XXXX'X COMPANIES, INC.
(a North Carolina corporation)
6-3/8% Senior Notes Due 2005
PURCHASE AGREEMENT
Dated: December 13, 1995
XXXX'X COMPANIES, INC.
(a North Carolina corporation)
6-3/8% Senior Notes Due 2005
PURCHASE AGREEMENT
December 13, 1995
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated XXXXXXX, SACHS & CO.
XXXXXX BROTHERS INC.
XXXXXXXXXX SECURITIES
x/x XXXXXXX XXXXX & XX.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxx'x Companies, Inc., a North Carolina corporation (the
"Company"), proposes to issue and sell to you, as underwriters (the
"Underwriters"), its 6-3/8% Senior Notes Due 2005 (the "Securities") on the
terms and conditions stated herein and in Schedule B. The Securities are to be
sold to each Underwriter, acting severally and not jointly, in the respective
principal amounts as are set forth in Schedule A hereto opposite the name of
such Underwriter. The Securities are to be issued pursuant to an indenture to be
dated as of December 1, 1995 (the "Indenture") between the Company and The First
National Bank of Chicago, as trustee (the "Trustee"). The Securities and the
Indenture are more fully described in the Prospectus referred to below.
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The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(Registration No. 33-51865), including a prospectus, relating to certain of its
debt securities, preferred stock, common stock and preferred stock purchase
rights and the offering thereof from time to time in accordance with Rule 415
under the Securities Act of 1933, as amended (the "1933 Act"). Such registration
statement has been declared effective by the Commission. As provided in Section
3(a), a prospectus supplement reflecting the terms of the Securities, the terms
of the offering thereof and other matters set forth therein has been prepared
and will be filed pursuant to Rule 424 under the 1933 Act. Such prospectus
supplement, in the form first filed after the date hereof pursuant to Rule 424,
is herein referred to as the "Prospectus Supplement." Such registration
statement, as amended at the date hereof, including the exhibits thereto and the
documents incorporated by reference therein, is herein called the "Registration
Statement," and the basic prospectus included therein relating to all offerings
of securities under the Registration Statement, as supplemented by the
Prospectus Supplement, is herein called the "Prospectus," except that, if such
basic prospectus is amended or supplemented on or prior to the date on which the
Prospectus Supplement is first filed pursuant to Rule 424, the term "Prospectus"
shall refer to the basic prospectus as so amended or supplemented and as
supplemented by the Prospectus Supplement, in either case including the
documents filed by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), that are incorporated by
reference therein.
The Company understands that the Underwriters propose to make
a public offering of the Securities as soon as you deem advisable after this
Agreement has been executed and delivered.
Section 1. Representations and Warranties. (a) The Company
represents and warrants to and agrees with each of the Underwriters that:
(i) On the original effective date of the Registration
Statement, on the effective date of the most recent post-effective
amendment thereto, if any, and on the date of the filing by the Company
of any annual report on Form 10-K after the original filing of the
Registration Statement, the Registration Statement complied in all
material respects with the requirements of the 1933 Act, the rules and
regulations of the Commission thereunder (the "1933 Act Regulations"),
the Trust Indenture Act of 1939, as amended (the "1939 Act") and the
rules and regulations of the Commission under the 1939 Act (the "1939
Act Regulations") and did 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; on the date
hereof and at the Closing Time (as defined below), (A) the Registration
Statement, and any amendments and supplements thereto, comply and will
comply in all material respects with the requirements of the 1933 Act,
the 1933 Act Regulations, the 0000 Xxx and
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the 1939 Act Regulations, (B) neither the Registration Statement nor
any amendment or supplement thereto includes or will include an untrue
statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and (C) neither the Prospectus nor
any amendment or supplement thereto includes or will include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter, directly or through you, expressly for use in the
Registration Statement or the Prospectus.
(ii) The documents incorporated by reference in the
Prospectus, pursuant to Item 12 of Form S-3 under the 1933 Act at the
time they were filed with the Commission, complied in all material
respects with the requirements of the 1934 Act, and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations")
and, when read together and with the other information in the
Prospectus do not and will not, on the date hereof and at the Closing
Time, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(iii) Deloitte & Touche, who have reported upon the audited
financial statements and schedules included or incorporated by
reference in the Registration Statement, are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) This Agreement has been duly authorized, executed and
delivered by the Company.
(v) The consolidated financial statements included or
incorporated by reference in the Registration Statement present fairly
the consolidated financial position of the Company and its subsidiaries
as of the dates indicated and the consolidated results of operations
and the consolidated 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 throughout the periods involved. The financial
statement schedules, if any, included in the Registration Statement
present fairly the information required to be stated therein. The
selected financial data included or incorporated by reference in the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited consolidated
financial statements included or incorporated by reference in the
Registration Statement.
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(vi) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of North
Carolina with corporate power and authority under such laws to own,
lease and operate its properties and conduct its business as described
in the Prospectus; and the Company is duly qualified to transact
business as a foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on the Company
and its subsidiaries, considered as one enterprise.
