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XXX XXXX CORPORATION
9 3/4% SENIOR SUBORDINATED DEBENTURES
UNDERWRITING AGREEMENT
DATED JANUARY 15, 1997
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UNDERWRITING AGREEMENT
January 15, 1997
XXXXXX, READ & CO. INC.
XXXXXXX, XXXXX & CO.
c/x Xxxxxx, Read & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxx Xxxx Corporation (the "Company") proposes to issue and sell to the
Underwriters named in Schedule I annexed hereto (the "Underwriters")
$150,000,000 aggregate principal amount of its 9 3/4% Senior Subordinated
Debentures due 2008, (the "Debentures"). The Debentures are described in the
Prospectus which is referred to below.
The Debentures are to be issued pursuant to an Indenture (the
"Indenture") to be dated as of January 21, 1997, among the Company, State Street
Bank and Trust Company, as trustee, and State Street Bank and Trust Company,
N.A., as agent.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a shelf registration statement on Form S-3, and Amendment
No.1 thereto, including a prospectus, relating to $200,000,000 of securities,
including debentures, which incorporates by reference documents that the Company
has filed or will file in accordance with the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
(collectively called the "Exchange Act"). As used in this Agreement, "Base
Prospectus" shall mean the prospectus included in the Registration Statement
when it became effective under the Act on July 21, 1995, as it may have been
amended subsequent to that date to the date hereof. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of a preliminary
prospectus supplement, including the Base Prospectus contained therein and all
documents incorporated by reference therein (collectively, the "Preliminary
Prospectus") relating to the Debentures. Except where the context otherwise
requires, the shelf registration statement and Amendment No. 1 thereto, as in
effect at the time of execution of this Agreement, including all documents filed
as part thereof or incorporated by reference therein, and including the Base
Prospectus, is herein called the "Registration Statement," and the final
prospectus supplement relating to the Debentures, including (i) the Base
Prospectus and (ii) all documents incorporated therein or in the Base Prospectus
by reference, in the form first filed by the Company with the Commission
pursuant to Rule 424(b)(2) under the Act, is herein called the "Prospectus."
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The Company and the Underwriters agree as follows:
1. Sale and Purchase: Upon the basis of the warranties and
representations and the other terms and conditions herein set forth, the Company
agrees to sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, the aggregate
principal amount of Debentures set forth opposite the name of such Underwriter
in Schedule I attached hereto, in each case at a purchase price of 96.750% of
the principal amount thereof, plus accrued interest from the Time of Purchase
(as hereinafter defined). You shall release the Debentures for public sale
promptly after this Agreement becomes effective. You may from time to time
increase or decrease the public offering price after the initial public offering
to such extent as you may determine.
2. Payment and Delivery: Payment of the purchase price for the
Debentures shall be made to the Company in same day funds at the office of
Xxxxxx, Read & Co. Inc. in New York City, against delivery of the certificates
for the Debentures to you for the respective accounts of the Underwriters. Such
payment and delivery shall be made at 10:00 A.M., New York City time, on January
21, 1997 (unless another time shall be agreed to by you and the Company or
unless postponed in accordance with the provisions of Section 8 hereof). The
time at which such payment and delivery are actually made is hereinafter
sometimes called the "Time of Purchase." Certificates for the Debentures shall
be delivered to you in definitive form in such names and in such denominations
as you shall specify on the second business day (1) preceding the Time of
Purchase. For the purpose of expediting the checking of the certificates for the
Debentures by you, the Company agrees to make such certificates available to you
for such purpose at lease one full business day preceding the Time of Purchase.
3. Representations and Warranties of the Company: The Company
represents and warrants to each of the Underwriters that:
(a) each Preliminary Prospectus filed pursuant to Rule 424
under the Act complied in all material respects with the Act; when the
Registration Statement became effective and at all times subsequent
thereto up to the Time of Purchase, the Registration Statement and the
Prospectus, and any supplements or amendments thereto, complied and
will comply in all material respects with the provisions of the Act and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the Registration Statement at all such times did not and
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus at all
such times did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no warranty or
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1 As used herein, "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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representation with respect to any statement contained in the
Prospectus in reliance upon and in conformity with information
concerning the Underwriters and furnished in writing by or on behalf of
any Underwriter through you to the Company expressly for use in the
Prospectus and set forth in the section of the Prospectus entitled
"Underwriting"; the documents incorporated by reference in the
Prospectus, at the time they were filed (or, if an amendment with
respect to any such document was filed, when such amendment was filed)
with the Commission, complied in all material respects with the
requirements of the Exchange Act, and, except to the extent, if any,
they are modified or superseded by the Registration Statement or the
Prospectus, do not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and the Company has
complied and, until completion of the offering of the Debentures will
continue in the future to comply, with its obligations under the
Exchange Act;
(b) the conditions for use of a registration statement on Form
S-3 set forth in the General Instructions to Form S-3 have been
satisfied with respect to the Company and the transactions contemplated
by this Agreement and the Registration Statement and Prospectus;
(c) the consolidated capitalization of the Company as of
September 30, 1996 is as set forth under the column entitled "September
30, 1996 - Actual" in the section of the Prospectus entitled
"Capitalization" and, as of the Time of Purchase, assuming the Time of
Purchase had been September 30, 1996, the consolidated capitalization
of the Company shall be as set forth under the column entitled
"September 30, 1996 - As Adjusted" in the section of the Prospectus
entitled "Capitalization"; all of the issued and outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and nonassessable; the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with full power and authority
(i) to own its properties and conduct its business as described in the
Registration Statement and Prospectus, and (ii) to execute, deliver and
perform its obligations under this Agreement and the Indenture and to
issue, sell and deliver the Debentures as herein contemplated;
(d) the Company and each of its subsidiaries (or, as to
Terravita Marketplace L.L.C., an Arizona limited liability company
("TLLC"), consolidated affiliates) listed on Schedule II attached
hereto (the "Operating Subsidiaries") are duly qualified or licensed by
and are in good standing in each jurisdiction in which they conduct
their respective business and in which the failure to be so licensed or
qualified could have a material adverse effect on the condition
(financial or other), business, prospects or results of operations of
the Company and the subsidiaries taken as a whole; the Company and each
of the Operating Subsidiaries are in compliance with the laws, orders,
rules, regulations and directives issued or administered by each such
jurisdiction, except where the failure to be in compliance will not
have a material adverse effect on the condition (financial or other),
business, prospects or
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results of operations of the Company and its subsidiaries taken as a
whole; all of the outstanding capital stock or other securities
evidencing equity ownership of each of the Operating Subsidiaries have
been duly and validly authorized and issued and are fully paid and
non-assessable, and, except with respect to TLLC, are directly or
indirectly owned by the Company; the Company directly or indirectly
owns a 60% percent membership interest in TLLC; each Operating
Subsidiary has been duly organized and is validly existing under the
laws of the jurisdiction pursuant to which such Operating Subsidiary is
incorporated or organized, and each Operating Subsidiary has full power
and authority to own its properties and conduct its business as
described in the Registration Statement and Prospectus; no subsidiary
of the Company other than an Operating Subsidiary, accounted for more
than one percent of the Company's consolidated assets, revenues or net
earnings (excluding for purposes of computing net earnings, the
non-cash loss incurred during the fiscal year ended June 30, 1996 in
connection with the adoption of Statement of Financial Accounting
Standards No. 121) at and for the fiscal year ended June 30, 1996 or at
and for the three months ended September 30, 1996 or is expected to
account for more than one percent of the Company's consolidated assets,
revenues or net earnings at and for the fiscal year ending June 30,
1997; and the Company and the Operating Subsidiaries accounted for more
than 99% of the Company's consolidated assets, revenues and net
earnings at and for the fiscal year ended June 30, 1996 and at and for
the three months ended September 30, 1996 and are expected to account
for more than 99% of the Company's consolidated assets, revenues and
net earnings at and for the fiscal year ending June 30, 1997;
(e) neither the Company nor any of its subsidiaries is in
breach of, or in default under (nor has any event occurred which with
notice, lapse of time or both would constitute a breach of, or default
under), its respective charter or bylaws or in the performance or
observance of any license, obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, bank loan or
credit agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which any of them is bound,
which breach or default could have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole; and
the execution, delivery and performance of this Agreement and the
issuance of the Debentures and consummation of the transactions
contemplated hereby will not conflict with, or result in any breach of,
or constitute a default under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of, or default
under), any provision of the charter, bylaws or operating agreement of
the Company or any of the Operating Subsidiaries or under any provision
of any license, indenture, mortgage, deed of trust, bank loan or credit
agreement or other agreement or instrument to which the Company or any
of the Operating Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of its Operating
Subsidiaries;
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(f) the Indenture has been duly authorized by the Company and
when executed and delivered by the Company will be a legal, valid and
binding agreement of the Company enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of equity;
(g) the Debentures have been duly authorized by the Company
and when executed and delivered by the Company will constitute legal,
valid and binding obligations of the Company enforceable in accordance
with their terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of equity;
(h) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of
the Company enforceable in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by federal or
state securities laws or announced public policy;
(i) the Debentures and the Indenture conform in all material
respects to the descriptions thereof contained in the Prospectus;
(j) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Debentures as contemplated hereby
other than registration of the Debentures under the Act, any necessary
qualification or exemption under the securities or blue sky laws of the
various jurisdictions in which the Debentures are being offered by the
Underwriters and the filing of this Agreement and the Indenture with
the Commission as exhibits to a Form 8-K, which filing of this
Agreement the Company agrees to make in a timely manner and in any
event prior to the Time of Purchase and which filing of the Indenture
the Company agrees to make in a timely manner, and in any event within
5 days of the Time of Purchase;
