EXECUTION COPY
$150,000,000
X.X. XXXXXX, INC.
9.75% SENIOR SUBORDINATED NOTES DUE 2010
UNDERWRITING AGREEMENT
September 6, 2000
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
X.X. Xxxxxx, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell $150,000,000 aggregate principal amount of its 9.75%
Senior Subordinated Notes due 2010 (the "NOTES")to Xxxxxxx Xxxxx Barney Inc.
(the "UNDERWRITER"). The Notes are to be issued pursuant to the provisions of an
Indenture dated as of September 11, 2000, as supplemented by the First
Supplemental Indenture to be dated September 11, 2000 (the "INDENTURE"), among
the Company, certain subsidiaries of the Company and American Stock Transfer and
Trust Company, as Trustee (the "TRUSTEE"). The Company's obligations under the
Indenture and the Notes will be unconditionally guaranteed (the "GUARANTEES"),
jointly and severally, by each of the subsidiaries of the Company listed on the
signature pages hereof (the "GUARANTORS"). The Company and the Guarantors are
collectively referred to herein as the "ISSUERS" and the Notes and the
Guarantees are collectively referred to herein as the "SECURITIES."
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the published rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-3 (No. 333-76175),
including a base prospectus relating to the Securities. The registration
statement as amended at the time it became effective on April 16, 1999,
including information (if any) deemed to be part of the registration statement
at the
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time of effectiveness pursuant to Rule 430A under the Act, is hereinafter
referred to as the "REGISTRATION STATEMENT"; and the base prospectus dated April
16, 1999 (the "BASE PROSPECTUS"), as supplemented by the prospectus supplement
relating to the Securities in the form first used to confirm sales of Securities
(the "PROSPECTUS SUPPLEMENT"), is hereinafter referred to as the "PROSPECTUS."
Any reference herein to the Registration Statement, a preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act,
as of the effective date of the Registration Statement or the date of such
preliminary prospectus or the Prospectus (the "INCORPORATED DOCUMENTS"), and,
except as otherwise indicated, when reference is made to information "in"
(including by use of the terms "set forth in," "described in" and similar terms)
the Prospectus or the Registration Statement, such reference shall be deemed to
include information incorporated by reference in the Prospectus or the
Registration Statement, as the case may be.
2. AGREEMENTS TO SELL AND PURCHASE. The Company agrees to
issue and sell, and, on the basis of the representations and warranties
contained in this Underwriting Agreement (the "AGREEMENT") and subject to its
terms and conditions, the Underwriter agrees to purchase from the Company, the
entire principal amount of the Notes at 98.965% of the principal amount thereof,
plus accrued interest, if any, from September 11, 2000 to the date of payment
and delivery (the "PURCHASE PRICE").
3. TERMS OF PUBLIC OFFERING. The Company is advised by the
Underwriter that the Underwriter proposes to make a public offering of the
Securities as soon after the execution and delivery of this Agreement as in
judgment of the Underwriter is advisable on the basis set forth in the
Prospectus Supplement.
4. DELIVERY AND PAYMENT. Delivery to the Underwriter of and
payment for the Securities shall be made at 10:00 A.M., New York City time, on
the third business day after the date hereof (the "CLOSING DATE"), at such place
as you shall designate. The Closing Date and the location of delivery of and the
form of payment for the Securities may be varied by agreement between you and
the Company.
Certificates for the Securities shall be registered in such
names and issued in such denominations as you shall request in writing not later
than two full business days prior to the Closing Date. Such certificates shall
be made available
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to you for inspection not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date. Certificates in definitive form
evidencing the Securities shall be delivered to you on the Closing Date with
any transfer taxes thereon duly paid by the Company, for the account of the
Underwriter, against payment of the Purchase Price therefor by wire or
certified or official bank checks payable in Federal funds to the order of
the Company. If the Securities will be issued in book-entry form, the Company
shall deposit the global certificate(s) representing the Securities with the
Depository Trust Company ("DTC"), or its designated custodian, at the Closing
Date, and the Company will deliver such global certificate(s) to the
Underwriter by causing DTC to credit the Securities to the account of the
Underwriter at DTC against payment therefor as set forth above.
5. AGREEMENTS OF THE ISSUERS. The Issuers, jointly and
severally, agree with the Underwriter as follows:
(a) The Issuers will, if necessary or required by law, file an
amendment to the Registration Statement or, if necessary pursuant to
Rule 430A under the Act, a post-effective amendment to the Registration
Statement, as soon as practicable after the execution and delivery of
this Agreement, and will use their best efforts to cause the
Registration Statement or such post-effective amendment to become
effective at the earliest possible time. The Company will comply fully
and in a timely manner with the applicable provisions of Rule 424 and
Rule 430A under the Act.
