EXHIBIT 1
CONTINENTAL HOMES HOLDING CORP.
$75,000,000 __% Convertible Subordinated Notes due 2005
UNDERWRITING AGREEMENT
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November __, 1995
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
As Representatives of
the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Continental Homes Holding Corp., a Delaware corporation (the
"Company"), proposes to issue and sell an aggregate of $75,000,000 (the "Firm
Securities") principal amount of the Company's __% Convertible Subordinated
Notes due 2005 (the "Securities") to be issued pursuant to an Indenture dated as
of _________, 1995 (the "Indenture"), between the Company and Manufacturers and
Traders Trust Company, as Trustee (the "Trustee"). The Securities are
convertible into shares of common stock, par value $.01 per share, of the
Company (the "Common Stock"). The Company has also agreed to grant to you and
the other Underwriters an option (the "Option") to purchase up to an additional
$11,250,000 principal amount of
Securities (the "Option Securities") on the terms and for the purposes set forth
in Section 1(b). The Firm Securities and the Option Securities are hereafter
collectively referred to as the "Securities". The Securities will be sold to
you and to the other underwriters named in Schedule I (collectively, the
"Underwriters") for whom you are acting as representatives (the
"Representatives").
The purchase price for the Securities to be paid by the several
Underwriters shall be agreed upon by the Company and the Representatives, acting
on behalf of the several Underwriters, and such agreement shall be set forth in
a separate written instrument substantially in the form of Exhibit A hereto (the
"Price Determination Agreement"). The Price Determination Agreement may take
the form of an exchange of any standard form of written telecommunication among
the Company and the Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Securities
will be governed by this Agreement, as supplemented by the Price Determination
Agreement. From and after the date of the execution and delivery of the Price
Determination Agreement, this Agreement shall be deemed to incorporate, and,
unless the context otherwise indicates, all references contained herein to "this
Agree-
2
ment" and to the phrase "herein" shall be deemed to include the Price
Determination Agreement.
The Company confirms as follows its agreements with the
Representatives and the several other Underwriters.
1. Agreement to Sell and Purchase.
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(a) On the basis of the representations, warranties and agreements of
the Company herein contained and subject to all the terms and conditions of this
Agreement, the Company agrees to sell to each Underwriter named below, and each
Underwriter agrees, severally and not jointly, to purchase from the Company, the
principal amount of the Firm Securities set forth opposite the name of such
Underwriter in Schedule I, plus such additional principal amount of Firm
Securities which such Underwriter may become obligated to purchase pursuant to
Section 8 hereof, all at the purchase price, to be agreed upon by the
Representatives and the Company in accordance with Section 1(c) or 1(d) and set
forth in the Price Determination Agreement. If the Company elects to rely on
Rule 430A (as hereinafter defined), Schedule I may be attached to the Price
Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement, the
Company grants the Option to
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the several Underwriters to purchase, severally and not jointly, up to
$11,250,000 principal amount of Option Securities from the Company at the same
price per Security as the Underwriters shall pay for the Firm Securities. The
Option may be exercised only to cover over-allotments in the sale of the Firm
Securities by the Underwriters and may be exercised in whole or in part at any
time (but not more than once) on or before the 45th day after the date of this
Agreement (or, if the Company has elected to rely on Rule 430A, on or before the
45th day after the date of the Price Determination Agreement), upon written or
telegraphic notice (the "Option Securities Notice") by the Representatives to
the Company no later than 12:00 noon, New York City time, at least two and no
more than five business days before the date specified for closing in the Option
Securities Notice (the "Option Closing Date") setting forth the aggregate number
of Option Securities to be purchased and the time and date for such purchase.
On the Option Closing Date, the Company will issue and sell to the Underwriters
the number of Option Securities set forth in the Option Securities Notice, and
each Underwriter will purchase such percentage of the Option Securities as is
equal to the percentage of Firm Securities that such Underwriter is purchasing,
as ad-
4
justed by the Representatives in such manner as they deem advisable to avoid
fractional shares.
(c) If the Company has elected not to rely on Rule 430A, the purchase
price for the Firm Securities to be paid by the several Underwriters shall be
agreed upon and set forth in the Price Determination Agreement, which shall be
dated the date hereof, and an amendment to the Registration Statement (as
hereinafter defined) containing such price information shall be filed before the
Registration Statement becomes effective.
(d) If the Company has elected to rely on Rule 430A, the purchase
price for the Firm Securities to be paid by the several Underwriters shall be
agreed upon and set forth in the Price Determination Agreement. In the event
that the Price Determination Agreement has not been executed by the close of
business on the fourth business day following the date on which the Registration
Statement becomes effective, this Agreement shall terminate forthwith, without
liability of any party to any other party except that Section 6 shall remain in
effect.
2. Delivery and Payment. Delivery of the Firm Securities shall be
--------------------
made to the Representatives for the accounts of the Underwriters against payment
of the purchase price by certified or official bank check
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payable in New York Clearing House (next-day) funds to the order of the Company
at the office of PaineWebber Incorporated, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Such payment shall be made at 10:00 a.m., New York City
time, on the third business day following the date of this Agreement or, if the
Company has elected to rely on Rule 430A, the third business day after the date
on which the first bona fide offering of the Securities to the public is made by
the Underwriters or at such time on such other date, not later than [five]
business days after the date of this Agreement, as may be agreed upon by the
Company and the Representatives (such date is hereinafter referred to as the
"Closing Date").