(k) no person has the right, contractual or otherwise, to
cause the Company to issue to it, or register pursuant to the Act, any
securities of the Company as a consequence of the issue and sale of the
Debentures to the Underwriters hereunder, nor does any person have
preemptive rights, rights of first refusal or other rights to purchase
any of the Debentures;
(l) KPMG Peat Marwick LLP, whose reports on the consolidated
financial statements of the Company and its subsidiaries are included
or incorporated by reference in the Registration Statement and
Prospectus, are independent public accountants with respect to the
Company as required by the Act;
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(m) each of the Company and the Operating Subsidiaries has all
necessary licenses, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all authorizations,
consents and approvals necessary to date from other persons, in order
to conduct its respective business, in each case where the absence of
which would have a material adverse effect on the condition (financial
or other), business, prospects or results of operations of the Company
and its subsidiaries taken as a whole; neither the Company nor any of
the Operating Subsidiaries is in violation of, or in default under, any
such license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any of the Operating Subsidiaries
the effect of which would have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole;
(n) all legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(o) there is no action, suit, or proceeding pending or, to the
best knowledge of the Company, threatened against the Company or any of
its subsidiaries or any of their respective properties, at law or in
equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency
that could result in a judgment, decree or order having a material
adverse effect on the condition (financial or other), business,
prospects or results of operations of the Company and its subsidiaries
taken as a whole;
(p) the audited financial statements included in the
Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as
of the dates indicated and the consolidated results of operations and
cash flows of the Company and its subsidiaries for the periods
specified; such financial statements have been prepared in conformity
with generally accepted accounting principles, applied on a consistent
basis during the periods involved;
(q) subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as
may be otherwise stated in or contemplated by the Registration
Statement or Prospectus, there has not been (A) any material adverse
change in the business, prospects or results of operations of the
Company and its subsidiaries taken as a whole, (B) any transaction that
is material to the Company and its subsidiaries taken as a whole,
proposed or entered into by the Company or any of its subsidiaries or
(C) any obligation, contingent or otherwise, directly or indirectly,
incurred by the Company or any of its subsidiaries that is material to
the Company and its subsidiaries taken as a whole;
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(r) there is no claim pending or threatened or to the best
knowledge of the Company, contemplated under any Environmental Law (as
defined below) against the Company or any subsidiary which, if
adversely determined, would have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole; there
are no past or present actions or conditions including, without
limitation, the release of any hazardous substance or waste regulated
under any Environmental Law that are likely to form the basis of any
such claim under existing law against the Company or any of its
subsidiaries, which, if adversely determined, would have a material
adverse effect on the condition (financial or other), business,
prospects or results of operations of the Company and its subsidiaries
taken as a whole. The term "Environmental Law" means any federal,
state, local or foreign law, rule or regulation now in effect governing
pollution or protection of the environment;
(s) the Company or the applicable subsidiary has good and
marketable title to all properties and assets reflected as owned in the
financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those reflected in such financial
statements (or elsewhere in the Prospectus), (ii) those existing in the
ordinary course in connection with the business of the Company and its
subsidiaries and which do not adversely affect the use made and
proposed to be made of such property by the Company and its
subsidiaries taken as a whole or (iii) those which are not material in
amount and do not adversely affect the use made and proposed to be made
of such property by the Company and its subsidiaries taken as a whole.
The Company or the applicable subsidiary holds its material leased
properties, if any, under valid and binding leases, with such
exceptions as are not materially significant in relation to the
business of the Company and its subsidiaries taken as a whole;
(t) neither the Company nor any of the Operating Subsidiaries,
nor any employee of the Company or any of the Operating Subsidiaries,
has made any payment of funds of the Company or any of the Operating
Subsidiaries prohibited by law, and no funds of the Company or any of
the Operating Subsidiaries have been set aside to be used for any
payment prohibited by law;
(u) the Company and its subsidiaries have filed all federal or
state income or franchise tax returns required to be filed and have
paid all taxes shown thereon as due, and there is no material tax
deficiency which has been or could be properly asserted against the
Company or any of its subsidiaries; all material tax liabilities are
adequately provided for on the books of the Company and its
subsidiaries;
(v) the Company has not incurred any liability for any
finder's fees or similar payments in connection with the transactions
herein contemplated; and
(w) neither the Company nor any of its subsidiaries is an
investment company within the meaning of the Investment Company Act of
1940, as amended, or is subject to regulation thereunder.
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4. Certain Covenants of the Company: The Company hereby covenants and
agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Debentures for offering and
sale under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect as long as
required for the distribution of the Debentures, provided that the
Company shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of any such state
(except service of process with respect to the offering and sale of the
Debentures); to promptly advise you of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Debentures for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best
efforts to obtain the withdrawal of any order of suspension at the
earliest practicable moment;
(b) from time to time to furnish to the Underwriters as many
copies of the Prospectus (as amended or supplemented) as the
Underwriters may reasonably request;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when any amendment to the
Registration Statement has been filed or become effective and (ii) when
the Prospectus is filed with the Commission pursuant to Rule 424(b)(2)
under the Act (which the Company agrees to file in a timely manner
under such Rule);
(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for,
or the entry of a stop order suspending the effectiveness of, the
Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to make
every reasonable effort to obtain the lifting or removal of such order
as soon as possible; to advise you promptly of any proposal to amend or
supplement the Registration Statement or Prospectus, including by
filing any documents that would be incorporated therein by reference
and to file no such amendment or supplement to which you shall
reasonably object in writing;
(e) to furnish to you and, upon request to each of the other
Underwriters, for a period of eight years from the date of this
Agreement, but only so long as the Company is subject to the periodic
reporting requirements of the Exchange Act (or, if shorter, the period
of time the Debentures are outstanding) (i) copies of any reports or
other communications that the Company shall send to its stockholders
generally or shall from time to time publish or publicly disseminate,
(ii) copies of all annual, quarterly and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar form as
may be designated by the Commission, and (iii)
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such other non-confidential information as you may reasonably request
regarding the Company and which is produced by the Company in the
ordinary course of business;
(f) to advise the Underwriters promptly of the happening of
any event known to the Company within the time during which a
Prospectus relating to the Debentures is required to be delivered under
the Act which, in the judgment of the Company, would require the making
of any change in the Prospectus then being used or in the information
incorporated therein by reference, so that the Prospectus, as then
supplemented, would not include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, and, during such time, to prepare and furnish, at the
Company's expense, to the Underwriters promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any such
change in such quantities as reasonably requested by the Underwriters
and to furnish to you a copy of such proposed amendment or supplement
before filing any such amendment or supplement with the Commission;
(g) to make generally available to its securityholders and to
deliver to you (if not otherwise delivered pursuant to Section 4(e)
hereof), an earnings statement of the Company (which need not be
audited and will satisfy the provisions of Section 11(a) of the Act
including, at the option of the Company, Rule 158) covering a period of
twelve months beginning after the date of the Prospectus as soon as is
reasonably practicable after the termination of such twelve-month
period but not later than fifteen months after the date of the
Prospectus.
(h) to furnish to you two (2) conformed copies of the
Registration Statement, as initially filed with the Commission, and of
all amendments thereto (including all exhibits thereto and documents
incorporated by reference therein) and such additional conformed copies
thereof as you shall reasonably request;
(i) to furnish to you as early as practicable prior to the
Time of Purchase, but no later than two business days prior thereto, a
copy of the latest available unaudited interim consolidated financial
statements, if any, of the Company and its subsidiaries that have been
read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(c) of this
Agreement;
(j) to apply the net proceeds from the sale of the Debentures
in the manner set forth under the caption "Use of Proceeds" in the
Registration Statement and Prospectus;
(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement otherwise becomes effective
or is terminated, to pay all expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the
Underwriters except as set forth under Section 5 hereof and (iv) below)
in connection with (i) the preparation and filing of each Preliminary
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Prospectus, the Prospectus, and any amendments or supplements thereto
or to the Registration Statement, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including
costs of mailing and shipment), (ii) the preparation, issuance,
execution, authentication, sale and delivery of the Debentures, (iii)
the reproduction and furnishing of copies of this Agreement, any dealer
agreements and the Indenture to the Underwriters and to dealers
(including costs of mailing and shipment), (iv) the qualification of
the Debentures for offering and sale under state laws and the
determination of their eligibility for investment under state law as
aforesaid (including the legal fees and filing fees and other
disbursements of counsel in connection with such state law matters) and
the preparation and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v) the
listing of the Debentures on the New York Stock Exchange and any other
stock exchange on which the Debentures may be listed, (vi) any filing
fee for review of the public offering of the Debentures by the National
Association of Securities Dealers, Inc. and (vii) the performance of
the Company's other obligations hereunder;
(l) to furnish to you, before filing with the Commission
subsequent to the effective date of the Registration Statement and
during the period referred to in paragraph (f) above, a copy of any
document proposed to be filed pursuant to Sections 13, 14 or 15(d) of
the Exchange Act;
(m) to refrain from investing the proceeds from the sale of
the Debentures in a manner to cause the Company or any of its
subsidiaries to become an "investment company" within the meaning of
the Investment Company Act of 1940, as amended; and
(n) to use its best efforts to cause the Debentures to be
listed on the New York Stock Exchange.