(b) The Issuers will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of the effectiveness of
any amendment to the Registration Statement; (ii) of the transmission
to the Commission for filing of any supplement to the Prospectus
(including any document that would as a result of such filing become an
Incorporated Document) and to furnish you with copies thereof; (iii) of
the receipt of any comments from the Commission that relate to the
Registration Statement or of any request by the Commission for
amendment of or a supplement to the Registration Statement or the
Prospectus or for additional information; (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any order preventing or suspending the use of
the Prospectus or of the suspension of qualification of the Securities
for offering or sale in any jurisdiction or the
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initiation or the threatening of any proceeding for such purpose;
and (v) within the period of time referred to in paragraph
(e) below, of any change in the Company's condition (financial or
other), business, prospects, properties, net worth or results of
operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or
the Prospectus (as then amended or supplemented) untrue or which
requires the making of any additions to or changes in the
Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading, or of the necessity to amend or supplement the
Prospectus (as then amended or supplemented) to comply with the Act
or any other law. If at any time any stop order suspending the
effectiveness of the Registration Statement or any order preventing
or suspending the use of the Prospectus or suspending any such
qualification shall be issued, the Issuers will promptly use their
best efforts to obtain the withdrawal of such order at the earliest
possible time.
(c) The Issuers will furnish to you, without charge, (i) five
copies of the registration statement as originally filed with the
Commission and of each amendment thereto, including all exhibits
thereto, (ii) the Prospectus and any amendment or supplement thereto,
(iii) such number of copies of the registration statement as originally
filed and of each amendment thereto, but without exhibits, as you may
request, (iv) such number of copies of the Incorporated Documents,
without exhibits, as you may request, and (v) five copies of the
exhibits to the Incorporated Documents.
(d) The Issuers will not file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectus or, prior to the end of the period of time referred to in
paragraph (e) below, file any document which, upon filing becomes an
Incorporated Document, of which you shall not previously have been
advised or to which, after you shall have received a copy of the
document proposed to be filed, you shall reasonably object.
(e) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time for such period as in the
opinion of counsel for the Underwriter a prospectus is required by the
Act to be
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delivered in connection with sales by the Underwriter or any dealer,
the Issuers will expeditiously deliver to the Underwriter and
each dealer, without charge, as many copies of the Prospectus (and of
any amendment or supplement thereto) as you may reasonably request. The
Issuers consent to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and
with the securities or Blue Sky laws of the jurisdictions in which the
Securities are offered by the Underwriter and by all dealers to whom
Securities may be sold, both in connection with the offering and sale
of the Securities and for such period of time thereafter as the
Prospectus is required by the Act to be delivered in connection with
sales by the Underwriter or any dealer.
(f) If during the period of time referred to in paragraph
(e) above any event shall occur as a result of which, in the judgment
of the Issuers or in the opinion of counsel for the Underwriter, it
becomes necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with the Act
or any other law, the Issuers will forthwith prepare and, subject to
the provisions of paragraph (d) above, file with the Commission an
appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not,
in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with law, and to
furnish to the Underwriter and to such dealers as you shall specify
such number of copies thereof as the Underwriter or such dealers may
reasonably request. In the event that the Issuers and you agree that
the Prospectus should be amended or supplemented, the Issuers, if
requested by you, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or
supplement.
(g) The Issuers will cooperate with you and with counsel for
the Underwriter in connection with the registration or qualification of
the Securities for offering and sale by the Underwriter and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such
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registration or qualification; PROVIDED, HOWEVER, that in no event
shall any Issuer be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
which would subject it to service of process in suits, other than
those arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(h) The Issuers will make generally available to its security
holders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the date of the
Prospectus and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act and
Rule 158 thereunder, and will advise you in writing when such statement
has been made available.
(i) During the period of five years hereafter, the Issuers
will furnish to you as soon as available, a copy of all public
materials furnished by the Company to its stockholders and all public
reports and financial statements furnished by the Company to the
principal national securities exchange upon which the common stock of
the Company may be listed pursuant to requirements of or agreements
with such exchange or to the Commission.
(j) The Company will apply the net proceeds from the sale of
the Securities in accordance with the description set forth in the
Prospectus under the caption "Use of Proceeds."
(k) Neither the Company nor any of its subsidiaries has taken,
or will take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Securities to facilitate the sale or
resale of the Securities.