To the extent the Option is exercised, delivery of the Option
Securities against payment by the Underwriters (in the manner specified above)
will take place at the offices specified above for the Closing Date at the time
and date (which may be the Closing Date) specified in the Option Securities
Notice.
Certificates evidencing the Securities shall be in definitive form and
shall be registered in such names and in such authorized denominations as the
Representa-
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tives shall request by written notice to the Company at least two business days
prior to the Closing Date or the Option Closing Date. For the purpose of
expediting the checking and packaging of certificates for the Securities, the
Company agrees to make such certificates available for inspection at least 24
hours prior to the Closing Date or the Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Securities by the Company to the respective
Underwriters shall be borne by the Company. The Company will pay and save each
Underwriter and any subsequent holder of the Securities harmless from any and
all liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other issuance taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Securities.
3. Representations and Warranties of the Company. The Company
---------------------------------------------
represents, warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 and a
registration statement (Registration No. ____) on Form S-3 relating to the
Securities
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and the shares of Common Stock to be delivered upon conversion thereof,
including a preliminary prospectus and such amendments to such registration
statement as may have been required to the date of this Agreement, has been
prepared by the Company under the provisions of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (collectively referred to as
the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. The term
"preliminary prospectus" as used herein means a preliminary prospectus as
contemplated by Rule 430 or Rule 430A ("Rule 430A") of the Rules and Regulations
included at any time as part of the registration statement. Copies of such
registration statement and amendments and of each related preliminary prospectus
have been delivered to the Representatives. If such registration statement has
not become effective, a further amendment to such registration statement,
including a form of final prospectus, necessary to permit such registration
statement to become effective will be filed promptly by the Company with the
Commission. If such registration has become effective, a final prospectus
containing information permitted to be omitted at the time of effectiveness by
Rule 430A will be filed by the
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Company with the Commission in accordance with Rule 424(b) of the Rules and
Regulations promptly after execution and delivery of the Price Determination
Agreement. The term "Registration Statement" means the registration statement
as amended at the time it becomes or became effective (the "Effective Date"),
including financial statements and all exhibits and any information deemed to be
included by Rule 430A. The term "Prospectus" means the prospectus as first
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
or, if no such filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date. Any reference herein to the
Registration Statement, any 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 which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the Effective Date or
the date of such preliminary prospectus or the Prospectus, as the case may be.
Any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the
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Exchange Act after the Effective Date, or the date of any preliminary prospectus
or the Prospectus, as the case may be, and deemed to be incorporated therein by
reference.
(b) On the Effective Date, the date the Prospectus is first filed
with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included or
incorporated by reference in the Prospectus, did or will comply with the
applicable provisions of the Act, the Exchange Act, the rules and regulations
thereunder (the "Exchange Act Rules and Regulations"), the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), the rules and regulations
thereunder (the "Trust Indenture Act Rules and Regulations") and the Rules and
Regulations and will contain all statements required to be stated therein in
accordance with the Act, the Exchange Act, the Exchange Act Rules and
Regulations and the Rules
10
and Regulations. On the Effective Date and when any post-effective amendment to
the Registration Statement becomes effective, no part of the Registration
Statement, or any such amendment did or will contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading. At the Effective Date, the date the Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission and at
the Closing Date, and if later, the Option Closing Date, the Prospectus did not
or will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. For all purposes of this
Agreement, the amounts of the selling concession and reallowance set forth in
the Prospectus constitute the only information relating to any Underwriter
furnished in writing to the
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Company by the Representatives specifically for inclusion in the Registration
Statement, the preliminary prospectus or the Prospectus. The Company has not
distributed any offering material in connection with the offering or sale of the
Securities other than the Registration Statement, the preliminary prospectus,
the Prospectus or any other materials, if any, permitted by the Act. On the
Effective Date, the date the Prospectus is first filed with the Commission
pursuant to Rule 497 (if required), and at all subsequent times to and including
the Closing Date or, if later, the Option Closing Date, the Indenture will
comply with all applicable provisions of the Trust Indenture Act and the Trust
Indenture Act Rules and Regulations.
(c) The documents which are incorporated by reference in the
preliminary prospectus and the Prospectus or from which information is so
incorporated by reference, when they became effective or were filed with the
Commission, as the case may be (the "Incorporated Documents"), complied in all
material respects with the requirements of the Act or the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and
Regulations; and any documents so filed and incorporated by reference subsequent
to the Effective Date
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shall, when they are filed with the Commission, conform in all material respects
with the requirements of the Act and the Exchange Act, as applicable, the
Exchange Act Rules and Regulations and the Rules and Regulations.
(d) The financial statements of the Company and its subsidiaries set
forth in the Registration Statement and Prospectus fairly present the financial
condition of the Company and its subsidiaries as of the dates indicated and the
results of operations and changes in financial position for the periods therein
specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise stated
therein).
(e) The Company and each of its subsidiaries has been duly
incorporated and is an existing corporation in good standing under the laws of
its jurisdiction of incorporation, has all requisite power and authority
(corporate and other) to conduct its business as described in the Registration
Statement and Prospectus and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in which the conduct of
its business requires such qualification, except where the failure to be so
qualified, considering all such cases in the aggregate, would not have a materi-
13
al adverse effect on the business, properties, financial position or results of
operations of the Company and its subsidiaries taken as a whole; and all of the
outstanding shares of capital stock of each such subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and (except as
otherwise stated in the Registration Statement) are owned beneficially by the
Company subject to no security interest, other encumbrance or adverse claim.