(vii) Each of Lowe's Home Centers, Inc., a North Carolina
corporation, LF Corporation, a Delaware corporation, and The Contractor
Yard, Inc., a North Carolina corporation (collectively, the
"Significant Subsidiaries"; "subsidiaries" has the meaning set forth in
Rule 405 under the 1933 Act), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation with corporate power and authority under such laws to
own, lease and operate its properties and conduct its business; and
each Significant Subsidiary is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction
in which it owns or leases property of a nature, or transacts business
of a type, that would make such qualification necessary, except to the
extent that the failure to so qualify or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
considered as one enterprise. All of the outstanding shares of capital
stock of each Significant Subsidiary have been duly authorized and
validly issued and are fully paid and nonassessable and are owned by
the Company, directly or through one or more Significant Subsidiaries,
free and clear of any pledge, lien, security interest, charge, claim,
equity or encumbrance of any kind.
(viii) The Company had at the date indicated a duly
authorized, issued and outstanding capitalization as set forth in the
Prospectus under the caption "Capitalization."
(ix) The Indenture and any supplement thereto or board
resolution or other action of authorized officers of the Company
setting forth the terms of the Securities (the Indenture, as so
supplemented by the supplement, board resolutions or action of
authorized officers being herein referred to as the "Indenture") has
been duly authorized by the Company, will be substantially in the form
heretofore delivered to you and, when duly executed and delivered by
the Company and the Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting
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enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law);
and the Indenture conforms to the description thereof in the
Prospectus.
(x) The Securities have been duly authorized by the Company.
When executed, authenticated, issued and delivered in the manner
provided for in the Indenture and sold and paid for as provided in this
Agreement, the Securities will constitute valid and binding obligations
of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except
as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law);
and the Securities conform to the description thereof in the
Prospectus.
(xi) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and nonassessable; no holder thereof is or will be subject to personal
liability by reason of being such a holder; and none of the outstanding
shares of capital stock of the Company issued since December 19, 1979
was issued in violation of the preemptive rights of any stockholder of
the Company.
(xii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein or contemplated thereby, there has not been
(A) any material adverse change in the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise, whether or
not arising in the ordinary course of business, (B) any transaction
entered into by the Company or any subsidiary, other than in the
ordinary course of business, that is material to the Company and its
subsidiaries, considered as one enterprise, or (C) any dividend (other
than ordinary quarterly dividends declared, paid or made in the
ordinary course of business) or distribution of any kind declared, paid
or made by the Company on its capital stock.
(xiii) Neither the Company nor any Significant Subsidiary is
in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
to which it is a party or by which it may be bound or to which any of
its properties may be subject, except for such defaults that would not
have a material adverse effect on the condition (financial or
otherwise), earnings,
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business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise. The execution and delivery
of this Agreement and the Indenture by the Company, the issuance and
delivery of the Securities, the consummation by the Company of the
transactions contemplated in this Agreement, in the Prospectus and in
the Registration Statement and compliance by the Company with the terms
of this Agreement and the Indenture, have been duly authorized by all
necessary corporate action on the part of the Company and do not and
will not result in any violation of the charter or by-laws of the
Company or any Significant Subsidiary, and do not and will not conflict
with, or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any Significant Subsidiary under (A) any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any Significant Subsidiary is a
party or by which it may be bound or to which any of its properties may
be subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a material adverse effect
on the condition (financial or otherwise), earnings, business affairs
or business prospects of the Company and its subsidiaries, considered
as one enterprise) or (B) any existing applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any Significant Subsidiary or any of their respective
properties.
(xiv) No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than under the 1933 Act, the 1939 Act and the securities or blue
sky laws of the various states), is required for the valid
authorization, issuance, sale and delivery of the Securities, or for
the execution, delivery or performance of the Indenture by the Company.
(xv) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company, threatened against or affecting the Company
or any Significant Subsidiary that is required to be disclosed in the
Prospectus or that could result in any material adverse change in the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as
one enterprise, or that could materially and adversely affect the
properties or assets of the Company and its subsidiaries, considered as
one enterprise, or that could adversely affect the consummation of the
transactions contemplated in this Agreement; the aggregate of all
pending legal or governmental proceedings that are not described in the
Prospectus to which the Company or any Significant Subsidiary is a
party or which affect any of their respective properties, including
ordinary routine litigation incidental to the business of the Company
or any Significant Subsidiary, would not have a material
7
adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise.
(xvi) There are no contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described and filed as required.
(xvii) The Company and the Significant Subsidiaries each owns,
possesses or has obtained all material governmental licenses, permits,
certificates, consents, orders, approvals and other authorizations
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as presently conducted (other
than such licenses, permits, certificates, consents, orders, approvals
and authorizations which, if neither owned, possessed nor obtained,
would not have a material adverse effect on the business of the Company
and its subsidiaries, considered as one enterprise), and neither the
Company nor any Significant Subsidiary has received any notice of
proceedings relating to revocation or modification of any such
licenses, permits, certificates, consents, orders, approvals or
authorizations.
(xviii) The Company and the Significant Subsidiaries each owns
or possesses, or can acquire on reasonable terms, adequate patents,
patent licenses, trademarks, service marks and trade names necessary to
carry on its business as presently conducted, and neither the Company
nor any Significant Subsidiary has received any notice of infringement
of or conflict with asserted rights of others with respect to any
patents, patent licenses, trademarks, service marks or trade names that
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, could materially adversely affect the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise.