5. Reimbursement of Underwriters' Expenses: If the Debentures are not
delivered for any reason other than the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company shall
reimburse the Underwriters for all of their reasonable out-of-pocket expenses in
connection with the matters contemplated hereunder, including the reasonable
fees and disbursements of their counsel; provided, however, that if the
Underwriters determine to terminate this Agreement pursuant to Section 7 hereof
and such determination is not reasonable, then the Underwriters shall not be
entitled to reimbursement of their out-of-pocket expenses under this Section 5.
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6. Conditions of the Underwriters' Obligations: The several obligations
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the Time of
Purchase, the performance by the Company of its obligations hereunder and to the
following conditions:
(a) The Company shall furnish to you at the Time of Purchase
an opinion of Xxxxxx, Xxxx & Xxxxxxxx, special counsel for the Company,
addressed to the Underwriters and dated the Time of Purchase in the
form set forth in Annex A hereto.
(b) The Company shall furnish to you at the Time of Purchase
an opinion of Xxxxxxxxx X. Xxxxx, Esq., Vice President and General
Counsel of the Company, addressed to the Underwriters and dated the
Time of Purchase in the form set forth in Annex B hereto.
(c) You shall have received at the Time of Purchase from
Xxxxxxx & Xxxxxxx, special counsel to the Trustee under the Indenture,
an opinion addressed to the Underwriters and dated the Time of
Purchase, with respect to the matters set forth in Annex C hereto.
(d) You shall have received from KPMG Peat Marwick LLP letters
dated as of the date of this Agreement and the Time of Purchase, as the
case may be, and addressed to the Underwriters, each in form and
substance heretofore approved by you.
(e) You shall have received at the Time of Purchase an opinion
from Xxxxxx & Xxxxxxx in form and substance reasonably satisfactory to
you.
(f) No amendment or supplement to the Registration Statement
or Prospectus, including documents deemed to be incorporated by
reference therein, shall be filed to which you reasonably have objected
in writing prior to such filing.
(g) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act;
(h) Prior to the Time of Purchase (i) no stop order with
respect to the effectiveness of the Registration Statement shall have
been issued under the Act or proceedings initiated under Section 8(d)
or 8(e) of the Act; (ii) the Registration Statement and all amendments
thereto, or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall not contain an untrue
statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
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(i) Between the time of execution of this Agreement and the
Time of Purchase there has not been (i) any material and adverse
change, present or prospective, in the condition (financial or other),
business, prospects or results of operations of the Company and its
subsidiaries taken as a whole, (ii) any transaction that is material to
the Company and its subsidiaries taken as a whole entered into by the
Company or any of its subsidiaries or (iii) any obligation, contingent
or otherwise, directly or indirectly, incurred by the Company or any of
its subsidiaries that is material to the Company and its subsidiaries
taken as a whole.
(j) The Company at the Time of Purchase will deliver to you a
certificate executed by two of its executive officers to the effect
that the representations and warranties of the Company set forth in
this Agreement and the conditions set forth in paragraph (h) and
paragraph (i) have been met and are true and correct as of such date.
(k) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the
Time of Purchase as you may reasonably request.
(l) The Company shall perform such of its obligations under
this Agreement as are to be performed by the terms hereof at or before
the Time of Purchase.
(m) The Debentures shall have been approved for listing on the
New York Stock Exchange.
(n) Between the time of execution of this Agreement and the
Time of Purchase (i) there shall not have occurred any downgrading in
the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization," as that term is defined in
Rule 436(g)(2) under the Act and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities; provided, however, that clause (i) shall not include any
rating by Standard & Poor's Corporation of the Company's 9 3/4% Senior
Subordinated Debentures due 2003 (the "9 3/4% Debentures"), the
Company's 9% Senior Subordinated Debentures due 2006 (the "9%
Debentures") or the Debentures of B- or higher, and clause (ii) shall
not include the announcement of any surveillance or review, with
possible negative implications, by Standard & Poor's Corporation of the
rating of the Company's 9 3/4% Debentures, the 9% Debentures or the
Debentures if the rating under such surveillance or review is higher
than B-.
12
14
7. Effective Date of Agreement; Termination: This Agreement shall
become effective when the parties hereto have executed and delivered this
Agreement.
The obligations of the Underwriters hereunder shall be subject to
termination in the absolute discretion of either of you if, at any time prior to
the Time of Purchase, trading in securities on the New York Stock Exchange shall
have been suspended or minimum prices shall have been established on the New
York Stock Exchange, or if a banking moratorium shall have been declared either
by the United States or New York State authorities, or if the United States
shall have declared war in accordance with its constitutional processes or there
shall have occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis of such magnitude in its effect on
the financial markets of the United States as, in your judgment or in the
judgment of such Underwriter, make it impracticable to market the Debentures.
If you elect to terminate this Agreement as provided in this Section 7,
the Company and the other Underwriter shall be notified promptly by letter sent
by facsimile transmission and registered mail, or by telegram.
If the sale to the Underwriters of the Debentures, as contemplated by
this Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company
shall be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Sections 4(k), 5 and 9 hereof), and the Underwriters
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 9 hereof).
8. Increase in Underwriters' Commitments: If any Underwriter shall
default in its obligation to take up and pay for the Debentures to be purchased
by it hereunder and if the aggregate principal amount of the Debentures which
all Underwriters so defaulting shall have agreed but failed to take up and pay
for does not exceed 10% of the total aggregate principal amount of the
Debentures, the non-defaulting Underwriter or Underwriters shall take up and pay
for (in addition to the aggregate principal amount of the Debentures it is
obliged to purchase pursuant to Section 1 hereof) the aggregate principal amount
of the Debentures agreed to be purchased by such defaulting Underwriter, as
hereinafter provided. Such aggregate principal amount of the Debentures shall be
taken up and paid for by such non-defaulting Underwriter or Underwriters in such
amounts as you may designate with the consent of each Underwriter so designated
or, in the event no such designation is made, such aggregate principal amount of
the Debentures shall be taken up and paid for by all nondefaulting Underwriters
pro rata in proportion to the aggregate principal amount of the Debentures set
opposite the names of such non-defaulting Underwriters in Schedule I.
Without relieving any defaulting Underwriter or Underwriters from its
obligations hereunder, the Company agrees with the non-defaulting Underwriter
that it will not sell any Debentures hereunder unless all of the Debentures are
purchased by the Underwriters (or by substituted Underwriters selected by you
with the approval of the Company or selected by the Company with your approval).
13
15
If a new Underwriter or Underwriters are substituted by the
non-defaulting Underwriter or Underwriters or by the Company for a defaulting
Underwriter or Underwriters in accordance with the foregoing provision, the
Company or you shall have the right to postpone the Time of Purchase for a
period not exceeding five (5) business days in order that any necessary changes
in the Registration Statement and Prospectus and other documents may be
effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule I.