Except as set forth on Schedule II hereto, there are no outstanding rights,
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the Company or any
of its subsidiaries.
(f) All of the outstanding shares of Common Stock of the Company and
all other equity securities of the Company have been duly authorized and are
validly issued, fully paid and non-assessable and conform to the description
thereof in the Prospectus. The stockholders of the Company have no preemptive
rights with respect to the Common Stock. Except as set forth on Schedule II,
no person has any rights to the registration of securities by reason of the
Company's filing the Registration Statement with the Commission or otherwise.
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(g) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, neither the Company nor any of its subsidiaries has incurred
any liabilities or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are material to the
Company and its subsidiaries taken as a whole, and there has not been any
material change, on a consolidated basis, in the capital stock, current
liabilities or long-term obligations of the Company and its subsidiaries taken
as a whole, or any material adverse change, in the condition (financial or
other), business, net worth, results of operations or properties of the Company
and its subsidiaries taken as a whole.
(h) Except as set forth in the Prospectus, neither the Company nor
any of its subsidiaries is in violation, and, to the best knowledge of the
Company, no director, officer, or employee of the Company or any of its
subsidiaries is in violation, of any law, ordinance, administrative or
governmental rule or regulation or court decree (including, without limitation,
any relating to environmental regulation) applicable to it or them, and there is
not pending or, to the knowledge of
15
the Company, threatened any action, suit, or proceeding (including, without
limitation, any relating to environmental regulation) to which the Company or
any of its subsidiaries is a party, or, to the best knowledge of the Company, to
which any director, officer or employee of the Company is a party, before or by
any court or governmental agency or body, that in either case might result in
any material adverse change in the condition (financial or other), business, net
worth or results of operations of the Company and its subsidiaries taken as a
whole, or might materially and adversely affect the properties or assets
thereof.
(i) There are no contracts or documents of the Company or any of its
subsidiaries that are required to be filed as exhibits to the Registration
Statement or to the Incorporated Documents by the Act or the Exchange Act or by
the Rule and Regulations or the Exchange Act Rules and Regulations that have not
been so filed.
(j) Each of this Agreement and the Indenture has been duly
authorized, executed and delivered by the Company and each is a legal, valid and
binding agreement of the Company enforceable in accordance with its terms,
except to the extent that (a) enforcement thereof
16
may be limited by (1) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (2) general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or in equity); and (b) with
respect to this Agreement, as rights to indemnity and contribution hereunder may
be limited by federal or state laws relating to securities or the policies
underlying such laws.
(k) The Indenture has been duly qualified under the Trust Indenture
Act and conforms in all material respects to the description thereof in the
Registration Statement and the Prospectus.
(l) The Securities will conform in all material respects to the
description thereof in the Prospectus. The Securities have been duly authorized
and, when executed by the Company and authenticated by the Trustee in accordance
with the Indenture and delivered to the Underwriters against payment therefor in
accordance with the terms hereof and the Indenture, will have been validly
issued and delivered and will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as such enforcement may be limited by (1)
17
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (2) general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity). The shares of Common Stock issuable upon
conversion of the Securities have been duly authorized and reserved for issuance
and, when delivered upon conversion of the Securities, will have been validly
issued and fully paid and will be non-assessable and free of preemptive or
similar rights.
(m) The performance of this Agreement and the Indenture and the
consummation of the transactions herein and therein contemplated, including the
issuance of Common Stock upon conversion of the Securities, will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them is bound or to which any
of the property of the Company or any of its subsidiaries is subject, the
charter or bylaws 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 re-
18
spective properties, which breach, violation or default, with respect to any
such agreement or instrument, would have a material adverse effect on the
condition (financial or other), business, net worth, results of operations or
properties of the Company and its subsidiaries taken as a whole; no consent,
approval, authorization or order of, or filing with, any court or governmental
agency or body is required for the consummation of the transactions contemplated
by this Agreement or the Indenture in connection with the issuance or sale of
the Securities to be sold by the Company, except such as may be required under
the Act or state securities or Blue Sky laws; and the Company has full corporate
power and authority to authorize, issue and sell the Securities to be sold by it
as contemplated by this Agreement and the Indenture.
(n) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(o) The Company and each of its subsidiaries has all material
governmental licenses, certificates, permits, authorizations, approvals,
franchises or other rights necessary to engage in the business current-
19
ly conducted by it as described in the Prospectus, except such as may be
necessary for the development of and construction on specific properties or as
do not materially adversely affect the condition (financial or other), business,
net worth, results of operations or properties of the Company and its
subsidiaries taken as a whole, and the Company has no reason to believe that any
governmental body or agency is considering limiting, suspending or revoking any
such license, certificate, permit, authorization, approval, franchise or right.
(p) The Company is not in breach or violation of any of the terms and
provisions of, or in default under, any agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them is
bound or to which any of the property of the Company or any of its subsidiaries
is subject, which breach, violation or default would have a material adverse
effect on the condition (financial or other), business, net worth, results of
operations or properties of the Company and its subsidiaries taken as a whole.
(q) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as
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such terms are defined in the Investment Company Act of 1940, as amended.
