$50,000,000
▇.▇. ▇▇▇▇▇▇, INC.
10-1/2% SENIOR NOTES DUE 2005
UNDERWRITING AGREEMENT
June 5, 2000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇.▇. ▇▇▇▇▇▇, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell $50,000,000 aggregate principal amount of its
10-1/2% Senior Notes due 2005 (the "NOTES") to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated (the "UNDERWRITER"). The Notes are to be issued pursuant to the
provisions of an Indenture dated as of June 7, 1999, as supplemented from time
to time by supplemental indentures including, without limitation, the Tenth
Supplemental Indenture referred to below (the "INDENTURE"), among the Company,
certain subsidiaries of the Company and the American Stock Transfer and Trust
Company, as Trustee (the "TRUSTEE"), and will be notes of the same series as
those issued under the Eighth Supplemental Indenture dated as of March 21,
2000 (the "EIGHTH SUPPLEMENTAL INDENTURE") to the Indenture (the "10-1/2%
SENIOR NOTES DUE 2005"). In connection with this offering, the Company has
solicited consents from holders of the 10-1/2% Senior Notes due 2005
outstanding on the date hereof to amend the Eighth Supplemental Indenture (the
"CONSENT SOLICITATION"), and executed the Tenth Supplemental Indenture (the
"TENTH SUPPLEMENTAL INDENTURE") to amend the Eighth Supplemental Indenture.
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."
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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.
333-76175), including a base prospectus relating to the Securities. The
registration statement as amended at the time it became effective on April 16,
1999, 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 April 16, 1999 (the "BASE PROSPECTUS"), as 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, the Underwriter agrees to purchase from the Company, the
entire principal amount of the Notes at 98.866% of the principal amount
thereof plus interest assumed to have accrued from March 21, 2000 (equal to
$1,122,916.50) (the "PURCHASE PRICE").
3. TERMS OF PUBLIC OFFERING. The Company is advised by the
Underwriter that the Underwriter proposes to make a public offering of the
Securities as soon after the execution and delivery of this Agreement as in
judgment of the Underwriter is advisable on the basis set forth in the
Prospectus Supplement.
4. DELIVERY AND PAYMENT. Delivery to the Underwriter of and
payment for the Securities shall be made at 10:00 A.M., New York City time, on
the third business day after the
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date hereof (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 Underwriter, 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, at the Closing Date, and the Company will deliver such
global certificate(s) to the Underwriter by causing DTC to credit the
Securities to the account of the Underwriter at DTC against payment therefor
as set forth above.
5. AGREEMENTS OF THE ISSUERS. The Issuers, jointly and
severally, agree with the 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
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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 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
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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 Underwriter a prospectus
is required by the Act to be delivered in connection with sales by
the Underwriter or any dealer, the Issuers will expeditiously deliver
to the 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 the
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 the 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 Underwriter, 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 Underwriter and to such dealers as you shall specify
such number of copies thereof as the Underwriter 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 announcing or
disclosing the matters to be covered by the proposed amendment or
supplement.
(g) The Issuers will cooperate with you and with counsel for
the Underwriter in connection with the regis-
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tration or qualification of the Securities for offering and sale by
the 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 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 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),
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and all amendments and supplements thereto prior to or during the
period specified in paragraph (e) above, (ii) the printing and
delivery of the Prospectus and all amendments or supplements thereto
during the period specified in paragraph (e) above, (iii) the
printing and 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 Underwriter relating to
such printing and delivery), (iv) 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 Underwriter relating to
such registration or qualification and memoranda relating thereto),
(v) filings and clearance with the National Association of Securities
Dealers, Inc. in connection with the offering, (vi) the listing, if
any, of the Securities on any national securities exchange, and (vii)
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 the
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 the
Underwriter.
(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.
(o) The Company will comply with its covenants in the
Solicitation Agent Agreement dated as of May 27, 2000 (the
"SOLICITATION AGENT AGREEMENT") between the Company and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, as solicitation agent.
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6. REPRESENTATIONS AND WARRANTIES OF THE ISSUERS. The
Issuers, jointly and severally, represent and warrant to the 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 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 Underwriter 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
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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.
(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.
(f) The representations and warranties of the Company in the
Solicitation Agent Agreement are true and correct.
(g) 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 necessary to own or hold their respective properties
and to conduct the businesses in which they are engaged.
(h) 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,
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equities or claims other than restrictions on transfer imposed by
applicable securities laws.
(i) 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
the 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.
(j) 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).
(k) 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
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the
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availability of equitable remedies may be limited by equitable
principles of general applicability.
(l) The Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to the Underwriter 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.
(m) 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 the Underwriter 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.
(n) The Securities and the Indenture conform to the
description thereof in the Prospectus.
(o) 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 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 op-
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erations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus.
(p) 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 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.
(q) 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.
(r) 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.
(s) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(t) 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 ra-
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dioactive 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 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.
(u) 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.
(v) 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.
(w) 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.
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(x) 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.
(y) 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.
(z) 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) except for the dividend of $.04 per share declared
in May 2000 and payable on May 22, 2000, 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
material liability other than in the ordinary course of business.
(aa) The Company is in full compliance with Section
13(b)(2) of the Exchange Act.
(bb) 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
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property or to the conduct of its business which violation or
failure would have a Material Adverse Effect.
(cc) 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.
-16-
7. INDEMNIFICATION. (a) The Issuers, jointly and severally,
agree to indemnify and hold harmless the Underwriter and each person, if any,
who controls the Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, 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 the
Underwriter furnished in writing to the Issuers by or on behalf of the
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 the Underwriter or any person controlling the Underwriter
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 the Underwriter 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 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, the Underwriter shall not 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 the
Underwriter or any person controlling the Underwriter, 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 Underwriter 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. The Under-
-17-
writer or any such controlling person 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 the Underwriter
or such controlling person 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 the
Underwriter or such controlling person and the Issuers and the Underwriter or
such controlling person 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 the
Underwriter or such controlling person, 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 the Underwriter and all such controlling persons, which firm
shall be designated in writing by the Underwriter 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 the Underwriter and any such
controlling person from and against any loss or liability by reason of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(c) The Underwriter agrees 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 Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Issuers to the Underwriter but only with
reference to information relating to the Underwriter furnished in writing by
or on behalf of the Underwriter expressly for use in the Registration
Statement, the Prospectus or any preliminary
-18-
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 the Underwriter, the
Underwriter shall have the rights and duties given to the Issuers (except that
if the Issuers shall have assumed the defense thereof, the 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 the Underwriter), and the Issuers, their directors,
any such officers and any person controlling the Issuers shall have the rights
and duties given to the Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to 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
Underwriter 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 Underwriter 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 Underwriter 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
Underwriter (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 Underwriter 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 the Underwriter and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
The Issuers and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Sec-
-19-
tion 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
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, the Underwriter 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
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The Underwriter confirms and the Issuers acknowledge
that the statements with respect to the public offering of the Securities by
the Underwriter set forth in the third paragraph of the section entitled
"Underwriting" in the Prospectus Supplement are correct and constitute the
only information concerning the Underwriter furnished in writing to the
Issuers by or on behalf of the Underwriter specifically for inclusion in the
Registration Statement and the Prospectus.
8. CONDITIONS OF UNDERWRITER'S OBLIGATION. The obligation of
the Underwriter 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 Commis-
-20-
sion, (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(g) 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.
(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 change, or any development
involving a prospective material adverse 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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, in their capacities as the Chairman of the
Board or Chief Executive Officer and President and Chief Financial
Officer of the Company, respectively, confirming the matters set
forth in paragraphs (a), (b), (c) and (d) of this Section 8.
-21-
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriter), dated the
Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special counsel for the
Company, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, is duly qualified to do
business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property
or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a
material adverse effect on the business, operations or
financial condition of the Company and its subsidiaries taken
as a whole, and has all corporate power and authority
necessary to own or hold its properties and conduct its
business as described in the Prospectus.
(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
-22-
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 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 of a character 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 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, delivery and performance of
this Agreement, the Indenture and the Securities by the
Issuers and the compliance by the Issuers with all of the
provisions of this Agreement and the consummation by the
Issuers of the transactions contemplated hereby and thereby
will not, to such counsel's knowledge, conflict with or
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 its Annual Report on Form 10-K for the fiscal year ended
September 30, 1999 or to any subsequent filing under the
Exchange Act or the Act, nor will such actions result in any
violation of the provisions of the charter or by-laws of any
Issuer or any statute or, to such counsel's knowledge, any
order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over any
Issuer or any of their property or assets; and, except for
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Act and
applicable state or
-23-
foreign securities laws in connection with the purchase and
distribution of the Securities by the 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 and the valid issuance and sale of the Securities by
the Issuers.
(viii) The Indenture has been duly qualified under
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
(a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors, rights
generally and (b) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability.
(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 Underwriter 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.
(x) The Guarantees have been duly authorized and
endorsed on the Notes by the Guarantors, and, upon execution
and authentication of the Notes in accordance with the
provisions of the Indenture and delivery thereof to the
Underwriter 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
-24-
may be limited by equitable principles of general
applicability.
(xi) The Securities and the Indenture conform in all
material respects to the descriptions thereof in the
Prospectus.
(xii) The Tenth Supplemental Indenture is (x)
authorized and permitted by the Indenture, (y) not
inconsistent with the Indenture and (c) 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
Underwriter a written statement, addressed to the Underwriter and dated the
Closing Date, in form and substance satisfactory to the Underwriter and
counsel for the Underwriter, 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 Underwriter 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 Com-
-25-
mission, as the case may be, contained (except as to financial and 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.
Such counsel shall also state that the Underwriter, in its
capacity as such, is entitled to rely on such counsel's opinions delivered
under the Solicitation Agent Agreement.
(g) You shall have received on the Closing Date, an opinion
of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq., Corporate Counsel for the Company,
dated the Closing Date and addressed to you, to the effect that:
Each Guarantor that is a corporation has been duly
incorporated and is validly existing as a corporation in
good standing under the laws of its state of incorporation,
is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its
ownership or lease of its property or the conduct of its
business requires such qualification, except where the
failure to be so qualified would not have a material adverse
effect on the business, operations or financial condition of
the Company and its subsidiaries taken as a whole, and has
all corporate power and authority necessary to own or hold
its properties and conduct its business as described in the
Prospectus. The outstanding shares of capital stock of each
such Guarantor is duly authorized, validly issued, fully
paid and nonassessable and (except for directors' qualifying
shares) are owned of record, directly or indirectly by the
Company. Each Guarantor that is a limited partnership has
been duly formed and is validly existing as a limited
partnership in good standing under the laws of the state of
its organization, is duly qualified to do business and is in
good standing
-26-
as a foreign limited partnership in each jurisdiction in
which its ownership or lease of its property or the conduct
of its business requires such qualification, except where
the failure to be so qualified would not have a material
adverse effect on the business, operation or financial
condition of the Company and its subsidiaries taken as a
whole, and has all partnership power and authority necessary
to own or hold its properties and conduct its business as
described in the Prospectus.
(h) You shall have received on the Closing Date an opinion,
dated the Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, counsel for the
Underwriter, in form and substance satisfactory to the Underwriter.
(i) 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 delivered to you by Ernst & Young,
LLP, on the date of this Agreement.
(j) (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 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
Underwriter, 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.
-27-
(k) 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.
(l) You shall have been furnished with such additional
documents and certificates as you or counsel for the Underwriter may
reasonably request.
(m) The conditions to consummation of the Consent
Solicitation set forth in the Solicitation Agent Agreement shall have
been satisfied. The Indenture shall have been amended to permit the
issuance of the Notes as 10-1/2% Senior Notes due 2005.
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 Underwriter as to the
statements made therein.
9. TERMINATION.
This Agreement may be terminated at any time prior to the
Closing Date by you 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 any of 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 Mar-
-28-
ket 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.
10. MISCELLANEOUS. Notices given pursuant to any provision
of this Agreement shall be addressed as follows: (a) if to the Issuers, to
▇.▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and (b)
if to the Underwriter, to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate 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 Underwriter 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 Underwriter 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) acceptance of the Securities and payment
for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriter
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 Underwriter for all out-of-pocket expenses (including the fees
and disbursements of counsel) reasonably incurred by it.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Issuers, the
Underwriter, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement,
and no other per-
-29-
son 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 the 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.
-30-
Please confirm that the foregoing correctly sets forth the
agreement between the Issuers and the Underwriter.
Very truly yours,
▇.▇. ▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
-31-
GUARANTORS:
DRHI, Inc.
▇▇▇▇▇▇▇ I, Ltd.
▇▇▇▇▇▇▇ IX, Inc.
▇▇▇▇▇▇▇ X, Inc.
▇.▇. ▇▇▇▇▇▇, Inc.-Birmingham
▇.▇. ▇▇▇▇▇▇, Inc.-Chicago
▇.▇. ▇▇▇▇▇▇, Inc.-Denver
▇.▇. ▇▇▇▇▇▇, Inc.-Greensboro
▇.▇. ▇▇▇▇▇▇, Inc.-Louisville
▇.▇. ▇▇▇▇▇▇, Inc.-Minnesota
▇.▇. ▇▇▇▇▇▇, Inc.-New Jersey
▇.▇. ▇▇▇▇▇▇, Inc.-Portland
▇.▇. ▇▇▇▇▇▇, Inc.-Sacramento
▇.▇. ▇▇▇▇▇▇, Inc.-San Diego
▇.▇. ▇▇▇▇▇▇, Inc.-Torrey
▇.▇. ▇▇▇▇▇▇ San Diego Holding Company, Inc.
▇.▇. ▇▇▇▇▇▇ Los Angeles Holding Company, Inc.
DRH Construction, Inc.
DRH Cambridge Homes, Inc. (formerly ▇.▇.
▇▇▇▇▇▇ Sacramento Management Company, Inc.)
C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Builders, Inc.
DRH Tucson Construction, Inc.
Continental Homes, Inc.
KDB Homes, Inc.
Continental Residential, Inc.
Continental Homes of Florida, Inc.
CHI Construction Company
CHTEX of Texas, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
-32-
▇▇▇▇▇▇▇ II, Ltd.
CH Investments of Texas, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: President
-33-
SGS COMMUNITIES AT GRANDE QUAY, LLC
By: ▇▇▇▇▇▇▇ IX, Inc., a member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
and
By: ▇▇▇▇▇▇▇ X, Inc., a member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
▇.▇. ▇▇▇▇▇▇ MANAGEMENT COMPANY, LTD.
▇.▇. ▇▇▇▇▇▇ - TEXAS, LTD.
By: ▇▇▇▇▇▇▇ I, Ltd.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
-▇▇-
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, L.P.
By: CHTEX of Texas, Inc.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
-35-
Agreed and accepted as of the date first written above:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