9. Indemnity by the Company and the Underwriters:
(a) The Company agrees to indemnify and hold harmless each
Underwriter, each person that controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
the agents, employees, officers and directors of each Underwriter and
of each such controlling person (collectively, the "Underwriter
indemnified parties') from and against any and all losses, claims,
damages, judgments, liabilities and expenses (including the reasonable
fees and expenses of counsel and other expenses in connection with
investigating, defending or settling any such action or claim) which,
jointly or severally, any Underwriter indemnified party may incur as
they are incurred (and regardless of whether the Underwriter
indemnified party is a party to the litigation, if any) arising out of
or based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus
or the Preliminary Prospectus (as the same may have been amended or
supplemented prior to the date of the Prospectus), or arising out of or
based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
judgments, liabilities or expenses arise out of, or are based upon, any
such untrue statement or omission or alleged untrue statement or
omission based upon and in conformity with information with respect to
any Underwriter furnished in writing by any such Underwriter through
you to the Company expressly for use therein with reference to such
Underwriter; provided, however, that the indemnity agreement contained
in this Section 9(a) with respect to the Preliminary Prospectus or
amended or supplemented Preliminary Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) from whom the person asserting any such loss,
expense, liability or claim purchased the Debentures which is the
subject thereof if the Prospectus corrected any such alleged untrue
statement or omission and if such Underwriter failed to send or give a
copy of the Prospectus to such person at or prior to the written
confirmation of the sale of such Debentures to such person.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted
against any Underwriter indemnified party, with respect to which
indemnity may be sought against the
14
16
Company pursuant to this Section 9, such Underwriter indemnified party
shall promptly notify the Company in writing, and the Company shall
assume the defense thereof, including the employment of counsel
satisfactory to the Underwriter indemnified party in its reasonable
judgment and payment of all fees and expenses; provided that the
omission so to notify the Company shall not relieve the Company from
any liability that it may have to any Underwriter indemnified party
unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the Company. An
Underwriter indemnified party shall have the right to employ separate
counsel in any such action or proceeding and to assume in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter indemnified party unless (i) the employment
of such counsel has been specifically authorized in writing by the
Company, (ii) the Company has failed promptly to assume the defense and
employ counsel satisfactory to the Underwriter indemnified party in its
reasonable judgment, or (iii) the named parties to any such action or
proceeding (including any impleaded parties) include both the
Underwriter indemnified party and the Company and such Underwriter
indemnified party shall have concluded in its reasonable judgment that
there may be one or more legal defenses available to it that are
different from or additional to those available to the Company (in
which case the Company shall not have the right to assume the defense
of such action on behalf of such Underwriter indemnified party), in any
of which events such fees and expenses shall be borne by the Company
and paid as incurred. It is understood, however, that the Company shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriter indemnified parties, which firm shall be designated in
writing by Xxxxxx, Read & Co. Inc., and that all such fees and expenses
shall be reimbursed as they are incurred. The Company shall not be
liable for any settlement of any such action effected without the
written consent of the Company (which consent shall not be unreasonably
withheld or delayed), but if settled with the written consent of the
Company, or if there is a final judgment with respect thereto, the
Company agrees to indemnify and hold harmless each Underwriter
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, its officers who signed the
Registration Statement, and any person that controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act
(collectively, the "Company indemnified parties") to the same extent as
the foregoing indemnity from the Company to the Underwriter indemnified
parties, but only with respect to information covering such Underwriter
furnished in writing by or on behalf of such Underwriter through you to
the Company expressly for use with respect to such Underwriter in the
Registration Statement, the Prospectus or the Preliminary Prospectus
(as the same may have been amended or supplemented prior to the date of
the Prospectus). In case any action shall be brought against any
Company indemnified party based on the Registration Statement, the
15
17
Prospectus or the Preliminary Prospectus (as the same may have been
amended or supplemented prior to the date of the Prospectus) and in
respect of which indemnity may be sought against the Underwriters
pursuant to this Section 9(c), the Underwriters shall have the rights
and duties given to the Company by Section 9(b) hereof (except that if
the Company shall have assumed the defense thereof the Underwriters
shall not be required to do so, but may employ separate counsel therein
and participate in the defense thereof, provided that the fees and
expenses of such counsel shall be at the Underwriters' expense), and
the Company indemnified parties shall have the rights and duties given
to the Underwriter indemnified parties by Section 9(b) hereof.
(d) If the indemnification provided for in this Section 9 is
unavailable to, or insufficient to hold harmless, any Underwriter
indemnified party or any Company indemnified party, then the party
required to indemnify such indemnified party under this Section 9
shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages, judgments, liabilities and expenses (i)
in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Debentures, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportions as the total proceeds from the
offering (net of underwriting discounts and commission but 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. The relative fault of the Company on the one hand and the
Underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or by the
Underwriters, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses incurred by such
party in its reasonable judgment in connection with investigating or
defending any claim or action.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even it the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute
16
18
any amount in excess of the underwriting discount applicable to the
Debentures underwritten by such Underwriter and distributed to the
public. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant
to this subsection (d) are several and in proportion to their
respective underwriting commitments and not joint.
The statements under the caption "Underwriting" in the
Prospectus (to the extent such statements relate to an Underwriter)
constitute the only information furnished to the Company in writing by
such Underwriter expressly for use in the Registration Statement, the
Prospectus or the Preliminary Prospectus (as the same may have been
amended or supplemented prior to the date of the Prospectus).
(e) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and representations of the
Company contained in this Agreement shall remain in full force and
effect, regardless of any investigation made by or on behalf of any
Underwriter indemnified party or by or on behalf of any Company
indemnified party, and shall survive any termination of this Agreement
or the issuance and delivery of the Debentures. The Company and each
Underwriter agree promptly to notify the other of the commencement of
any litigation or proceeding against it and, in the case of the
Company, against any of the Company's officers and directors, in
connection with the issuance and sale of the Debentures or in
connection with the Registration Statement, the Prospectus or the
Preliminary Prospectus (as the same may have been amended or
supplemented prior to the date of the Prospectus).
10. Notices. Except as otherwise provided herein, all statements,
requests, notices and agreements shall be in writing and, if to the
Underwriters, shall be sufficient in all respects if timely delivered or sent to
Xxxxxx, Read & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if timely delivered to the Company at the offices of the Company at 0000 X. 00xx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxxxx X. Xxxxx, Esq. Any party
may change the address at which it is to receive statements, requests, notices
and agreements by written notice to the other parties.
11. GOVERNING LAW; CONSTRUCTION. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT
HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF
THIS AGREEMENT.
17
19
12. Parties in Interest: The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company, the Underwriter
indemnified parties and the Company indemnified parties, and their respective
successors, assigns, executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
13. Counterparts: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement between
the parties.
Very truly yours,
XXX XXXX CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Vice President and
General Counsel
Agreed to and accepted as of the date
first above written:
XXXXXX, READ & CO. INC.
XXXXXXX, XXXXX & CO.
By: XXXXXX, READ & CO. INC.
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Managing Director
18
20
SCHEDULE I
Principal Amount
Underwriter of Debentures
----------- -------------
Xxxxxx, Read & Co. Inc............................................................. $ 90,000,000
Xxxxxxx, Sachs & Co................................................................ 60,000,000
-------------
Total......................................................................... $ 150,000,000
=============
21
SCHEDULE II
Xxx Xxxx Communities, Inc., an Arizona corporation
Del X. Xxxx Development Co., L.P., a Delaware limited partnership
Xxx Xxxx California Corp., an Arizona corporation
Xxx Xxxx'x Coventry Homes, Inc., an Arizona corporation
Xxx Xxxx'x Coventry Homes Construction Co., an Arizona corporation
Xxx Xxxx Home Construction, Inc., an Arizona corporation
Del X. Xxxx Foothills Corporation, an Arizona corporation
Xxx Xxxx Commercial Properties Corporation, an Arizona corporation
Terravita Home Construction Co., an Arizona corporation
Terravita Corp., an Arizona corporation
Terravita Marketplace L.L.C., an Arizona limited liability company
Xxx Xxxx'x Coventry Homes of Tucson, Inc., an Arizona corporation
Xxx Xxxx'x Coventry Homes Construction of Tucson, Co. an Arizona Corporation
Xxx Xxxx'x Coventry Homes of Nevada, Inc., an Arizona corporation
Xxx Xxxx Homes, Inc., an Arizona corporation
The Villages at Desert Hills, Inc.
(formerly Xxx Xxxx Lakeview Corporation), an Arizona corporation
DW Aviation Co., Inc., an Arizona corporation
Xxx Xxxx Conservation Holding Corp., an Arizona corporation
Terravita Commercial Corp., an Arizona corporation
Trovas Company, an Arizona corporation
Trovas Construction Company, an Arizona corporation
Xxx Xxxx Texas Limited Partnership, an Arizona limited partnership
Fairmount Mortgage, Inc., an Arizona corporation
Xxx Xxxx Limited Holding Co., an Arizona corporation
Xxx Xxxx Southwest Co., an Arizona corporation
22
ANNEX A
January ___, 1997
Xxxxxx, Read & Co. Inc. C 95181-00123
Xxxxxxx, Sachs & Co.
c/x Xxxxxx, Read & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Xxx Xxxx Corporation
Public Offering of $150 Million of
9 3/4% Senior Subordinated Debentures due
Ladies and Gentlemen:
We have acted as special counsel to Xxx Xxxx Corporation, a
Delaware corporation (the "Company"), in connection with its sale to you of $150
million of 9 3/4% Senior Subordinated Debentures Due 2008 (the "Debentures")
pursuant to the Underwriting Agreement, dated January 15, 1997, between each of
you and the Company (the "Underwriting Agreement"). This opinion is rendered to
you pursuant to Section 6(a) of the Underwriting Agreement.
In connection with our examination of documents as described
below, we have assumed the genuineness of all signatures on, and the
authenticity of, all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as copies. With respect
to agreements and instruments executed by natural persons, we have assumed the
legal competency of such persons.
For the purpose of rendering this opinion, we have made such
factual and legal inquiries as we deemed necessary under the circumstances and
in that connection we have examined, among other things, originals or copies of
the following:
(1) The registration statement on Form S-3 (file number
33-60089) filed by the Company with the Securities
and Exchange Commission (the "Commission") on June 9,
1995 for the purpose of registering the sale of
various securities, including Senior Subordinated
Debt Securities, under the Securities Act of 1933, as
amended (the "Securities Act"),
A-1
23
Xxxxxx, Read & Co. Inc.
Xxxxxxx, Sachs & Co.
January ___, 1997
Page 2
the related Form T-1 filed with the Commission for
the purpose of qualifying the Indenture (defined
below) under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), Amendment No. 1
to that Registration Statement filed with the
Commission on July 21, 1995 and the final prospectus,
dated July 21, 1995, filed by the Company with the
Commission pursuant to Rule 424(b) of the Rules and
Regulations adopted by the Commission under the
Securities Act (the "Rules"). The registration
statement in the form in which it became effective on
July 21, 1995, including the documents incorporated
by reference therein to the extent not modified or
superseded thereby, is referred to below as the
"Registration Statement", the final prospectus of the
Company dated July 21, 1995, in the form filed with
the Commission pursuant to Rule 424(b) of the Rules,
including the documents incorporated by reference
therein to the extent not modified or superseded
thereby, is referred to below as the "Prospectus" and
the Prospectus, as supplemented by the Prospectus
Supplement to Prospectus dated January 15, 1997, in
the form filed with the Commission pursuant to Rule
424(b) of the Rules, including the documents
incorporated by reference therein to the extent not
modified or superseded thereby, is referred to below
as the "Prospectus/Prospectus Supplement";
(2) The order of the Commission dated July 21, 1995
declaring the Registration Statement effective under
the Securities Act;
(3) The Certificate of Incorporation of the Company, as
amended to date;
(4) The Bylaws of the Company, as amended to date;
(5) Minutes of meetings of the Company's Board of
Directors at which actions were taken with respect to
the transactions covered by this opinion and minutes
or records of other corporate proceedings;
(6) The action of the Chief Executive Officer of the
Company, dated as of January 15, 1997, with respect
to the terms of the Debentures and the Indenture;
A-2
24
Xxxxxx, Read & Co. Inc.
Xxxxxxx, Sachs & Co.
January ___, 1997
Page 3
(7) The letters of KPMG Peat Marwick LLP, dated January
15, 1997 and the date hereof, delivered pursuant to
Section 6(d) of the Underwriting Agreement;
(8) The certificates, dated as of the date hereof,
delivered pursuant to Section 6(k) of the
Underwriting Agreement;
(9) The Directors and Officers Questionnaires of the
directors and executive officers of the Company;
(10) The Indenture, dated as of January 21, 1997, among
the Company, State Street Bank and Trust Company, as
Trustee (the "Trustee"), and State Street Bank and
Trust Company, N.A., as Co-Registrar and Co-Paying
Agent (the "Agent"), pursuant to which the Debentures
are to be issued (the "Indenture");
(11) The Certificate of the Trustee, dated as of the date
hereof, as to the due authentication of the
Debentures;
(12) The Underwriting Agreement;
(13) Specimen certificate(s) representing the Debentures;
(14) The opinion of Xxxxxxxxx X. Xxxxx, Esq., Vice
President and General Counsel of the Company, to you,
dated January ___, 1997;
(15) The documents referred to in subparagraphs (x)(B),
(C), (D), (E) and (F) below and the indentures with
respect to the Company's 10-7/8% Senior Notes due
2000, 9-3/4% Senior Subordinated Debentures due 2003
and 9% Senior Subordinated Debentures due 2006;
(16) Such other certificates and assurances from public
officials and officers and representatives of the
Company that we considered necessary or appropriate
for the purpose of rendering this opinion, copies of
which have been delivered to you; and
(17) The opinions rendered by us in connection with our
representation of the Company in the issuance of its
common stock and certain related documents.
A-3
25
Xxxxxx, Read & Co. Inc.
Xxxxxxx, Xxxxx & Co.
January ___, 1997
Page 4
Based on the foregoing and in reliance thereon (with respect
to the opinion of Xxxxxxxxx X. Xxxxx, to the extent set forth below), and
subject to the assumptions, qualifications and limitations set forth herein, we
are of the opinion that:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware and has the corporate power to (A)
own its properties and conduct its business, in each
case as described in the Prospectus/Prospectus
Supplement, and (B) execute and deliver the
Underwriting Agreement and the Indenture and to
issue, sell and deliver the Debentures as
contemplated by the Underwriting Agreement;
(ii) Each of the entities listed on Schedule II to the
Underwriting Agreement (the "Material Subsidiaries")
is a corporation, limited partnership or limited
liability company, as the case may be, duly
organized, validly existing and, as to the Material
Subsidiaries that are corporations and Del X. Xxxx
Development Co., L.P., a Delaware limited partnership
("DEVCO"), in good standing under the laws of its
respective jurisdiction of incorporation or
organization. Each Material Subsidiary has the
corporate, partnership or limited liability company
power to own its properties and conduct its business,
in each case as described in the
Prospectus/Prospectus Supplement;
(iii) The Company is qualified to do business and in good
standing in California and Arizona; Xxx Xxxx
Communities, Inc., an Arizona corporation, is
qualified to do business and in good standing in
Nevada and South Carolina; DEVCO is qualified to do
business in Arizona and Nevada; Xxx Xxxx Southwest
Co., an Arizona corporation, is qualified to do
business and in good standing in Texas; Xxx Xxxx
Texas Limited Partnership, an Arizona limited
partnership, is qualified to do business in Texas;
Xxx Xxxx'x Coventry Homes Construction Co., an
Arizona corporation, is qualified to do business and
in good standing in Nevada; and Xxx Xxxx California
Corp., an Arizona corporation, is qualified to do
business and in good standing in California;
(iv) The Company has the authorized capital stock set
forth in the Prospectus/Prospectus Supplement;
A-4
26
Xxxxxx, Read & Co. Inc.
Xxxxxxx, Xxxxx & Co.
January ___, 1997
Page 5
(v) The 2,500,000 shares and 375,000 shares of the
Company's Common Stock issued on June 25 and July 25,
1991, respectively, in a registered public offering,
the approximately 1.1 million shares of the Company's
common stock publicly issued in August and September
1987 in an exchange offer for then outstanding notes,
the 333,333 shares of common stock of the Company
issued on September 25, 1983, upon exercise of
warrants, in a registered public offering and the
approximately 3.2 million shares of common stock of
the Company issued in connection with the
underwritten call in May and June 1992 of the
Company's 10-3/8% Convertible Subordinated Debentures
(none of which, we are informed, are now outstanding)
were all duly and validly authorized, fully paid,
non-assessable and not issued in violation of any
preemptive rights provided by Arizona law or the
Articles of Incorporation or Bylaws of the Company as
then in effect (the Company was incorporated in
Arizona at the time of each of these issuances of
common stock). The 2,474,900 shares of the Company's
common stock issued on August 16, 1995 in a
registered public offering were all duly and validly
authorized, fully paid, non-assessable and not issued
in violation of any preemptive rights provided by
Delaware law or the Certificate of Incorporation or
Bylaws of the Company as then in effect;
(vi) To our knowledge, there are no actions, suits or
proceedings pending or threatened in writing against
the Company or any of the Material Subsidiaries or
any of their respective properties, at law or in
equity or before or by any commission, board, body,
authority or agency, that are required to be
described in the Prospectus/Prospectus Supplement but
are not so described;
(vii) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(viii) The Debentures have been duly authorized by the
Company and, when executed, issued and authenticated
in accordance with the terms of the Indenture and
delivered and paid for in accordance with the terms
of the Underwriting Agreement, will be entitled to
the benefits of the Indenture and will be legal,
valid and binding obligations of the Company,
enforceable against the Company in accordance with
their
A-5
27
Xxxxxx, Read & Co. Inc.
Xxxxxxx, Xxxxx & Co.
January ___, 1997
Page 6
terms, and the Debentures and the Indenture conform
to the descriptions thereof in the
Prospectus/Prospectus Supplement;
(ix) The Indenture has been duly authorized, executed and
delivered by the Company and is a legal, valid and
binding agreement of the Company, enforceable against
the Company in accordance with its terms, and the
Indenture has been qualified under the Trust
Indenture Act;
(x) The execution, delivery and performance of the
Underwriting Agreement and the Indenture, the
issuance and sale of the Debentures by the Company
and the consummation of the other transactions
contemplated by the Underwriting Agreement and the
Indenture will not result in any breach of or
constitute a default under (or constitute an event
which with notice, lapse of time or both would
constitute a breach of or default under): (A) the
Certificate of Incorporation or Bylaws of the
Company; (B) any indenture, mortgage, deed of trust,
bank loan or credit agreement or other similar
written agreement or instrument that was filed, or
incorporated by reference, as an exhibit to the
Company's Annual Report on Form 10-K for its fiscal
year ended June 30, 1995 filed with the Commission or
that is referred to in the Prospectus/Prospectus
Supplement; (C) the Company's 10-7/8% Senior Notes
due 2000; (D) the Company's 9-3/4% Senior
Subordinated Debentures due 2003; (E) the Company's
9% Senior Subordinated Debentures due 2006; (F) any
federal or Arizona state statute, regulation or rule
applicable to the Company (with respect to the
execution, delivery and performance of the Indenture
and the issuance and sale of the Debentures only,
provided that no opinion is expressed as to state
securities or Blue Sky laws or the rules and
regulations under any of them or as to any
misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement); (G) the Delaware General Corporation Law
(with respect to the execution, delivery and
performance of the Indenture and the issuance and
sale of the Debentures only, provided that no opinion
is expressed as to state securities or Blue Sky laws
or the rules and regulations under any of them or as
to any misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement); or (H) any license, decree, judgment or
order applicable to the Company and known to us (with
respect to the execution, delivery and performance of
the Indenture and the issuance and sale of
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January ___, 1997
Page 7
the Debentures only, provided that no opinion is
expressed as to state securities or Blue Sky laws or
the rules and regulations under any of them or as to
any misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement);
(xi) No consent, approval, authorization, order or
qualification of or registration with any federal or
Arizona, Delaware (to the extent required by the
Delaware General Corporation Law) or New York state
governmental or regulatory commission, board, body,
authority or agency is required for the issuance or
sale of the Debentures by the Company as contemplated
by the Underwriting Agreement and the Indenture,
other than as has been accomplished under the
Securities Act and the Trust Indenture Act and for
filing of the Indenture under the Securities Act
(which, we understand, is anticipated to be timely
done by the Company by the filing of a Current Report
on Form 8-K to which such document will be an
exhibit), provided that we express no opinion as to
any necessary qualification or registration, or
exemption therefrom, under any state securities or
Blue Sky laws;
(xii) The Registration Statement has become effective under
the Securities Act and, to our knowledge, no stop
order proceedings with respect thereto are pending or
threatened under the Securities Act;
(xiii) To our knowledge, neither the Company nor any of the
Material Subsidiaries is in breach of or in default
under (nor has any event occurred that with notice,
lapse of time or both would constitute a breach of or
default under): (a) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other written
agreement or instrument identified or described in
subparagraph (x)(B), (C), (D) and (E) above; or (b)
any federal or Arizona, California, Delaware, Nevada,
South Carolina or Texas state or local license,
decree, judgment or order applicable to the Company
or any of the Material Subsidiaries and known to us;
in each case in clauses (a) and (b) where such breach
or default could have a material adverse affect on
the consolidated financial position, prospects,
shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole;
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January ___, 1997
Page 8
(xiv) To our knowledge, there are no contracts, licenses,
agreements, leases or documents of a character that
are required to be filed as exhibits to the
Registration Statement or to be summarized or
described in the Prospectus/Prospectus Supplement
that have not been so filed, summarized or described;
and
(xv) The Registration Statement and the
Prospectus/Prospectus Supplement (except as to the
financial statements, financial statement notes and
financial statement schedules and other financial and
statistical data contained or incorporated by
reference therein and in the Exhibits thereto
(including the T-1), as to which we express no
opinion or make no other statement) comply as to form
in all material respects with the applicable
requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations under
both; the documents incorporated by reference in the
Registration Statement and the Prospectus/Prospectus
Supplement when they were filed or, if an amendment
with respect to any such document was filed, when
such amendment was filed (except as to financial
statements, financial statement notes and financial
statement schedules and other financial and
statistical data contained therein, as to which we
express no opinion or make no other statement),
complied as to form in all material respects with the
then applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
During the course of the preparation of the
Prospectus/Prospectus Supplement, we participated in conferences with
representatives of the Company, its independent accountants, you and your
counsel, at which conferences the contents of the Registration Statement,
Prospectus and Prospectus/Prospectus Supplement and related matters were
discussed. We have not independently verified the accuracy, completeness or
fairness of the statements contained in the Registration Statement, Prospectus
or Prospectus/Prospectus Supplement and the nature of our participation is such
that we are unable to assume, and do not assume, any responsibility for the
accuracy, completeness or fairness of such statements. However, based upon our
participation as described in this paragraph, we have no reason to believe and
do not believe that the Registration Statement, Prospectus or the
Prospectus/Prospectus Supplement or any documents incorporated by reference
therein (provided that we express no opinion and make no other statement as to
the financial statements, financial statement notes and financial statement
schedules and other financial and statistical data contained therein or with
respect to the T-1), as of their respective effective or issue dates
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Page 9
and as of the date hereof, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Our opinion set forth in paragraphs (viii) and (ix) above is
subject to (a) the effect of applicable bankruptcy, reorganization, insolvency,
moratorium and other similar laws and court decisions of general application,
including without limitation, statutory or other laws regarding fraudulent or
preferential transfers relating to, limiting or affecting the enforcement of
creditors' rights generally and (b) general principles of equity which may limit
the enforceability of any of the remedies, covenants or other provisions of the
Debentures and the Indenture, as well as the availability of injunctive relief
or other equitable remedies, and the application of principles of equity
(regardless of whether enforcement is considered in proceedings at law or in
equity) as such principles relate to, limit or affect the enforcement of
creditors' rights generally. In addition, we express no opinion as to: (a) any
provisions of the Debentures or the Indenture regarding the remedies available
to any person (1) to take discretionary action that is arbitrary, unreasonable
or capricious or is not taken in good faith or in a commercially reasonable
manner, whether or not such action is permitted under the Debentures or the
Indenture, or (2) for violations or breaches that are determined by a court to
be non-material; (b) with respect to subparagraphs (x)(B), (C), (D) or (E),
whether compliance by the Company with Sections 4.14 or 4.15 of the Indenture,
by making a "Change of Control Offer" or a "Net Worth Offer" (as defined
therein), the creation of a lien on property of the Company under the fourth
paragraph of Section 7.07 of the Indenture or the existence of a "Default" or
"Event of Default" under Article 6 of the Indenture will constitute a default,
event of default or cross-default under any of the indentures, mortgages, deeds
of trust, bank loans or credit agreements or other similar written agreements or
instruments referred to in subparagraphs (x)(B), (C), (D) or (E); (c) with
respect to whether acceleration of the Debentures may affect the collectibility
of that portion of the stated principal amount thereof that might be determined
to constitute unearned interest thereon; (d) the enforceability of the waivers
of rights or defenses provided for in Section 4.12 of the Indenture; or (e) the
enforceability under certain circumstances under law or court decisions of
provisions providing for the indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is contrary to
public policy. Our opinion in paragraphs (viii) and (ix) is subject to the
assumption that the Indenture has been duly authorized, executed and delivered
by the Trustee and the Agent and constitutes a valid and binding agreement of
the Trustee and the Agent, enforceable against the Trustee and the Agent in
accordance with its terms, subject to exceptions of the type contained above in
this paragraph.
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January ___, 1997
Page 10
This letter is limited to the facts and the law as they exist
on the date hereof. In addition, with respect to statements in this letter based
on our knowledge, (i) we have advised you only as to knowledge obtained by us in
connection with matters to which we have given substantive attention as counsel
to the Company in the form of legal consultation and (ii) such knowledge refers
only to the knowledge of the lawyers in our firm participating in the
preparation of the Registration Statement and the Prospectus/Prospectus
Supplement (being Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxx Xxxxxx, Xxxxxx
Xxxxxxxxxxxx and Xxxxx Xxxxxxxx White) and not to the knowledge of every lawyer
in our firm. The individuals mentioned above are those whom, we believe, are the
appropriate persons of whom to inquire in rendering the opinions given as to our
knowledge herein. Please be advised that (a) our firm has not represented the
Company or any of its subsidiaries in any real property-related matters or
given substantive attention as counsel for the Company in the form of legal
consultation as to any license, decree, judgment or order as may exist with
respect to the business of Company and its subsidiaries (other than judgments or
orders favorable to the Company that are either not relevant to, or are
consistent with, the opinions expressed in this letter), (b) we are not
representing the Company in connection with any actual or threatened actions,
suits or proceedings and (c) except for a review of one of the certificates
referred to in paragraph (16), with your permission, we have not made any other
inquiries with respect thereto.
The Company is a Delaware corporation and, until it
reincorporated in Delaware in 1994, was an Arizona corporation. The Material
Subsidiaries are Arizona corporations, an Arizona limited liability company and
an Arizona limited partnership and a Delaware limited partnership. We are not
admitted to practice in Arizona or Delaware. However, we are generally familiar
with Title 10 of the Arizona Revised Statutes, Chapters 1-23 (Corporations and
Associations) and its predecessor statutes, the Delaware General Corporation Law
and the Delaware Revised Uniform Limited Partnership Act and, except as set
forth in the following sentence, have made such review thereof as we consider
necessary for the purpose of rendering the opinion contained in paragraphs (i),
(ii) (as to DEVCO), (iv), (v), (vii), (viii), (ix), (x)(A) and (xi) of this
opinion. Insofar as this opinion covers Arizona law (except with respect to
paragraph (iii) hereof), or Arizona, California, Delaware, Nevada, South
Carolina or Texas state or local licenses, decrees, judgments or orders and as
to paragraphs (v), (xiii) (b) and (xiv), we have relied, with your permission,
on the opinion of Xxxxxxxxx X. Xxxxx, Esq., Vice President and General Counsel
of the Company, to you, a copy of which is attached hereto, and (a) as to
paragraphs (ii) (second sentence) (with respect to the Material Subsidiaries
other than DEVCO), (x)(F) (except as to federal law), (xi) (except as to federal
law and the Delaware General Corporation Law), and (xiii) such reliance is, with
your permission, exclusive and without any independent verification and (b) our
opinion is subject to the same qualifications, assumptions and
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January ___, 1997
Page 11
limitations as are set forth in that opinion. We believe you and we are
justified in relying on that opinion. Subject to the foregoing, this opinion is
limited to federal, Arizona, Delaware and New York law, to the extent set forth
above. With respect to the opinion in paragraphs (i) and (ii) as to valid
existence and good standing and with respect to the opinion in paragraph (iii),
we have relied exclusively on certificates from the relevant state authorities[,
except with respect to the qualification of DEVCO in Arizona, in which case we
have relied exclusively on oral advice from a representative of the relevant
state authority]. Xxxxxx Xxxxxx, the partner of this firm with primary
responsibility for the matters covered by this letter, beneficially owns
$225,000 in principal amount of 10-7/8% Senior Notes due 2000 of the Company.*
This letter is furnished to you in connection with the
Underwriting Agreement and the transactions contemplated thereby, is solely for
your benefit, may not be quoted in part by you or in whole or in part by any
other person and may not be relied upon by any other person or by you in any
other context.
Very truly yours,
XXXXXX, XXXX & XXXXXXXX LLP
* Note -- the language in brackets will be included only if appropriate given
the facts at the time the opinion is delivered.
X-00
00
XXXXX X
January ___, 1997
Xxxxxx, Read & Co. Inc.
Xxxxxxx, Xxxxx & Co.
c/x Xxxxxx, Read & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Xxx Xxxx Corporation
Public Offering of $150,000,000 of
9 3/4% Senior Subordinated Debentures due 2008
Ladies and Gentlemen:
I am the General Counsel of Xxx Xxxx Corporation, a Delaware
corporation (the "Company"), and render this opinion to you pursuant to Section
6(b) of the Underwriting Agreement, dated January 15, 1997, between each of you
and the Company (the "Underwriting Agreement") in connection with the sale by
the Company to you of $150 million of 9 3/4% Senior Subordinated Debentures due
2008 (the "Debentures").
In connection with my examination of documents as described below, I
have assumed the genuineness of all signatures on, and the authenticity of, all
documents submitted to me as originals and the conformity to original documents
of all documents submitted to me as copies. With respect to agreements and
instruments executed by natural persons, I have assumed the legal competency of
such persons.
For the purpose of rendering this opinion, I have made such factual and
legal inquiries as I deemed necessary under the circumstances and in that
connection I have examined, among other things, originals or copies of the
following:
(1) The registration statement on Form S-3 (Securities
Act file number 33-60089) filed by the Company with
the Securities and Exchange Commission (the
"Commission") on June 9, 1995 for the purpose of
registering the sale of various securities, including
Senior Subordinated Debt Securities, under the
Securities Act of 1933, as amended (the
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"Securities Act"), the related Form T-1 filed with
the Commission for the purpose of qualifying the
Indenture (defined below) under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"),
Amendment No. 1 to that Registration Statement filed
with the Commission on July 21, 1995 and the final
prospectus, dated July 21, 1995, filed by the Company
with the Commission pursuant to Rule 424(b) of the
Rules and Regulations adopted by the Commission under
the Securities Act (the "Rules"). The registration
statement in the form in which it became effective on
July 21, 1995, including the documents incorporated
by reference therein to the extent not modified or
superseded thereby, is referred to below as the
"Registration Statement", the final prospectus of the
Company dated July 21, 1995, in the form filed with
the Commission pursuant to Rule 424(b) of the Rules,
including the documents incorporated by reference
therein to the extent not modified or superseded
thereby, is referred to below as the "Prospectus" and
the Prospectus, as supplemented by the Prospectus
Supplement to Prospectus dated January 15, 1997, in
the form filed by the Company with the Commission
pursuant to Rule 424(b) of the Rules, including the
documents incorporated by reference therein to the
extent not modified or superseded thereby, is
referred to below as the "Prospectus/Prospectus
Supplement";
(2) The Certificate of Incorporation of the Company and
the Articles of Incorporation of Xxx Xxxx
Communities, Inc., Xxx Xxxx California Corp., Xxx
Xxxx'x Coventry Homes, Inc., Xxx Xxxx'x Coventry
Homes Construction Co., Xxx Xxxx Home Construction,
Inc., Del X. Xxxx Foothills Corporation, Xxx Xxxx
Commercial Properties Corporation, Terravita Home
Construction Co., Terravita Corp., Terravita
Commercial Corp., Xxx Xxxx'x Coventry Homes of
Tucson, Inc., Xxx Xxxx'x Coventry Homes Construction
of Tucson Co., Xxx Xxxx'x Coventry Homes of Nevada,
Inc., Xxx Xxxx Homes, Inc., The Villages at Desert
Hills, Inc., DW Aviation Co., Inc., Xxx Xxxx
Conservation Holding Corp., Trovas Company, Trovas
Construction Company, Fairmount Mortgage, Inc., Xxx
Xxxx Limited Holding Co. and Xxx Xxxx Southwest Co.,
each of which is an Arizona corporation, the Articles
of Organization and Operating Agreement of Terravita
Marketplace L.L.C., an Arizona limited liability
company ("Terravita L.L.C."), and the Certificate and
Agreement of Limited Partnership of Xxx Xxxx Texas
Limited Partnership, an Arizona
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January ___, 1997
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limited partnership ("DW Texas L.P.") (together, the
"Material Subsidiaries");
(3) The Bylaws of the Company and of the Material
Subsidiaries that are corporations, as amended to
date;
(4) Minutes of meetings of the Boards of Directors of the
Company at which actions were taken with respect to
the transactions covered by this opinion and minutes
or records of other corporate proceedings;
(5) The action of the Chief Executive Officer of the
Company, dated as of January 15, 1997, with respect
to the terms of the Debentures and the Indenture;
(6) The letters of KPMG Peat Marwick LLP, dated January
15, 1997, and the date hereof, delivered pursuant to
Section 6(d) of the Underwriting Agreement;
(7) The certificate, dated as of the date hereof,
delivered pursuant to Section 6(k) of the
Underwriting Agreement;
(8) The Indenture, dated as of January 21, 1997, among
the Company, State Street Bank and Trust Company, as
Trustee (the "Trustee"), and State Street Bank and
Trust Company, N.A., as Co-Registrar and Co-Paying
Agent, pursuant to which the Debentures are to be
issued (the "Indenture");
(9) The Certificate of the Trustee, dated as of the date
hereof, as to the due authentication of the
Debentures;
(10) The Underwriting Agreement;
(11) Specimen certificate(s) representing the Debentures;
(12) The documents referred to in subparagraph (v)(A)-(E)
below and the indentures with respect to the
Company's the 10-7/8% Senior Notes due 2000, 9-3/4%
Senior Subordinated Debentures due 2003 and 9% Senior
Subordinated Debentures due 2006;
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January ___, 1997
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(13) The Directors and Officers Questionnaires of the
directors and executive officers of the Company;
(14) My opinions rendered in connection with the public
offerings by the Company of its 10-7/8% Senior Notes
due 2000, 9-3/4% Senior Subordinated Debentures due
2003, 9% Senior Subordinated Debentures due 2006 and
2,474,900 shares of the Common Stock in August 1995;
and
(15) Such other certificates and assurances from public
officials and officers and representatives of the
Company that I considered necessary or appropriate
for the purpose of rendering this opinion, copies of
which have been delivered to you.
Based on the foregoing and in reliance thereon, and subject to the
assumptions, qualifications and limitations set forth herein, I am of the
opinion that:
(i) Each of the Material Subsidiaries (except Terravita
L.L.C. and DW Texas L.P.) is a corporation organized,
validly existing and in good standing under the laws
of Arizona, Terravita L.L.C. is a limited liability
company organized and validly existing under the Laws
of Arizona and DW Texas L.P. is a limited partnership
organized and validly existing under the laws of
Arizona. Each Material Subsidiary has the corporate,
limited liability company (as to Terravita L.L.C.) or
partnership (as to DW Texas L.P.) power to own its
properties and conduct its business, in each case as
described in the Prospectus/Prospectus Supplement;
(ii) The 2,500,000 shares and 375,000 shares of the
Company's common stock issued on June 25 and July 25,
1991, respectively, in a registered public offering,
the approximately 1.1 million shares of the Company's
common stock publicly issued in August and September
1987 in an exchange offer for then outstanding notes,
the 333,333 shares of common stock of the Company
issued on September 25, 1983, upon exercise of
warrants, in a registered public offering and the
approximately 3.2 million shares of common stock of
the Company issued in connection with the
underwritten call in May and June 1992 of the
Company's 10-3/8% Convertible Subordinated Debentures
(none of which, I am informed, are now outstanding)
were all duly and
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January ___, 1997
Page 5
validly authorized, fully paid, non-assessable and
not issued in violation of any preemptive rights
provided by Arizona law or the Articles of
Incorporation or Bylaws of the Company as then in
effect (the Company was incorporated in Arizona at
the time of each of these issuances of common stock);
(iii) To my knowledge and except for a 1989 lawsuit
challenging the issuance of the Company's 10-3/8%
Convertible Subordinated Debentures and the shares
issuable upon conversion thereof, which lawsuit was
dismissed without any payment by the Company to the
plaintiffs or their counsel, no shares of common
stock of the Company issued and outstanding as of the
date hereof have been or are the subject of any claim
or threatened claim that they were not duly
authorized, validly issued and non-assessable. Though
it is unclear precisely which statute of limitations
in Arizona law would govern any such claim, for
issuances when the Company was an Arizona
corporation, the limitation period by which any such
claim must be made is the later of six years from the
date of any issuance of shares or three years from
the date any claimant knew or should have known that
the applicable shares were not authorized, validly
issued and non- assessable;
(iv) The Underwriting Agreement and the Indenture have
been duly authorized, executed and delivered by the
Company;
(v) To my knowledge, none of the Company, any of the
Material Subsidiaries or Del X. Xxxx Development Co.,
L.P., a Delaware limited partnership ("DEVCO"), is in
breach of or in default under (nor has any event
occurred which with notice, lapse of time or both
would constitute a breach of or default under): (A)
any indenture, mortgage, deed of trust, bank loan or
credit agreement or other written agreement or
instrument which was filed, or incorporated by
reference, as an exhibit to the Company's Annual
Report on Form 10-K for its fiscal year ended June
30, 1995 filed with the Commission or which is
referred to in the Prospectus/Prospectus Supplement;
(B) the Company's 10-7/8% Senior Notes due 2000; (C)
the Company's 9-3/4% Senior Subordinated Debentures
due 2003; (D) the Company's 9% Senior Subordinated
Debentures due 2006; (E) the Company's Option
Agreements with respect to real property located in
Xxxxxxxxx,
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Xxxxxxx, Xxxxx & Co.
January ___, 1997
Page 6
California, near Hilton Head Island, South Carolina,
and in Georgetown, Texas, the Company's purchase
agreement with respect to real property located
adjacent to Sun City Las Vegas and the Company's
purchase agreements with respect to real property or
interests in real property located adjacent to Sun
City West, in each case which are referred to in the
Prospectus/Prospectus Supplement; or (F) any federal
or Arizona, California, Delaware, Nevada, South
Carolina or Texas state or local license, decree,
judgment or order applicable to the Company, any of
the Material Subsidiaries or DEVCO and known to me;
in each case in subparagraphs (A)-(F) above, where
such breach or default could have a material adverse
effect on the consolidated financial position,
prospects, shareholders' equity or results of
operations of the Company and its subsidiaries taken
as a whole;
(vi) To my knowledge, there are no contracts, licenses,
agreements, leases or documents of a character which
are required to be filed as exhibits to the
Registration Statement or to be summarized or
described in the Prospectus/Prospectus Supplement
which have not been so filed, summarized or
described;
(vii) The Debentures have been duly authorized, executed
and delivered by the Company;
(viii) No consent, approval, authorization, order or
qualification of or registration with any Arizona
state governmental or regulatory commission, board,
body, authority or agency is required for the
issuance or sale of the Debentures by the Company as
contemplated by the Underwriting Agreement, provided
that I express no opinion as to any necessary
qualification or registration, or exemption
therefrom, under Arizona state securities or Blue Sky
laws;
(ix) The execution, delivery and performance of the
Underwriting Agreement and the Indenture and the
issuance and sale of the Debentures by the Company
and the consummation of the transactions contemplated
by the Underwriting Agreement and the Indenture by
the Company will not result in any breach of or
constitute a default under (or constitute an event
which with notice, lapse of time or both would
constitute a breach of or default under): (A) any
indenture, mortgage,
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Xxxxxxx, Xxxxx & Co.
January ___, 1997
Page 7
deed of trust, bank loan or credit agreement or other
written agreement or instrument referred to in
paragraphs (v)(A)-(E) above, provided that no opinion
is rendered as to whether the making of a Charge of
Control Offer or a Net Worth Offer, as defined in and
pursuant to Sections 4.14 or 4.15 of the Indenture,
respectively, or creating a lien pursuant to the
fourth paragraph of Section 7.07 of the Indenture
would result in such a breach or default (or event
which with notice, lapse of time or both would
constitute such a breach of default); (B) any
Arizona, California, Delaware, Nevada, South Carolina
or Texas state statute, regulation or rule applicable
to the Company, any of the Material Subsidiaries or
DEVCO (with respect to the execution, delivery and
performance of the Indenture and the sale of the
Debentures only, provided that no opinion is
expressed as to state securities or Blue Sky laws or
the rules and regulations under any of them or as to
any misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement); or (C) any license, decree, judgment or
order applicable to the Company, any of the Material
Subsidiaries or DEVCO and known to me (with respect
to the execution, delivery and performance of the
Indenture and the sale of the Debentures only,
provided that no opinion is expressed as to state
securities or Blue Sky laws or the rules and
regulations under any of them or as to any
misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement);
(x) To my knowledge, there are no actions, suits or
proceedings pending or threatened in writing against
the Company, any of the Material Subsidiaries or
DEVCO, or any of their respective properties, at law
or in equity or before or by any commission, board,
body, authority or agency, which are required to be
described in the Prospectus/Prospectus Supplement,
but are not so described; and
(xi) The Company owns, directly or indirectly, all of the
"Common Equity" (as defined in the Indenture) of each
of the Material Subsidiaries (other than Terravita
L.L.C.) and DEVCO.
During the course of the preparation of the Prospectus/Prospectus
Supplement, I participated in conferences with representatives of the Company,
its independent accountants, you and your counsel, at which conferences the
contents of the Registration Statement, Prospectus and Prospectus/Prospectus
Supplement and related matters were discussed. I have
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January ___, 1997
Page 8
not independently verified the accuracy, completeness or fairness of the
statements contained in the Registration Statement, Prospectus or
Prospectus/Prospectus Supplement and the nature of my participation is such that
I am unable to assume, and do not assume, any responsibility for the accuracy,
completeness or fairness of such statements. However, based upon my
participation as described in this paragraph, I have no reason to believe and do
not believe that the Registration Statement, the Prospectus or the
Prospectus/Prospectus Supplement (provided that I express no opinion and make no
other statement as to the financial statements, financial statement notes and
financial statement schedules and other financial and statistical data contained
or incorporated by reference therein or with respect to the T-1), as of their
respective effective or issue date and as of the date hereof, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
This letter is limited to the facts and the law as they exist on the
date hereof. In addition, with respect to statements in this letter based on my
knowledge, I have advised you only as to knowledge obtained by me in connection
with matters to which I have given substantive attention as General Counsel of
the Company in the form of legal consultation and knowledge obtained by me from
consultation with attorneys in the legal department of the Company concerning
the opinions set forth above with respect to their knowledge in connection with
matters to which they have given substantive attention as attorneys for the
Company in the form of legal consultation.
This opinion is limited to Arizona law. The statements herein as to
California, Delaware, Nevada, South Carolina and Texas state or local statutes,
regulations, rules, licenses, decrees, judgments or orders are as to my
knowledge and not an opinion with respect thereto. This letter is furnished to
you in connection with the Underwriting Agreement and the transactions
contemplated thereby, is solely for your benefit, may not be quoted in part by
you or in whole or in part by any other person and may not be relied upon by any
other person or by you in any other context, provided that this letter may be
relied upon by Xxxxxx, Xxxx & Xxxxxxxx LLP in connection with its opinion
pursuant to Section 6(a) of the Underwriting Agreement and in any opinion to the
Trustee and may be attached to those opinions.
Very truly yours,
XXXXXXXXX X. XXXXX
B-8
41
ANNEX C
January ___, 1997
Xxx Xxxx Corporation
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
Xxxxxx, Read & Co. Inc.
Xxxxxxx, Sachs & Co.
c/x Xxxxxx, Read & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxx Xxxx Corporation
Public Offering of $150,000,000 of
9 3/4% Senior Subordinated Debentures due 2008
Ladies and Gentlemen:
We have acted as counsel to State Street Bank and Trust Company ("State
Street") as Trustee and its affiliate, State Street Bank and Trust Company, N.A.
as Agent, in connection with the Underwriting Agreement dated January 15, 1997
(the "Underwriting Agreement") between Xxx Xxxx Corporation (the "Company"),
Xxxxxx, Read & Co. Inc. and Xxxxxxx, Xxxxx & Co. (the "Underwriters"), pursuant
to which the Company will sell to the Underwriters $150,000,000 of its 9 3/4%
Senior Subordinated Debentures due 2008 (the "Debentures"). This opinion is
rendered pursuant to Section 6(c) of the Underwriting Agreement.
We have assumed for the purposes of rendering this opinion (a) that the
Company filed a shelf registration statement with the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, to which was attached
both a form of indenture naming The First National Bank of Boston ("Bank of
Boston") as trustee and Bank of Boston's Form T-1 submitted pursuant to the
Trust Indenture Act of 1939 (the "TIA"), (b) that such registration statement
has become effective and has been supplemented by the filing of a Prospectus
Supplement dated January 15, 1997 with the SEC referencing State Street rather
than Bank of Boston as Trustee under the Indenture pursuant to which the
Debentures are to
C-1
42
Xxx Xxxx Corporation
Xxxxxxx, Sachs & Co.
January ___, 1997
Page 2
be issued (the "Indenture"), (c) that the Indenture naming State Street rather
than Bank of Boston as Trustee under the Indenture, has been duly qualified
under the TIA, and (d) that the Debentures and the Indenture are legal, valid
and enforceable obligations of the Company, subject only to the qualifications
set forth in the opinion of its counsel, Xxxxxx, Xxxx & Xxxxxxxx LLP, addressed
to the Underwriters, dated today. We have not independently verified any of such
assumptions.
Subject to, and in reliance upon, the foregoing, we are of the
opinion that (i) State Street need not file with the SEC its own Form T-1 in
connection with its acting as Trustee under the Indenture or in respect of the
offer and sale of the Debentures, and (ii) State Street satisfies the
requirements of Section 310(a)(1) of the Trust Indenture Act of 1939, as
amended.
This opinion is furnished to you in connection with the Underwriting
Agreement and the transactions contemplated thereby, is solely for your benefit,
may not be quoted in part by you or in whole or in part by any other person and
may not be relied upon by any other person or by you in any other context,
provided that Xxxxxx, Xxxx & Xxxxxxxx LLP may rely on this opinion in rendering
its opinion pursuant to the Underwriting Agreement.
Very truly yours,
XXXXXXX & XXXXXXX LLP
C-2