4. Agreements of the Company. The Company agrees with the several
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Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Securities by an Underwriter or
dealer, file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly, and
will confirm such advice in writing, (1) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (2) of any request by the Commission for amendments or supplements to
the Registration Statement or the Prospectus or for additional information, (3)
of the issuance by the Com-
21
mission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof, (4) of the happening of any event during the period mentioned in the
second sentence of Section 4(e) that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading and (5) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If the Company
has omitted any information from the Registration Statement pursuant to Rule
430A, the Company will use its best efforts to comply with the provisions of and
make all requisite filings with the Commission pursuant to
22
said Rule 430A and to notify the Representatives promptly of all such filings.
(c) The Company will furnish to the Representatives, without charge,
two signed copies of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto (including any document filed under the Exchange Act and deemed
to be incorporated by reference into the Prospectus), and will furnish to the
Representatives, without charge, for transmittal to each of the other
Underwriters, a copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules but without
exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the
Company will deliver to each of the Underwriters, without charge, as many copies
of the Prospectus or any amendment or supplement thereto, as the Representatives
may reasonably request. The Company consents to the use of the Prospectus or
any amendment or supplement thereto by the several Underwriters and by all
23
dealers to whom the Securities may be sold, both in connection with the offering
or sale of the Securities and for any period of time thereafter during which the
Prospectus is required by law to be delivered in connection therewith. If
during such period of time any event shall occur which in the judgment of the
Company or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto, and
will deliver to each of the Underwriters, without charge, such number of copies
thereof as the Representatives may reasonably request. The Company shall not
file any document under the Exchange Act before the termination of the offering
of the Securities by the Underwriters if such document would be deemed to be
incorporated by reference into the Prospectus which is not approved by the
Representatives after reasonable notice thereof.
(f) Prior to any public offering of the Securities by the
Underwriters, the Company will cooperate with the Representatives and counsel to
the Under-
24
writers in connection with the registration or qualification of the Securities
and the shares of Common Stock to be delivered upon conversion thereof for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may request; provided, that in no event shall the Company 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 general service of
process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the Effective Date,
the Company will furnish to the Representatives and each other Underwriter who
may so request copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar
25
quarter in which the Effective Date falls, an earnings statement (which need not
be audited but shall be in reasonable detail) for a period of 12 months ended
commencing after the Effective Date, and satisfying the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company will pay, or
reimburse if paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
but not limited to costs and expenses of or relating to (1) the preparation,
printing and filing of the Registration Statement and exhibits to it, each
preliminary prospectus, the Prospectus, any amendment or supplement to the
Registration Statement or the Prospectus and the Indenture, (2) the preparation
and delivery of certificates representing the Securities and the shares of
Common Stock to be delivered upon conversion thereof, (3) the printing of this
Agreement, the Agreement Among Underwriters, any Dealer Agreements and any
Underwriters' Questionnaire, (4) furnishing (including costs of shipping and
mailing) such copies of the Registration State-
26
ment, the Prospectus and any preliminary prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the offering
and sale of the Securities by the Underwriters or by dealers to whom Securities
may be sold, (5) the listing of the Securities and the shares of Common Stock
to be delivered upon conversion thereof on the New York Stock Exchange, (6) any
filings required to be made by the Underwriters with the NASD, and the fees,
disbursements and other charges of counsel for the Underwriters in connection
therewith, (7) the registration or qualification of the Securities and the
shares of Common Stock to be delivered upon conversion thereof for offer and
sale under the securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 4(f), including the fees, disbursements and other charges of
counsel to the Underwriters in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (8) counsel
to the Company, (9) the transfer agent and registrar for the Securities and the
shares of Common Stock to be delivered upon conversion thereof, (10) the rating
of the Securities by one or more rating agencies and (11) the Trustee and any
agent of the Trustee and the fees, disbursements and other
27
charges of counsel for the Trustee in connection with the Indenture and the
Securities.
(j) If this Agreement shall be terminated by the Company pursuant to
any of the provisions hereof (other than pursuant to Section 8) or if for any
reason the Company shall be unable to perform its obligations hereunder, the
Company will reimburse the several Underwriters for all out-of-pocket expenses
(including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith.
(k) The Company will not at any time, directly or indirectly, take
any action intended, or which might reasonably be expected, to cause or result
in, or which will constitute, stabilization of the price of the Securities or
the shares of Common Stock to be delivered upon conversion thereof to facilitate
the sale or resale of any of the Securities or such shares of Common Stock.
(l) The Company will apply the net proceeds from the offering and
sale of the Securities in the manner set forth in the Prospectus under "Use of
Proceeds".
28
(m) The Company will not claim the benefit of any usury law against
any holders of Securities.
(n) The Company will not, and will cause ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to enter
into an agreement with the Representatives in the form set forth in Exhibit B to
the effect that he will not, for a period of 90 days after the commencement
of the public offering of the Securities, without the prior written consent of
the Representatives, sell, contract to sell or otherwise dispose of any shares
of Common Stock or rights to acquire such shares (other than pursuant to
employee stock option plans or in connection with other employee incentive
compensation arrangements).