(xix) To the best knowledge of the Company, no labor problem
exists with its employees or with employees of the Significant
Subsidiaries or is imminent that could adversely affect the Company and
its subsidiaries, considered as one enterprise, and the Company is not
aware of any existing or imminent labor disturbance by the employees of
any of its or the Significant Subsidiaries' principal suppliers,
contractors or customers that could be expected to materially adversely
affect the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise.
(xx) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Securities.
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(xxi) Except as disclosed in the Registration Statement and
except as would not individually or in the aggregate have a material
adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise, (A) the Company and the
Significant Subsidiaries are each in compliance with all applicable
Environmental Laws, (B) the Company and the Significant Subsidiaries
have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened Environmental
Claims against the Company or any of the Significant Subsidiaries, and
(D) there are no circumstances with respect to any property or
operations of the Company or the Significant Subsidiaries that could
reasonably be anticipated to form the basis of an Environmental Claim
against the Company or the Significant Subsidiaries.
For purposes of this Agreement, the following terms shall have
the following meanings: "Environmental Law" means any United States (or
other applicable jurisdiction's) federal, state, local or municipal
statute, law, rule, regulation, ordinance, code, policy or rule of
common law and any judicial or administrative interpretation thereof
including any judicial or administrative order, consent decree or
judgment, relating to the environment, health, safety or any chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority. "Environmental Claims" means
any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigations or proceedings relating in any way to any
Environmental Law.
(b) Any certificate signed by any officer of the Company or
any Significant Subsidiary and delivered to you or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to the Underwriters; Closing. (a)
On the basis of the representations and warranties herein contained, and subject
to the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at the purchase price to the Underwriters set forth in
Schedule B, the principal amount of Securities set forth opposite the name of
such Underwriter in Schedule A, plus any additional principal amount of
Securities that such Underwriter may become obligated to purchase pursuant to
Section 10 of this Agreement.
(b) Payment of the purchase price for, and delivery of,
the Securities shall be made at the offices of Shearman & Sterling, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx,
0
Xxx Xxxx 00000, or at such other place as shall be agreed upon by the Company
and you, at 10:00 A.M. on the third full business day after the date of this
Agreement (unless postponed pursuant to Section 10), or at such other time not
more than ten full business days thereafter as you and the Company shall
determine (such date and time of payment and delivery being herein called the
"Closing Time"). Payment shall be made to the Company by wire transfer of
immediately available funds to an account designated by the Company, against
delivery to you for the respective accounts of the several Underwriters of the
Securities to be purchased by them.
(c) The Securities to be purchased by the Underwriters shall
be in such denominations and registered in such names as you may request in
writing at least two full business days before the Closing Time. The Securities
will be made available in New York City for examination and packaging by you not
later than 10:00 A.M. on the business day prior to the Closing Time.
Section 3. Certain Covenants of the Company. The Company
covenants with each Underwriter as follows:
(a) If reasonably requested by you in connection with the
offering of the Securities, the Company will prepare preliminary
prospectus supplements containing such information as you and the
Company deem appropriate, and, immediately following the execution of
this Agreement, the Company will prepare a Prospectus Supplement that
complies with the 1933 Act and the 1933 Act Regulations and that sets
forth the principal amount of the Securities and their terms not
otherwise specified in the Indenture, the name of each Underwriter
participating in the offering and the principal amount of the
Securities that each severally has agreed to purchase, the name of each
Underwriter, if any, acting as representative of the Underwriters in
connection with the offering, the price at which the Securities are to
be purchased by the Underwriters from the Company, any initial public
offering price, any selling concession and reallowance and any delayed
delivery arrangements, and such other information as you and the
Company deem appropriate in connection with the offering of the
Securities. The Company will promptly transmit copies of the Prospectus
Supplement to the Commission for filing pursuant to Rule 424 under the
1933 Act and will furnish to the Underwriters as many copies of any
preliminary prospectus supplements and the Prospectus as you shall
reasonably request.
(b) The Company will comply to the best of its ability with
the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations, and the 1939 Act and the 1939 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and the Prospectus. If at any time when
a prospectus is required by the 1933 Act to be delivered in connection
with sales of the Securities any event shall occur or condition exist
as a
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result of which it is necessary, in the opinion of counsel for the
Underwriters or counsel for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary,
in the opinion of either such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(d), such amendment or supplement as
may be necessary to correct such untrue statement or omission or to
make the Registration Statement or the Prospectus comply with such
requirements.
(c) During the period when a prospectus is required by the
1933 Act to be delivered in connection with sales of the Securities,
the Company will, subject to Section 3(d), file promptly all documents
required to be filed with the Commission pursuant to Section 13, 14 or
15(d) of the 1934 Act.
(d) During the period when a prospectus is required by the
1933 Act to be delivered in connection with sales of the Securities,
the Company will inform you of its intention to file any amendment to
the Registration Statement, any supplement to the Prospectus or any
document that would as a result thereof be incorporated by reference in
the Prospectus; will furnish you with copies of any such amendment,
supplement or other document a reasonable time in advance of filing;
and will not file any such amendment, supplement or other document in a
form to which you or your counsel shall reasonably object.
