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Draft of July 25, 1997
EXHIBIT 1.1
2,875,000 SHARES
TRENDWEST RESORTS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
August __, 1997
XXXXXXXXXX SECURITIES
SALOMON BROTHERS INC
As Representatives of the several Underwriters
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
1. Introductory. Trendwest Resorts, Inc., an Oregon corporation (the
"Company"), proposes to issue and sell 2,745,000 shares of its authorized but
unissued Common Stock (the "Common Stock") and the stockholder of the Company
named in Schedule B annexed hereto (the "Selling Stockholder") proposes to sell
an aggregate of 130,000 shares of the Company's issued and outstanding Common
Stock to the several underwriters named in Schedule A annexed hereto (the
"Underwriters"), for whom you are acting as Representatives. Said aggregate of
2,875,000 shares are herein called the "Firm Common Shares." In addition, the
Company proposes to grant to the Underwriters an option to purchase up to
431,250 additional shares of Common Stock (the "Optional Common Shares"), as
provided in Section 5 hereof. The Firm Common Shares and, to the extent such
option is exercised, the Optional Common Shares are hereinafter collectively
referred to as the "Common Shares."
You have advised the Company, the Selling Stockholder and the
Company's parent, JELD-WEN, inc. (the "Major Stockholder") that the Underwriters
propose to make a public offering of their respective portions of the Common
Shares on the effective date of the registration statement hereinafter referred
to, or as soon thereafter as in your judgment is advisable.
The Company, the Selling Stockholder and the Major Stockholder
hereby confirm their respective agreements with respect to the purchase of the
Common Shares by the Underwriters as follows:
2. Representations and Warranties of the Company and the Selling
Stockholder. The Company and the Selling Stockholder represent and warrant to
the several Underwriters as of the date hereof, as of the First Closing Date
and, if applicable, as of the Second Closing Date, that:
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(a) A registration statement on Form S-1 (File No. 333-26861)
with respect to the Common Shares has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The Company has prepared and has filed or proposes to file prior to
the effective date of such registration statement and amendment or amendments to
such registration statement, which amendment or amendments have been or will be
similarly prepared. There have been delivered to you two signed copies of such
registration statement and amendments, together with two copies of each exhibit
filed therewith. Conformed copies of such registration statement and amendments
(but without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested for each of
the Underwriters. The Company will next file with the Commission one of the
following: (i) prior to effectiveness of such registration statement, a further
amendment thereto, including the form of final prospectus, (ii) a final
prospectus in accordance with Rules 430A and 424(b) of the Rules and Regulations
of (iii) a term sheet (the "Term Sheet") as described in and in accordance with
Rules 434 and 424(b) of the Rules and Regulations. As filed, the final
prospectus, if one is used, or the Term Sheet and Preliminary Prospectus, if a
final prospectus is not used, shall include all Rule 430A Information (as
hereinafter defined) and, except to the extent that you shall agree in writing
to a modification, shall be in all substantive respects in the form furnished to
you prior to the date and time that this Agreement was executed and delivered by
the parties hereto, or, to the extent not completed at such date and time, shall
contain only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Representatives shall
have approved.
The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration statement
becomes effective and, in the event any post-effective amendment thereto
becomes effective prior to the First Closing Date, shall also mean such
registration statement as so amended; provided, however, that such term shall
also include (i) all Rule 430A Information deemed to be included in such
registration statement at the time such registration statement becomes
effective as provided by Rule 430A of the Rules and Regulations and (ii) any
registration statement filed pursuant to 462(b) of the Rules and Regulations
relating to the Common Shares. The term "Preliminary Prospectus" shall mean
any preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean either (i) the prospectus relating to the
Common Shares in the form in which it is first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or, (ii) if a Term Sheet
is not used and no filing pursuant to Rule 424(b) of the Rules and Regulations
is required, shall mean the form of final prospectus included in the
Registration Statement at the time such registration statement becomes
effective or (iii) if a Term Sheet is used, the Term Sheet in the form in which
it is first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, together with the Preliminary Prospectus included in the
Registration Statement at the time it becomes effective. The term "Rule 430A
Information" means information with respect to the Common Shares and the
offering thereof permitted to be omitted from the Registration Statement when
it becomes effective pursuant to Rule 430A of the Rules and Regulations.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements of the
Act and the Rules and Regulations and, as of its date, has not included any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and at the time the Registration
Statement becomes effective, and at all times subsequent thereto up to and
including each Closing Date hereinafter mentioned, the Registration Statement
and the Prospectus, and any amendments or supplements thereto, will contain all
material statements and information required to be included therein by the Act
and the Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, and neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, will include any 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; provided, however, no representation or warranty
contained in this subsection 2(b) shall be applicable to information contained
in or omitted from any Preliminary Prospectus, the Registration Statement, the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter, directly or through the Representatives or their counsel,
specifically for use in the preparation thereof.
(c) The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 22 to the Registration Statement. WorldMark, the
Club, a California nonprofit mutual benefit corporation ("WorldMark"), does not
own or control, directly or indirectly, any corporation, association or other
entity (other than homeowners' associations). Each of the Company, its
subsidiaries and WorldMark has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, with full power and authority (corporate and other) to own and
lease its properties and conduct its business as described in the Prospectus;
the Company owns all of the outstanding capital stock of its subsidiaries free
and clear of all claims, liens, charges and encumbrances; each of the Company,
its subsidiaries and WorldMark is in possession of and operating in compliance
with all authorizations, licenses, permits, consents, certificates and orders
material to the conduct of its business, all of which are valid and in full
force and effect; each of the Company, its subsidiaries and WorldMark is duly
qualified to do business and in good standing as a foreign corporation in each
jurisdiction in which the ownership or leasing of properties or the conduct of
its business requires such qualification, except for jurisdictions in which the
failure to so qualify would not have a material adverse effect on the condition
(financial or otherwise), business, properties, results of operations or
prospects of the Company and its subsidiaries taken as a whole or WorldMark (a
"Material Adverse Effect"); and no proceeding has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification.
(d) The Company has an authorized and outstanding capital
stock as set forth under the heading "Capitalization" in the Prospectus; the
issued and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, were not issued in violation of or
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subject to any preemptive rights or other rights to subscribe for or purchase
securities, and conform to the description thereof contained in the Registration
Statement and the Prospectus. The form of certificate, if any, evidencing the
Common Stock complies with all applicable requirements of Oregon law. All issued
and outstanding shares of capital stock of each subsidiary of the Company have
been duly authorized and validly issued and are fully paid and nonassessable.
All issued and outstanding membership interests of WorldMark have been duly
authorized and validly issued and have been issued in compliance with all
federal and state securities laws. Except as disclosed in or specifically
contemplated by the Prospectus and the financial statements of the Company, and
the related notes thereto, included in the Prospectus, neither the Company nor
any of its subsidiaries has outstanding any options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the options or
other rights granted and exercised thereunder, set forth in the Prospectus
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights.
(d) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, will be registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), have been duly authorized
for quotation by the Nasdaq National Market upon official notice of issuance and
will conform to the description thereof contained in the Prospectus. No
preemptive rights or other rights to subscribe for or purchase exist with
respect to the issuance and sale of the Common Shares by the Company pursuant to
this Agreement. No stockholder of the Company has any right which has not been
waived to require the Company to register the sale of any shares owned by such
stockholder under the Act in the public offering contemplated by this Agreement.
No further approval or authority of the stockholders or the Board of Directors
of the Company will be required for the transfer and sale of the Common Shares
to be sold by the Selling Stockholder or the issuance and sale of the Common
Shares to be sold by the Company as contemplated herein.
(e) The Company has full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company in accordance with its
terms. The making and performance of this Agreement by the Company and the
consummation of the transactions herein contemplated will not violate any
provisions of the certificate of incorporation or bylaws, or other
organizational documents, of the Company or any of its subsidiaries, and will
not materially conflict with, result in the material breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a
material default under (i) any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of its respective properties may be bound or affected, or
(ii) any statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or other
governmental body applicable to the Company or any of its subsidiaries or any of
its respective properties. No consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental body is
required
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for the execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement, except for compliance with the Act,
the Blue Sky laws applicable to the public offering of the Common Shares by the
several Underwriters and the clearance of such offering with the National
Association of Securities Dealers, Inc. (the "NASD").
(f) The Company and WorldMark had full right, power and
authority to enter into (i) the Management Agreement dated as of September 30,
1994 by and between the Company and WorldMark, as amended, and (ii) the Vacation
Program Agreement dated as of June 3, 1994 by and between the Company and
WorldMark, as amended (collectively, the "Key Agreements"). The Key Agreements
were duly and validly authorized by all necessary corporate action by the
Company and WorldMark, were duly and validly executed and delivered by and on
behalf of the Company and WorldMark, and are valid and binding agreements of the
Company and WorldMark enforceable in accordance with their terms, except as
enforceability may be limited by general equitable principles, bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally; and no approval, authorization, order, consent, registration, filing,
qualification, license or permit of or with any court, regulatory,
administrative or other governmental body was required for the execution and
delivery of the Key Agreements by the Company and WorldMark.
(g) Each of KPMG Peat Marwick LLP and Xxxxxxxx, Peugh,
McDaniel, Xxxxxxxx & Co. LLP, who have expressed their opinion with respect to
the financial statements of the Company and WorldMark, respectively, which were
filed with the Commission as a part of the Registration Statement and included
in the Prospectus and in the Registration Statement, are independent accountants
as required by the Act and the Rules and Regulations.
(h) The financial statements of the Company, and the related
notes thereto, included in the Registration Statement and the Prospectus present
fairly the financial position of the Company as of the respective dates of such
financial statements and the results of operations and changes in financial
position of the Company for the respective periods covered thereby. Such
statements and related notes have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis as certified by the
independent accountants named in subsection 2(g). No other financial statements
or schedules are required to be included in the Registration Statement. The
selected combined financial data set forth in the Prospectus under the captions
"Capitalization" and "Selected Combined Financial and Operating Data" fairly
present the information set forth therein on the basis stated in the
Registration Statement.
(i) Except as disclosed in the Prospectus, and except as to
defaults which individually or in the aggregate would not have a Material
Adverse Effect, neither the Company, any of its subsidiaries nor WorldMark is in
violation or default of any provision of its certificate of incorporation or
bylaws, or other organizational documents, or is in breach of or in default with
respect to any provision of any agreement, judgment, decree, order, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other instrument
to which it is a party or by which it or any of its properties are bound; and
there does not exist any state of facts which constitutes an event of default on
the part of the Company, any of its subsidiaries or WorldMark as defined in such
documents or which, with notice or lapse of time or both, would constitute such
an event of default.
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(j) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which have not
been described or filed as required. The description of the contracts in the
Prospectus is accurate and complete in all material respects; all such contracts
are in full force and effect; and neither the Company, any of its subsidiaries
nor WorldMark, nor to the best of the Company's knowledge, any other party is in
breach of or in default under any of such contracts.
(k) Except as disclosed in the Prospectus, there are no legal
or governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened to which the Company, any of its subsidiaries or
WorldMark is or may be a party or of which property owned or leased by the
Company, any of its subsidiaries or WorldMark is or may be the subject, or
related to environmental or discrimination matters, which actions, suits or
proceedings might, individually or in the aggregate, prevent or adversely affect
the transactions contemplated by this Agreement or result in a material adverse
change in the condition (financial or otherwise), properties, results of
operations or prospects of the Company and its subsidiaries taken as a whole or
WorldMark (a "Material Adverse Change"); and no labor disturbance by the
employees of the Company, any of its subsidiaries or WorldMark exists or is
imminent which might be expected to have a Material Adverse Effect. Neither the
Company, any of its subsidiaries nor WorldMark is a party or subject to the
provisions of any injunction, judgment, decree or order of any court, regulatory
body, administrative agency or other governmental body which would have a
Material Adverse Effect.
(l) The Company or the applicable subsidiary has good and
marketable title to all the properties and assets reflected as owned in the
financial statements hereinabove described (or elsewhere in the Prospectus),
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
(i) those, if any, reflected in such financial statements (or elsewhere in the
Prospectus), or (ii) those which are not material in amount and do not adversely
affect the use made and proposed to be made of such property by the Company and
its subsidiaries. The Company or the applicable subsidiary holds its leased
properties under valid and binding leases, with such exceptions as are not
materially significant in relation to the business of the Company and its
subsidiaries taken as a whole. Except as disclosed in the Prospectus, the
Company owns or leases all such properties as are necessary to its operations as
now conducted or as proposed to be conducted.
(m) WorldMark has good and marketable title to all the
timeshare resorts, properties and assets reflected as owned by it in the
Prospectus, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except (i) those, if any, reflected in the Prospectus, or (ii) those which
are not material in amount and do not adversely affect the use made and proposed
to be made of such property by WorldMark. WorldMark holds its leased properties
under valid and binding leases, with such exceptions as are not materially
significant in relation to the business of WorldMark. Except as disclosed in the
Prospectus, WorldMark owns or leases all such properties as are necessary to its
operations as now conducted or as proposed to be conducted.
(n) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as described in
or specifically contemplated by the Prospectus: (i) neither the Company, any of
its subsidiaries nor WorldMark has incurred any material liabilities or
obligations, indirect, direct or contingent, or entered into any material verbal
or
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written agreement or other transaction which is not in the ordinary course of
business or which is reasonably likely to result in a material reduction in the
future earnings of the Company or any of its subsidiaries; (ii) neither the
Company, any of its subsidiaries nor WorldMark has sustained any loss or
interference with its business or properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance, that would have
a Material Adverse Effect; (iii) neither the Company nor any of its subsidiaries
has paid or declared any dividends or other distributions with respect to its
capital stock and neither the Company, any of its subsidiaries nor WorldMark is
in default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the capital stock of the
Company (other than upon the sale of the Common Shares hereunder) or
indebtedness material to the Company, any of its subsidiaries or WorldMark
(other than in the ordinary course of business); and (v) there has not been any
Material Adverse Change.
(o) Except as specifically disclosed in or specifically
contemplated by the Prospectus, each of the Company, its subsidiaries and
WorldMark has sufficient trademarks, trade names, patent rights, mask works,
shop rights, copyrights, licenses, or other similar rights and proprietary
knowledge (collectively, "Intangibles"), approvals and governmental
authorizations to conduct its business as now conducted; the expiration of any
Intangibles, approvals or governmental authorizations would not have a Material
Adverse Effect; and the Company has no knowledge of any material infringement by
the Company, any of its subsidiaries or WorldMark of any Intangibles of others,
and there is no claim being made against the Company, any of its subsidiaries or
WorldMark regarding any Intangibles or other infringement which could have a
Material Adverse Effect.
(p) The Company has not been advised, and has no reason to
believe, that the Company, any of its subsidiaries or WorldMark is not
conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which the Company, any of its subsidiaries
or WorldMark is conducting business, including, without limitation, all
applicable local, state and federal environmental laws and regulations; except
where failure to be so in compliance would not have a Material Adverse Effect.
(q) Each of the Company, its subsidiaries and WorldMark has
filed all necessary federal, state and foreign income and franchise tax
returns and, except for those taxes currently being contested in good faith or
for which adequate reserves have been provided, have paid all taxes shown as due
thereon; and, except as disclosed in the Prospectus, the Company has no
knowledge of any tax deficiency which has been or might be asserted or
threatened against the Company, any of its subsidiaries or WorldMark which could
have a Material Adverse Effect.
(r) Neither the Company nor WorldMark is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
(the "1940 Act").
(s) Neither the Company, any of its subsidiaries nor WorldMark
has distributed nor will any such entity distribute prior to the First Closing
Date any offering material in connection with the offering and sale of the
Common Shares other than the Prospectus, the Registration Statement and the
other materials permitted by the Act.
(t) Each of the Company, its subsidiaries and WorldMark
maintains insurance of the types and in the amounts generally deemed adequate
for its business, including, but not limited
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to, insurance covering real and personal property owned or leased by it against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect.
(u) Neither the Company, any of its subsidiaries nor WorldMark
has at any time during the last five years (i) made any unlawful contribution to
any candidate for foreign office, or failed to disclose fully any contribution
in violation of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or any jurisdiction thereof.
(v) 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 Common Stock to
facilitate the sale or resale of the Common Shares.
(w) Title insurance in favor of WorldMark is in force with
respect to each of the timeshare resorts reflected as owned or leased by
WorldMark in the Prospectus (collectively, the "Resorts") in amounts and with
such endorsements generally deemed adequate for its business, except for those
Resorts located in Mexico.
(x) There are no monetary encumbrances on any of the Resorts.
(y) Each of the Company, its subsidiaries and WorldMark (i) is
in compliance with any and all applicable foreign, federal, state and local
rules, laws and regulations relating to the protection of human health and
safety, the environment or any Hazardous Material (as hereinafter defined)
(collectively, "Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct
its business and (iii) is in compliance with all terms and conditions of any
such permit, license or approval, except where any such noncompliance or failure
to receive or comply with such permits, licenses or approvals would not have a
Material Adverse Effect. As used herein, "Hazardous Material" shall mean (a) any
"hazardous substance" as defined by the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended ("CERCLA"), (b) any
"hazardous waste" as defined by the Resource Conservation and Recovery Act, as
amended, (c) any petroleum or petroleum product, (d) any polyclorinated biphenyl
and (e) any pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of any other
Environmental Law.
(z) To the best of the Company's knowledge, there is no
liability, alleged liability or potential liability (including, without
limitation, liability, alleged liability or potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries or penalties) of the
Company, any of its subsidiaries or WorldMark arising out of, based on or
resulting from (a) the presence or release in the environment of any Hazardous
Material at any location, whether or not owned by the Company, any of its
subsidiaries or WorldMark or (b) the violation or alleged violation of any
Environmental Law, which liability, alleged liability, potential liability,
violation or alleged violation is required to be disclosed in the Registration
Statement, other than as disclosed therein.
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(aa) Neither the assets of the Company, any of its
subsidiaries nor WorldMark constitute "plan assets" under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(bb) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to financial and corporate books and records is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(cc) No environmental engineering firm which prepared Phase I
environmental assessment reports (or other similar reports) with respect to any
of the Resorts was employed for such purpose on a contingent basis or has any
substantial interest in the Company, any of its subsidiaries or WorldMark.
(dd) To the best of the Company's knowledge, no labor problem
exists or is imminent with respect to the employees of the Company, any of its
subsidiaries or WorldMark.
(ee) All agreements, deeds, assignments of leases and other
documents delivered in connection with the acquisition of the Resorts by the
Company and the transfer of such Resorts to WorldMark are sufficient to effect
the transfer to WorldMark of all right, title and interest in and to all real
and personal property of the Resorts upon payment of the consideration therefor.
(ff) Each of the Company, its subsidiaries and WorldMark is in
compliance with all federal, state, local and foreign laws and regulations
regarding the marketing, offers to sell and sales of timeshare interests in each
state in which it is doing business, including but not limited to the Federal
Trade Commission Act, Regulation Z (the truth-in-lending act), Equal Opportunity
Credit Act and Regulation B, Interstate Land Sales Full Disclosure Act, Real
Estate Standards Practices Act, Telephone Consumer Protection Act, Telemarketing
and Consumer Fraud and Abuse Prevention Act, Fair Housing Act and Civil Rights
Acts of 1964 and 1968, except where noncompliance would not have a Material
Adverse Effect. Each of the Company, its subsidiaries and WorldMark has filed
all required documents and supporting information in compliance with federal,
state, local and foreign laws and regulations, and the Company, each of its
subsidiaries and WorldMark is in compliance with all licensure, anti-fraud,
telemarketing, price, gift and sweepstakes and labor laws to which it is or may
become subject, except where noncompliance would not have a Material Adverse
Effect. Each of the Company, its subsidiaries and WorldMark has all permits and
licenses which are required of it to sell timeshare interests in each state and
foreign jurisdiction where it conducts business.
(gg) No person has an option or right of first refusal to
purchase all or part of any of the Resorts or any interest therein. Each of the
Resorts complies with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes and laws relating to handicapped
access), except where noncompliance would not have a Material Adverse Effect.
The
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Company has no knowledge of any pending or threatened condemnation proceedings,
zoning changes, or other proceedings or actions that will in any manner affect
the size of, number of timeshare credit units planned for, the use of any
improvements on, or access to, any of the Resorts.
(hh) To the best of the Company's knowledge, no dispute exists
or is imminent between the Company and WorldMark or between the Company and the
Major Stockholder (or any affiliate of the Major Stockholder) and no officer or
director of the Company has any material agreement or understanding (verbally or
in writing) with WorldMark or the Major Stockholder (or any affiliate of the
Major Stockholder), except as set forth in the Prospectus.
3. Representations and Warranties of the Major Stockholder and
Additional Representations, Warranties and Covenants of the Selling Stockholder.
(a) The Major Stockholder represents and warrants to the
several Underwriters as of the date hereof, as of the First Closing Date and, if
applicable, as of the Second Closing Date, that:
(i) The Major Stockholder has full legal right, power
and authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed
and delivered by the Major Stockholder and constitutes a valid and
binding obligation of the Major Stockholder in accordance with its
terms. The making and performance of this Agreement by the Major
Stockholder and the consummation of the transactions herein
contemplated will not violate any provisions of the certificate of
incorporation or bylaws, or other organizational documents, of the
Major Stockholder or any of its subsidiaries, and will not conflict
with, result in the breach or violation of, or constitute, either by
itself or upon notice or the passage of time or both, a default under
(i) any agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Major Stockholder or
any of its subsidiaries is a party or by which the Major Stockholder or
any of its subsidiaries or any of its respective properties may be
bound or affected, or (ii) any statute or any authorization, judgment,
decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental body applicable to the
Major Stockholder or any of its subsidiaries or any of its respective
properties. No consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental
body is required for the execution and delivery of this Agreement or
the consummation of the transactions contemplated by this Agreement,
except for compliance with the Act, the Blue Sky laws applicable to the
public offering of the Common Shares by the several Underwriters and
the clearance of such offering with the NASD.
(ii) The information pertaining to the Major
Stockholder in the Registration Statement and the Prospectus under the
captions "Summary -- Corporate Background and Consolidation of Finance
Subsidiaries,""Certain Transactions -- Relationship with Jeld-Wen" and
"Principal and Selling Stockholders" is complete and accurate in all
material respects.
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(iii) The Major Stockholder has reviewed and is
familiar with the Registration Statement and the Prospectus and has no
reason to believe the Registration Statement or the Prospectus contains
any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The Selling Stockholder represents and warrants to, and
agrees with, the several Underwriters, as of the First Closing Date and, if
applicable, as of the Second Closing Date, that:
(i) Such Selling Stockholder has good and marketable
title to the Common Shares proposed to be sold by such Selling
Stockholder hereunder on the applicable Closing Date and full right,
power and authority to enter into this Agreement and to sell, assign,
transfer and deliver such Common Shares hereunder, free and clear of
all voting trust arrangements, liens, encumbrances, equities, security
interests, restrictions and claims whatsoever; and upon delivery of and
payment for such Common Shares hereunder, the Underwriters will acquire
good and marketable title thereto, free and clear of all liens,
encumbrances, equities, claims, restrictions, security interests,
voting trusts or other defects of title whatsoever.
(ii) Such Selling Stockholder has executed and
delivered a Power of Attorney and caused to be executed and delivered
on his behalf a Custody Agreement (hereinafter collectively referred to
as the "Stockholder Agreement") and in connection herewith such Selling
Stockholder further represents, warrants and agrees that such Selling
Stockholder has deposited in custody, under the Stockholder Agreement,
with the agent named therein as custodian (the "Agent"), certificates
in negotiable form for the Common Shares to be sold hereunder by such
Selling Stockholder, for the purpose of further delivery pursuant to
this Agreement. Such Selling Stockholder agrees that the Common Shares
to be sold by such Selling Stockholder on deposit with the Agent are
subject to the interests of the Company and the Underwriters, that the
arrangements made for such custody are to that extent irrevocable, and
that the obligations of such Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement or in the Stockholder
Agreement, by any act of such Selling Stockholder, by operation of law,
by the death or incapacity of such Selling Stockholder or by the
occurrence of any other event. If the Selling Stockholder should die or
become incapacitated, or if any other event should occur, before the
delivery of the Common Shares hereunder, the documents evidencing
Common Shares then on deposit with the Agent shall be delivered by the
Agent in accordance with the terms and conditions of this Agreement as
if such death, incapacity or other event had not occurred, regardless
of whether or not the Agent shall have received notice thereof. This
Agreement and the Stockholder Agreement have been duly executed and
delivered by or on behalf of such Selling Stockholder and the form of
such Stockholder Agreement has been delivered to you.
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(iii) The performance of this Agreement and the
Stockholder Agreement and the consummation of the transactions
contemplated hereby and by the Stockholder Agreement will not result in
a breach or violation by such Selling Stockholder of any of the terms
or provisions of, or constitute a default by such Selling Stockholder
under, any indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other agreement or
instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder or any of its properties is bound, any
statute, or any judgment, decree, order, rule or regulation of any
court or governmental agency or body applicable to such Selling
Stockholder or any of its properties.
(iv) Such Selling Stockholder has not taken and will
not take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Common Shares.
(c) The Selling Stockholder and the Major Stockholder agree
with the Company and the Underwriters not to offer to sell, sell or contract to
sell or otherwise dispose of any shares of Common Stock or securities
convertible into or exchangeable for any shares of Common Stock, for a period of
one year after the first date that any of the Common Shares are released by you
for sale to the public, without the prior written consent of Xxxxxxxxxx
Securities, which consent may be withheld at the sole discretion of Xxxxxxxxxx
Securities.
4. Representations and Warranties of the Underwriters. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company, the Selling Stockholder and the Major Stockholder that the
information set forth (i) on the cover page of the Prospectus with respect to
price, underwriting discount and terms of the offering and (ii) under
"Underwriting" (other than the fifth paragraph thereof) in the Prospectus was
furnished to the Company by and on behalf of the Underwriters for use in
connection with the preparation of the Registration Statement and the Prospectus
and is correct in all material respects. The Representatives represent and
warrant that they have been authorized by each of the other Underwriters as the
Representatives to enter into this Agreement on its behalf and to act for it in
the manner herein provided.
5. Purchase, Sale and Delivery of Common Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, (i) the Company agrees to issue and sell
to the Underwriters 2,745,000 of the Firm Common Shares, and (ii) the Selling
Stockholder agrees to sell to the Underwriters 130,000 of the Firm Common
Shares. The Underwriters agree, severally and not jointly, to purchase from the
Company and the Selling Stockholder, respectively, the number of Firm Common
Shares described below. The purchase price per share to be paid by the several
Underwriters to the Company and to the Selling Stockholder, shall be $___ per
share.
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Delivery of certificates for the Firm Common Shares to be
purchased by the Underwriters and payment therefor shall be made at the offices
of Xxxxxxxxxx Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or
such other place as may be agreed upon by the Company and the Representatives)
at such time and date, not later than the third (or, if the Firm Common Shares
are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30
P.M. Washington D.C. time, the fourth) full business day following the first
date that any of the Common Shares are released by you for sale to the public,
as you shall designate by at least 48 hours prior notice to the Company (or at
such other time and date, not later than one week after such third or fourth, as
the case may be, full business day as may be agreed upon by the Company and the
Representatives) (the "First Closing Date"); provided, however, that if the
Prospectus is at any time prior to the First Closing Date recirculated to the
public, the First Closing Date shall occur upon the later of the third or
fourth, as the case may be, full business day following the later of the first
date that any of the Common Shares are released by you for sale to the public
and the date that is 48 hours after the date that the Prospectus has been so
recirculated.
Delivery of certificates for the Firm Common Shares shall be
made by or on behalf of the Company and the Selling Stockholder to you, for the
respective accounts of the Underwriters with respect to the Firm Common Shares
to be sold by the Company and by the Selling Stockholder against payment by you,
for the accounts of the several Underwriters, of the purchase price therefor by
a wire transfer of immediately available funds to an account designated by the
Company and by the Agent in proportion to the number of Firm Common Shares to be
sold by the Company and the Selling Stockholder, respectively. The certificates
for the Firm Common Shares shall be registered in such names and denominations
as you shall have requested at least two full business days prior to the First
Closing Date, and shall be made available for checking and packaging on the
business day preceding the First Closing Date at a location in New York, New
York, or such other location as may be designated by you. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
In addition, on the basis of the representations, warranties
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 431,250 Optional
Common Shares at the purchase price per share to be paid for the Firm Common
Shares, for use solely in covering any over-allotments made by you for the
account of the Underwriters in the sale and distribution of the Firm Common
Shares. The option granted hereunder may be exercised at any time (but not more
than once) within 30 days after the first date that any of the Common Shares are
released by you for sale to the public, upon notice by you to the Company
setting forth the aggregate number of Optional Common Shares as to which the
Underwriters are exercising the option, the names and denominations in which the
certificates for such shares are to be registered and the time and place at
which such certificates will be delivered. Such time of delivery (which may not
be earlier than the First Closing Date), being herein referred to as the "Second
Closing Date," shall be determined by you, but if at any time other than the
First Closing Date shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. The number of Optional
Common Shares to be purchased by each Underwriter shall be determined by
multiplying the number of Optional Common Shares to be sold by the Company
pursuant to such notice of exercise by a fraction, the numerator of which is the
number of Firm Common Shares to be
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purchased by such Underwriter as set forth opposite its name in Schedule A and
the denominator of which is 2,875,000 (subject to such adjustments to eliminate
any fractional share purchases as you in your discretion may make). Certificates
for the Optional Common Shares will be made available for checking and packaging
on the business day preceding the Second Closing Date at a location in New York,
New York, or such other location as may be designated by you. The manner of
payment for and delivery of the Optional Common Shares shall be the same as for
the Firm Common Shares purchased from the Company as specified in the two
preceding paragraphs. At any time before lapse of the option, you may cancel
such option by giving written notice of such cancellation to the Company. If the
option is cancelled or expires unexercised in whole or in part, the Company will
deregister under the Act the number of Optional Common Shares as to which the
option has not been exercised.
You have advised the Company and the Selling Stockholder that
each Underwriter has authorized you to accept delivery of its Common Shares, to
make payment and to issue a receipt therefor. You, individually and not as the
Representatives of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by you by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any of its obligations
under this Agreement. Subject to the terms and conditions hereof, the
Underwriters propose to make a public offering of their respective portions of
the Common Shares as soon after the effective date of the Registration Statement
as in the judgment of the Representatives is advisable and at the public
offering price set forth on the cover page of and on the terms set forth in the
final prospectus, if one is used, or on the first page of the Term Sheet, if one
is used.
6. Covenants of the Company. The Company covenants and agrees that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto, to
become effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Rules and Regulations, or the filing of the
Prospectus is otherwise required under Rule 424(b) of the Rules and Regulations,
the Company will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such timely
filing. The Company will promptly advise you in writing (i) of the receipt of
any comments of the Commission, (ii) of any request of the Commission for
amendment of or supplement to the Registration Statement (either before or after
it becomes effective), any Preliminary Prospectus or the Prospectus or for
additional information, (iii) when the Registration Statement shall have become
effective, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the institution
of any proceedings for that purpose. If the Commission shall enter any such stop
order at any time, the Company will use its best efforts to obtain the lifting
of such order at the earliest possible moment. The Company will not file any
amendment or supplement to the Registration Statement (either before or after it
becomes effective), any Preliminary Prospectus or the Prospectus of which you
have not been furnished with a copy a reasonable time prior to such filing or to
which you reasonably object or which is not in compliance with the Act and the
Rules and Regulations.
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(b) The Company will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the Registration
Statement or the Prospectus which in your judgment may be necessary or advisable
to enable the several Underwriters to continue the distribution of the Common
Shares and will use its best efforts to cause the same to become effective as
promptly as possible. The Company will fully and completely comply with the
provisions of Rule 430A of the Rules and Regulations with respect to information
omitted from the Registration Statement in reliance upon such Rule.
(c) If at any time within the applicable period referred to in
Section 10(a)(3) of the Act or Rule 174 of the Rules and Regulations during
which a prospectus relating to the Common Shares is required to be delivered
under the Act any event occurs, as a result of which the Prospectus, including
any amendments or supplements, would include an 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, or if it is necessary
at any time to amend the Prospectus, including any amendments or supplements, to
comply with the Act or the Rules and Regulations, the Company will promptly
advise you thereof and will promptly prepare and file with the Commission, at
its own expense, an amendment or supplement which will correct such statement or
omission or an amendment or supplement which will effect such compliance and
will use its best efforts to cause the same to become effective as soon as
possible; and, in case any Underwriter is required to deliver a prospectus after
such applicable period, the Company upon request, but at the expense of such
Underwriter, will promptly prepare such amendment or amendments to the
Registration Statement and such Prospectus or Prospectuses as may be necessary
to permit compliance with the requirements of Section 10(a)(3) of the Act and
Rule 174 of the Rules and Regulations.
(d) As soon as practicable, but not later than 45 days after
the end of the first quarter ending after one year following the "effective date
of the Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of Section
11(a) of the Act.
(e) During such period as a prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, the Company,
at its expense, but only for the applicable period referred to in Section
10(a)(3) of the Act and Rule 174 of the Rules and Regulations, will furnish to
you and the Selling Stockholder or mail to your order copies of the Registration
Statement, the Prospectus, the Preliminary Prospectus and all amendments and
supplements to any such documents in each case as soon as available and in such
quantities as you and the Selling Stockholder may request, for the purposes
contemplated by the Act and the Rules and Regulations.
(f) The Company shall cooperate with you and your counsel in
order to qualify or register the Common Shares for sale under (or obtain
exemptions from the application of) the Blue Sky laws of such jurisdictions as
you designate will comply with such laws and will continue such qualifications,
registrations and exemptions in effect so long as reasonably required for the
distribution of the Common Shares. The Company shall not be required to qualify
as a foreign
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corporation or to file a general consent to service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise you promptly of the
suspension of the qualification or registration of (or any such exemption
relating to) the Common Shares for offering, sale or trading in any jurisdiction
or any initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification, registration
or exemption, the Company, with your cooperation, will use its best efforts to
obtain the withdrawal thereof.
(g) During the period of five years hereafter, the Company
will furnish to the Representatives and their counsel and, upon request of the
Representatives, to each of the other Underwriters: (i) as soon as practicable
after the end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such fiscal year
and statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Report on
Form 8-K or other report filed by the Company with the Commission, the NASD or
any securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its Common Stock.
(h) During the period of 180 days after the first date that
any of the Common Shares are released by you for sale to the public, without the
prior written consent of Xxxxxxxxxx Securities (which consent may be withheld at
the sole discretion of Xxxxxxxxxx Securities), the Company will not issue,
offer, sell, grant options to purchase or otherwise dispose of any of the
Company's equity securities or any other securities convertible into or
exchangeable with its Common Stock or other equity security; provided, however,
that the Company may issue shares of its Common Stock or options to purchase its
Common Stock, or Common Stock upon exercise of options, pursuant to any stock
option, stock bonus or other stock plan or arrangement described in the
Prospectus, but only if the holders of such shares, options, or shares issued
upon exercise of such options, agree in writing not to, directly or indirectly,
sell, offer, contract or grant any option to sell (including without limitation
any short sale), pledge, transfer, establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of (including by devise or descent unless such devisees or descendants take
subject to such agreement) any such shares or options during such 180 day period
without the prior written consent of Xxxxxxxxxx Securities (which consent may be
withheld at the sole discretion of the Xxxxxxxxxx Securities).
(i) The Company will apply the net proceeds of the sale of the
Common Shares sold by it substantially in accordance with its statements under
the caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to continue the
quotation of the Common Stock as a national market system security on the NASD
Automated Quotation System.
(k) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of formation of the Company, a registrar (which
may be the same entity as the transfer agent).
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You, on behalf of the Underwriters, may, in your sole
discretion, waive in writing the performance by the Company of any one or more
of the foregoing covenants or extend the time for their performance.
7. Payment of Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement becomes effective or is terminated,
the Company and, unless otherwise paid by the Company, the Selling Stockholder
agree to pay in such proportions as they may agree upon among themselves all
costs, fees and expenses incurred in connection with the performance of their
obligations hereunder and in connection with the transactions contemplated
hereby, including without limiting the generality of the foregoing, (i) all
expenses incident to the issuance and delivery of the Common Shares (including
all printing and engraving costs), (ii) all fees and expenses of the registrar
and transfer agent of the Common Stock, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Common Shares
to the Underwriters, (iv) all fees and expenses of the Company's and the Selling
Stockholder's counsel (and any counsel retained to represent WorldMark) and the
Company's independent accountants, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement, each Preliminary Prospectus and the Prospectus
(including all exhibits and financial statements) and all amendments and
supplements provided for herein, this Agreement, the Agreement Among
Underwriters, the Selected Dealers Agreement, the Underwriters' Questionnaire,
the Underwriters' Power of Attorney and the preliminary and final Blue Sky
memoranda, (vi) all filing fees, attorneys' fees and expenses incurred by the
Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Common Shares for offer and sale under the Blue Sky laws, (vii) the
filing fee of the NASD and the fees and expenses related to the inclusion of the
Common Stock on the Nasdaq National Market, and (viii) all other fees, costs and
expenses referred to in Item 13 of Part II of the Registration Statement. The
Underwriters may deem the Company to be the primary obligor with respect to all
costs, fees and expenses to be paid by the Company and by the Selling
Stockholder. Except as provided in this Section 7, Section 9 and Section 11
hereof, the Underwriters shall pay all of their own expenses, including the fees
and disbursements of their counsel (excluding those relating to qualification,
registration or exemption under the Blue Sky laws and the preliminary and final
Blue Sky memoranda referred to above). This Section 7 shall not affect any
agreements relating to the payment of expenses between the Company and the
Selling Stockholder.
The Selling Stockholder will pay (directly or by
reimbursement) all fees and expenses incident to the performance of its
obligations under this Agreement which are not otherwise specifically provided
for herein, including but not limited to (i) any fees and expenses of counsel
for such Selling Stockholder; (ii) any fees and expenses of the Agent; and (iii)
all expenses and taxes incident to the sale and delivery of the Common Shares to
be sold by such Selling Stockholder to the Underwriters hereunder.
8. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Firm Common Shares on
the First Closing Date and the Optional Common Shares on the Second Closing Date
shall be subject to the accuracy of the representations and warranties on the
part of the Company, the Selling Stockholder and the Major
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Stockholder herein set forth as of the date hereof and as of the First Closing
Date or the Second Closing Date, as the case may be, to the accuracy of the
statements of Company officers, the Selling Stockholder and the Major
Stockholder made pursuant to the provisions hereof, to the performance by the
Company and the Selling Stockholder of their respective obligations hereunder,
and to the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 P.M. (or, in the case of a registration statement filed pursuant
to Rule 462(b) of the Rules and Regulations relating to the Common Shares, not
later than 10:00 P.M.), Washington, D.C. Time, on the date of this Agreement, or
at such later time as shall have been consented to by you; if the filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b) of
the Rules and Regulations, the Prospectus shall have been filed in the manner
and within the time period required by Rule 424(b) of the Rules and Regulations;
and prior to such Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending or, to the knowledge of
the Company, the Selling Stockholder or you, shall be contemplated by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall have been
complied with to your satisfaction.
(b) You shall be satisfied that since the respective dates as
of which information is given in the Registration Statement and Prospectus, (i)
there shall not have been any change in the capital stock of the Company or any
of its subsidiaries or any material change in the indebtedness (other than in
the ordinary course of business) of the Company, any of its subsidiaries or
WorldMark, (ii) except as set forth in or specifically contemplated by the
Registration Statement or the Prospectus, no material verbal or written
agreement or other transaction shall have been entered into by the Company, any
of its subsidiaries, or WorldMark which is not in the ordinary course of
business or which is reasonably likely to result in a material reduction in the
future earnings of the Company or any of its subsidiaries, (iii) no loss or
damage (whether or not insured) to the property of the Company, any of its
subsidiaries or WorldMark shall have been sustained which results in a Material
Adverse Change, (iv) no legal or governmental action, suit or proceeding
affecting the Company, any of its subsidiaries or WorldMark which affects or may
affect the transactions contemplated by this Agreement or which can be expected
to result in a Material Adverse Change shall have been instituted or threatened,
and (v) there shall not have been any Material Adverse Change which makes it
impractical or inadvisable in the judgment of the Representatives to proceed
with the public offering or purchase the Common Shares as contemplated hereby.
(c) The Firm Common Shares and the Optional Common Shares
shall have been approved for listing on the Nasdaq National Market, subject to
official notice of issuance, and the NASD, upon review of the terms of the
public offering, shall not have objected to such offering, such terms or the
Underwriters' participation in the same.
(d) There shall have been furnished to you, as Representatives
of the Underwriters, on each Closing Date, in form and substance satisfactory to
you, except as otherwise expressly provided below:
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(i) An opinion of Xxxxxx Pepper & Shefelman PLLC, counsel for
the Company, WorldMark, the Selling Stockholder and the Major Stockholder,
addressed to the Underwriters and dated the First Closing Date, or the Second
Closing Date (in the latter case with respect to the Company only), as the case
may be, to the effect that:
(1) Each of the Company, its subsidiaries, WorldMark
and the Major Stockholder has been duly incorporated and is validly
existing as a corporation under the laws of its jurisdiction of
incorporation, is duly qualified to do business as a foreign
corporation and is in good standing in all other jurisdictions where
the ownership or leasing of properties or the conduct of its business
requires such qualification, except for jurisdictions in which the
failure to so qualify would not have a Material Adverse Effect, and has
full corporate power and authority to own its properties and conduct
its business as described in the Registration Statement;
(2) The authorized, issued and outstanding capital
stock of the Company is as set forth under the caption "Capitalization"
in the Prospectus; all necessary and proper corporate proceedings have
been taken in order to authorize validly such authorized Common Stock;
all outstanding shares of Common Stock (including the Firm Common
Shares and any Optional Common Shares) have been duly and validly
issued, are fully paid and nonassessable, have been issued in
compliance with the registration provisions of federal and state
securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase any
securities and conform to the description thereof contained in the
Prospectus; without limiting the foregoing, there are no preemptive or
other rights to subscribe for or purchase any of the Common Shares to
be sold by the Company hereunder;
(3) All of the issued and outstanding shares of the
Company's subsidiaries have been duly and validly authorized and
issued, are fully paid and nonassessable and are owned beneficially by
the Company free and clear of all liens, encumbrances, equities,
claims, security interests, voting trusts or other defects of title
whatsoever;
(4) All of the issued and outstanding membership
interests of WorldMark have been duly and validly authorized and issued
and have been issued in compliance with federal and state securities
laws;
(5) The certificates evidencing the Common Shares to
be delivered hereunder are in due and proper form under Oregon law, and
when duly countersigned by the Company's transfer agent and registrar,
and delivered to you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of this
Agreement, the Common Shares represented thereby will be duly
authorized and validly issued, fully paid and nonassessable, will not
have been issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities and will conform
in all material respects to the description thereof contained in the
Prospectus;
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(6) Except as disclosed in or specifically
contemplated by the Prospectus, to the best of such counsel's
knowledge, there are no outstanding options, warrants or other rights
calling for the issuance of, and no commitments, plans or arrangements
to issue, any shares of capital stock of the Company or any security
convertible into or exchangeable for capital stock of the Company;
(7) The Registration Statement has become effective
under the Act and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement or
preventing the use of the Prospectus has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated by
the Commission; any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) of the Rules and Regulations
has been made in the manner and within the time period required by such
Rule 424(b);
(8) The Registration Statement, the Prospectus and
each amendment or supplement thereto (except for the financial
statements and schedules included therein as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations;
(9) To the best of such counsel's knowledge, there
are no franchises, leases, licenses, contracts, agreements or documents
of a character required to be disclosed in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration Statement
which are not disclosed or filed, as required;
(10) To the best of such counsel's knowledge, there
are no legal or governmental actions, suits or proceedings pending or
threatened against the Company, any of its subsidiaries or WorldMark
which are required to be described in the Prospectus which are not
described as required;
(11) The Company and the Major Stockholder have full
right, power and authority to enter into this Agreement and the Company
has full right, power and authority to sell and deliver the Common
Shares to be sold by it to the several Underwriters; this Agreement has
been duly and validly authorized by all necessary corporate action by
the Company and the Major Stockholder, has been duly and validly
executed and delivered by and on behalf of the Company and the Major
Stockholder, [and is a valid and binding agreement of the Company and
the Major Stockholder enforceable in accordance with its terms, except
as enforceability may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and except as to those provisions
relating to indemnity or contribution for liabilities arising under the
Act as to which no opinion need be expressed]; and no approval,
authorization, order, consent, registration, filing, qualification,
license or permit of or with any court, regulatory, administrative or
other governmental body is required for the execution and delivery of
this Agreement by the Company or the consummation of the transactions
contemplated by this Agreement, except such as have been obtained and
are in full force and effect under the Act and such as may be required
under applicable Blue Sky laws in connection with the purchase and
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distribution of the Common Shares by the Underwriters and the clearance
of such offering with the NASD;
(12) The Company and WorldMark had full right, power
and authority to enter into (i) the Management Agreement dated as of
September 30, 1994 by an between the Company and WorldMark, as amended,
and (ii) the Vacation Program Agreement dated as of June 3, 1994 by and
between the Company and WorldMark, as amended (collectively, the "Key
Agreements"); the Key Agreements were duly and validly authorized by
all necessary corporate action by the Company and WorldMark, were duly
and validly executed and delivered by and on behalf of the Company and
WorldMark, and are valid and binding agreements of the Company and
WorldMark enforceable in accordance with their terms, except as
enforceability may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally; and no approval, authorization,
order, consent, registration, filing, qualification, license or permit
of or with any court, regulatory, administrative or other governmental
body was required for the execution and delivery of the Key Agreements
by the Company and WorldMark;
(13) The execution and performance of this Agreement
and the consummation of the transactions herein contemplated will not
(i) conflict with, result in the material breach of, or constitute,
either by itself or upon notice or the passage of time or both, a
material default under, any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument known to such
counsel to which the Company, any of its subsidiaries or WorldMark is a
party or by which the Company, any of its subsidiaries or WorldMark or
any of its or their property may be bound or affected which conflict,
breach or default would have a Material Adverse Effect, or (ii) violate
any of the provisions of the certificate of incorporation or bylaws, or
other organizational documents, of the Company, any of its subsidiaries
or WorldMark or, so far as is known to such counsel, violate any
statute, judgment, decree, order, rule or regulation of any court or
governmental body having jurisdiction over the Company, any of its
subsidiaries or WorldMark or any of their property;
(14) Neither the Company, any of its subsidiaries nor
WorldMark is in violation of its articles of incorporation or bylaws,
or other organizational documents, or to the best of such counsel's
knowledge, in breach of or default with respect to any provision of any
agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument known to such counsel to which
the Company, any of its subsidiaries or WorldMark is a party or by
which such entity or any of its properties may be bound or affected,
except where such default would not have a Material Adverse Effect;
and, to the best of such counsel's knowledge, the Company, its
subsidiaries and WorldMark are in compliance with all laws, rules,
regulations, judgments, decrees, orders and statutes of any court or
jurisdiction to which they are subject, except where noncompliance
would not have a Material Adverse Effect;
(15) To the best of such counsel's knowledge, no
holders of securities of the Company have rights which have not been
waived to the registration of
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shares of Common Stock or other securities because of the filing of the
Registration Statement by the Company or the offering contemplated
hereby;
(16) Neither the Company nor WorldMark is an
"investment company" within the meaning of the 1940 Act;
(17) To the best of such counsel's knowledge, this
Agreement and the Stockholder Agreement have been duly authorized,
executed and delivered by or on behalf of the Selling Stockholder; the
Agent has been duly and validly authorized to act as the custodian of
the Common Shares to be sold by such Selling Stockholder; and the
performance of this Agreement and the Stockholder Agreement and the
consummation of the transactions herein contemplated by the Selling
Stockholder will not result in a breach of, or constitute a default
under, any indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other agreement or
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder or any of his properties may be bound, or violate
any statute, judgment, decree, order, rule or regulation known to such
counsel of any court or governmental body having jurisdiction over any
of the Selling Stockholder or any of his properties; and to the best of
such counsel's knowledge, no approval, authorization, order or consent
of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of this
Agreement or the Stockholder Agreement or the consummation by the
Selling Stockholder of the transactions contemplated by this Agreement,
except such as have been obtained and are in full force and effect
under the Act and such as may be required under the rules of the NASD
and applicable Blue Sky laws;
(18) To the best of such counsel's knowledge, the
Selling Stockholder has full right, power and authority to enter into
this Agreement and the Stockholder Agreement and to sell, transfer and
deliver the Common Shares to be sold on such Closing Date by such
Selling Stockholder hereunder and good and marketable title to such
Common Shares so sold, free and clear of all liens, encumbrances,
equities, claims, restrictions, security interests, voting trusts, or
other defects of title whatsoever, has been transferred to the
Underwriters (whom counsel may assume to be bona fide purchasers) who
have purchased such Common Shares hereunder;
(19) To the best of such counsel's knowledge, this
Agreement and the Stockholder Agreement are valid and binding
agreements of the Selling Stockholder, enforceable in accordance with
their terms except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and
except with respect to those provisions relating to indemnities or
contributions for liabilities under the Act, as to which no opinion
need be expressed;
(20) No transfer taxes are required to be paid in
connection with the sale and delivery of the Common Shares to the
Underwriters hereunder;
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(21) Except as described in the Prospectus with
respect to the Resorts located in Hawaii, the Company, each of its
subsidiaries which sells timeshare interests, if any, and WorldMark
have obtained the material approvals and permits from all relevant
state timeshare authorities necessary to offer for sale and to sell
timeshare interests and to offer purchase money financing in connection
with such sales in accordance with all applicable state timeshare laws
and regulations;
(22) To such counsel's knowledge and based upon its
review of certificates and letters from state timeshare authorities,
the Company, WorldMark and other pertinent parties (collectively,
"Reliance Certificates and Letters"), neither the Company, any of its
subsidiaries nor WorldMark has received any written notice from any
regulatory authority that they are in violation of any applicable
federal or state law or regulation regarding the offering for sale and
sale of timeshare interests in the Resorts, the violation of which
could have a Material Adverse Effect;
(23) To such counsel's knowledge, there are no
material franchises, licenses, leases, contracts, agreements or other
documents (collectively, the "Material Agreements") entered into by the
Company, any of its subsidiaries or WorldMark outside the ordinary
course of business, which involve matters relating to the ownership,
purchase money financing or use of real property or the offering for
sale or sale of timeshare interests in the Resorts, which are of a
character required to be disclosed in the Prospectus or to be filed as
exhibits to the Registration Statement which are not disclosed or filed
as required;
(24) To such counsel's knowledge, there are no real
estate or timeshare related governmental actions, governmental suits or
governmental proceedings pending or threatened against the Company, any
of its subsidiaries or WorldMark with respect to the business and
property relating to the Resorts except (a) those which have been
disclosed in the Prospectus, and (b) those which, if determined
adversely to the Company, any of its subsidiaries or WorldMark, would
not have a Material Adverse Effect;
(25) The consummation by the Company of the
transactions contemplated by the Underwriting Agreement do not require
the consent, approval, authorizations, registration or qualification of
(i) any governmental agency or authority of the timeshare authority of
the states where each of the Resorts are located or in which timeshare
interests are sold, or (ii) any lender which has a recorded security
interest in the Resorts, except those which have been obtained and are
in full force and effect and those as to which the failure to so obtain
would not have a Material Adverse Effect;
(26) The consummation by the Company of the
transactions contemplated by the Underwriting Agreement does not
conflict with or result in a material breach or violation by the
Company, any of its subsidiaries or WorldMark of: (i) any of the terms
or provisions of any loans which encumber the Resorts; or (ii) any
terms or provisions of any applicable state timeshare laws or
regulations;
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(27) The statements (i) in the Prospectus under the
captions "Dividend Policy," "Business -- Governmental Regulation,"
"Business -- Insurance; Legal Proceedings," "Management -- Limitation
of Liability and Indemnification Matters," "Management -- Employment
Agreements," "Management -- 1997 Stock Option Plan," "Certain
Transactions," "Description of Capital Stock" and "Certain Provisions
of Oregon Law and of Trendwest's Articles of Incorporation and Bylaws"
and "Shares Eligible for Future Sale" and (ii) in the Registration
Statement in Items 14 and 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(28) A statement to the effect that although such
counsel is not passing upon, and does not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus and has not made any
independent check or verification thereof, during the course of such
participation (relying as to the factual matters upon the Reliance
Certificates and Letters), no facts came to such counsel's attention
that have caused such counsel to believe that the Registration
Statement at the time it became effective or the Prospectus 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 in light of the circumstances under which they were made, not
misleading with respect to (i) indebtedness secured by the Resorts,
(ii) environmental matters with respect to the Resorts, (iii) ownership
of the Resorts, (iv) regulation by applicable state timeshare
authorities, (v) WorldMark's contractual relationships with the
Company, and (vi) the statements in the Prospectus under the caption
"Business - Governmental Regulation," to the extent that such
information constitutes matters of law or legal conclusions as it
pertains to the ownership, operation, sale and offering of timeshare
interests in the Resorts.
In rendering such opinion, such counsel may rely as to matters of local
law, on opinions of local counsel, and as to matters of fact, on certificates of
the Selling Stockholder and of officers of the Company and of governmental
officials, in which case their opinion is to state that they are so doing and
that the Underwriters are justified in relying on such opinions or certificates
and copies of said opinions or certificates are to be attached to the opinion.
Such counsel shall also include a statement to the effect that nothing has come
to such counsel's attention that would lead such counsel to believe that either
at the effective date of the Registration Statement or at the applicable Closing
Date the Registration Statement or the Prospectus, or any such amendment or
supplement thereto, contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (it being understood that such counsel need
express no belief as to the financial statements, schedules and other financial
and statistical information, included in the Registration Statement or the
Prospectus or any amendments or supplements thereto).
(ii) Such opinion or opinions of Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP, counsel for the Underwriters, dated the First Closing Date or the
Second Closing Date,
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as the case may be, with respect to the incorporation of the Company, the
sufficiency of all corporate proceedings and other legal matters relating to
this Agreement, the validity of the Common Shares, the Registration Statement
and the Prospectus and other related matters as you may reasonably require, and
the Company and the Selling Stockholder shall have furnished to such counsel
such documents and shall have exhibited to them such papers and records as they
may reasonably request for the purpose of enabling them to pass upon such
matters. In connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company, the Selling
Stockholder and governmental officials.
(iii) A certificate of the Company executed by the Chairman of
the Board or President and the chief financial or accounting officer of the
Company, dated the First Closing Date or the Second Closing Date, as the case
may be, to the effect that:
(1) The representations and warranties of the
Company set forth in Section 2 of this Agreement are true and correct
as of the date of this Agreement and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied on or prior to such Closing Date;
(2) The Commission has not issued any order
preventing or suspending the use of the Prospectus or any Preliminary
Prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued; and to the best of the
knowledge of the respective signers, no proceedings for that purpose
have been instituted or are pending or contemplated under the Act;
(3) Each of the respective signers of the
certificate has carefully examined the Registration Statement and the
Prospectus; in his opinion and to the best of his knowledge, the
Registration Statement and the Prospectus and any amendments or
supplements thereto contain all statements required to be stated
therein regarding the Company and its subsidiaries; and neither the
Registration Statement nor the Prospectus nor any amendment or
supplement thereto includes any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(4) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, transaction or
event has occurred which should have been set forth in an amendment to
the Registration Statement or in a supplement to or amendment of any
prospectus which has not been disclosed in such a supplement or
amendment;
(5) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
and except as disclosed in or specifically contemplated by the
Prospectus, there has not been any Material Adverse Change or a
development involving a Material Adverse Change; and no legal or
governmental action, suit or proceeding is pending or threatened
against the Company,
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any of its subsidiaries or WorldMark, whether or not arising from
transactions in the ordinary course of business, which may adversely
affect the transactions contemplated by this Agreement, or which would
have a Material Adverse Effect; since such dates and except as so
disclosed, neither the Company, any of its subsidiaries nor WorldMark
has entered into any verbal or written agreement or other transaction
which is not in the ordinary course of business or which could result
in a material reduction in the future earnings of the Company or
incurred any material liability or obligation, direct, contingent or
indirect, made any change in its capital stock, made any material
change in its short-term debt or funded debt or repurchased or
otherwise acquired any of the Company's capital stock; and neither the
Company nor WorldMark has declared or paid any dividend, or made any
other distribution, upon its outstanding capital stock payable to
stockholders of record on a date prior to the First Closing Date or
Second Closing Date, as the case may be; and
(6) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus
and except as disclosed in or specifically contemplated by the
Prospectus, neither the Company, any of its subsidiaries nor WorldMark
has sustained a loss or damage by strike, fire, flood, windstorm,
accident or other calamity (whether or not insured), that could have a
Material Adverse Effect.
(iv) On the First Closing Date, and if applicable, on the
Second Closing Date, a certificate, dated such Closing Date and addressed to
you, signed by or on behalf of the Selling Stockholder to the effect that the
representations and warranties of such Selling Stockholder in this Agreement are
true and correct, as if made at and as of such Closing Date, and such Selling
Stockholder has complied with all the agreements and satisfied all the
conditions on his part to be performed or satisfied prior to such Closing Date.
(v) On the date before this Agreement is executed and also on
the First Closing Date and the Second Closing Date a letter addressed to you, as
Representatives of the Underwriters, from each of KPMG Peat Marwick LLP and
Xxxxxxxx, Peugh, McDaniel, Xxxxxxxx & Co. LLP, each independent accountants, the
first one to be dated the day before the date of this Agreement, the second one
to be dated the First Closing Date and the third one (in the event of a Second
Closing) to be dated the Second Closing Date, in form and substance satisfactory
to you.
(vi) On or before the First Closing Date, letters from each
holder of the Company's Common Stock and each director and officer of the
Company, in form and substance satisfactory to you, confirming that for a period
of 180 days after the first date that any of the Common Shares are released by
you for sale to the public, such person will not directly or indirectly sell or
offer to sell or otherwise dispose of any shares of Common Stock or any right to
acquire such shares without the prior written consent of Xxxxxxxxxx Securities,
which consent may be withheld at the sole discretion of Xxxxxxxxxx Securities.
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(vii) The Company shall have furnished to you such further
certificates and documents as you shall have reasonably requested.
(viii) There shall have been delivered to you the Firm Common
Shares and, if any Optional Common Shares are purchased, the Optional Common
Shares in the manner required pursuant to Section 5 hereof.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, counsel for the Underwriters. The Company
shall furnish you with such manually signed or conformed copies of such
opinions, certificates, letters and documents as you request. Any certificate
signed by any officer of the Company and delivered to the Representatives or to
counsel for the Underwriters shall be deemed to be a representation and warranty
by the Company to the Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you to the
Company and the Selling Stockholder without liability on the part of any
Underwriter, the Company or the Selling Stockholder except for the expenses to
be paid or reimbursed by the Company and by the Selling Stockholder pursuant to
Sections 7 and 9 hereof and except to the extent provided in Section 11 hereof.
9. Reimbursement of Underwriters' Expenses. Notwithstanding any other
provisions hereof, if this Agreement shall be terminated by you pursuant to
Section 8, or if the sale to the Underwriters of the Common Shares at the First
Closing is not consummated because of any refusal, inability or failure on the
part of the Company or the Selling Stockholder to perform any agreement herein
or to comply with any provision hereof, the Company agrees to reimburse you and
the other Underwriters upon demand for all out-of-pocket expenses that shall
have been reasonably incurred by you and them in connection with the proposed
purchase and the sale of the Common Shares, including but not limited to fees
and disbursements of counsel, printing expenses, travel expenses, postage,
telegraph charges and telephone charges relating directly to the offering
contemplated by the Prospectus. Any such termination shall be without liability
of any party to any other party except that the provisions of this Section,
Section 7 and Section 11 shall at all times be effective and shall apply.
10. Effectiveness of Registration Statement. You, the Company and the
Selling Stockholder will use your, its and his best efforts to cause the
Registration Statement to become effective, to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement and, if such
stop order be issued, to obtain as soon as possible the lifting thereof.
11. Indemnification. (a) The Company, the Selling Stockholder and the
Major Stockholder, jointly and severally, agree to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of the Act against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Underwriter or such controlling person
may become subject, under the Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such losses, claims,
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damages, liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state in
any of them a material fact required to be stated therein or necessary to make
the statements in any of them not misleading, or arise out of or are based in
whole or in part on any inaccuracy in the representations and warranties of the
Company, the Selling Stockholder or the Major Stockholder contained herein or
any failure of the Company or the Selling Stockholder to perform their
respective obligations hereunder or under law; and will reimburse each
Underwriter and each such controlling person for any legal and other expenses as
such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that, notwithstanding the foregoing, the Selling Stockholder and the
Major Stockholder shall have no liability pursuant to this Section 11(a) with
respect to the inaccuracy of the aforementioned representations and warranties
or the failure to perform the aforementioned obligations unless the
representation and warranty was made by, or the obligation was incurred by, the
Selling Stockholder or the Major Stockholder, as applicable, pursuant to this
Agreement; provided, further, that (i) neither the Company, the Selling
Stockholder nor the Major Stockholder will be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with the information furnished to the Company pursuant to Section 4
hereof, (ii) the maximum liability of the Major Stockholder under this Section
11(a) shall not exceed the lesser of (a) $15,000,000 or (b) the aggregate amount
of all sums paid by the Company to the Major Stockholders during the six month
period following the date of this Agreement in respect of the outstanding
indebtedness and accrued interest described under "Use of Proceeds" in the
Prospectus, (iii) the Major Stockholder shall not be liable under the provisions
of this Section 11(a) unless and until the Underwriters have made written demand
on the Company for payment under this Section 11(a) which shall not have been
paid by the Company within 30 days after receipt of such demand and (iv) the
maximum liability of the Selling Stockholder under this Section 11(a) shall not
exceed the amount equal to the initial public offering price of the Common
Shares sold by such Selling Stockholder, less the underwriting discount as set
forth on the cover page of the Prospectus; and provided, further, that with
respect to any preliminary prospectus, the foregoing indemnity agreement shall
not inure to the benefit of any Underwriter from whom the person asserting any
loss, claim, damage, liability or expense purchased Common Shares, or any person
controlling such Underwriter, if copies of the Prospectus were timely delivered
to the Underwriter pursuant to Section 2 hereof and a copy of the Prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Common Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense. The
Company, the Selling Stockholder and the Major Stockholder may agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible. In addition to its other obligations under this Section
11(a), the Company, the Selling Stockholder and the Major Stockholder agree
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, or any inaccuracy
in the representations and warranties of the Company, the Selling Stockholder or
the Major Stockholder
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herein or failure to perform its obligations hereunder, all as described in this
Section 11(a), it will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's, the Selling Stockholder's or the Major
Stockholder's obligation to reimburse each Underwriter for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Underwriter shall
promptly return it to the Company together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by Bank of
America NT&SA, San Francisco, California (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Underwriter within 30 days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request. This indemnity agreement will be in addition to any liability
which the Company, the Selling Stockholder or the Major Stockholder may
otherwise have.
(b) Each Underwriter will severally indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement, the Selling Stockholder, the Major Stockholder and each
person, if any, who controls the Company, the Selling Stockholder or the Major
Stockholder within the meaning of the Act, against any losses, claims, damages,
liabilities or expenses to which the Company, or any such director, officer,
Selling Stockholder, Major Stockholder or controlling person may become subject,
under the Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with the information
furnished to the Company pursuant to Section 4 hereof; and will reimburse the
Company, or any such director, officer, Selling Stockholder, Major Stockholder
or controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer, Selling Stockholder, Major Stockholder
or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. In addition to its other obligations under this Section 11(b), each
Underwriter severally agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 11(b) which relates to information furnished to the
Company pursuant to Section 4 hereof, it will reimburse the Company (and, to the
extent applicable, each officer, director, controlling person, Selling
Stockholder or Major Stockholder) on a quarterly basis for all reasonable legal
or other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the
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propriety and enforceability of the Underwriters' obligation to reimburse the
Company (and, to the extent applicable, each officer, director, controlling
person, Selling Stockholder or Major Stockholder) for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company (and, to the
extent applicable, each officer, director, controlling person, Selling
Stockholder or Major Stockholder) shall promptly return it to the Underwriters
together with interest, compounded daily, determined on the basis of the Prime
Rate. Any such interim reimbursement payments which are not made to the Company
within 30 days of a request for reimbursement, shall bear interest at the Prime
Rate from the date of such request. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel, approved by the Representatives in the case of paragraph
(a), representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) If the indemnification provided for in this Section 11 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) in respect of any losses, claims, damages, liabilities
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or expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company, the Selling Stockholder, the Major Stockholder and the
Underwriters from the offering of the Common Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, the Selling
Stockholder, the Major Stockholder and the Underwriters in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations; provided, however, that
in no event shall the Major Stockholder be required to contribute more than the
lesser of (a) $15,000,000 or (b) the aggregate amount of all sums paid by the
Company to the Major Stockholders during the six month period following the date
of this Agreement in respect of the outstanding indebtedness and accrued
interest described under "Use of Proceeds" in the Prospectus. The respective
relative benefits received by the Company, the Selling Stockholder, the Major
Stockholder and the Underwriters shall be deemed to be in the same proportion,
in the case of the Company, the Selling Stockholder and the Major Stockholder as
the total price paid to the Company and to the Selling Stockholder,
respectively, for the Common Shares sold by them to the Underwriters (net of
underwriting commissions but before deducting expenses) bears to the total price
to the public set forth on the cover of the Prospectus, and in the case of the
Underwriters as the total underwriting discount received by them bears to the
total price to the public set forth on the cover of the Prospectus. The relative
fault of the Company, the Selling Stockholder, the Major Stockholder and the
Underwriters 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 or the inaccurate or the alleged
inaccurate representation and/or warranty relates to information supplied by the
Company, the Selling Stockholder, the Major Stockholder or the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in subparagraph (c) of this Section 11, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in subparagraph (c) of
this Section 11 with respect to notice of commencement of any action shall apply
if a claim for contribution is to be made under this subparagraph (d); provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under subparagraph (c) for purposes of
indemnification. The Company, the Selling Stockholder, the Major Stockholder and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 11 were determined solely 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 in this paragraph. Notwithstanding the provisions of this Section
11, no Underwriter shall be required to contribute any amount in excess of the
amount of the total underwriting discount received by such Underwriter in
connection with the Common Shares underwritten by it and distributed to the
public. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 11 are several in proportion
to their respective underwriting commitments and not joint.
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(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections 11(a)
and 11(b) hereof, including the amounts of any requested reimbursement payments
and the method of determining such amounts, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in Sections 11(a) and 11(b)
hereof and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses which is created by the provisions of such
Sections 11(a) and 11(b) hereof.
12. Default of Underwriters. It shall be a condition to this Agreement
and the obligation of the Company and the Selling Stockholder to sell and
deliver the Common Shares hereunder, and of each Underwriter to purchase the
Common Shares in the manner as described herein, that, except as hereinafter in
this paragraph provided, each of the Underwriters shall purchase and pay for all
the Common Shares agreed to be purchased by such Underwriter hereunder upon
tender to the Representatives of all such shares in accordance with the terms
hereof. If any Underwriter or Underwriters default in their obligations to
purchase Common Shares hereunder on either the First or Second Closing Date and
the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase on such Closing Date does not exceed
10% of the total number of Common Shares which the Underwriters are obligated to
purchase on such Closing Date, the non-defaulting Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the Common Shares which such defaulting Underwriters agreed but failed
to purchase on such Closing Date. If any Underwriter or Underwriters so default
and the aggregate number of Common Shares with respect to which such default
occurs is more than the above percentage and arrangements satisfactory to the
Representatives and the Company for the purchase of such Common Shares by other
persons are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company or the Selling Stockholder except for the expenses to be paid by the
Company and the Selling Stockholder pursuant to Section 7 hereof and except to
the extent provided in Section 11 hereof.
In the event that Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five business days in
order that the necessary changes in the Registration Statement, Prospectus and
any other documents, as well as any other arrangements, may be effected. As used
in this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
13. Effective Date. This Agreement shall become effective immediately
as to Sections 7, 9, 11, 14 and 16 and, as to all other provisions, (i) if at
the time of execution of this Agreement the Registration Statement has not
become effective, at 2:00 P.M., California time, on the first full
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business day following the effectiveness of the Registration Statement, or (ii)
if at the time of execution of this Agreement the Registration Statement has
been declared effective, at 2:00 P.M., California time, on the first full
business day following the date of execution of this Agreement; but this
Agreement shall nevertheless become effective at such earlier time after the
Registration Statement becomes effective as you may determine on and by notice
to the Company or by release of any of the Common Shares for sale to the public.
For the purposes of this Section 13, the Common Shares shall be deemed to have
been so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising Underwriters that the Common Shares are released for public offering,
or (ii) offering the Common Shares for sale to securities dealers, whichever may
occur first.
14. Termination. Without limiting the right to terminate this Agreement
pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice
to you and the Selling Stockholder or by you by notice to the Company and the
Selling Stockholder at any time prior to the time this Agreement shall become
effective as to all its provisions, and any such termination shall be without
liability on the part of the Company or the Selling Stockholder to any
Underwriter (except for the expenses to be paid or reimbursed by the Company and
the Selling Stockholder pursuant to Sections 7 and 9 hereof and except to the
extent provided in Section 11 hereof) or of any Underwriter to the Company or
the Selling Stockholder (except to the extent provided in Section 11 hereof).
(b) This Agreement may also be terminated by you prior to the
First Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof, shall
have been imposed upon trading in securities generally or minimum or maximum
prices shall have been generally established on the New York Stock Exchange or
on the American Stock Exchange or in the over the counter market by the NASD, or
trading in securities generally shall have been suspended on either such
Exchange or in the over the counter market by the NASD, or a general banking
moratorium shall have been established by federal, New York or California
authorities, (ii) if an outbreak of major hostilities or other national or
international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Representatives, to affect
adversely the marketability of the Common Shares, (iii) if any adverse event
shall have occurred or shall exist which makes untrue or incorrect in any
material respect any statement or information contained in the Registration
Statement or Prospectus or which is not reflected in the Registration Statement
or Prospectus but should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect, or (iv) if
there shall be any action, suit or proceeding pending or threatened, or there
shall have been any development or prospective development involving
particularly the business or properties or securities of the Company or any of
its subsidiaries or the transactions contemplated by this Agreement, which, in
the reasonable judgment of the Representatives, may materially and adversely
affect the Company's business or earnings and makes it impracticable or
inadvisable to offer or sell the Common Shares. Any termination pursuant to this
subsection (b) shall without liability on the part of any Underwriter to the
Company or the Selling Stockholder or on the part of the Company or the Selling
Stockholder to any Underwriter (except for expenses to be paid or reimbursed by
the Company and the Selling
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Stockholder pursuant to Sections 7 and 9 hereof and except to the extent
provided in Section 11 hereof.
(c) This Agreement shall also terminate at 5:00 P.M.,
California time, on the tenth full business day after the Registration Statement
shall have become effective if the initial public offering price of the Common
Shares shall not then as yet have been determined as provided in Section 5
hereof. Any termination pursuant to this subsection (c) shall be without
liability on the part of any Underwriter to the Company or the Selling
Stockholder or on the part of the Company or the Selling Stockholder to any
Underwriter (except for expenses to be paid or reimbursed by the Company and the
Selling Stockholder pursuant to Sections 7 and 9 hereof and except to the extent
provided in Section 11 hereof).
15. Failure of the Selling Stockholder to Sell and Deliver. If the
Selling Stockholder shall fail to sell and deliver to the Underwriters the
Common Shares to be sold and delivered by such Selling Stockholder at the First
Closing Date under the terms of this Agreement, then the Underwriters may at
their option, by written notice from you to the Company and the Selling
Stockholder, either (i) terminate this Agreement without any liability on the
part of any Underwriter or, except as provided in Sections 7, 9 and 11 hereof,
the Company or the Selling Stockholder, or (ii) purchase the shares which the
Company has agreed to sell and deliver in accordance with the terms hereof. In
the event of a failure by the Selling Stockholder to sell and deliver as
referred to in this Section, either you or the Company shall have the right to
postpone the Closing Date for a period not exceeding seven business days in
order that the necessary changes in the Registration Statement, Prospectus and
any other documents, as well as any other arrangements, may be effected.
16. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, of its officers, of the Selling Stockholder, of the Major Stockholder
and of the several Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholder, or
the Major Stockholder, as the case may be, and will survive delivery of and
payment for the Common Shares sold hereunder and any termination of this
Agreement; provided, however, that notwithstanding the foregoing, the
indemnification obligations of the Major Stockholder pursuant to Section 11(a)
of this Agreement shall expire with respect to any claim as to which the Major
Stockholder is not notified by the Underwriters within three (3) years after the
date of this Agreement.
17. Notices. All communications hereunder shall be in writing and, if
sent to the Representatives shall be mailed, delivered or telegraphed and
confirmed to you at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxx X. Xxxxxxxx, with a copy to Xxxxx Xxxxxxxxx, Esq. at Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000;
and if sent to the Company, the Selling Stockholder or the Major Stockholder
shall be mailed, delivered or telegraphed and confirmed to the Company at 00000
XX 00xx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, with a copy to Xxxxx Xxxxxx, Esq. at
Xxxxxx Pepper & Shefelman PLLC, 0000 0xx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx
00000. The Company, the Selling Stockholder, the Major Stockholder or you may
change the address for receipt of communications hereunder by giving notice to
the others.
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18. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 12 hereof, and to the benefit of the officers and directors and
controlling persons referred to in Section 11, and in each case their respective
successors, personal representatives and assigns, and no other person will have
any right or obligation hereunder. No such assignment shall relieve any party of
its obligations hereunder. The term "successors" shall not include any purchaser
of the Common Shares as such from any of the Underwriters merely by reason of
such purchase.
19. Representation of Underwriters. You will act as Representatives for
the several Underwriters in connection with all dealings hereunder, and any
action under or in respect of this Agreement taken by you jointly or by
Xxxxxxxxxx Securities, as Representatives, will be binding upon all the
Underwriters.
20. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
21. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws (and not the laws pertaining to conflicts
of laws) of the State of California.
22. General. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Stockholder, the Major
Stockholder and you.
Any person executing and delivering this Agreement as Attorney-in-fact
for the Selling Stockholder represents by so doing that he has been duly
appointed as Attorney-in-fact by such Selling Stockholder pursuant to a validly
existing and binding Power of Attorney which authorizes such Attorney-in-fact to
take such action. Any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on the Selling Stockholder.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon it
will become a binding agreement among the Company, the Selling Stockholder, the
Major Stockholder and the several Underwriters including you, all in accordance
with its terms.
Very truly yours,
TRENDWEST RESORTS, INC.
By:
------------------------------------
President
SELLING STOCKHOLDER
By:
------------------------------------
(Attorney-in-fact)
JELD-WEN, inc.
By:
------------------------------------
President
The foregoing Underwriting Agreement is hereby confirmed and accepted by us in
San Francisco, California as of the date first above written.
XXXXXXXXXX SECURITIES
SALOMON BROTHERS INC
Acting as Representatives of the several Underwriters named in the attached
Schedule A.
By XXXXXXXXXX SECURITIES
By:
------------------------------------
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(Authorized Signatory)
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SCHEDULE A
Number of Firm
Common Shares
Name of Underwriter to be Purchased
------------------- ---------------
Xxxxxxxxxx Securities..........................................
Salomon Brothers Inc...........................................
---------
TOTAL 2,875,000
=========
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SCHEDULE B
Number of Firm Common
Shares to be Sold by
Name of Selling Stockholder Selling Stockholder
--------------------------- -------------------
Xxxxxxx X. Xxxxx..................................................130,000
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