5. Conditions of Obligations of the Underwriters. In addition to
---------------------------------------------
the execution and delivery of the Price Determination Agreement, the obligations
of each Underwriter hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 5:00 P.M., New York City
time, on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Representatives and all filings required by Rule
424 of
29
the Rules and Regulations and Rule 430A shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Securities and the shares of Common Stock to be delivered upon conversion
thereof under the securities or Blue Sky laws of any jurisdiction shall be in
effect and no proceeding for such purpose shall be pending before or threatened
or contemplated by the Commission or the authorities of any such jurisdiction,
(iii) any request for additional information on the part of the staff of the
Commission or any such authorities shall have been complied with to the
satisfaction of the staff of the Commission or such authorities and (iv) after
the date hereof no amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was first submitted to
the Representatives and the Representatives did not object thereto in good
faith, and the Representatives shall have received certificates, dated the
Closing Date and signed by the Chief Executive Offi-
30
cer or the Chairman of the Board of Directors of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii).
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus (i) there shall not have been a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus, and (ii) neither the Company nor any of its subsidiaries shall have
sustained any material loss or interference with its business or properties from
fire, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not set forth in the Registration Statement
and the Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or
31
inadvisable to consummate the sale and delivery of the Securities by the
Underwriters in accordance with the terms hereof and thereof.
(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
subsidiaries or any of their respective officers or directors in their
capacities as such, before or by any Federal, state or local court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling, decision or
finding would materially and adversely affect the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company and its subsidiaries taken as a whole.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects at the
Closing Date and, with respect to the Option Securities, at the Option Closing
Date, as if made at the Closing Date, and all covenants and agreements herein
contained to be performed on the part of the Company and all conditions herein
32
contained to be fulfilled or complied with by the Company at or prior to the
Closing Date and, with respect to the Option Securities, at or prior to the
Option Closing Date, shall have been duly performed, fulfilled or complied with.
(f) The Representatives shall have received opinions, dated the
Closing Date and, with respect to the Option Securities, the Option Closing
Date, and satisfactory in form and substance to counsel for the Underwriters,
from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Company, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
general counsel to the Company, and ▇▇▇▇▇ ▇▇▇▇▇ Associates, counsel to L&W
Investments, to the effect set forth in Exhibits C1, C2 and C3, respectively.
(g) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Securities, the Option Closing
Date, from Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, counsel to the Underwriters,
with respect to the Registration Statement, the Prospectus and this Agreement,
which opinion shall be satisfactory in all respects to the Representatives.
(h) Concurrently with the execution and delivery of this Agreement,
or, if the Company elects to
33
rely on Rule 430A, on the date of the Prospectus, the Accountants shall have
furnished to the Representatives a letter, dated the date of its delivery,
addressed to the Representatives and in form and substance satisfactory to the
Representatives, confirming that they are independent accountants with respect
to the Company as required by the Act and the Rules and Regulations and with
respect to the financial and other statistical and numerical information
contained or incorporated by reference in the Registration Statement. At the
Closing Date and, as to the Option Securities, the Option Closing Date, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, which shall confirm, on the basis of a review in accordance
with the procedures set forth in the letter from the Accountants, that nothing
has come to their attention during the period from the date of the letter
referred to in the prior sentence to a date (specified in the letter) not more
than five days prior to the Closing Date and the Option Closing Date which would
require any change in their letter dated the date hereof if it were required to
be dated and delivered at the Closing Date and the Option Closing Date.
34
(i) Concurrently with the execution and delivery of this Agreement
or, if the Company elects to rely on Rule 430A, on the date of the Prospectus,
and at the Closing Date and, as to the Option Securities, the Option Closing
Date, there shall be furnished to the Representatives an accurate certificate,
dated the date of its delivery, signed by each of the Chief Executive Officer
and the Chief Financial Officer of the Company, in form and substance
satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus (including any documents filed
under the Exchange Act and deemed to be incorporated by reference into the
Prospectus) and (A) as of the date of such certificate, such documents are
true and correct in all material respects and do not omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein not untrue or misleading and (B) in the case of the
certificate delivered at the Closing Date and the Option Closing Date,
since the Effective Date no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order
35
to make the statements therein not untrue or misleading in any material
respect and there has been no document required to be filed under the
Exchange Act and the Exchange Act Rules and Regulations that upon such
filing would be deemed to be incorporated by reference into the Prospectus
that has not been so filed.
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects.
(iii) Each of the covenants required herein to be performed by
the Company on or prior to the delivery of such certificate has been duly,
timely and fully performed and each condition herein required to be
complied with by the Company on or prior to the date of such certificate
has been duly, timely and fully complied with.
(j) On or prior to the Closing Date, the Representatives shall have
received the executed agreement referred to in Section 4(n).
(k) The Securities and the shares of Common Stock to be delivered
upon conversion thereof
36
shall be qualified for sale in such states as the Representatives may reasonably
request, each such qualification shall be in effect and not subject to any stop
order or other proceeding on the Closing Date and the Option Closing Date.
(l) Prior to the Closing Date, the Securities and the shares of
Common Stock to be delivered upon conversion thereof shall have been duly
authorized for listing by the New York Stock Exchange upon official notice of
issuance.
(m) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus or any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, as
to the accuracy at the Closing Date and the Option Closing Date of the
representations and warranties of the Company herein, as to the performance by
the Company of its obligations hereunder, or as to the fulfillment of the
conditions concurrent and
37
precedent to the obligations hereunder of the Representatives.
6. Indemnification.
---------------
(a) The Company will indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person, if any, who controls each 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, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based on any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any docu-
38
ments filed under the Exchange Act and deemed to be incorporated by reference
into the Prospectus, or the omission or alleged omission to state in such
document a material fact required to be stated in it or necessary to make the
statements in it not misleading, provided that the Company will not be liable to
the extent that such loss, claim, liability, expense or damage arises from the
sale of the Securities in the public offering to any person by an Underwriter
and is based on an untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of any Underwriter expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus, and provided further that the Company
will not be liable to any Underwriter, the directors, officers, employees or
agents of such Underwriter or any person controlling such Underwriter with
respect to any loss, claim, liability, expense, charge or damage arising out of
or based on any untrue statement or alleged untrue statement or omission or
alleged omission to state a material fact in any preliminary prospectus which is
corrected in the Prospectus if the person asserting any such loss, claim,
liabil-
39
ity, charge or damage purchased Securities from such Underwriter but was not
sent or given a copy of the Prospectus at or prior to the written confirmation
of the sale of such Securities to such person. This indemnity agreement will be
in addition to any liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of such Underwriter expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus. This indemnity will be in addition to
any liability that each Underwriter might otherwise have.
40
(c) Any party that proposes to assert the right to be indemnified
under this Section 6 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to
41
assume the defense, the indemnifying party will not be liable to the indemnified
party for any legal or other expenses except as provided below and except for
the reasonable costs of investigation subsequently incurred by the indemnified
party in connection with the defense. The indemnified party will have the right
to employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases
42
the reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of,
43
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the Underwriters,
such as persons who control the Company within the meaning of the Act, officers
of the Company who signed the Registration Statement and directors of the
Company, who also may be liable for contribution) to which the Company and any
one or more of the Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the
44
Underwriters, on the other, with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Representatives on behalf of the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 6(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to above in this Section 6(d) shall be deemed to include, for
purpose of this Section 6(d), any legal or other expenses reasonably
45
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this Section 6(d),
no Underwriter shall be required to contribute any amount in excess of the
underwriting discounts received by it, and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 6(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 6(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not
46
relieve the party or parties from whom contribution may be sought from any other
obligation it or they may have under this Section 6(d). No party will be liable
for contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Underwriters, (ii) acceptance
of any of the Securities and payment therefor or (iii) any termination of this
Agreement.
7. Termination. The obligations of the several Underwriters under
-----------
this Agreement may be terminated at any time on or prior to the Closing Date
(or, with respect to the Option Securities, on or prior to the Option Closing
Date), by notice to the Company from the Representatives, without liability on
the part of any Underwriter to the Company, if, prior to delivery and payment
for the Securities (or the Option Securities, as the case may be), in the sole
judgment of the Representatives, (i) trading in any of the equity securities of
the
47
Company shall have been suspended by the Commission, by an exchange or by the
National Association of Securities Dealers Automated Quotation National Market
System, (ii) trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum or maximum prices shall have
been generally established on such exchange, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by such exchange or by order of the
Commission or any court or other governmental authority, (iii) a general banking
moratorium shall have been declared by either Federal or New York State
authorities or (iv) any material adverse change in the financial or securities
markets in the United States or in political, financial or economic conditions
in the United States or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or other
calamity or crisis shall have occurred the effect of any of which is such as to
make it, in the sole judgment of the Representatives, impracticable or
inadvisable to market the Securities on the terms and in the manner contemplated
by the Prospectus.
48
8. Substitution of Underwriters. If any one or more of the
----------------------------
Underwriters shall fail or refuse to purchase any of the Firm Securities which
it or they have agreed to purchase hereunder, and the aggregate principal amount
of Firm Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Firm Securities, the other Underwriters shall be obligated,
severally, to purchase the Firm Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase, in the proportions which
the principal amount of Firm Securities which they have respectively agreed to
purchase pursuant to Section I bears to the aggregate principal amount of Firm
Securities which all such non-defaulting Underwriters have so agreed to
purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum principal amount of Firm Securities
which any Underwriter has become obligated to purchase pursuant to Section I be
increased pursuant to this Section 8 by more than one-ninth of the principal
amount of Firm Securities agreed to be purchased by such Underwriter without the
prior written consent of such Underwriter. If any Underwriter or
49
Underwriters shall fail or refuse to purchase any Firm Securities and the
aggregate principal amount of Firm Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase exceeds one-tenth of
the aggregate principal amount of the Firm Securities and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Firm Securities are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company for the purchase or sale of any Securities under this Agreement.
In any such case either the Representatives or the Company shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken pursuant to this Section 8 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. Miscellaneous. Notice given pursuant to any of the provisions of
-------------
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the
50
Company, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer, with a copy to: ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq. or (b) if to the Underwriters, to the Representatives at the
offices of PaineWebber Incorporated, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department, with a copy to: Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. Any such notice shall be effective only upon
receipt. Any notice under Section 7 or 8 may be made by telex or telephone, but
if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters and the Company and of the controlling persons, directors
and officers referred to in Section 6, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" as used in this Agreement
shall not include a purchaser, as such purchaser, of Securities from any of the
several Underwriters.
51
Any action required or permitted to be taken by the Representatives
under this Agreement may be taken by them jointly or by PaineWebber
Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive any
right they may have to trial by trial by jury in respect of any claim based upon
or arising out of this Agreement or the transactions contemplated hereby.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
CONTINENTAL HOMES HOLDING CORP.
52
By: ______________________
Title:
53
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By: ________________________
Title:
By: ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: ________________________
Title:
54
SCHEDULE I
UNDERWRITERS
Principal Amount
of Firm Securities
Name To Be Purchased
---- ------------------
PaineWebber Incorporated $
▇▇▇▇▇ ▇▇▇▇▇▇ Inc $
-----------
Total $75,000,000
===========
SCHEDULE II
1. Stock Options
As of September 30, 1995, the Company granted and had outstanding non-
qualified stock options to purchase an aggregate 219,690 shares of Common Stock
under its 1988 Stock Incentive Plan and its Restated 1986 Stock Incentive Plan.
2. 6-7/8% Convertible Subordinated Notes due 2002
The 6-7/8% Convertible Subordinated Notes due 2002 are
convertible into 1,489,250 shares of Common Stock.
3. ▇▇▇▇ Agreement
Until January 19, 1996, the Company has the right to buy from ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇ (the "Wades") and the Wades have the right to sell to the
Company up to 488,000 shares of Common Stock of the Company held by the Wades at
a price of $20.50 per share.
EXHIBIT A
CONTINENTAL HOMES HOLDING CORP.
-------------------------------
PRICE DETERMINATION AGREEMENT
-----------------------------
October __, 1995
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Reference is made to the Underwriting Agreement, dated __________,
1995 (the "Underwriting Agreement"), among Continental Homes Holding Corp., a
Delaware corporation (the "Company"), and the several Underwriters named in
Schedule I thereto or hereto (the "Underwriters"), for whom PaineWebber
Incorporated and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. are acting as representatives (the
"Representatives"). The Underwriting Agreement provides for the purchase by the
Underwriters from the Company, subject to the terms and conditions set forth
therein, of an aggregate of $75,000,000 (the "Firm Securities") principal amount
of the Company's __% Convertible Subordinated Notes due 2005 (the "Securities")
to be issued pursuant to an Indenture dated as of __________, 1995 between the
Company and Manufacturers and Traders Trust Company, as Trustee. This Agreement
is the Price Determination Agreement referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree with the Representatives that the purchase price for the Firm Securities
to be paid by each of the several Underwriters shall be _____% of the aggregate
principal amount of the Firm Securities set forth opposite the name of such
Underwriter in Schedule I attached hereto [plus accrued interest, if any, from
____, 1995 to the Closing Date].
The Company represents and warrants to each of the Underwriters that
the representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
As contemplated by the Underwriting Agreement, attached as Schedule I
is a completed list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of the
agreement among the Underwriters and the Company, please sign and return to the
Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.
Very truly yours,
CONTINENTAL HOMES HOLDING CORP.
By: ____________________
Title:
2
Confirmed as of the date
first above mentioned.
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By: ________________________
Title:
By: ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: ________________________
Title:
3
EXHIBIT B
[DATE]
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
In consideration of the agreement of the several Underwriters, for
which PaineWebber Incorporated and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (the "Representatives")
intend to act as Representatives to underwrite a proposed public offering (the
"Offering") of an aggregate of $75,000,000 principal amount of __% Convertible
Subordinated Notes due 2005 of Continental Homes Holding Corp., a Delaware
corporation (the "Company"), as contemplated by a registration statement with
respect to such securities filed with the Securities and Exchange Commission on
Form S-3 (Registration No. _________), the undersigned hereby agrees that the
undersigned will not, for a period of 90 days after the commencement of the
public offering of such securities, without the prior written consent of the
Representatives, offer to sell, sell, contract to sell or otherwise dispose of
any shares of the Company's common
stock or rights to acquire shares of the Company's common stock.
Very truly yours,
By:___________________
Print Name:___________
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EXHIBIT C1
Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
Counsel to the Company
----------------------
1. Each of the Company and each of its subsidiaries, other than the
Company's subsidiaries incorporated in the States of Arizona and California, has
been duly incorporated and is an existing corporation in good standing under the
laws of its jurisdiction of incorporation; has all requisite corporate power and
authority to conduct its business as described in the Registration Statement and
Prospectus and is duly qualified to do business in each jurisdiction in which
such counsel has been advised it owns or leases real property or in which the
conduct of its business requires such qualification, except where the failure to
be so qualified, considering all such cases in the aggregate, would not have a
material adverse effect on the business, net worth, properties, financial
position or results of operations of the Company and its subsidiaries taken as a
whole; all of the outstanding shares of capital stock of each such subsidiary
have been duly authorized and validly issued, are fully paid and non-assessable
and, to the knowledge of such counsel, (except as otherwise stated in the Regis-
tration Statement) are owned beneficially by the Company subject to no security
interest, other encumbrance or adverse claim; and to the knowledge of such
counsel, except as set forth on Schedule A hereto, there are no outstanding
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in the
Company or any of its subsidiaries.
2. All of the outstanding shares of Common Stock and all other equity
securities of the Company set forth on Schedule A hereto, have been duly
authorized and validly issued, are fully paid and non-assessable and conform to
the description thereof in the Prospectus; and the stockholders of the Company
have no preemptive rights with respect to the shares of Common Stock issuable
upon conversion of the Securities.
3. The Registration Statement has become effective under the Act; if
required, the Prospectus has been filed as required by Section 3(a) hereof; 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 has
been instituted or threatened by the Commission.