(l) The Issuers will pay all costs, expenses, fees and taxes
incident to (i) the preparation, printing, filing and distribution
under the Act of the Registration Statement (including financial
statements and exhibits), and all amendments and supplements thereto
prior to or during the period specified in paragraph (e) above,
(ii) the printing and delivery of the Prospectus and all amendments or
supplements thereto during the period specified in paragraph (e) above,
(iii) the printing and
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delivery of this Agreement, the Preliminary and Supplemental Blue
Sky Memoranda and all other agreements, memoranda, correspondence
and other documents printed and delivered in connection with the
offering of the Securities (including in each case any disbursements
of counsel for the Underwriter relating to such printing and
delivery), (iv) the registration or qualification of the Securities
for offer and sale under the securities or Blue Sky laws of the
several states (including in each case the reasonable fees and
disbursements of counsel for the Underwriter relating to such
registration or qualification and memoranda relating thereto),
(v) filings and clearance with the National Association of Securities
Dealers, Inc. in connection with the offering, (vi) the listing, if
any, of the Securities on any national securities exchange, and
(vii) furnishing such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be
requested for use in connection with the offering or sale of the
Securities by the Underwriter or by dealers to whom Securities may
be sold.
(m) The Issuers will not during the period beginning on the
date hereof and continuing to and including the Closing Date, offer,
sell, contract to sell or otherwise dispose of any debt securities of
the Company or any warrants, options or other rights to purchase or
acquire debt securities of the Company or any securities convertible
into or exchangeable for debt securities of the Company (other than (i)
the Securities and (ii) commercial paper issued in the ordinary course
of business), without the prior written consent of the Underwriter.
(n) The Issuers will use their best efforts to do and perform
all things required or necessary to be done and performed under this
Agreement by the Issuers prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Securities.
6. REPRESENTATIONS AND WARRANTIES OF THE ISSUERS. The Issuers,
jointly and severally, represent and warrant to the Underwriter that:
(a) Each preliminary prospectus included as part of the
registration statement as originally filed or as part of any amendment
or supplement thereto, or filed pursuant to Rule 424 under the Act,
complied when so filed in all
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material respects with the provisions of the Act. The Commission has
not issued any order preventing or suspending the use of any
preliminary prospectus.
(b) The Registration statement has become effective and at the
date of the Prospectus (if different), including at the date of any
post-effective amendment or supplement, the Registration Statement will
comply in all material respects with the provisions of the Act, and
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading; the Prospectus (and any
supplements or amendments thereto) will at all such times comply in all
material respects with the provisions of the Act and will not at any
such time contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that no representation or warranty
is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with
written information furnished to the Issuers with respect to the
Underwriter specifically for inclusion therein.
(c) The Incorporated Documents, at the time they were filed
with the Commission or, to the extent such documents were subsequently
amended prior to the date hereof, at the time so amended, complied in
all material respects with the requirements of the Act or the
Securities Exchange Act of 1934, as amended, and the published rules
and regulations of the Commission thereunder (collectively, the
"EXCHANGE ACT"), as applicable, and such documents do not on the date
hereof and will not on the Closing Date contain an untrue statement of
a material fact and do not on the date hereof and will not on the
Closing Date omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d) The financial statements (including the related notes and
supporting schedules) in the Registration Statement or the Prospectus
present fairly the consolidated financial position and results of
operations of the entities purported to be shown thereby, at the dates
and for the periods indicated, and have been prepared in conformity
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with generally accepted accounting principles applied on a consistent
basis throughout the periods involved.
(e) Ernst & Young, LLP, who have reported on the financial
statements of the Company, are independent public accountants with
respect to the Company and its subsidiaries as required by the Act.
(f) [Reserved]
(g) The Company and each of its subsidiaries have been duly
formed and are validly existing in good standing under the laws of
their respective jurisdictions of organization, are duly qualified to
do business and are in good standing in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification except where the
failure to so qualify, singly or in the aggregate, would not have a
material adverse effect on the financial condition, results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole (a "MATERIAL ADVERSE EFFECT"), and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged.
(h) The Company has an authorized capitalization as set forth
in the Prospectus; and all of the issued equity interests of each
subsidiary of the Company have been duly authorized and validly issued
and, as to shares of capital stock of any corporation constituting a
subsidiary, are fully paid and non-assessable and (except for
directors' qualifying shares as disclosed in the Registration Statement
or the Prospectus or minority interests in non-Guarantor subsidiaries)
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims other than restrictions on
transfer imposed by applicable securities laws.
(i) The execution, delivery and performance of this Agreement,
the Indenture and the Securities by the Issuers, compliance by the
Issuers of all the provisions hereof and thereof and the consummation
of the transactions contemplated hereby will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument to which the
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Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will
such actions result in any violation of the provisions of the
organizational documents of the Company or any of its subsidiaries or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their property or assets; and except for
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Act or applicable state or
foreign securities laws in connection with the purchase and
distribution of the Securities by the Underwriter, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, the Indenture
and the Securities by the Issuers, compliance by the Issuers of all the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby.
(j) This Agreement has been duly authorized, executed and
delivered by the Issuers and is a valid and binding agreement of the
Issuers enforceable in accordance with its terms (except as rights to
indemnity and contribution hereunder may be limited by applicable law).
(k) The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), and has been duly
authorized, executed and delivered by the Issuers and is a valid and
binding agreement of the Issuers, enforceable in accordance with its
terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(l) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to the Underwriter against payment therefor as provided by
this Agreement, will be entitled to the benefits of the Indenture, and
will be valid and binding obligations of the Company, enforceable in
accordance with their terms
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except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(m) The Guarantees have been duly authorized and, upon
endorsement on the Notes by the Guarantors, execution and
authentication of the Notes in accordance with the provisions of the
Indenture and delivery of the Notes to the Underwriter against payment
therefor as provided by this Agreement, will be entitled to the
benefits of the Indenture, and will be valid and binding obligations of
the Guarantors, enforceable in accordance with their terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(n) The Securities and the Indenture conform to the
description thereof in the Prospectus.
(o) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements in
the Prospectus, any loss or interference with the business of the
Company and its subsidiaries taken as a whole from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus,
resulting in a Material Adverse Effect; and, since such date, there has
not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus.
(p) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of
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the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(q) The Company and its subsidiaries own the items of real
property and personal property purported to be owned by them which are
material to the conduct of the business of the Company and its
subsidiaries taken as a whole, free and clear of all liens,
encumbrances and defects, except such as are described in the
Prospectus or such as would not have a Material Adverse Effect. All
real property held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases, with such
exceptions as are described in the Prospectus or such as would not have
a Material Adverse Effect.
(r) Except as described in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which are reasonably
likely to have a Material Adverse Effect; and to the Issuers'
knowledge, no such proceedings are threatened by governmental
authorities or by others.
(s) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(t) To the Issuers' knowledge, all real property owned (either
presently or at any time in the past) or presently leased by the
Company and its subsidiaries in connection with the operation of their
business, including, without limitation, any subsurface soils and
ground water (collectively, the "REALTY"), is free of contamination
from any substance or material presently known to be toxic or
hazardous, including, without limitation, any radioactive substance,
methane, volatile hydrocarbons or industrial solvents (each, a
"HAZARDOUS SUBSTANCE"), which could reasonably be expected to
materially impair the beneficial use thereof by the Company and its
subsidiaries or constitute or cause a significant health, safety or
other environmental hazard to occupants or users (except for
contaminations which would not have a Material Adverse Effect); and to
the Issuers' knowledge, the Realty does
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not contain any underground storage or treatment tanks, active or
abandoned water, gas or oil xxxxx, or any other underground
improvements or structures, other than the foundations, footings or
other supports for the improvements located thereon, the presence of
which would have a Material Adverse Effect. Notwithstanding the
foregoing, Hazardous Substances shall be deemed not to include any
supplies or substances maintained, used, stored or held on the
Realty which are (i) naturally occurring, (ii) installed by public
utilities or (iii) used in the ordinary course of the Company's or
its subsidiaries' business, provided that such supplies or
substances are stored, used, maintained and held in all material
respects in accordance with any applicable governmental requirements
and with restrictions, conditions and standards suggested by the
manufacturer and the Company's insurance carriers.
(u) The Company and its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses.
(v) The Company and its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses necessary for the conduct of
their respective businesses the absence of which would have a Material
Adverse Effect and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of others.
(w) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Act which have not been described in the
Prospectus or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Act.
(x) No labor disturbance by the employees of the Company or
any of its subsidiaries exists or, to the Issuers' knowledge, is
imminent which could reasonably be expected to have a Material Adverse
Effect.
(y) The Company and its subsidiaries have filed all federal,
state and local income and franchise tax returns
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required to be filed through the date hereof and has paid all taxes
due thereon, except where the failure to do so has not had and would
reasonably not be expected to have a Material Adverse Effect, and no
tax deficiency has been determined adversely to the Company or any
of its subsidiaries which has had (nor does any Issuer have any
knowledge of any tax deficiency which would reasonably likely have)
a Material Adverse Effect.
(z) Since the date as of which information is given in the
Prospectus, and except as may otherwise be disclosed in the Prospectus,
neither the Company nor any of its subsidiaries has (i) entered into
any material transaction not in the ordinary course of business or (ii)
except for the dividend of $.04 per share declared in August 2000 and
payable on August 25, 2000, declared or paid any dividend on its
capital stock, and, from the date of the Prospectus, neither the
Company nor any of its subsidiaries has incurred any material liability
other than in the ordinary course of business.
(aa) The Company is in full compliance with Section 13(b)(2)
of the Exchange Act.
(bb) Neither the Company nor any of its subsidiaries (i) is in
violation of its organizational documents, (ii) is in default in any
material respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which it is a party or by which it
is bound or to which any of its properties or assets is subject as a
result of which default there would be a Material Adverse Effect or
(iii) is in violation of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject or has failed to obtain any license, permit, certificate,
franchise or other governmental authorization or permit necessary to
the ownership of its property or to the conduct of its business which
violation or failure would have a Material Adverse Effect.
(cc) Neither the Company nor any of its subsidiaries is an
"investment company" or an entity "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, and the rules and
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regulations of the Commission thereunder.
7. INDEMNIFICATION. (a) The Issuers, jointly and severally,
agree to indemnify and hold harmless the Underwriter, each person, if any, who
controls the Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and the directors, officers, employees and agents of
each of the foregoing (collectively, the "UNDERWRITER INDEMNIFIED PARTIES"),
from and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the Underwriter furnished in writing to the Issuers by
or on behalf of the Underwriter expressly for use therein; PROVIDED, HOWEVER,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter Indemnified Party
asserted by a person with respect to any such losses, claims, damages and
liabilities and judgments, if a copy of the Prospectus (as then amended or
supplemented if the Issuers shall have furnished such amendment or supplement
thereto in the requisite quantity on a timely basis to permit such sending or
giving) was not sent or given by or on behalf of the Underwriter to such person,
if required by law so to have been delivered, at or prior to the written
confirmation of the sale of Securities to such person, and if the Prospectus (as
so amended and supplemented) would have cured the defect giving rise to such
loss, claim, damage, liability or judgment. Notwithstanding anything to the
contrary herein, the Underwriter shall not be obligated to send or give any
Incorporated Document, or any amendment or supplement thereto, to any person in
order to benefit from the indemnity provisions herein or otherwise. The
foregoing indemnity agreement shall be in addition to any liability that the
Issuers may otherwise have.
(b) In case any action shall be brought against any
Underwriter Indemnified Party, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any
-16-
amendment or supplement thereto and with respect to which indemnity may be
sought against the Issuers, the Underwriter shall promptly notify the Issuers
in writing and the Issuers shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses. Such Underwriter Indemnified Party shall
have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Underwriter Indemnified Party unless (i) the employment
of such counsel shall have been specifically authorized in writing by the
Issuers, (ii) the Issuers shall have failed to assume the defense and employ
counsel or (iii) the named parties to any such action (including any
impleaded parties) include both such Underwriter Indemnified Party and the
Issuers and such Underwriter Indemnified Party shall have been advised by
such counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the Issuers (in
which case the Issuers shall not have the right to assume the defense of such
action on behalf of such Underwriter Indemnified Party, it being understood,
however, that the Issuers shall not, in connection with any one such action
or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all such Underwriter Indemnified
Parties, which firm shall be designated in writing by the Underwriter and
that all such fees and expenses shall be reimbursed as they are incurred).
The Issuers shall not be liable for any settlement of any such action
effected without the Company's written consent but if settled with the
written consent of the Company, the Issuers agree to indemnify and hold
harmless the Underwriter Indemnified Parties from and against any loss or
liability by reason of such settlement. The Company shall not, without the
prior written consent of the Underwriter, effect any settlement of any
pending or threatened proceeding in respect of which any Underwriter
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Underwriter Indemnified Party, unless such
settlement includes an unconditional release of such Underwriter Indemnified
Party from all liability on claims that are the subject matter of such
proceeding.
(c) The Underwriter agrees to indemnify and hold harmless the
Issuers, their directors, their officers who sign the Registration Statement and
any person controlling the Issuers within the meaning of Section 15 of the Act
or Section 20 of
-17-
the Exchange Act, to the same extent as the foregoing indemnity from the
Issuers to the Underwriter Indemnified Parties but only with reference to
information relating to the Underwriter furnished in writing by or on behalf
of the Underwriter expressly for use in the Registration Statement, the
Prospectus or any preliminary prospectus. In case any action shall be brought
against the Issuers, any of its directors, any such officer or any person
controlling the Issuers based on the Registration Statement, the Prospectus
or any preliminary prospectus and in respect of which indemnity may be sought
against the Underwriter, the Underwriter shall have the rights and duties
given to the Issuers (except that if the Issuers shall have assumed the
defense thereof, the Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of the
Underwriter), and the Issuers, their directors, any such officers and any
person controlling the Issuers shall have the rights and duties given to the
Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7
is unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities or judgments referred to
therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
and judgments (i) in such proportion as is appropriate to reflect the
relative benefits received by the Issuers on the one hand and the Underwriter
on the other hand from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Issuers and the Underwriter in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by the Issuers and the Underwriter shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company, and the compensation received by the
Underwriter (based on discount to investors on resale), bear to the sum of
such total net proceeds and such compensation. The relative fault of the
Issuers and the Underwriter shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a
-18-
material fact relates to information supplied by the Issuers or the
Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuers and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, the Underwriter shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The Underwriter confirms and the Issuers acknowledge that
the statements with respect to the public offering of the Securities by the
Underwriter set forth in the third paragraph of the section entitled
"Underwriting" in the Prospectus Supplement are correct and constitute the only
information concerning the Underwriter furnished in writing to the Issuers by or
on behalf of the Underwriter specifically for inclusion in the Registration
Statement and the Prospectus.
8. CONDITIONS OF UNDERWRITER'S OBLIGATION. The obligation of
the Underwriter to purchase the Securities under this Agreement is subject to
the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Issuers
contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing
Date. The Issuers shall have performed or complied with all of their
agreements herein
-19-
contained and required to be performed or complied with by them at or
prior to the Closing Date.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been commenced or shall be pending before or
threatened by the Commission, (ii) every request for additional
information on the part of the Commission shall have been complied with
in all material respects, and (iii) no stop order suspending the sale
of the Securities in any jurisdiction referred to in Section 6(g) shall
have been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened which would, in your
reasonable judgment, make it impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities.
(c) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have been any
downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does
not indicate the direction of the possible change, in the rating
accorded any Issuer's debt by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Act.
(d) (i) Since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, there shall not have
been any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, affairs or business prospects, whether
or not arising in the ordinary course of business, of the Company and
its subsidiaries taken as a whole, (ii) since the date of the latest
balance sheet included in the Registration Statement and the Prospectus
there shall not have been any change, or any development involving a
prospective material adverse change, in the capital stock or in the
long-term debt of the Company or any of its subsidiaries from that set
forth in the Registration Statement and Prospectus and (iii) the
Company and its subsidiaries shall have no liability or obligation,
direct or contingent, which is material to the Company and its
subsidiaries, taken as a whole, other than those reflected in the
Registration Statement and the Prospectus.
-20-
(e) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by Xxxxxx X. Xxxxxx or Xxxxxx X. Xxxxxxx
and Xxxxxx Xxxxxx, in their capacities as the Chairman of the Board or
Chief Executive Officer and President and Chief Financial Officer of
the Company, respectively, confirming the matters set forth in
paragraphs (a), (b), (c) and (d) of this Section 8.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriter), dated the
Closing Date, of Xxxxxx Xxxx & Xxxxxxxx LLP, special counsel for the
Company, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, is duly qualified to do
business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property
or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a
material adverse effect on the business, operations or
financial condition of the Company and its subsidiaries taken
as a whole, and has all corporate power and authority
necessary to own or hold its properties and conduct its
business as described in the Prospectus.
(ii) To such counsel's knowledge and other than as
described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the
subject which is of a character which is required to be
disclosed in the Prospectus; and, to such counsel's knowledge,
no such proceedings are threatened by governmental authorities
or by others.
(iii) The Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) under the Act on
the date specified therein, and, to such counsel's knowledge,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no
-21-
proceeding for that purpose is pending or threatened by the
Commission.
(iv) The Registration Statement and the Prospectus
and any further amendments or supplements thereto made by the
Company prior to the Closing Date (other than the financial
data (and the related notes thereto) and statistical data and
the financial statements and related schedules therein, as to
which such counsel need express no opinion) appear on their
face to comply as to form in all material respects with the
requirements of the Act; the documents incorporated by
reference in the Prospectus and any further amendment or
supplement to any such incorporated document made by the
Company prior to the Closing Date (other than the financial
data (and the related notes thereto) and statistical data and
the financial statements, and related schedules therein, as to
which such counsel need express no opinion), when they were
filed with the Commission appear on their face to have been
appropriately responsive in all material respects to the
requirements of the Act and the Exchange Act.
(v) To such counsel's knowledge, there are no
contracts or other documents of a character which are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Act which have not been
described or filed as exhibits to the Registration Statement
or incorporated therein by reference as permitted by the Act.
(vi) This Agreement has been duly authorized,
executed and delivered by the Issuers.
(vii) The execution, delivery and performance of this
Agreement, the Indenture and the Securities by the Issuers and
the compliance by the Issuers with all of the provisions of
this Agreement and the consummation by the Issuers of the
transactions contemplated hereby and thereby will not, to such
counsel's knowledge, conflict with or result in a material
breach or violation of any of the terms or provisions of, or
constitute a material default under, any indenture, mortgage,
deed of trust, loan agreement or other material agreement or
instrument listed as an exhibit to its Annual Report on Form
10-K for the fiscal year ended September 30, 1999 or to any
-22-
subsequent filing under the Exchange Act or the Act, nor will
such actions result in any violation of the provisions of the
charter or by-laws of any Issuer or any statute or, to such
counsel's knowledge, any order, rule or regulation known to
such counsel of any court or governmental agency or body
having jurisdiction over any Issuer or any of their property
or assets; and, except for such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Act and applicable state or foreign
securities laws in connection with the purchase and
distribution of the Securities by the Underwriter, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement, the Indenture and the Securities by the Issuers and
the valid issuance and sale of the Securities by the Issuers.
(viii) The Indenture has been duly qualified under
the TIA and has been duly authorized, executed and delivered
by the Issuers and is a valid and binding agreement of the
Issuers, enforceable in accordance with its terms except as
(a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors, rights
generally and (b) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability.
(ix) The Notes have been duly authorized and executed
by the Company and, when authenticated in accordance with the
provisions of the Indenture and delivered to the Underwriter
against payment therefor as provided by this Agreement, will
be entitled to the benefits of the Indenture, and will be
valid and binding obligations of the Company, enforceable in
accordance with their terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(x) The Guarantees have been duly authorized and
endorsed on the Notes by the Guarantors, and, upon execution
and authentication of the Notes in
-23-
accordance with the provisions of the Indenture and
delivery thereof to the Underwriter against payment
therefor as provided by this Agreement, will be entitled
to the benefits of the Indenture, and will be valid and
binding obligations of the Guarantors, enforceable in
accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by
equitable principles of general applicability.
(xi) The Securities and the Indenture conform in all
material respects to the descriptions thereof in the
Prospectus.
(xii) The First Supplemental Indenture is (x)
authorized and permitted by the Indenture, (y) not
inconsistent with the Indenture and (z) valid and binding upon
the Issuers an accordance with its terms.
In rendering such opinion, such counsel may state that its
opinion is limited to the Federal laws of the United States of America, the laws
of the States of Texas and New York and the General Corporation Law of the State
of Delaware. Such counsel shall also have furnished to the Underwriter a written
statement, addressed to the Underwriter and dated the Closing Date, in form and
substance satisfactory to the Underwriter and counsel for the Underwriter, to
the effect that (x) such counsel has acted as special counsel to the Company in
connection with the preparation of the Registration Statement and during the
course of the preparation of the Registration Statement and Prospectus, such
counsel participated in conferences with representatives of the Company, the
Company's internal counsel, and its accountants and the representatives of the
Underwriter and at which conferences the contents of the Registration Statement
and the Prospectus and related matters were discussed, and (y) based on the
foregoing, no facts have come to the attention of such counsel which lead it to
believe that (I) the Registration Statement (except as to financial data (and
related notes thereto) and statistical data and the financial statements and
related schedules contained or incorporated by reference therein), as of the
date the Registration Statement became effective, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to
-24-
make the statements therein not misleading, or that the Prospectus (except as
to financial data (and related notes thereto) and statistical data and the
financial statements and related schedules contained or incorporated by
reference therein) contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading or (II) any Incorporated Document or any
amendment or supplement thereto made by the Company prior to such Closing
Date, when they were filed with the Commission, as the case may be, contained
(except as to financial and data (and related notes thereto) and statistical
data and the financial statements and related schedules contained or
incorporated by reference therein) an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel has not independently verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus or incorporated by reference therein,
and such counsel is not passing upon and such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus.
(g) You shall have received on the Closing Date, an opinion of
Xxxx X. Xxxxxxxxxxxx, Esq., Corporate Counsel for the Company, dated
the Closing Date and addressed to you, to the effect that:
Each Guarantor that is a corporation has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its state of incorporation, is duly
qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or
lease of its property or the conduct of its business requires
such qualification, except where the failure to be so
qualified would not have a material adverse effect on the
business, operations or financial condition of the Company and
its subsidiaries taken as a whole, and has all corporate power
and authority necessary to own or hold its properties and
conduct its business as described in the Prospectus. The
outstanding shares of capital stock of each such Guarantor is
duly authorized,
-25-
validly issued, fully paid and nonassessable and (except
for directors' qualifying shares) are owned of record,
directly or indirectly by the Company. Each Guarantor
that is a limited partnership has been duly formed and is
validly existing as a limited partnership in good
standing under the laws of the state of its organization,
is duly qualified to do business and is in good standing
as a foreign limited partnership in each jurisdiction in
which its ownership or lease of its property or the
conduct of its business requires such qualification,
except where the failure to be so qualified would not
have a material adverse effect on the business, operation
or financial condition of the Company and its
subsidiaries taken as a whole, and has all partnership
power and authority necessary to own or hold its
properties and conduct its business as described in the
Prospectus.
(h) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Xxxxxx Xxxxxx and Xxxxxxx, counsel for the
Underwriter, in form and substance satisfactory to the Underwriter.
(i) You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from Ernst & Young,
LLP, independent public accountants, with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus and substantially in the form
and substance of the letter delivered to you by Ernst & Young, LLP, on
the date of this Agreement.
(j) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus or (ii) since such date there shall not have been any
change in the capital stock, net revenues, per share or total amounts
of income before extraordinary income or of net income or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of
-26-
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such
case described in clause (i) or (ii), is, in the judgment of the
Underwriter, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of
the Securities being delivered on the Closing Date on the terms and
in the manner contemplated in the Prospectus.
(k) The Issuers shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement or the Prospectus as you
reasonably may request.
(l) You shall have been furnished with such additional
documents and certificates as you or counsel for the Underwriter may
reasonably request.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the
Issuers and delivered to you or to your counsel shall be deemed a representation
and warranty by the Issuers to the Underwriter as to the statements made
therein.
9. TERMINATION.
This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Issuers if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries or the earnings,
affairs, or business prospects of the Company and any of its subsidiaries taken
as a whole, whether or not arising in the ordinary course of business, which
would, in your judgment, make it impracticable to market the Securities on the
terms and in the manner contemplated in the Prospectus, (ii) any outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic conditions or in the financial markets of the United
States or elsewhere that, in your judgment, is material and adverse and would,
in your judgment, make it impracticable to market the Securities on the terms
and in the manner
-27-
contemplated in the Prospectus, (iii) the suspension or material limitation
of trading in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market or limitation on prices for securities
on any such exchange, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially
and adversely affects, or will materially and adversely affect, the business
or operations of the Company and its subsidiaries taken as a whole, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in
your opinion has a material adverse effect on the financial markets in the
United States.
10. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (a) if to the Issuers, to X.X.
Xxxxxx, 0000 Xxxxxxxxx Xxxx., Xxxxx 000 Xxxxxxxxx, Xxxxx 00000, and (b) if to
the Underwriter, to Xxxxxxx Xxxxx Barney Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Syndicate Desk, or in any case to such other address
as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, its officers
and directors (in their capacities as such) and of the Underwriter set forth in
or made pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Securities, regardless
of (i) any investigation, or statement as to the results thereof, made by or on
behalf of the Underwriter or by or on behalf of the Company, the officers or
directors of the Company or any controlling person of the Company (in their
capacities as such), (ii) acceptance of the Securities and payment for them
hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriter
because of any failure or refusal on the part of any Issuer to perform any of
its agreements in this Agreement or to fulfill any of the conditions of Section
8 of this Agreement, the Issuers, jointly and severally, agree to reimburse the
Underwriter for all out-of-pocket expenses (including the fees and disbursements
of counsel) reasonably incurred by it.
-28-
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Issuers, the
Underwriter, any controlling persons referred to herein, the other indemnitees
referred to herein and their respective successors and assigns, all as and to
the extent provided in this Agreement, and no other person shall acquire or have
any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Securities from the
Underwriter merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
-29-
Please confirm that the foregoing correctly sets forth the
agreement between the Issuers and the Underwriter.
Very truly yours,
X.X. XXXXXX, INC.
By:
Name:
Title:
-30-
GUARANTORS:
DRHI, Inc.
Xxxxxxx I, Ltd.
Xxxxxxx IX, Inc.
Xxxxxxx X, Inc.
X.X. Xxxxxx, Inc.-Birmingham
X.X. Xxxxxx, Inc.-Chicago
X.X. Xxxxxx, Inc.-Denver
X.X. Xxxxxx, Inc.-Greensboro
X.X. Xxxxxx, Inc.-Louisville
X.X. Xxxxxx, Inc.-Minnesota
X.X. Xxxxxx, Inc.-New Jersey
X.X. Xxxxxx, Inc.-Portland
X.X. Xxxxxx, Inc.-Sacramento
X.X. Xxxxxx, Inc.-San Diego
X.X. Xxxxxx, Inc.-Xxxxxx
X.X. Xxxxxx San Diego Holding Company, Inc.
X.X. Xxxxxx Los Angeles Holding Company, Inc.
DRH Construction, Inc.
DRH Cambridge Homes, Inc.
C. Xxxxxxx Xxxxxx Builders, Inc.
DRH Tucson Construction, Inc.
Continental Homes, Inc.
KDB Homes, Inc.
Continental Residential, Inc.
Continental Homes of Florida, Inc.
CHI Construction Company
CHTEX of Texas, Inc.
By:
Name:
Title:
-31-
Xxxxxxx II, Ltd.
CH Investments of Texas, Inc.
By: __________________________
Name: Xxxxxxx Xxxx
Title: President
-32-
SGS COMMUNITIES AT GRANDE QUAY, LLC
By: Xxxxxxx IX, Inc., a member
By:
Name:
Title:
and
By: Xxxxxxx X, Inc., a member
By:
Name:
Title:
X.X. XXXXXX MANAGEMENT COMPANY, LTD.
X.X. XXXXXX - TEXAS, LTD.
By: Xxxxxxx I, Ltd.,
its general partner
By:
Name:
Title:
-00-
XXXXXXXXXXX XXXXX XX XXXXX, L.P.
By: CHTEX of Texas, Inc.,
its general partner
By:
Name:
Title:
-34-
Agreed and accepted as of the
date first written above:
XXXXXXX XXXXX BARNEY INC.
By:
Name:
Title:
