the
Prospectus, any loss or interference with the business of the Company and
its subsidiaries taken as a whole from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, resulting in a Material Adverse
Effect; and, since such date, there has not been any material change in
the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus.
(o) There are no contracts, agreements or understandings 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
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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.
(p) The Company and its subsidiaries own the items of real
property and personal property purported to be owned by them which are
material to the conduct of the business of the Company and its
subsidiaries taken as a whole, free and clear of all liens, encumbrances
and defects, except such as are described in the Prospectus or such as
would not have a Material Adverse Effect. All real property held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are described
in the Prospectus or such as would not have a Material Adverse Effect.
(q) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company
or any of its subsidiaries is the subject which are reasonably likely to
have a Material Adverse Effect; and to the Issuers' knowledge, no such
proceedings are threatened by governmental authorities or by others.
(r) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(s) To the Issuers' knowledge, all real property owned (either
presently or at any time in the past) or presently leased by the Company
and its subsidiaries in connection with the operation of their business,
including, without limitation, any subsurface soils and ground water
(collectively, the "Realty"), is free of contamination from any substance
or material presently known to be toxic or hazardous, including, without
limitation, any radioactive substance, methane, volatile hydrocarbons or
industrial solvents (each, a "Hazardous Substance"), which could
reasonably be expected to materially impair the beneficial use thereof by
the Company and its subsidiaries or constitute or cause a significant
health, safety or other environmental hazard to occupants or users (except
for contaminations which would not have a Material Adverse Effect); and to
the Issuers' knowledge, the Realty does not contain any underground
storage or treatment tanks, active or abandoned water, gas or oil ▇▇▇▇▇,
or any other underground improvements or structures, other than the
foundations, footings or other supports for the improvements located
thereon, the presence of which would have a Material Adverse Effect.
Notwithstanding the foregoing, Hazardous Substances shall be deemed not to
include any supplies or substances maintained, used, stored or held on the
Realty which are (i) naturally occurring, (ii) installed by public
utilities or (iii) used in the ordinary course of the Company's or its
subsidiaries' business, provided that such supplies or substances are
stored, used, maintained and held
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in all material respects in accordance with any applicable governmental
requirements and with restrictions, conditions and standards suggested by
the manufacturer and the Company's insurance carriers.
(t) The Company and its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses.
(u) The Company and its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights and licenses necessary for the conduct of their
respective businesses the absence of which would have a Material Adverse
Effect and have no reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice of any
claim of conflict with, any such rights of others which could reasonably
be expected to have a Material Adverse Effect.
(v) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the Registration
Statement by the Act which have not been described in the Prospectus or
filed as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Act.
(w) No labor disturbance by the employees of the Company or any of
its subsidiaries exists or, to the Issuers' knowledge, is imminent which
could reasonably be expected to have a Material Adverse Effect.
(x) The Company and its subsidiaries have filed all federal, state
and local income and franchise tax returns required to be filed through
the date hereof and has paid all taxes due thereon, except where the
failure to do so has not had and would reasonably not be expected to have
a Material Adverse Effect, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor
does any Issuer have any knowledge of any tax deficiency which would
reasonably likely have) a Material Adverse Effect.
(y) Since the date as of which information is given in the
Prospectus, and except as may otherwise be disclosed in the Prospectus,
neither the Company nor any of its subsidiaries has (i) entered into any
material transaction not in the ordinary course of business or (ii)
declared or paid any dividend on its capital stock, and, from the date of
the Prospectus, neither the Company nor any of its subsidiaries has
incurred any liability other than in the ordinary course of business that
is material to the Company and its subsidiaries taken as a whole.
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(z) The Company is in full compliance with Section 13(b)(2) of the
Exchange Act.
(aa) Neither the Company nor any of its subsidiaries (i) is in
violation of its organizational documents, (ii) is in default in any
material respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which it is a party or by which it is bound or to which any
of its properties or assets is subject as a result of which default there
would be a Material Adverse Effect or (iii) is in violation of any law,
ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject or has failed to obtain any license,
permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of its
business which violation or failure would have a Material Adverse Effect.
(bb) Neither the Company nor any of its subsidiaries is an
"investment company" or an entity "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and
the rules and regulations of the Commission thereunder.
7. Indemnification. (a) The Issuers, jointly and severally, agree
to indemnify and hold harmless each Underwriter, each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and the directors, officers, employees and agents of
each of the foregoing (collectively, the "Underwriter Indemnified Parties"),
from and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Issuers by
or on behalf of such Underwriter expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter Indemnified Party
asserted by a person with respect to any such losses, claims, damages and
liabilities and judgments, if a copy of the Prospectus (as then amended or
supplemented if the Issuers shall have furnished such amendment or supplement
thereto in the requisite quantity on a timely basis to permit such sending or
giving) was not sent or given by or on behalf of such Underwriter or related
Underwriter Indemnified Party to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of Securities to
such
-13-
person, and if the Prospectus (as so amended and supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or judgment.
Notwithstanding anything to the contrary herein, no Underwriter shall be
obligated to send or give any Incorporated Document, or any amendment or
supplement thereto, to any person in order to benefit from the indemnity
provisions herein or otherwise. The foregoing indemnity agreement shall be in
addition to any liability that the Issuers may otherwise have.
(b) In case any action shall be brought against any Underwriter
Indemnified Party, based upon any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement thereto and with
respect to which indemnity may be sought against the Issuers, the Underwriters
shall promptly notify the Issuers in writing and the Issuers shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses. Such Underwriter
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter Indemnified Party unless (i)
the employment of such counsel shall have been specifically authorized in
writing by the Issuers, (ii) the Issuers shall have failed to assume the defense
and employ counsel or (iii) the named parties to any such action (including any
impleaded parties) include both such Underwriter Indemnified Party and the
Issuers and such Underwriter Indemnified Party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Issuers (in which case
the Issuers shall not have the right to assume the defense of such action on
behalf of such Underwriter Indemnified Party, it being understood, however, that
the Issuers shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all such Underwriter Indemnified Parties, which firm shall be
designated in writing by UBS Securities LLC and that all such fees and expenses
shall be reimbursed as they are incurred). The Issuers shall not be liable for
any settlement of any such action effected without the Company's written consent
but if settled with the written consent of the Company, the Issuers agree to
indemnify and hold harmless any Underwriter Indemnified Parties from and against
any loss or liability by reason of such settlement. The Company shall not,
without the prior written consent of the Underwriter Indemnified Parties, effect
any settlement of any pending or threatened proceeding in respect of which any
Underwriter Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Underwriter Indemnified Party, unless such
settlement includes an unconditional release of such Underwriter Indemnified
Party from all liability on claims that are the subject matter of such
proceeding.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Issuers, their directors, their officers who
sign the Registration Statement and any person controlling the Issuers within
the meaning of Section 15 of the Act or
-14-
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Issuers to the Underwriter Indemnified Parties but only with reference
to information relating to an Underwriter furnished in writing by or on behalf
of such Underwriter expressly for use in the Registration Statement, the
Prospectus or any preliminary prospectus. In case any action shall be brought
against the Issuers, any of its directors, any such officer or any person
controlling the Issuers based on the Registration Statement, the Prospectus or
any preliminary prospectus and in respect of which indemnity may be sought
against any Underwriter, such Underwriter shall have the rights and duties given
to the Issuers (except that if the Issuers shall have assumed the defense
thereof, such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Issuers, their directors, any such officers and any person controlling the
Issuers shall have the rights and duties given to the Underwriters, by Section
7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities or judgments referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers on the one hand and the Underwriters on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Issuers and the Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Issuers and the Underwriters shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company, and the compensation received by
the Underwriters (based on discount to investors on resale), bear to the sum of
such total net proceeds and such compensation. The relative fault of the Issuers
and the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Issuers
or any Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in
-15-
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, the Underwriters shall not 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 the
Underwriters have 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.
(e) Each Underwriter confirms and the Issuers acknowledge that the
statements with respect to the public offering of the Securities by such
Underwriter set forth in the fourth and sixth paragraphs of the section entitled
"Underwriting" in the Prospectus Supplement are correct and constitute the only
information concerning such Underwriter furnished in writing to the Issuers by
or on behalf of such Underwriter specifically for inclusion in the Registration
Statement and the Prospectus.
8. Conditions of Underwriters' Obligation. The obligation of the
Underwriters to purchase the Securities under this Agreement is subject to the
satisfaction of each of the following conditions:
(a) All the representations and warranties of the Issuers
contained in this Agreement shall be true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date.
The Issuers shall have performed or complied with all of their agreements
herein contained and required to be performed or complied with by them at
or prior to the Closing Date.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or threatened
by the Commission, (ii) every request for additional information on the
part of the Commission shall have been complied with in all material
respects, and (iii) no stop order suspending the sale of the Securities in
any jurisdiction referred to in Section 6(f) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending
or threatened which would, in your reasonable judgment, make it
impracticable or inadvisable to market the Securities or to enforce
contracts for the sale of the Securities.
(c) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have been any downgrading, nor
shall any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any Issuer's debt
by any "nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the Act.
-16-
(d) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of the Company and its subsidiaries taken as
a whole, (ii) since the date of the latest balance sheet included in the
Registration Statement and the Prospectus there shall not have been any
material change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries from that set forth in the Registration
Statement and Prospectus and (iii) the Company and its subsidiaries shall
have no liability or obligation, direct or contingent, which is material
to the Company and its subsidiaries, taken as a whole, other than those
reflected in the Registration Statement and the Prospectus.
(e) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by (i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and (ii) ▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ in their
capacities as (A) the Chairman of the Board, Chief Executive Officer and
President or Senior Executive Vice President and (B) Chief Financial
Officer or Treasurer of the Company, respectively, confirming the matters
set forth in paragraphs (a), (b), (c) and (d) of this Section 8.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special counsel for the Company,
substantially in the form of Exhibit A hereto.
(g) You shall have received on the Closing Date letters, dated the
Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, in form and substance satisfactory to the Underwriters.
(h) You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from Ernst & Young LLP,
independent public accountants, with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus and substantially in the form and substance of the
letter previously delivered to you by Ernst & Young LLP in connection with
the Registration Statement and Prospectus.
(i) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements in the
Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus or
(ii) since such date there shall not have been any change in the capital
stock, net revenues, per share or total amounts of income before
extraordinary income or of net
-17-
income or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in clause (i) or (ii), is, in the judgment of
the Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities being delivered on the Closing Date on the terms and in the
manner contemplated in the Prospectus.
(j) The Issuers shall have furnished to you such other documents
and certificates as to the accuracy and completeness of any statement in
the Registration Statement or the Prospectus as you reasonably may
request.
(k) You shall have been furnished with such additional documents
and certificates as you or counsel for the Underwriters may reasonably
request.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Issuers and
delivered to you or to your counsel shall be deemed a representation and
warranty by the Issuers to the Underwriters as to the statements made therein.
9. Default by an Underwriter. If an Underwriter shall fail to
purchase and pay for any of the Notes agreed to be purchased by such Underwriter
hereunder and such failure to purchase shall constitute a default in the
performance of its obligations under this Agreement, the remaining Underwriter
shall be obligated to take up and pay for (in the proportion which the principal
amount of Notes set forth opposite its name in Schedule A hereto bears to the
aggregate principal amount of Notes set forth opposite the name of the remaining
Underwriter) the Notes which the defaulting Underwriter agreed but failed to
purchase; provided, however, that in the event that the aggregate principal
amount of Notes which the defaulting Underwriter agreed but failed to purchase
shall exceed 10% of the aggregate principal amount of Notes set forth in
Schedule A hereto, the remaining Underwriter shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Notes, and if
such non-defaulting Underwriter does not purchase all the Notes, this Agreement
will terminate without liability to any non-defaulting Underwriter or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five business days, as the non-defaulting Underwriter shall determine in order
that the required changes in the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any
-18-
defaulting Underwriter of its liability, if any, to the Company or any
non-defaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement may be terminated at any time
prior to the Closing Date by UBS Securities LLC by written notice to the Issuers
if any of the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or development involving a prospective material adverse
change in the condition, financial or otherwise, of the Company and its
subsidiaries or the earnings, affairs, or business prospects of the Company and
its subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, which would, in your judgment, make it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (ii)
any outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and would, in your judgment, make it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (iii)
the suspension or material limitation of trading in securities on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market or
limitation on prices for securities on any such exchange, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects, or will materially and adversely
affect, the business or operations of the Company and its subsidiaries taken as
a whole, (v) the declaration of a banking moratorium by either federal or New
York State authorities or (vi) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs which in
your opinion has a material adverse effect on the financial markets in the
United States.
11. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Issuers, to ▇.▇. ▇▇▇▇▇▇,
Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Financial Officer, and (b) if to the Underwriters, to UBS Securities LLC, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: High Yield Capital
Markets Desk, or in any case to such other address as the person to be notified
may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, its officers
and directors (in their capacities as such) and of the Underwriters set forth in
or made pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Securities, regardless
of (i) any investigation, or statement as to the results thereof, made by or on
behalf of the Underwriters or by or on behalf of the Company, the officers or
directors of the Company or any controlling person of the Company (in their
capacities as such), (ii)
-19-
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of any Issuer to perform any of its
agreements in this Agreement or to fulfill any of the conditions of Section 8 of
this Agreement, the Issuers, jointly and severally, agree to reimburse the
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Issuers, the
Underwriters, any controlling persons referred to herein, the other indemnitees
referred to herein and their respective successors and assigns, all as and to
the extent provided in this Agreement, and no other person shall acquire or have
any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Securities from any
Underwriter merely because of such purchase.
This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
References herein to "your judgment" or "your opinion" shall be
deemed to be the judgment or opinion, as the case may be, of UBS Securities LLC
only.
[Signature Pages Follow]
-3-
Please confirm that the foregoing correctly sets forth the agreement
between the Issuers and the Underwriter.
Sincerely,
▇.▇. ▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
GUARANTORS:
C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BUILDERS, INC.
CHTEX OF TEXAS, INC.
CONTINENTAL RESIDENTIAL, INC.
▇.▇. ▇▇▇▇▇▇, INC. - BIRMINGHAM
▇.▇. ▇▇▇▇▇▇, INC. - CHICAGO
▇.▇. ▇▇▇▇▇▇, INC. - DENVER
▇.▇. ▇▇▇▇▇▇, INC. - ▇▇▇▇▇-▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇, INC. - GREENSBORO
▇.▇. ▇▇▇▇▇▇, INC. - JACKSONVILLE
▇.▇. ▇▇▇▇▇▇, INC. - LOUISVILLE
▇.▇. ▇▇▇▇▇▇, INC. - MINNESOTA
▇.▇. ▇▇▇▇▇▇, INC. - NEW JERSEY
▇.▇. ▇▇▇▇▇▇, INC. - PORTLAND
▇.▇. ▇▇▇▇▇▇, INC. - SACRAMENTO
▇.▇. ▇▇▇▇▇▇, INC. - TORREY
▇.▇. ▇▇▇▇▇▇ LOS ANGELES HOLDING COMPANY, INC.
▇.▇. ▇▇▇▇▇▇ MATERIALS, INC.
▇.▇. ▇▇▇▇▇▇ SAN DIEGO HOLDING COMPANY, INC.
DRH CAMBRIDGE HOMES, INC.
DRH ENERGY, INC.
DRH REGREM IV, INC.
DRH REGREM V, INC.
▇▇▇▇▇▇▇ I, LTD.
▇▇▇▇▇▇▇ VIII, LTD.
▇▇▇▇▇▇▇ IX, INC.
▇▇▇▇▇▇▇ X, INC.
MELMORT CO.
▇▇▇▇▇▇▇ HOMES OF CALIFORNIA, INC.
▇▇▇▇▇▇▇ HOMES OF OREGON, INC.
▇▇▇▇▇▇▇ HOMES OF WASHINGTON, INC.
▇▇▇▇▇▇▇ MORTGAGE, INC.
▇▇▇▇▇▇▇ REALTY HAWAII, INC.
SHLR OF CALIFORNIA, INC.
SHLR OF COLORADO, INC.
SHLR OF NEVADA, INC.
SHLR OF UTAH, INC.
SHLR OF WASHINGTON, INC.
THE CLUB AT PRADERA, INC.
VERTICAL CONSTRUCTION CORPORATION
WESTERN PACIFIC FUNDING, INC.
-5-
WESTERN PACIFIC HOUSING, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
-6-
CH INVESTMENTS OF TEXAS, INC.
▇▇▇▇▇▇▇ II, LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Secretary and Treasurer
-7-
CHI CONSTRUCTION COMPANY
CONTINENTAL HOMES, INC.
DRH CONSTRUCTION, INC.
DRH SOUTHWEST CONSTRUCTION, INC.
DRH TUCSON CONSTRUCTION, INC.
DRHI, INC.
KDB HOMES, INC.
MELODY HOMES, INC.
WESTERN PACIFIC HOUSING MANAGEMENT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
CONTINENTAL HOMES OF TEXAS, L.P.
By: CHTEX of Texas, Inc.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
▇.▇. ▇▇▇▇▇▇ MANAGEMENT COMPANY, LTD.
▇.▇. ▇▇▇▇▇▇ - EMERALD, LTD.
▇.▇. ▇▇▇▇▇▇ - TEXAS, LTD.
DRH REGREM VII, LP
By: ▇▇▇▇▇▇▇ I, Ltd.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
-8-
SGS COMMUNITIES AT GRANDE QUAY, LLC
By: ▇▇▇▇▇▇▇ IX, Inc.,
a Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
and
By: ▇▇▇▇▇▇▇ X, Inc.,
a Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
DRH CAMBRIDGE HOMES, LLC
DRH REGREM VIII, LLC
By: ▇.▇. ▇▇▇▇▇▇, Inc. - Chicago,
its Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
-9-
HPH HOMEBUILDERS 2000 L.P.
WESTERN PACIFIC HOUSING CO., A CALIFORNIA
LIMITED PARTNERSHIP
WESTERN PACIFIC HOUSING-ANTIGUA, LLC
WESTERN PACIFIC HOUSING-AVIARA, L.P.
WESTERN PACIFIC HOUSING-BOARDWALK, LLC
WESTERN PACIFIC HOUSING-BROADWAY, LLC
WESTERN PACIFIC HOUSING-CANYON PARK, LLC
WESTERN PACIFIC HOUSING-CARMEL, LLC
WESTERN PACIFIC HOUSING-▇▇▇▇▇▇▇▇, LLC
WESTERN PACIFIC HOUSING-COMMUNICATIONS HILL, LLC
WESTERN PACIFIC HOUSING-COPPER CANYON, LLC
WESTERN PACIFIC HOUSING-CREEKSIDE, LLC
WESTERN PACIFIC HOUSING-▇▇▇▇▇▇ CITY, L.P.
WESTERN PACIFIC HOUSING-DEL ▇▇▇▇▇, LLC
WESTERN PACIFIC HOUSING-LOMAS VERDES, LLC
WESTERN PACIFIC HOUSING-LOST HILLS PARK, LLC
WESTERN PACIFIC HOUSING-▇▇▇▇▇▇▇▇▇ CANYON, LLC
WESTERN PACIFIC HOUSING-MOUNTAINGATE, L.P.
WESTERN PACIFIC HOUSING-NORCO ESTATES, LLC
WESTERN PACIFIC HOUSING-OSO, L.P.
WESTERN PACIFIC HOUSING-PACIFIC PARK II, LLC
WESTERN PACIFIC HOUSING-PARK AVENUE EAST, LLC
WESTERN PACIFIC HOUSING-PARK AVENUE WEST, LLC
WESTERN PACIFIC HOUSING-PLAYA VISTA, LLC
WESTERN PACIFIC HOUSING-POINSETTIA, L.P.
WESTERN PACIFIC HOUSING-RIVER RIDGE, LLC
WESTERN PACIFIC HOUSING-ROBINHOOD RIDGE, LLC
WESTERN PACIFIC HOUSING-SANTA FE, LLC
WESTERN PACIFIC HOUSING-SCRIPPS, L.P.
WESTERN PACIFIC HOUSING-SCRIPPS II, LLC
WESTERN PACIFIC HOUSING-SEACOVE, L.P.
WESTERN PACIFIC HOUSING-STUDIO 528, LLC
WESTERN PACIFIC HOUSING-TERRA BAY DUETS, LLC
WESTERN PACIFIC HOUSING-TORRANCE, LLC
WESTERN PACIFIC HOUSING-TORREY COMMERCIAL, LLC
WESTERN PACIFIC HOUSING-▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLC
WESTERN PACIFIC HOUSING-TORREY MULTI-FAMILY, LLC
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CENTER, LLC
WESTERN PACIFIC HOUSING-VINEYARD TERRACE, LLC
WESTERN PACIFIC HOUSING-WINDEMERE, LLC
WESTERN PACIFIC HOUSING-WINDFLOWER, L.P.
WPH-CAMINO ▇▇▇▇, LLC
By: Western Pacific Housing Management, Inc.,
its Manager, Member or General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
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▇▇▇▇▇▇▇ HOMES OF ARIZONA LLC
SHA CONSTRUCTION LLC
By: SRHI LLC,
its Member
By: SHLR of Nevada, Inc.,
its Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
▇.▇. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ HOMES, LLC
By: Vertical Construction Corporation,
its Manager
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
SRHI LLC
By: SHLR of Nevada, Inc.,
its Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
SSHI LLC
By: SHLR of Washington, Inc.,
its Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
Agreed and accepted as of the
date first written above:
UBS SECURITIES LLC
WACHOVIA CAPITAL MARKETS, LLC
By: UBS Securities LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Director
SCHEDULE A
Underwriters Principal Amount of Notes
------------ -------------------------
UBS Securities LLC $212,500,000
Wachovia Capital Markets, LLC $ 37,500,000
------------
Total $250,000,000
EXHIBIT A
FORM OF OPINION OF ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
(i) The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware and has all corporate power and
authority necessary to execute, deliver and perform its obligations under the
Underwriting Agreement, the Indenture and the Notes. Each of the Guarantors that
are organized under the laws of the States of California, Colorado, Delaware,
Nevada and Texas (the "Specified Guarantors") that is a corporation is validly
existing as a corporation in good standing under the laws of its state of
incorporation and has all corporate power and authority necessary to execute,
deliver and perform its obligations under the Underwriting Agreement, the
Indenture and the Guarantees. Each Specified Guarantor that is a limited
liability company or a limited partnership is validly existing as a limited
liability company or a limited partnership, as the case may be, under the laws
of its state of its formation and has all limited liability company or
partnership power and authority necessary to execute, deliver and perform its
obligations under the Underwriting Agreement, the Indenture and the Guarantees.
(ii) To such counsel's knowledge and other than as described in the
Prospectus, there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject which is of a character
which is required to be disclosed in the Prospectus; and, to such counsel's
knowledge, no such proceedings are threatened by governmental authorities or by
others.
(iii) The Registration Statement was declared effective under the Act as
of the date and time specified in such opinion, the Prospectus was filed with
the Commission pursuant to the subparagraph of Rule 424(b) under the Act on the
date specified therein, and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose is pending or threatened by the Commission.
(iv) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to the Closing Date
(other than the financial data (and the related notes thereto) and statistical
data and the financial statements and related schedules therein, as to which
such counsel need express no opinion) appear on their face to comply as to form
in all material respects with the requirements of the Act; the documents
incorporated by reference in the Prospectus and any further amendment or
supplement to any such incorporated document made by the Company prior to the
Closing Date (other than the financial data (and the related notes thereto) and
statistical data and the financial statements, and related schedules therein, as
to which such counsel need express no opinion), when they were filed with the
Commission appear on their face to have been
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appropriately responsive in all material respects to the requirements of the Act
and the Exchange Act.
(v) To such counsel's knowledge, there are no contracts or other
documents which are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Act which have not been described
in the Prospectus or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Act.
(vi) This Agreement has been duly authorized, executed and delivered by
the Issuers.
(vii) The execution and delivery of the Underwriting Agreement, the
issuance and sale of the Securities and the execution, delivery and performance
of the Indenture and the Securities by the Issuers will not result in a material
breach or violation of any of the terms or provisions of, or constitute a
material default under, any indenture, mortgage, deed of trust, loan agreement
or other material agreement or instrument listed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 2003 or to
any subsequent filing under the Exchange Act or the Act by the Company, nor will
such actions result in any violation of the provisions of the articles or
certificates of incorporation, bylaws, limited liability company agreement,
limited partnership agreement, operating agreement or other constitutive
document of the Company or any Specified Guarantor under any Applicable Law (as
defined below) or any order, judgment or decree known to us under any court or
government agency or body of the United States of America or the States of New
York, California or Texas having jurisdiction over the Company or any Specified
Guarantor or any of its property or assets under any Applicable Law.
For the purposes of this clause (vii), the term "Applicable Law" shall
mean the Delaware General Corporation Law, the Delaware Limited Liability
Company Act and the Delaware Revised Uniform Limited Partnership Act, the Nevada
General Corporation Law, the present corporation, partnership and limited
liability company statutes of the States of California, Texas and Colorado, any
of the present laws of the United States of America, any of the present laws of
the State of New York, the statutes, rules or regulations of the State of
California and Texas, in each case generally applicable to transactions in the
nature of those contemplated by the Underwriting Agreement and the Indenture,
and to present judicial interpretations thereto and to the facts as they
presently exist.
(viii) The Indenture has been duly authorized, executed and delivered by
the Company and the Specified Guarantors and is a valid and binding agreement of
the Company and the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms.
(ix) The Notes have been duly authorized and executed by the Company and,
when authenticated in accordance with the provisions of the Indenture and
delivered to the
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Underwriters against payment therefor as provided by the this Agreement, will be
entitled to the benefits of the Indenture, and will be valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms.
(x) The Guarantees have been duly authorized and endorsed on the Notes
by the Guarantors, and, upon authentication of the Notes in accordance with the
provisions of the Indenture and delivery thereof to the Underwriters against
payment therefor as provided by this Agreement, will be entitled to the benefits
of the Indenture, and will be valid and binding obligations of the Guarantors,
enforceable against the Guarantors in accordance with their terms.
(xi) The Securities and the Indenture conform in all material respects to
the descriptions thereof in the Prospectus.
(xii) The Supplemental Indenture is (x) authorized and permitted by the
Indenture, (y) not inconsistent with the Indenture and (z) valid and binding
upon the Issuers in accordance with its terms.
In rendering such opinion, such counsel may state that its opinion is
limited to the Federal laws of the United States of America, the laws of the
States of Texas and New York and the General Corporation Law of the State of
Delaware. Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Underwriters and counsel for the Underwriters, to
the effect that (x) such counsel has acted as special counsel to the Company in
connection with the preparation of the Registration Statement and during the
course of the preparation of the Registration Statement and Prospectus, such
counsel participated in conferences with representatives of the Company, the
Company's internal counsel, and its accountants and the representatives of the
Underwriters and at which conferences the contents of the Registration Statement
and the Prospectus and related matters were discussed, and (y) based on the
foregoing, no facts have come to the attention of such counsel which lead it to
believe that (I) the Registration Statement (except as to financial data (and
related notes thereto) and statistical data and the financial statements and
related schedules contained or incorporated by reference therein), as of the
date the Registration Statement became effective, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Prospectus (except as to financial data (and related notes thereto) and
statistical data and the financial statements and related schedules contained or
incorporated by reference therein) contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading or (II) any Incorporated Document or
any amendment or supplement thereto made by the Company prior to such Closing
Date, when they were filed with the Commission, as the case may be, contained
(except as to
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financial data (and related notes thereto) and statistical data and the
financial statements and related schedules contained or incorporated by
reference therein) an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing opinion
and statement may be qualified by a statement to the effect that such counsel
has not independently verified the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus or incorporated
by reference therein, and such counsel is not passing upon and such counsel does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus.