2
4. The Registration Statement when it became effective, and the
Prospectus and any amendment or supplement thereto, on the date of filing
thereof with the Commission and at the Closing Date, appeared to comply as to
form in all material respects with the requirements of the Act and the Rules and
Regulations; and the Incorporated Documents, when they were filed with the
Commission under the Exchange Act, appeared to comply as to form in all material
respects with the requirements of the Exchange Act and the Exchange Act Rules
and Regulations (it being understood that such counsel need express no opinion
as to the financial statements or other financial data included in any of the
documents mentioned in this clause and as to the Statement of Eligibility on
Form T-1).
5. There is no statute or contract or other document known to such
counsel of a character required to be described in the Registration Statement,
the Prospectus or the Incorporated Documents or to be filed as an exhibit to the
Registration Statement or the Incorporated Documents, which is not described or
filed as required.
6. The Company has full corporate power and authority to enter into
this Agreement and the Indenture and to issue the Securities. Each of this
Agreement and
3
the Indenture has been duly authorized, executed and delivered by the Company
and each is the legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, except that (a) the enforceability
thereof may be subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' and debtors' rights and remedies generally, (b) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceedings therefor may be brought and (c) rights to
indemnification and contribution hereunder may be limited by Federal and state
securities laws or the policies underlying such laws.
7. The Indenture has been duly qualified under the Trust Indenture
Act and conforms in all material respects to the description thereof in the
Registration Statement and the Prospectus.
8. The Securities conform in all material respects to the description
thereof in the Prospectus. The Securities have been duly authorized and, when
executed by the Company and authenticated by the Trustee in accordance with the
Indenture and delivered to the Under-
4
writers against payment therefor in accordance with the terms hereof and the
Indenture, will have been validly issued and delivered and will constitute valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms, subject to (a) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, or other similar laws now or hereafter
in effect relating to creditors' and debtors' rights and remedies generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceedings therefor may be brought. The shares of
Common Stock issuable upon conversion of the Securities have been duly
authorized and reserved for issuance and, when delivered upon conversion of the
Securities, will have been validly issued and fully paid and will be non-
assessable and free of preemptive or similar rights.
9. The execution and delivery of this Agreement, the Indenture and
the Securities, the performance of this Agreement, the Indenture and the
Securities and the consummation of the transactions herein and therein
contemplated, including the issuance of Common Stock upon conversion of the
Securities, will not result in a breach
5
or violation of any of the terms and provisions of, or constitute a default
under, any statute or any material agreement or instrument known to such counsel
to which the Company is a party or by which it is bound or to which any of the
property of the Company is subject, the Company's charter or by-laws, or any
order, rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of its properties;
and no consent, approval, authorization or order of, or filing with, any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement or the Indenture in connection with
the issuance or sale of the Securities to be sold by the Company, except such as
have been obtained under the Act and such as may be required under state
securities laws in connection with the purchase and distribution of the
Securities by the Underwriters.
10. The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
6
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, your
representatives and representatives of your counsel at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus, on the basis of the
foregoing (relying as to materiality to a large extent upon the opinions of
officers and other representatives of the Company), no facts have come to such
counsel's attention that lead them to believe either that the Registration
Statement at the time the Registration Statement became effective contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus as of its date contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading
7
(it being understood that such counsel is not requested to and need not express
any comment with respect to the financial statements and schedules and other
financial and statistical data included or incorporated by reference in the
Registration Statement or Prospectus and the Statement of Eligibility on Form
T-1).
In rendering the opinions set forth in this paragraph, ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ may rely as to matters of law other than the law of the State of New
York, the General Corporation Law of the State of Delaware and the federal law
of the United States on the opinions of foreign counsel retained by it or the
Company on behalf of itself, provided that such counsel is satisfactory to you
and your counsel and that a copy of such opinion is attached to the opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇.
8
EXHIBIT (C)(2)
Form of Opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
General Counsel to the Company
------------------------------
1. Each of the Company's subsidiaries incorporated in the State of
Arizona has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Arizona; has all requisite corporate
power and authority to conduct its business as described in the Registration
Statement and Prospectus and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in which the conduct of
its business requires such qualification, except where the failure to be so
qualified, considering all such cases in the aggregate, would not have a
material adverse effect on the business, net worth, properties, financial
position or results of operations of the Company and its subsidiaries taken as a
whole; all of the outstanding shares of capital stock of each such subsidiary
have been duly authorized and validly issued, are fully paid and non-assessable
and, to the knowledge of such counsel, (except as otherwise stated in the
Registration Statement) are owned beneficially by the Company subject to no
security interest, other encumbrance or adverse
1
claim, and except as set forth in Schedule A hereto, there are no outstanding
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in such
subsidiaries.
2. There are no legal or governmental proceedings pending or
threatened to which the Company is a party or to which any of its property or
assets is subject, including ordinary routine litigation incidental to its
business, which are, considered in the aggregate, likely to result in any
material adverse effect on the business, properties, net worth, financial
position or results of operations of the Company and its subsidiaries taken as a
whole.
2
EXHIBIT C2
Form of Opinion of ▇▇▇▇▇ ▇▇▇▇▇ Associates,
Counsel to L&W Investments, Inc.
--------------------------------
L&W Investments, Inc., a California corporation and a wholly-owned
subsidiary of the Company, is a corporation duly organized and validly existing
under the laws of the State of California and has the power and authority to
engage in the business authorized by its Articles of Incorporation.
1