(e) During the period when a prospectus is required by the
1933 Act to be delivered in connection with sales of the Securities,
the Company will notify you immediately, and confirm the notice in
writing, (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the transmission to the Commission for filing of any
supplement to the Prospectus or any document that would as a result
thereof be incorporated by reference in the Prospectus, (iii) of the
receipt of any comments from the Commission with respect to the
Registration Statement, the Prospectus or the Prospectus Supplement,
(iv) of any request by the Commission for any amendment to the
Registration Statement or any supplement to the Prospectus or for
additional information relating thereto or to any document incorporated
by reference in the Prospectus and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the
institution or threatening of any proceeding for any of such purposes.
The Company will use every reasonable effort to prevent the issuance of
any such stop order or of
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any order suspending such qualification and, if any such order is
issued, to obtain the lifting thereof at the earliest possible moment.
(f) The Company has furnished or will furnish to you as many
signed copies of the Registration Statement (as originally filed) and
of all amendments thereto, whether filed before or after the
Registration Statement became effective, copies of all exhibits and
documents filed therewith or incorporated by reference therein (through
the end of the period when a prospectus is required by the 1933 Act to
be delivered in connection with sales of the Securities) and signed
copies of all consents and certificates of experts, as you may
reasonably request, and has furnished or will furnish to you, for each
of the Underwriters, one conformed copy of the Registration Statement
(as originally filed) and of each amendment thereto (including
documents incorporated by reference into the Prospectus but without
exhibits).
(g) The Company will use its best efforts, in cooperation with
the Underwriters, to qualify the Securities for offering and sale under
the applicable securities laws of such states and other jurisdictions
as you may designate and to maintain such qualifications in effect for
a period of not less than one year from the date hereof; provided,
however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject. The
Company will file such statements and reports as may be required by the
laws of each jurisdiction in which the Securities have been qualified
as above provided. The Company will also supply you with such
information as is necessary for the determination of the legality of
the Securities for investment under the laws of such jurisdictions as
you may request.
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 45 days after the
close of the period covered thereby, an earnings statement of the
Company (in form complying with the provisions of Rule 158 of the 1933
Act Regulations), covering (i) a period of 12 months beginning after
the effective date of the Registration Statement and covering a period
of 12 months beginning after the effective date of any post-effective
amendment to the Registration Statement but not later than the first
day of the Company's fiscal quarter next following such respective
effective dates and (ii) a period of 12 months beginning after the date
of this Agreement but not later than the first day of the Company's
fiscal quarter next following the date of this Agreement.
(i) The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the
Prospectus under the caption "Use of Proceeds."
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(j) For a period of five years after the Closing Time, the
Company will furnish to you and, upon request, to each Underwriter,
copies of all annual reports, quarterly reports and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Company
to its stockholders or security holders generally.
(k) The Company has complied and will comply with all the
provisions of Florida H.B. 1771, codified as Section 517.075 of the
Florida Statutes, and all regulations promulgated thereunder relating
to issuers doing business in Cuba.
Section 4. Payment of Expenses. The Company will pay and bear
all costs and expenses incident to the performance of its obligations under this
Agreement, including (a) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits), as
originally filed and as amended, the preliminary prospectus supplement and the
Prospectus and any amendments or supplements thereto, and the cost of furnishing
copies thereto to the Underwriters, (b) the preparation, printing and
distribution of this Agreement, the Indenture, the Securities, the Blue Sky
Survey and the Legal Investment Survey, (c) the delivery of the Securities to
the Underwriters, (d) the fees and disbursements of the Company's counsel and
accountants, (e) the qualification of the Securities under the applicable
securities laws in accordance with Section 3(g) and any filing for review of the
offering with the National Association of Securities Dealers, Inc., including
filing fees and fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the Blue Sky Survey and the Legal
Investment Survey, (f) any fees charged by rating agencies for rating the
Securities and (g) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee, in connection with the Indenture and
the Securities.
If this Agreement is terminated by you in accordance with the
provisions of Section 5 or 9(a)(i), the Company shall reimburse the Underwriters
for all their out-of-pocket expenses, including the fees and disbursements of
counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The
obligations of the several Underwriters to purchase and pay for the Securities
that they have respectively agreed to purchase pursuant to this Agreement are
subject to the accuracy of the representations and warranties of the Company
contained herein or in certificates of any officer of the Company or any
Significant Subsidiary delivered pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to the following
further conditions:
(a) At the Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act and no proceedings
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for that purpose shall have been instituted or shall be pending or, to
your knowledge or the knowledge of the Company, shall be contemplated
by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the
satisfaction of counsel for the Underwriters.
(b) (i) At the Closing Time, you shall have received a signed
opinion of Xxxxxxx X. Xxxxxx, Xx., General Counsel for the Company,
dated as of the Closing Time, together with signed or reproduced copies
of such opinion for each of the other Underwriters, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(A) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of North Carolina, with corporate power and authority
under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectus.
(B) Each Significant Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation with corporate
power and authority under such laws to own, lease and operate
its properties and conduct its business.
(C) All of the outstanding shares of capital stock of
the Company have been duly authorized and validly issued and
are fully paid and non-assessable, and no holder thereof is or
will be subject to personal liability by reason of being such
a holder; and none of the outstanding shares of capital stock
of the Company was issued in violation of the preemptive
rights of any stockholder of the Company.
(D) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under
the heading "Capitalization".
(E) All of the outstanding shares of capital stock of
each Significant Subsidiary have been duly authorized and
validly issued and are fully paid and non-assessable; all of
such shares are owned by the Company, directly or through one
or more Significant Subsidiaries, free and clear of any
pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind; no holder thereof is subject to
personal liability by reason of being such a holder and none
of such shares was issued in violation of the preemptive
rights of any stockholder of the Significant Subsidiaries.
(F) The Indenture has been duly authorized, executed and delivered by the
Company and, assuming due authorization, execution and delivery by
14
the Trustee, constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with
its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law).
(G) The Securities have been duly authorized by the
Company and, assuming that the Securities have been duly
authenticated by the Trustee in the manner described in its
certificate delivered to you at the Closing Time (which fact
such counsel need not determine by an inspection of the
Securities), the Securities have been duly executed, issued
and delivered by the Company and constitute valid and binding
obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance
with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law).
(H) Such counsel does not know of any statutes or
regulations, or any pending or threatened legal or
governmental proceedings, required to be described in the
Prospectus that are not described as required, nor of any
contracts or documents of a character required to be described
or referred to in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that
are not described, referred to or filed as required.
(I) To the knowledge of such counsel, no default
exists in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, loan agreement, note, lease or other
agreement or instrument that is described or referred to in
the Registration Statement or the Prospectus or filed as an
exhibit to the Registration Statement.
(J) The execution and delivery of this Agreement and
the Indenture by the Company, the issuance and delivery of the
Securities, the consummation by the Company of the
transactions contemplated in this Agreement, in the Indenture,
in the Prospectus and in the Registration Statement and
compliance by the Company with the terms of this Agreement
15
and the Indenture do not and will not result in any violation
of the charter or by-laws of the Company or any Significant
Subsidiary, and do not and will not conflict with, or result
in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Significant
Subsidiary under (1) any contract, indenture, mortgage, loan
agreement, note, lease or any other agreement or instrument
known to such counsel, to which the Company or any Significant
Subsidiary is a party or by which it may be bound or to which
any of its properties may be subject (except for such
conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise), (2) any existing
applicable law, rule or regulation (other than the securities
or blue sky laws of the various states, as to which such
counsel need express no opinion), or (3) any judgment, order
or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the
Company or any Significant Subsidiary or any of their
respective properties.
(K) The descriptions in the Prospectus of the
statutes, regulations, legal or governmental proceedings,
contracts and other documents therein described are accurate
and fairly summarize the information required to be shown.
Such opinion shall be to such further effect with respect to other
legal matters relating to this Agreement and the sale of the Securities
pursuant to this Agreement as counsel for the Underwriters may
reasonably request. In giving such opinion, such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the law
of the State of North Carolina and the federal law of the United
States, upon opinions of other counsel, who shall be counsel
satisfactory to counsel for the Underwriters, in which case the opinion
shall state that they believe you and they are entitled to so rely.
Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and the Significant
Subsidiaries and certificates of public officials; provided that such
certificates have been delivered to the Underwriters.
(ii) At the Closing Time, you shall have received a signed
opinion of Hunton & Xxxxxxxx, counsel for the Company, dated as of the
Closing Time, together with signed or reproduced copies of such opinion
for each of the other Underwriters, in form and substance satisfactory
to counsel for the Underwriters, to the effect that:
16
(A) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of North Carolina with corporate power and authority
under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectus.
(B) The Indenture has been duly authorized, executed
and delivered by the Company and, assuming due authorization,
execution and delivery by the Trustee, constitutes a valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
(C) The Securities have been duly authorized by the
Company and, assuming that the Securities have been duly
authenticated by the Trustee in the manner described in its
certificate delivered to you at the Closing Time (which fact
such counsel need not determine by an inspection of the
Securities), the Securities have been duly executed, issued
and delivered by the Company and constitute valid and binding
obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance
with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law).
(D) This Agreement has been duly authorized, executed
and delivered by the Company.
(E) The Indenture has been duly qualified under the
1939 Act.
(F) The Securities and the Indenture conform in all
material respects as to legal matters to the descriptions
thereof in the Prospectus.
(G) No authorization, approval, consent or license of
any government, governmental instrumentality or court,
domestic or foreign (other than under the 1933 Act, the 1939
Act and the securities or blue sky laws of the various
states), is required for the valid authorization, issuance,
sale and
17
delivery of the Securities or for the execution, delivery or performance of
the Indenture by the Company.
(H) The execution and delivery of this Agreement by
the Company, the issuance and delivery of the Securities, the
consummation by the Company of the transactions contemplated
in this Agreement, in the Indenture, in the Prospectus and in
the Registration Statement and compliance by the Company with
the terms of this Agreement and the Indenture do not and will
not result in any violation of the charter or by-laws of the
Company or any Significant Subsidiary.
(I) The Registration Statement became effective under
the 1933 Act on February 8, 1994; any required filing of any
preliminary prospectus supplement or the Prospectus Supplement
pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, to the best of
the knowledge of such counsel, the Registration Statement is
still effective, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or are
contemplated under the 1933 Act.
(J) The Registration Statement and the Prospectus,
excluding the documents incorporated by reference therein, and
each amendment or supplement thereto (except for the financial
statements and other financial or statistical data included
therein or omitted therefrom, as to which such counsel need
express no opinion), as of their respective effective or issue
dates, appear on their face to have been appropriately
responsive in all material respects to the requirements of the
1933 Act and the 1933 Act Regulations and the Indenture and
the Statement of Eligibility of the Trustee on Form T-1 filed
with the Commission as part of the Registration Statement
appear on their face to have been appropriately responsive in
all material respects to the requirements of the 1939 Act and
the 1939 Act Regulations.
(K) The documents incorporated by reference in the
Prospectus (except for the financial statements and other
financial or statistical data included therein or omitted
therefrom, as to which such counsel need express no opinion,
and except to the extent that any statement therein is
modified or superseded in the Prospectus), as of the dates
they were filed with the
18
Commission, appear on their face to have been appropriately
responsive in all material respects to the requirements of the
1934 Act and the 1934 Act Regulations.
(L) Such counsel have participated in the preparation
of the Registration Statement and the Prospectus and are
familiar with or have participated in the preparation of the
documents incorporated by reference in the Prospectus and no
facts have come to the attention of such counsel to lead them
to believe (1) that the Registration Statement or any
amendment thereto (except for the financial statements and
other financial or statistical data included therein or
omitted therefrom and the Statement of Eligibility of the
Trustee on Form T-1, as to which such counsel need express no
opinion), on the original effective date of the Registration
Statement, on the effective date of the most recent
post-effective amendment thereto, if any, on the date of the
filing of any annual report on Form 10-K after the filing of
the Registration Statement, on the date of this Agreement, or
on the date any such amendment became effective after the date
of this Agreement, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or (2) that the Prospectus or any amendment or
supplement thereto (except for the financial statements and
other financial or statistical data included therein or
omitted therefrom, as to which such counsel need express no
opinion), at the time the Prospectus Supplement was issued, at
the time any such amended or supplemented prospectus was
issued or at the Closing Time, included or include an untrue
statement of a material fact or omitted or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading or (3) that the documents
incorporated by reference in the Prospectus (except for the
financial statements and other financial or statistical data
included therein or omitted therefrom, as to which such
counsel need express no opinion, and except to the extent that
any statement therein is modified or superseded in the
Prospectus), as of the dates they were filed with the
Commission, included an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
Such opinion shall be to such further effect with respect to other
legal matters relating to this Agreement and the sale of the Securities
pursuant to this Agreement as counsel for the Underwriters may
reasonably request. In giving such opinion, such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the law
of the States of New York and North Carolina and the federal law of the
United States, upon opinions of other counsel, who shall be counsel
satisfactory to counsel for the Underwriters, in which case the opinion
shall state that they believe you and they are
19
entitled to so rely. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and the
Significant Subsidiaries and certificates of public officials; provided
that such certificates have been delivered to the Underwriters.
(c) At the Closing Time, you shall have received the favorable
opinion of Shearman & Sterling, counsel for the Underwriters, dated as
of the Closing Time, together with signed or reproduced copies of such
opinion for each of the other Underwriters, to the effect that the
opinions delivered pursuant to Sections 5(b)(i) and 5(b)(ii) hereof
appear on their face to be appropriately responsive to the requirements
of this Agreement except, specifying the same, to the extent waived by
you, and with respect to the incorporation and legal existence of the
Company, the Securities, this Agreement, the Indenture, the
Registration Statement, the Prospectus, the documents incorporated by
reference and such other related matters as you may require. In giving
such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York and
the federal law of the United States, upon the opinions of counsel
satisfactory to you. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and the
Significant Subsidiaries and certificates of public officials; provided
that such certificates have been delivered to the Underwriters.
(d) At the Closing Time, (i) the Registration Statement and
the Prospectus, as they may then be amended or supplemented, shall
contain all statements that are required to be stated therein under the
1933 Act and the 1933 Act Regulations and in all material respects
shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the 1939 Act Regulations, and neither
the Registration Statement nor the Prospectus, as they may then be
amended or supplemented, shall 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,
(ii) there shall not have been, since the respective dates as of which
information is given in the Registration Statement, any material
adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise, whether or not arising in
the ordinary course of business, (iii) no action, suit or proceeding
shall be pending or, to the knowledge of the Company, threatened
against the Company or any Significant Subsidiary that would be
required to be set forth in the Prospectus other than as set forth
therein and no proceedings shall be pending or, to the knowledge of the
Company, threatened against the Company or any Significant Subsidiary
before or by any government, governmental instrumentality or court,
domestic or foreign, that could result in any material adverse change
in the condition (financial or otherwise), earnings, business affairs
or business prospects of the Company and its subsidiaries,
20
considered as one enterprise, other than as set forth in the
Prospectus, (iv) the Company shall have complied with all agreements
and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Time and (v) the other representations and
warranties of the Company set forth in Section 1(a) shall be accurate
as though expressly made at and as of the Closing Time. At the Closing
Time, you shall have received a certificate of the President or a Vice
President, and the Treasurer or Controller, of the Company, dated as of
the Closing Time, to such effect.
(e) At the time that this Agreement is executed by the
Company, you shall have received from Deloitte & Touche a letter, dated
such date, in form and substance satisfactory to you, together with
signed or reproduced copies of such letter for each of the other
Underwriters, confirming that they are independent public accountants
with respect to the Company within the meaning of the 1933 Act and
applicable published 1933 Act Regulations, and stating in effect that:
(i) in their opinion, the audited financial
statements and the related financial statement schedules
included or incorporated by reference in the Registration
Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
1933 Act and the 1934 Act and the published rules and
regulations thereunder;
(ii) on the basis of procedures (but not an
examination in accordance with generally accepted auditing
standards) consisting of a reading of the unaudited interim
consolidated financial statements of the Company for the
nine-month periods ended October 31, 1994 and October 31,
1995, included or incorporated by reference in the
Registration Statement and the Prospectus (collectively, the
"10-Q Financials"), a reading of the latest available
unaudited interim consolidated financial statements of the
Company, a reading of the minutes of all meetings of the
stockholders and directors of the Company and its subsidiaries
since February 1, 1995, inquiries of certain officials of the
Company and its subsidiaries responsible for financial and
accounting matters with respect to the changes in the
financial statement items after October 31, 1995 performed at
the request of the Company, and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) the 10-Q Financials incorporated by
reference in the Registration Statement and the
Prospectus do not comply as to form in all material
respects with the accounting requirements of the 1934
Act and the 1934 Act Regulations applicable to
unaudited financial statements included in Form 10-Q
or are not in conformity with
21
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included or incorporated
by reference in the Registration Statement and the
Prospectus;
(B) at November 30, 1995 and at a specified
date not more than five days prior to the date of
this Agreement, there was any change in the common
stock of the Company and its subsidiaries or any
decrease in the consolidated net current assets or
consolidated net assets of the Company and its
subsidiaries or any increase in the long-term debt of
the Company and its subsidiaries, in each case as
compared with amounts shown in the October 31, 1995
unaudited consolidated balance sheet included in the
Registration Statement, except in each case for
changes, decreases or increases that the Registration
Statement discloses have occurred or may occur; or
(C) for the period from November 1, 1995 to
November 30, 1995 and for the period from December 1,
1995 to a specified date not more than five days
prior to the date of this Agreement, there were any
decreases in consolidated net sales or in the total
or per share amounts of consolidated net income, in
each case as compared with the comparable period in
the preceding year, except in each case for any
decreases that the Registration Statement discloses
have occurred or may occur;
(iii) based upon the procedures set forth in clause
(ii) above and a reading of the consolidated financial
statements and financial statement schedules included in the
Registration Statement and a reading of the financial
statements, from which certain of such data were derived,
nothing has come to their attention that gives them reason to
believe that the consolidated financial statements and
financial statement schedules included in the Registration
Statement do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations; and
(iv) in addition to the procedures referred to in
clause (ii) above, they have performed other specified
procedures, not constituting an audit, with respect to certain
amounts, percentages, numerical data and financial information
appearing in the Registration Statement, which have previously
been specified by you and which shall be specified in such
letter, and have compared certain of such items with, and have
found such items to be in agreement with, the accounting and
financial records of the Company.
22
(f) At the Closing Time, you shall have received from Deloitte
& Touche a letter, in form and substance satisfactory to you and dated
as of the Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to Section 5(e), except that the
specified date referred to shall be a date not more than five days
prior to the Closing Time.
(g) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Time, there shall not have been any
downgrading, nor any notice given of any intended or potential
downgrading or of a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities, including the Securities, by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the 1933 Act.
(h) At the Closing Time, counsel for the Underwriters shall
have been furnished with all such documents, certificates and opinions
as they may reasonably request for the purpose of enabling them to pass
upon the issuance and sale of the Securities as contemplated in this
Agreement and the matters referred to in Section 5(c) and in order to
evidence the accuracy and completeness of any of the representations,
warranties or statements of the Company, the performance of any of the
covenants of the Company, or the fulfillment of any of the conditions
herein contained; and all proceedings taken by the Company at or prior
to the Closing Time in connection with the authorization, issuance and
sale of the Securities as contemplated in this Agreement shall be
satisfactory in form and substance to you and to counsel for the
Underwriters.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement, this Agreement may
be terminated by you on notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party, except as provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 6, 7 and 8 shall remain in effect.
Section 6. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of an untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to
23
make the statements therein not misleading or arising out of an untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus supplement or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including fees and disbursements of counsel chosen by you), reasonably
incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") expressly for use in the Registration Statement
(or any amendment thereto) or any preliminary prospectus supplement or the
Prospectus (or any amendment or supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity agreement in Section 6(a),
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus supplement or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus supplement or the Prospectus (or any amendment or
supplement thereto).
24
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 6(a) above, counsel to the indemnified parties shall be selected by
Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. An indemnifying party may participate at its own expense in
the defense of any such action. In no event shall the indemnifying party or
parties be liable for fees and expenses of more than one counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Section 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the
25
one hand and the Underwriters on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) 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 of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages 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 hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters, in
each case as set forth on the cover of the Prospectus bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
Underwriters on the other hand 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 Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
26
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
Section 8. Representations, Warranties and Agreements to
Survive Delivery. The representations, warranties, indemnities, agreements and
other statements of the Company or its officers set forth in or made pursuant to
this Agreement will remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Company, any Underwriter or any
person who controls the Company or any Underwriter within the meaning of Section
15 of the 1933 Act and will survive delivery of and payment for the Securities.
Section 9. Termination of Agreement. (a) You may terminate
this Agreement, by notice to the Company, at any time at or prior to the Closing
Time (i) if there has been, since the respective dates as of which information
is given in the Prospectus, any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects of
the Company and its subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which on the financial markets of the United States is such as to make
it, in your judgment, impracticable to market the Securities or enforce
contracts for the sale of the Securities or (iii) if trading in any securities
of the Company has been suspended by the Commission or the National Association
of Securities Dealers, Inc., or if trading generally on either the American
Stock Exchange or the New York Stock Exchange or in the over-the-counter market
has been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by such exchange or
by order of the Commission, the National Association of Securities Dealers, Inc.
or any other governmental authority or (iv) if a banking moratorium has been
declared by either federal, New York or North Carolina authorities. As used in
27
this Section 9(a), the term "Prospectus" means the Prospectus in the form first
used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party,
except to the extent provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 6, 7 and 8 shall remain in effect.
(c) This Agreement may also terminate pursuant to the provisions of Section
2, with the effect stated in such Section.
Section 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at the Closing Time to purchase the
Securities that it or they are obligated to purchase pursuant to this Agreement
(the "Defaulted Securities"), you shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms set forth in this Agreement; if, however, the non-defaulting Underwriters
have not completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities
does not exceed 10% of the aggregate principal amount of the Securities
to be purchased pursuant to this Agreement, each non-defaulting
Underwriter shall be obligated to purchase the full amount thereof in
the proportions that their respective Securities underwriting
obligation proportions bear to the underwriting obligations of all
non-defaulting Underwriters; or
(b) if the aggregate principal amount of Defaulted Securities
exceeds 10% of the aggregate principal amount of the Securities to be
purchased pursuant to this Agreement, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default that does not result in a
termination of this Agreement, either the non-defaulting Underwriters or the
Company shall have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used
herein, the term "Underwriter" includes any person substituted for a Underwriter
under this Section 10.
28
Section 11. Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered, mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to you, c/o
Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, at Xxxxxxx Xxxxx World
Headquarters, Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
attention of Xxxxxx XxXxxxxxxx; notices to the Company shall be directed to it
at Xxxx'x Companies, Inc., X.X. Xxx 0000, Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx
00000, attention of Xxxxxxx X. Xxxx.
Section 12. Parties. This Agreement herein set forth is made
solely for the benefit of the several Underwriters, the Company and, to the
extent expressed, any person who controls the Company or any of the Underwriters
within the meaning of Section 15 of the 1933 Act, and the directors of the
Company, its officers who have signed the Registration Statement, and their
respective executors, administrators, successors and assigns and, subject to the
provisions of Section 10, no other person shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns" shall not
include any purchaser, as such purchaser, from any of the several Underwriters
of the Securities. All of the obligations of the Underwriters hereunder are
several and not joint.
Section 13. Representation of Underwriters. Xxxxxxx Xxxxx will
act for the several Underwriters in connection with the transactions
contemplated by this Agreement, and any action under or in respect of this
Agreement taken by Xxxxxxx Xxxxx will be binding upon all Underwriters.
Section 14. Governing Law and Time. This Agreement shall be governed by the
laws of the State of New York. Specified times of the day refer to New York City
time.
Section 15. Counterparts. This Agreement may be executed in
one or more counterparts, and when a counterpart has been executed by each
party, all such counterparts taken together shall constitute one and the same
agreement.
------------------------------
29
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
XXXX'X COMPANIES, INC.
By /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Assistant Treasurer
CONFIRMED AND ACCEPTED as of the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
XXXXXXX, SACHS & CO.
XXXXXX BROTHERS INC.
XXXXXXXXXX SECURITIES
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
By /s/ Xxxxxx XxXxxxxxxx
Xxxxxx XxXxxxxxxx
Managing Director
SCHEDULE A
Number of
Underwriter Securities
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated..........................................................$30,000,000
Xxxxxxx, Sachs & Co.................................................................. 25,000,000
Xxxxxx Brothers Inc.................................................................. 25,000,000
Xxxxxxxxxx Securities................................................................ 20,000,000
----------
Total
$ 100,000,000
SCHEDULE B
Dated December 13, 1995
XXXX'X COMPANIES, INC.
6-3/8% Senior Notes Due 2005
Principal amount to be issued: $100,000,000
Current ratings: None
Interest rate: 6-3/8%, payable:
Interest accrues from: December 18, 1995
Date of maturity: December 15, 2005
Redemption provisions: None
Sinking fund requirements: None
Initial public offering price: 99.605% of the principal amount plus accrued
interest from December 18, 1995.
Purchase price: 98.955% of the principal amount plus accrued interest from
December 18, 1995 (payable in immediately available funds).
Closing date, time and location: December 18, 1995, 10:00 A.M., New York
City time, at
Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
Delayed delivery contracts: Not authorized
Listing requirement: None
Other terms and conditions:
