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EXHIBIT 1
TXI CAPITAL TRUST I
___% Share Preference Unit Redeemable Securities ("SPURS")
(Liquidation Preference $50 per Security)
fully and unconditionally guaranteed by
and convertible into the Common Stock of
TEXAS INDUSTRIES, INC.
UNDERWRITING AGREEMENT
___________, 1998
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UNDERWRITING AGREEMENT
__________, 1998
SBC Warburg Dillon Read Inc.
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
c/o SBC Warburg Dillon Read Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as Managing Underwriters
Dear Sirs:
TXI Capital Trust I (the "Trust"), a statutory business trust
created under the Business Trust Act of the State of Delaware (the "Delaware
Act") proposes to issue and sell to you and the other underwriters, if any,
named in Schedule A (the "Underwriters"), for whom you are acting as Managing
Underwriters (the "Managing Underwriters"), an aggregate of ___________ shares
(the "Firm Securities") of its ____% Share Preference Unit Redeemable
Securities (the "Preferred Securities"). In addition, solely for the purpose
of covering overallotments, the Trust proposes to issue and sell, at the
Underwriters' option, up to _________ additional shares of the Preferred
Securities (the "Additional Securities"). The Additional Securities and the
Firm Securities are collectively referred to as the "Securities". The
Securities are described in the Prospectus which is referred to below. If you
are the only Underwriters, all references herein to the Managing Underwriters
shall be deemed to be references to the Underwriters.
The Preferred Securities represent preferred beneficial
ownership interests in the Trust. Pursuant to the Preferred Securities
Guarantee Agreement (the "Guarantee Agreement") to be entered into by Texas
Industries, Inc. ("TXI"), a Delaware corporation, and ____________________ as
Preferred Guarantee Trustee (the "Preferred Guarantee Trustee") for the benefit
of the holders from time to time of the Preferred Securities, the Preferred
Securities will be guaranteed (the "Guarantees") by TXI with respect to
distributions and amounts
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payable upon liquidation or redemption. TXI will be the owner of all of the
common beneficial ownership interests in the Trust, which will be represented
by the common securities (the "Common Securities") of the Trust.
Proceeds from the sale of the Preferred Securities to the
Underwriters, and from the concurrent sale of the Common Securities to TXI,
will be used to purchase $___________ aggregate principal amount of TXI's ____%
Convertible Subordinated Debentures due 2028 (the "Debentures"). The
Debentures will be issued by TXI pursuant to an Indenture (the "Indenture") to
be entered into between TXI and _______________, as Trustee (the "Indenture
Trustee"). In view of the fact that TXI will be the owner of all of the Common
Securities and that the proceeds from the sale of the Preferred Securities will
be used to purchase the Debentures from TXI, TXI has agreed to enter into this
Agreement and to make the representations and warranties to the Underwriters
herein set forth, and to indemnify the Underwriters and hold them harmless and
to contribute to certain amounts payable by the Underwriters, as provided
herein, and to pay the expenses of the Trust relating to the offering of the
Preferred Securities contemplated by the Registration Statement and the
Prospectus (as hereinafter defined).
The Preferred Securities and the Common Securities
(collectively referred to as the "Trust Securities") may be exchanged at the
option of the holder for a principal amount of Debentures equal to the
liquidation amount of the Trust Securities so being exchanged. This Agreement,
the Indenture, the Debentures, the Trust Agreement (as defined in Section 3(h))
and the Guarantee Agreement are referred to collectively as the "Operative
Documents". Copies of the Operative Documents, in substantially final form,
have been delivered to each of the Underwriters.
The Trust and TXI have filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively called the "Act"), with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3,
including a prospectus, relating to the Securities, the Debentures, the
Guarantees and the shares (the "Conversion Shares") of common stock, par value
$1.00 per share (the "Common Stock"), of TXI issuable upon conversion of the
Debentures. Such registration statement incorporates by reference documents
that TXI has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively called the "Exchange Act"). TXI and the Trust have
furnished to you, for use by the Underwriters and by dealers,
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copies of one or more preliminary prospectuses and all documents incorporated
by reference therein (each such preliminary prospectus, including the documents
incorporated therein by reference, is called a "Preliminary Prospectus")
relating to the Securities. Except where the context otherwise requires, the
registration statement as in effect at the time of execution of this Agreement
or, if the registration statement is not yet effective, as amended when it
becomes effective, including all documents filed as a part thereof or
incorporated by reference therein, and including any registration statement
filed pursuant to Rule 462(b) under the Act increasing the size of the offering
registered under the Act and any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b) under the Act
and deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is herein called the
"Registration Statement", and the prospectus, including all documents
incorporated therein by reference, in the form filed by the Trust and TXI with
the Commission pursuant to Rule 424(b) under the Act or, if no such filing is
required, in the form of final prospectus included in the Registration
Statement at the time it became effective, is herein called the "Prospectus".
The Trust, TXI and the Underwriters agree as follows:
1. Sale and Purchase. On the basis of the
representations and warranties and the other terms and conditions herein set
forth, the Trust agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Trust the
number of Firm Securities set forth opposite the name of such Underwriter on
Schedule A, at a purchase price of ____% of the liquidation amount thereof,
plus accrued distributions, if any, from ___________, 1998 to the time of
purchase (as hereinafter defined). You may release the Firm Securities for
public sale promptly after this Agreement becomes effective. You may from time
to time increase or decrease the public offering price after the initial public
offering to such extent as you may determine.
In addition, on the basis of the representations and
warranties and the other terms and conditions herein set forth, the Trust
hereby grants to the several Underwriters an option to purchase, and the
Underwriters shall have the right to purchase, severally and not jointly, from
the Trust all or a portion of the Additional Securities as may be necessary to
cover overallotments made in connection with the offering of the Firm
Securities, at the same purchase price per share to be paid by the several
Underwriters to the Trust for the Firm Securities. This option may be
exercised in whole or in part from time to time on or
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before the thirtieth day following the date hereof, by written notice to the
Trust. Any such notice shall set forth the aggregate number of Additional
Securities as to which the option is being exercised, and the date and time
when the Additional Securities are to be delivered (any such date and time
being herein referred to as an "additional time of purchase"); provided,
however, that no additional time of purchase shall occur earlier than the time
of purchase (as defined below) nor earlier than the second business day* after
the date on which the option shall have been exercised nor later than the
eighth business day after the date on which the option shall have been
exercised. The number of Additional Securities to be sold to each Underwriter
at an additional time of purchase shall be the number which bears the same
proportion to the aggregate number of Additional Securities being purchased at
such additional time of purchase as the number of Firm Securities set forth
opposite the name of such Underwriter on Schedule A bears to the total number
of Firm Securities (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the
Firm Securities shall be made to the Trust by wire transfer, in immediately
available funds, against delivery of the certificates for the Firm Securities
to you for the respective accounts of the Underwriters, at the office of SBC
Warburg Dillon Read Inc. in New York City. Such payment and delivery shall be
made at 9:30 A.M., New York City time, on ________________, 1998 (unless
another date not later than ________________, 1998 shall be agreed to by you
and the Trust or unless postponed in accordance with the provisions of Section
8). The time at which such payment and delivery are actually made is called
the "time of purchase". Certificates for the Firm Securities shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify on the second business day preceding the time of purchase.
For the purpose of expediting the checking of the certificates for the Firm
Securities by you, the Trust agrees to make such certificates available to you
for such purpose at least one full business day preceding the time of purchase.
Payment of the purchase price for the Additional Securities
shall be made at the additional time of purchase in the same manner as the
payment for the Firm Securities.
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* As used herein, "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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Certificates for the Additional Securities shall be delivered to you in
definitive form in such names and in such denominations as you shall specify on
the second business day preceding the additional time of purchase. For the
purpose of expediting the checking of the certificates for the Additional
Securities by you, the Trust agrees to make such certificates available to you
for such purpose at least one full business day preceding the additional time
of purchase.
3. Representations and Warranties of the Trust and TXI.
The Trust and TXI, jointly and severally, represent and warrant to each of the
Underwriters that:
(a) Each Preliminary Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, complied when so
filed in all material respects with the Act; when the Registration
Statement becomes or became effective and at all times subsequent
thereto up to the time of purchase and the additional time of
purchase, the Registration Statement and the Prospectus, and any
supplements or amendments thereto, complied and will comply in all
material respects with the provisions of the Act; and the Registration
Statement at all such times did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and the Prospectus at all such times did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that neither the Trust
nor TXI makes any representation or warranty with respect to any
statement contained in the Registration Statement or the Prospectus in
reliance upon and in conformity with information concerning the
Underwriters and furnished in writing by or on behalf of any
Underwriter through you to the Trust expressly for use in the
Registration Statement or the Prospectus and set forth in the section
of the Registration Statement and the Prospectus entitled
"Underwriting"; the documents incorporated by reference in the
Prospectus, at the time they were filed with the Commission, complied
in all material respects with the requirements of the Exchange Act,
and do not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
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(b) As of the date of this Agreement, TXI has an
authorized consolidated capitalization as set forth under the column
entitled "February 28,1998 Actual" in the section of the Registration
Statement and the Prospectus entitled "Capitalization" and, as of the
time of purchase, the authorized consolidated capitalization of TXI
will be as set forth under the column entitled "February 28, 1998 As
Adjusted" in the section of the Registration Statement and the
Prospectus entitled "Capitalization"; all of the issued and
outstanding shares of capital stock of TXI have been duly authorized
and validly issued and are fully paid and nonassessable and are free
of statutory and contractual preemptive rights.
(c) As of the date of this Agreement, the Trust has an
authorized capitalization of (A) ____________ Common Securities, none
of which are issued or outstanding, and (ii) _____________ Preferred
Securities, none of which are issued or outstanding. As of the time
of purchase, the authorized consolidated capitalization of the Trust
will be (A) ____________ Common Securities, all of which will be
issued or outstanding and owned by TXI, and (ii) ___________ Preferred
Securities, all of which are issued and outstanding.
(d) TXI has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware with full power and authority to (i) own its properties and
conduct its business as described in the Registration Statement and
the Prospectus and (ii) execute and deliver this Agreement and the
other Operative Documents and (A) to issue, sell and deliver the
Debentures as contemplated herein and in the Indenture, (B) to issue
the Guarantees as contemplated herein and in the Guarantee Agreement
and (C) to issue the Conversion Shares upon conversion of the
Debentures pursuant to the Indenture.
(e) The Trust has been duly organized and is validly
existing as a business trust in good standing under the Delaware Act
with full power and authority to (i) own its assets and conduct its
business as described in the Registration Statement and the Prospectus
and (ii) execute and deliver this Agreement and the other Operative
Documents and to issue, sell and deliver the Common Securities and the
Preferred Securities as contemplated herein and in the Trust
Agreement. All filings required under the laws of the State of
Delaware with respect to the valid existence of the Trust as a
business trust have been made. Prior to the date
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hereof, the Trust has conducted no business, and will conduct no
business other than the transactions contemplated by this Agreement
and as contemplated by the Registration Statement and the Prospectus.
(f) All of the issued and outstanding shares of capital
stock of each of the subsidiaries of TXI and all of the outstanding
partnership interests of each partnership operated by TXI
(collectively referred to as the "Subsidiaries") are owned directly or
indirectly by TXI; all of such shares have been duly authorized and
validly issued and are fully paid and (except for general partnership
interests and beneficial interests in trusts) nonassessable and,
except as described in the Prospectus, are owned free and clear of any
pledge, lien, encumbrance, security interest or other claim; there are
no outstanding rights, subscriptions, warrants, calls, preemptive
rights, options or other agreements of any kind with respect to the
capital stock of any of the Subsidiaries. For purposes of this
Section 3(f) and the definition of "Subsidiaries", the Trust will not
be deemed to be a Subsidiary.
(g) Each of the Subsidiaries has been duly formed and is
validly existing as a corporation, partnership or trust, as the case
may be, in good standing under the laws of its respective jurisdiction
of incorporation or organization, with full power and authority to own
its respective properties and to conduct its respective businesses.
(h) Each of TXI and each of the Subsidiaries is duly
qualified or licensed by and is in good standing in each jurisdiction
in which it owns or leases property or conducts its business and in
each other jurisdiction in which the failure, individually or in the
aggregate, to be so qualified or licensed could have a material
adverse effect on the properties, assets, operations, business,
business prospects or condition (financial or other) of TXI and the
Subsidiaries taken as a whole; each of TXI and each of the
Subsidiaries is in compliance in all material respects with the laws,
orders, rules, regulations and directives applicable to TXI or any of
its Subsidiaries issued or administered by each such jurisdiction.
The Trust is not required to be qualified or licensed by or in good
standing in, any jurisdiction other than the State of Delaware.
(i) Neither TXI nor any of the Subsidiaries is in breach
of, or in default under (nor has any event occurred which with notice,
lapse of time or both would constitute a breach of, or default under),
its charter or bylaws, or in
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the performance or observance of any obligation, agreement, covenant
or condition contained in any license, indenture, lease, mortgage,
deed of trust, bank loan or credit agreement, material supply
agreement or other agreement or instrument to which TXI or any of the
Subsidiaries is a party or by which any of them may be bound or
affected, except for such breach or default as would not have a
material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of TXI
and the Subsidiaries taken as a whole. The execution, delivery and
performance of this Agreement and the other Operative Documents, the
issuance and sale of the Securities and the Debentures and the
application of the net proceeds thereof as described in the
Prospectus, the issuance of the Guarantees, the issuance of the
Conversion Shares upon conversion of the Debentures and the
consummation of the transactions contemplated hereby and by the other
Operative Documents will not conflict with, or result in any breach of
or constitute a default under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of, or default
under), the charter or bylaws of TXI or any of the Subsidiaries or
under any provision of any license, indenture, lease, mortgage, deed
of trust, bank loan or credit agreement, material supply agreement or
other agreement or instrument to which TXI or any of the Subsidiaries
is a party or by which any of them or their properties may be bound or
affected, or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to TXI
or any of the Subsidiaries.
(j) The Trust is not a party to or bound by any license,
indenture, lease, mortgage, deed of trust, bank loan or credit
agreement, material supply agreement or other agreement or instrument
other than this Agreement. The Trust has no liabilities or
obligations other than those arising out of the transactions described
in the Registration Statement and the Prospectus and the agreements
and instruments contemplated by the Trust Agreement and described in
the Registration Statement and the Prospectus. The Trust is not a
party to or subject to any action, suit or proceeding of any nature.
The Trust is not in breach of, or in default under (nor has any event
occurred which with notice, lapse of time or both would constitute a
breach of, or default under), the Amended and Restated Trust Agreement
(the "Trust Agreement") among TXI,____________ , as Property Trustee
(the "Property Trustee"), First Chicago Delaware Inc., as Delaware
Trustee (the "Delaware Trustee") and the Administrative Trustees named
therein (the "Administrative
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Trustees"). The execution, delivery and performance of this Agreement
and the other Operative Documents, the issuance and sale of the
Securities, the application of the net proceeds thereof as described
in the Prospectus and the consummation of the transactions
contemplated hereby and by the other Operative Documents will not
conflict with, or result in any breach of or constitute a default
under (nor constitute any event which with notice, lapse of time or
both would constitute a breach of, or default under), the Trust
Agreement or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Trust.
(k) The Firm Securities and the Additional Securities,
when issued and delivered to and paid for by the Underwriters as
contemplated hereby, will be duly authorized and validly issued and
fully paid and nonassessable, free and clear of any pledge, lien,
encumbrance, security interest, preemptive right or other claim. The
Debentures, when issued and delivered to and paid for by the Trust as
contemplated by the Operative Documents, will have been duly
authorized and validly issued and will constitute legal, valid and
binding obligations of TXI entitled to the benefits of the Indenture
and enforceable against TXI in accordance with their terms, except as
the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally and general principles of
equity. The Conversion Shares issuable upon conversion of the
Debentures have been duly authorized and validly reserved for issuance
upon conversion of the Debentures and, when issued upon conversion of
the Debentures as contemplated by the Indenture, will have been
validly issued and will be fully paid and nonassessable, free and
clear of any pledge, lien, encumbrance, security interest, preemptive
right or other claim. The Guarantees, when issued by TXI as
contemplated by the Operative Documents, will have been duly
authorized and validly issued and will constitute legal, valid and
binding obligations of TXI enforceable against TXI in accordance with
their terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally and
general principles of equity.
(l) This Agreement has been duly authorized, executed and
delivered by the Trust and TXI.
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(m) The Trust Agreement has been duly authorized by TXI
and, when executed and delivered by TXI, the Property Trustee, the
Delaware Trustee and the Administrative Trustees, will constitute the
legal, valid and binding obligation of TXI enforceable against TXI in
accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and general principles of equity. Each of the
Administrative Trustees is an employee of TXI and has been duly
authorized by TXI to serve in such capacity and to execute and deliver
the Trust Agreement.
(n) The Indenture has been duly authorized by XXX and,
when executed and delivered by TXI and the Indenture Trustee, will
constitute the legal, valid and binding obligation of TXI enforceable
against TXI in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally and general principles of equity.
(o) The Guarantee Agreement has been duly authorized by
TXI and, when executed and delivered by TXI, will constitute the
legal, valid and binding obligation of TXI enforceable against TXI in
accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and general principles of equity.
(p) The Securities, the Debentures, the Guarantees and
the capital stock of TXI conforms in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus. The certificates for the Securities and the Debentures
are in due and proper form, and the holders of the Securities after
making payment therefor will not be subject to personal liability by
reason of being such holders.
(q) The Trust Agreement, the Indenture and the Guarantee
Agreement conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(r) No approval, authorization, consent or order of or
filing with any federal, state, local or foreign
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governmental or regulatory commission, board, body, authority or
agency is required in connection with the issuance and sale of the
Securities or the Debentures, the issuance of the Guarantees or the
issuance of the Conversion Shares upon conversion of the Debentures as
contemplated hereby and by the other Operative Documents, other than
registration of the Securities and the Debentures under the Act,
qualification of the Trust Agreement and the Guarantee Agreement as
indentures under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act'), clearance of the offering of the Securities
with the National Association of Securities Dealers, Inc. (the "NASD")
and any necessary qualification under the securities or blue sky laws
of the various jurisdictions in which the Securities are being offered
by the Underwriters.
(s) No person has the right, contractual or otherwise, to
cause the Trust or TXI to issue to it, or register pursuant to the
Act, any securities of the Trust or TXI in consequence of the issue
and sale of the Securities to the Underwriters hereunder or the
issuance of the Debentures to the Trust.
(t) Ernst & Young LLP, whose reports on the consolidated
financial statements of TXI and the Subsidiaries are included or
incorporated by reference in the Registration Statement and the
Prospectus, are independent public accountants with respect to the
Trust and TXI as required by the Act and the applicable published
rules and regulations thereunder.
(u) All legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required.
(v) There is no action, suit or proceeding pending or
threatened against TXI or any of the Subsidiaries or any of their
properties, at law or in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency that could result in a judgment, decree or order
having a material adverse effect on the properties, assets,
operations, business, business prospects or condition (financial or
other) of TXI and the Subsidiaries taken as a whole.
(x) The audited and unaudited financial statements
included in the Registration Statement and the Prospectus
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present fairly the consolidated financial condition of TXI and the
Subsidiaries as of the dates indicated and the consolidated results of
operations and cash flows of TXI and the Subsidiaries for the periods
specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis during the periods involved.
(y) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
and except as may be otherwise stated in the Registration Statement or
the Prospectus, there has not been: (i) any material adverse change
in the properties, assets, operations, business, business prospects or
condition (financial or other), present or prospective, of TXI and the
Subsidiaries taken as a whole or of the Trust; (ii) any transaction,
that is material to TXI and the Subsidiaries taken as a whole or the
Trust, contemplated or entered into by TXI or any of the Subsidiaries
or the Trust; or (iii) any obligation, contingent or otherwise,
directly or indirectly incurred by TXI or any of the Subsidiaries or
the Trust that is material to TXI and the Subsidiaries taken as a
whole or the Trust.
(z) TXI has obtained the agreement of the shareholders
listed on Schedule B not to offer, sell, contract to sell, transfer or
otherwise encumber or dispose of, directly or indirectly, any shares
of Common Stock, or securities convertible into or exchangeable for
Common Stock, for a period of 90 days from the date of the Prospectus
without the prior written consent of SBC Warburg Dillon Read Inc.
(aa) Neither TXI nor any of the Subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or
state wages and hours laws, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations
promulgated thereunder, which in each case might result in any
material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of TXI
and the Subsidiaries taken as a whole.
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(bb) TXI and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including without limitation under any
applicable Environmental Laws, as are necessary to own, lease and
operate its respective properties and to conduct its business; TXI and
each of the Subsidiaries has fulfilled and performed all of its
material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit; and, except
as described in the Prospectus, such permits contain no restrictions
that are materially burdensome to TXI's or any of the Subsidiaries'
ability to operate their business in the manner described in the
Prospectus.
(cc) In the ordinary course of its business, TXI conducts
a periodic review of the effect of Environmental Laws on the business,
operations and properties of TXI and the Subsidiaries, in the course
of which it identifies and evaluates associated costs and liabilities
(including without limitation any capital or operating expenditure
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, TXI reasonably has
concluded that such associated costs and liabilities, singly or in the
aggregate, would not have a material adverse effect on the properties,
assets, operations, business, business prospects or condition
(financial or other) of TXI and the Subsidiaries taken as a whole.
(dd) Neither TXI nor any of the Subsidiaries, nor any
employee of TXI or any of the Subsidiaries, has made any payment of
funds of TXI or any of the Subsidiaries prohibited by law, and no
funds of TXI or any of the Subsidiaries have been set aside to be used
for any payment prohibited by law.
(ee) TXI and the Subsidiaries have filed all federal or
state income or franchise tax returns required to be filed and have
paid all taxes shown thereon as due, and there is no material tax
deficiency which has been or might be asserted against TXI or any of
the Subsidiaries; all material tax liabilities are adequately provided
for on the books of TXI and the Subsidiaries.
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(ff) TXI and the Subsidiaries have good title to all
properties and assets owned or leased by them, in each case free and
clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects (except such as are described or
referred to in the Prospectus and the financial statements and the
notes thereto contained therein or such as do not interfere with the
use made and proposed to be made of such property by TXI and the
Subsidiaries).
(gg) None of the Trust, TXI or any of the Subsidiaries is
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, or is subject to regulation under such Act.
4. Certain Covenants of the Trust and TXI. The Trust
and TXI hereby agree as follows:
(a) The Trust and TXI will furnish such information as
may be required and otherwise will cooperate in qualifying the
Securities, the Debentures, the Guarantees and the Conversion Shares
for offering and sale under the securities or blue sky laws of such
states as you may designate and will maintain such qualifications in
effect as long as required for the distribution of the Securities, the
Debentures, the Guarantees and the Conversion Shares, provided that
neither the Trust nor TXI will be required to qualify as a foreign
corporation or trust or to consent to the service of process under the
laws of any such state (except service of process with respect to the
offering and sale of the Securities, the Debentures, the Guarantees
and the Conversion Shares). The Trust and TXI promptly will advise
you of the receipt by the Trust or TXI of any notification with
respect to the suspension of the qualification of the Securities, the
Debentures, the Guarantees or the Conversion Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, and will use their best efforts to obtain the withdrawal
of any order of suspension at the earliest practicable moment.
(b) The Trust and TXI will make available to you in New
York City, as soon as practicable after the Registration Statement
becomes effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the Prospectus
as amended or supplemented if the Trust or TXI shall have made any
amendment or supplement thereto after the effective date of the
Registration Statement) as the Underwriters may request for the
purposes contemplated by the Act.
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(c) The Trust and TXI will advise you promptly and if
requested by you will confirm such advice in writing, (i) when the
Registration Statement has become effective and when any
post-effective amendment thereto becomes effective and (ii) when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act, if required under the Act (which the Trust and TXI agree to
file in a timely manner under such Rule).
(d) The Trust and TXI will advise you promptly,
confirming such advice in writing, of any request by the Commission
for amendments or supplements to the Registration Statement or the
Prospectus or for additional information with respect thereto, or of
notice of institution of proceedings for or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of
the Registration Statement, will use their best efforts to obtain the
lifting or removal of such order as soon as possible. The Trust and
TXI will advise you promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus, including by filing any
document that would be incorporated therein by reference, and will
file no such amendment or supplement to which you shall object in
writing.
(e) The Trust and TXI will furnish to you for a period of
three years from the date of this Agreement (i) copies of all reports
or other communications that the Trust or TXI shall send to their
respective securityholders or from time to time shall publish or
publicly disseminate and (ii) copies of all annual, quarterly and
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K,
or such other similar form as may be designated by the Commission, and
any other document filed by the Trust or TXI pursuant to Section 12,
13, 14 or 15(d) of the Exchange Act.
(f) The Trust and TXI will advise the Underwriters
promptly of the happening of any event known to the Trust or TXI
within the time during which a prospectus relating to the Securities,
the Debentures, the Guarantees or the Conversion Shares is required to
be delivered under the Act that, in the reasonable judgment of the
Trust or TXI, would require the making of any change in the Prospectus
then being used, or in the information incorporated therein by
reference, so that the Prospectus, as then supplemented, would not
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under
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which they are made, not misleading and, during such time, promptly
will prepare and furnish, at TXI's expense, to the Underwriters such
amendments or supplements to such Prospectus as may be necessary to
reflect any such change in such quantities as requested by the
Underwriters, and to furnish to you a copy of such proposed amendment
or supplement before filing any such amendment or supplement with the
Commission.
(g) The Trust and TXI will make generally available to
their respective securityholders, and will deliver to you, an earnings
statement of TXI (which need not be audited and which will satisfy the
provisions of Section 11(a) of the Act including, at the option of
TXI, Rule 158) covering a period of 12 months beginning after the
effective date of the Registration Statement but ending not later than
15 months after the date of the Registration Statement, as soon as is
reasonably practicable after the termination of such 12-month period.
(h) The Trust and TXI will furnish to you four signed
copies of the Registration Statement, as initially filed with the
Commission, and of all amendments thereto (including all exhibits
thereto and documents incorporated by reference therein) and
sufficient conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters.
(i) The Trust and TXI will furnish to you as early as
practicable prior to the time of purchase and the additional time of
purchase, as the case may be, but not later than two business days
prior thereto, a copy of the latest available unaudited interim
consolidated financial statements, if any, of TXI and the Subsidiaries
that have been read by TXI's independent certified public accountants
as stated in their letter to be furnished pursuant to Section 6(b).
(j) The Trust and TXI will apply the net proceeds from
the sale of the Securities and the Debentures in the manner set forth
under the caption "Use of Proceeds" in the Registration Statement and
the Prospectus.
(k) The Trust and TXI will use their best efforts to
cause the Securities to be included in the New York Stock Exchange.
(l) Whether or not the transactions contemplated in this
Agreement and the other Operative Documents are consummated or this
Agreement otherwise becomes effective or
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is terminated, TXI will pay all expenses, fees and taxes (other than
(x) any transfer taxes and (y) fees and disbursements of your counsel
except as set forth under Section 5 and clauses (iii) and (iv) below)
in connection with (i) the preparation and filing of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any
amendment or supplement thereto, and the printing and furnishing of
copies of each thereof to you and to dealers (including costs of
mailing and shipment), (ii) the issuance, sale and delivery of the
Securities, the Debentures, the Guarantees and the Conversion Shares,
(iii) the word processing or printing of this Agreement, the other
Operative Documents and any dealer agreements, and the reproduction or
printing and furnishing of copies of each thereof to you and to
dealers (including costs of mailing and shipment), (iv) the
qualification of the Securities, the Debentures, the Guarantees and
the Conversion Shares or offering and sale under state laws as
aforesaid (including legal fees and filing fees and other
disbursements of your counsel) and the printing and furnishing of
copies of any blue sky surveys to you and to dealers, (v) any listing
of the Securities on any securities exchange or qualification of the
Securities for inclusion in the New York Stock Exchange and any
registration of the Securities, the Debentures, the Guarantees and the
Conversion Shares under the Exchange Act, (vi) any filing for review
of the public offering of the Securities by the NASD, (vii) any fees
payable to rating agencies with respect to the Trust Securities or the
Debentures and (viii) the performance of the Trust's and TXI's other
obligations hereunder.
(m) TXI will not sell, contract to sell, transfer or
otherwise encumber or dispose of, directly or indirectly, any shares
of Common Stock or securities convertible into or exchangeable for
Common Stock or permit the registration under the Act of any shares of
Common Stock, except for the registration of the Securities and the
sale of the Debentures pursuant to this Agreement and the Indenture
for a period commencing on the date hereof and continuing for 90 days
after the date of the Prospectus, without the prior written consent of
SBC Warburg Dillon Read Inc., except for (i) issuance of shares of
Common Stock upon the exercise of outstanding options, (ii) grant of
options to purchase Common Stock pursuant to TXI's existing employee
stock option plans and (iii) issuance of shares of Common Stock in a
private transaction in connection with the acquisition by TXI of a
business or assets so long as the recipient of such shares of Common
Stock agrees to comply with the provisions of this Section 4(m).
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(n) The Trust and TXI will refrain from investing the
proceeds from the sale of the Securities in a manner that would cause
the Trust or TXI or any of the Subsidiaries to become an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(o) TXI will take all such action as may be required, so
long as any of the Debentures remain outstanding, to maintain a
sufficient number of authorized shares of Common Stock reserved for
issuance upon conversion of such debentures.
5. Reimbursement of Underwriters' Expenses. If the Firm
Securities or the Additional Securities are not delivered pursuant to this
Agreement for any reason, other than the failure of the Underwriters to
purchase the Firm Securities or the Additional Securities as provided herein
(unless such failure is permitted under the provisions of Section 6 or Section
7(b) of this Agreement), TXI will reimburse the Underwriters for all of their
out-of-pocket expenses, including the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Trust and TXI on the date
hereof and at the time of purchase (and the several obligations of the
Underwriters at any additional time of purchase are subject to the accuracy of
the representations and warranties on the part of the Trust and TXI on the date
hereof and at the time of purchase and at such additional time of purchase, as
the case may be), the performance by the Trust and TXI of their obligations
hereunder and to the following conditions:
(a) The Trust and TXI shall furnish to you at the time of
purchase and at such additional time of purchase, as the case may be,
an opinion of Xxxxx Xxxxxxx Rain Xxxxxxx (A Professional Corporation),
counsel for the Trust and TXI, addressed to the Underwriters and dated
the time of purchase or such additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and
in form and scope satisfactory to Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel
for the Underwriters, stating that:
(i) TXI has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware, with full corporate power and authority
(A) to own its properties and conduct its business as
described in
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the Registration Statement and the Prospectus and (B) to execute and
deliver this Agreement and the other Operative Documents and (A) to
issue, sell and deliver the Debentures as contemplated herein and in
the Indenture, (B) to issue the Guarantees as contemplated herein and
in the Guarantee Agreement and (C) to issue the Conversion Shares upon
conversion of the Debentures pursuant to the Indenture;
(ii) each of ________, _________ and _______ (the
"Material Subsidiaries") has been duly formed and is validly existing
as a corporation, partnership or trust, as the case may be, in good
standing under the laws of the state in which such Material Subsidiary
is incorporated or organized, with full power and authority to own its
properties and to conduct its business as described in the
Registration Statement and the Prospectus;
(iii) all of the issued and outstanding shares of capital
stock of each Material Subsidiary have been duly authorized and
validly issued and are fully paid and (except for general partnership
interests and beneficial interests in trusts) nonassessable and,
except as set forth in the Prospectus, are owned, directly or
indirectly, by TXI, to the knowledge of such counsel, free and clear
of any pledge, lien, encumbrance, security interest, preemptive right
or other claim, and to the knowledge of such counsel there are no
rights, warrants, options or other agreements to acquire or
instruments convertible into or exchangeable for any shares of capital
stock or other equity interest of any Material Subsidiary, except as
set forth in the Prospectus;
(iv) this Agreement has been duly authorized, executed and
delivered by the Trust and TXI;
(v) (a) the Securities, when issued and delivered to and
paid for by the Underwriters, will be duly authorized, validly issued,
fully paid and nonassessable, and will be free of any pledge, lien,
encumbrance, claim or preemptive right; and (b) the certificates for
the Securities are in due and proper form and the holders of the
Securities will not be subject to personal liability by reason of
being such holders; the Debentures, when issued and delivered to and
paid for by the Trust as contemplated by the Operative Documents, will
have been duly authorized
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and validly issued and will constitute legal, valid and binding
obligations of TXI entitled to the benefits of the Indenture and
enforceable against TXI in accordance with their terms, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally and general principles of
equity; the Conversion Shares issuable upon conversion of the
Debentures have been duly authorized and validly reserved for issuance
upon conversion of the Debentures and, when issued upon conversion of
the Debentures as contemplated by the Indenture, will have been
validly issued and will be fully paid and nonassessable, free and
clear of any pledge, lien, encumbrance, security interest, preemptive
right or other claim; the Guarantees, when issued by TXI as
contemplated by the Operative Documents, will have been duly
authorized and validly issued and will constitute legal, valid and
binding obligations of TXI enforceable against TXI in accordance with
their terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally and
general principles of equity.
(vi) the outstanding shares of capital stock of TXI have
been duly authorized and validly issued and are fully paid,
nonassessable and free of statutory and, to the knowledge of such
counsel, contractual preemptive rights;
(vii) the Securities, the Debentures, the Guarantees and
the capital stock of TXI conform in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus;
(viii) the Indenture has been duly authorized by XXX and,
when executed and delivered by TXI and the Indenture Trustee, will
constitute the legal, valid and binding obligation of TXI enforceable
against TXI in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally and general principles of equity;
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(ix) the Guarantee Agreement has been duly authorized by
TXI and, when executed and delivered by TXI, will constitute the
legal, valid and binding obligation of TXI enforceable against TXI in
accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and general principles of equity;
(x) the Trust Agreement has been duly authorized by TXI
and, when executed and delivered by TXI, the Property Trustee, the
Delaware Trustee and the Administrative Trustees, will constitute the
legal, valid and binding obligation of TXI enforceable against TXI in
accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and general principles of equity;
(xi) the Trust Agreement, the Indenture and the Guarantee
Agreement conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus;
(xii) the Registration Statement and the Prospectus (except
as to the financial statements and schedules and financial and
statistical data contained or incorporated by reference therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act;
(xiii) the Registration Statement has become effective under
the Act and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under the
Act;
(xiv) no approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency is required in
connection with the issuance or sale of the Securities or the
Debentures, the issuance of the Guarantees or the issuance of the
Conversion Shares upon conversion of the Debentures as contemplated
hereby and by the other
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Operative Documents, other than registration of the Securities and the
Debentures under the Act, qualification of the Trust Agreement and the
Guarantee Agreement as indentures under the Trust Indenture Act under
the Act (except such counsel need express no opinion as to any
necessary qualification under the state securities or blue sky laws of
the various jurisdictions in which the Securities are being offered by
the Underwriters, the clearance of the offering with the NASD or any
foreign securities laws);
(xv) the execution, delivery and performance of this
Agreement and the other Operative Documents by TXI, the issuance and
sale of the Debentures and the application of the net proceeds thereof
as described in the Prospectus, the issuance of the Guarantees, the
issuance of the Conversion Shares upon conversion of the Debentures
and the consummation of the transactions contemplated hereby and by
the other Operative Documents do not and will not conflict with, or
result in any breach of, or constitute a default under (nor constitute
any event which with notice, lapse of time or both would constitute a
breach of or default under), the charter or bylaws of TXI or any of
the Subsidiaries, or any provision of any license, indenture, lease,
mortgage, deed of trust, bank loan or credit agreement or other
agreement or instrument to which TXI or any of the Subsidiaries is a
party or by which TXI or any of the Subsidiaries or their properties
are bound or affected, or under any federal, state, local or foreign
law, regulation or rule or any decree, judgment or order applicable to
TXI or any of the Subsidiaries;
(xvi) the execution, delivery and performance of this
Agreement and the other Operative Documents by the Trust, the issuance
and sale of the Securities, the application of the net proceeds
thereof as described in the Prospectus and the consummation of the
transactions contemplated hereby and by the other Operative Documents
do not and will not conflict with, or result in any breach of or
constitute a default under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of, or default
under), the Trust Agreement or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order
applicable to the Trust.
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(xvii) the statements in the Registration Statement and the
Prospectus under the captions "Risk Factors -- Status of Certain
Tariffs" and "Impact of Environmental Laws", and in TXI's Quarterly
Report on Form 10-Q for the period ended February 28, 1998 under the
captions "Shareholders' Equity" and "Stock Option Plans", insofar as
they are descriptions of laws, regulations and rules, of legal and
governmental proceedings or of contracts, agreements, leases and other
legal documents, or refer to statements of law or legal conclusions,
have been reviewed by such counsel and are accurate in all material
respects;
(xviii) the statements in the Registration Statement and the
Prospectus under the caption "Certain Federal Income Tax
Consequences", insofar as they are descriptions of provisions of the
Internal Revenue Code and the treasury regulations published
thereunder, have been reviewed by such counsel and are accurate in all
material respects; the Debentures should be treated as debt for
federal income tax purposes; and the Trust will be treated as a
grantor trust for federal income tax purposes;
(xix) none of the Trust, TXI of any of the Subsidiaries is
an "investment company" or a person "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended; and
(xx) nothing has come to the attention of such counsel
that causes them to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at all times up to and including the time of
purchase 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 (it being understood that such counsel
need express no opinion with respect to the financial statements and
schedules and other financial and statistical data included in the
Registration Statement or Prospectus).
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(b) The Trust and TXI shall furnish to you at the time of
purchase and at such additional time of purchase, as the case may be,
an opinion of Xxxxxx X. Xxxxx, Esq., General Counsel of TXI, addressed
to the Underwriters and dated the time of purchase or such additional
time of purchase, as the case may be, with reproduced copies for each
of the other Underwriters and in form satisfactory to Xxxxxx, Xxxx &
Xxxxxxxx LLP, counsel for the Underwriters, stating that:
(i) each of _________, _______ and ________ (the
"Other Subsidiaries") has been duly formed and is validly
existing as a corporation, partnership or trust, as the case
may be, in good standing under the laws of the state in which
such Other Subsidiary is incorporated or organized, with full
power and authority to own its properties and to conduct its
business as described in the Registration Statement and the
Prospectus;
(ii) each of TXI and each of the Subsidiaries is
duly qualified or licensed to do business by and is in good
standing as a foreign corporation in each jurisdiction in
which it conducts business or owns property and in which the
failure, individually or in the aggregate, to be so licensed
or qualified could have a material adverse effect on the
properties, assets, operations, business, business prospects
or condition (financial or other) of TXI and the Subsidiaries
taken as a whole;
(iii) all of the issued and outstanding shares of
capital stock of each Other Subsidiary have been duly
authorized and validly issued and are fully paid and
nonassessable and, except as set forth in the Prospectus, are
owned, directly or indirectly, by TXI free and clear of any
pledge, lien, encumbrance, security interest, preemptive right
or other claim, and there are no rights, warrants, options or
other agreements to acquire or instruments convertible into or
exchangeable for any shares of capital stock or other equity
interest of any Other Subsidiary, except as set forth in the
Prospectus;
(iv) the Trust Agreement has been duly authorized
by XXX and, when executed and delivered by TXI, the Property
Trustee, the Delaware Trustee and the Administrative Trustees,
will constitute the legal, valid and binding obligation of TXI
enforceable
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against TXI in accordance with its terms, except as the
enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or affecting creditors' rights generally and
general principles of equity. Each of the Administrative
Trustees is an employee of TXI and has been duly authorized by
TXI to serve in such capacity and to execute and deliver the
Trust Agreement.
(iv) TXI has an authorized capitalization as set
forth under the heading "Capitalization" in the Registration
Statement and the Prospectus;
(v) to the best of such counsel's knowledge,
neither TXI nor any of the Subsidiaries is in breach of or in
default under (nor has any event occurred which with notice,
lapse of time or both would constitute a breach of or default
under) any license, indenture, lease, mortgage, deed of trust,
bank loan or credit agreement or any other agreement or
instrument to which TXI or any of the Subsidiaries is a party
or by which TXI or any of the Subsidiaries or their properties
are bound or affected or under any law, regulation or rule or
any decree, judgment or order applicable to TXI or any of the
Subsidiaries, except for such matters as could not,
individually or in the aggregate, have a material adverse
effect on the properties, assets, operations, business,
business prospects or condition (financial or other) of TXI
and the Subsidiaries taken as a whole;
(vi) to the best of such counsel's knowledge, after
due inquiry, neither TXI nor any of the Subsidiaries has
violated any Environmental Laws, nor any federal or state law
relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours
laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated
thereunder, which in each case might result in any material
adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other)
of TXI and the Subsidiaries taken as a whole;
(vii) TXI and each of the Subsidiaries has such
permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits"),
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including without limitation under any applicable
Environmental Laws, as are necessary to own, lease and operate
its respective properties and to conduct its business in the
manner described in the Prospectus; to the best of such
counsel's knowledge, after due inquiry, TXI and each of the
Subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any
other material impairment of the rights of the holder of any
such permit, subject in each case to such qualification as may
be set forth in the Prospectus; and, except as described in
the Prospectus, such permits contain no restrictions that are
materially burdensome to TXI or any of the Subsidiaries;
(viii) except as described in the Registration
Statement and the Prospectus, there are no actions, suits or
proceedings of which such counsel has knowledge pending or
threatened against TXI or any of the Subsidiaries, or any of
their respective properties, at law or in equity, or before or
by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency that
individually or in the aggregate could result in a judgment,
decree or order having a material adverse effect on the
properties, assets, operations, business, business prospects
or condition (financial or other) of TXI and the Subsidiaries
taken as a whole;
(ix) the documents incorporated by reference in the
Registration Statement and Prospectus, when they were filed
(or, if an amendment with respect to any such document was
filed, when such amendment was filed), complied as to form in
all material respects with the Exchange Act (except as to the
financial statements and schedules and other financial and
statistical data contained or incorporated by reference
therein, as to which such counsel need express no opinion);
and
(x) to the best of such counsel's knowledge, no
person has the right, contractual or otherwise, to cause the
Trust or TXI to issue to it, or register pursuant to the Act,
any securities of the Trust or TXI in consequence of the issue
and sale of the
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Securities to the Underwriters hereunder or the
issuance of the Debentures to the Trust.
(xi) all contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed.
(c) The Trust and TXI shall furnish to you at the time
of purchase and at such additional time of purchase, as the case may be,
an opinion of Xxxxxx, Xxxxxxx, Arsht & Xxxxxxx, special Delaware
counsel for the Trust, addressed to the Underwriters and dated the time
of purchase or such additional time of purchase, as the case may be,
with reproduced copies for each of the other Underwriters and in form
and scope satisfactory to Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for the
Underwriters, stating that:
(i) the Trust has an authorized capitalization of
(A) ____________ Common Securities, all of which will be
issued or outstanding and owned by TXI, and (ii) ___________
Preferred Securities, all of which are issued and outstanding;
(ii) the Trust has been duly organized and is
validly existing as a business trust in good standing under
the Delaware Act with full power and authority to (i) own its
assets and conduct its business as described in the
Registration Statement and the Prospectus and (ii) execute and
deliver this Agreement and the other Operative Documents and
to issue, sell and deliver the Common Securities and the
Preferred Securities as contemplated herein and in the Trust
Agreement; all filings required under the laws of the State of
Delaware with respect to the valid existence of the Trust as a
business trust have been made;
(iii) the Securities, when issued and delivered to
and paid for by the Underwriters as contemplated hereby, will
be duly authorized and validly issued and fully paid and
nonassessable, free and clear of any pledge, lien,
encumbrance, security interest, preemptive right or other
claim; the holders of the Trust Securities will be entitled to
the same limitation of personal liability extended to holders
of common stock of private for profit corporations organized
under the General Corporation Law of the State of Delaware;
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(iv) assuming that the Trust derives no income from
or in connection with sources with the State of Delaware and
has no assets, activities (other than maintaining the Delaware
Trustee and the filing of documents with the secretary of
State of the State of Delaware) or employees in the State of
Delaware, the holders of the Trust Securities (other than
those holders domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware
solely as a result of their participation in the Trust, and
the Trust will not be liable for any income tax imposed by the
State of Delaware;
(v) this Agreement has been duly authorized,
executed and delivered by the Trust; and
(vi) the execution, delivery and performance by the
Trust of this Agreement and the other Operative Documents, the
issuance and sale of the Securities, the application of the
net proceeds thereof by the Trust as described in the
Prospectus and the consummation by the Trust of the
transactions contemplated hereby and by the other Operative
Documents will not conflict with, or result in any breach of
or constitute a default under (nor constitute any event which
with notice, lapse of time or both would constitute a breach
of, or default under), the Trust Agreement or under any law,
regulation or rule of the State of Delaware applicable to the
Trust.
(d) You shall have received from Ernst & Young LLP
letters dated, respectively, the date of this Agreement and the time
of purchase and additional time of purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in form and substance satisfactory to you.
(e) You shall have received at the time of purchase and
at the additional time of purchase, as the case may be, opinions from
Xxxxxx, Xxxx & Xxxxxxxx LLP in form and substance satisfactory to you.
(f) No amendment or supplement to the Registration
Statement or the Prospectus, including documents deemed to be
incorporated by reference therein, shall be filed prior to the time
the Registration Statement becomes effective to which you shall have
objected in writing.
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(g) The Registration Statement shall become effective at
or before 5:00 P.M., New York City time, on the date of this Agreement
and, if Rule 430A under the Act is used, the Prospectus shall have
been filed with the Commission pursuant to Rule 424(b) under the Act
at or before 5:00 P.M., New York City time, on the second full
business day after the date of this Agreement; provided, however, that
the Trust and TXI and you and any group of Underwriters, including
you, who have agreed hereunder to purchase in the aggregate at least
50% of the Firm Securities from time to time may agree in writing or
by telephone, confirmed in writing, on a later date.
(h) Prior to the time of purchase or the additional time
of purchase, as the case may be: (i) no stop order with respect to
the effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto,
or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(i) Between the time of execution of this Agreement and
the time of purchase or the additional time of purchase, as the case
may be, there has not been: (i) any material and adverse change,
present or prospective, in the properties, assets, operations,
business, business prospects or condition (financial or other) of TXI
and the Subsidiaries taken as a whole or the Trust, other than as
described in the Registration Statement and the Prospectus; (ii) any
transaction that is material to TXI and the Subsidiaries taken as a
whole or the Trust contemplated or entered into by TXI or any of the
Subsidiaries or the Trust, other than as described in the Registration
Statement and the Prospectus; or (iii) any obligation, contingent or
otherwise, directly or indirectly, incurred by TXI or any of the
Subsidiaries or the Trust that is material to TXI and the Subsidiaries
taken as a whole or the Trust, other than as described in the
Registration Statement, the Prospectus and the documents incorporated
by reference therein.
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(j) TXI, at the time of purchase or additional time of
purchase, as the case may be, will deliver to you a certificate of two
of its executive officers to the effect that the representations and
warranties of TXI and the Trust set forth in this Agreement are true
and correct as of each such date and the conditions set forth in
Section 6(g) and Section 6(h) have been met.
(k) You shall have received a signed letter, dated the
date of this Agreement, from each of the shareholders listed in
Schedule B to the effect that such persons shall not offer, sell,
contract to sell, transfer or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into
or exchangeable for Common Stock or warrants or other rights to
purchase Common Stock for a period of 90 days from the date of the
Prospectus without the prior written consent of SBC Warburg Dillon
Read Inc.
(l) TXI shall have furnished to you such other documents
and certificates as you reasonably may request.
(m) The Trust and TXI shall have performed such of their
obligations under this Agreement as are to be performed by the terms
hereof at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
(n) The Securities shall have been approved for listing
on the New York Stock Exchange subject top official notice of
issuance.
7. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective (i) if Rule
430A under the Act is not used, when you shall have received
notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have
executed and delivered this Agreement.
(b) The obligations of the several Underwriters hereunder
shall be subject to termination in the absolute discretion of you or
any group of Underwriters (which may include you) which has agreed to
purchase in the aggregate at least 50% of the Firm Securities if, at
any time prior to the time of purchase or, with respect to the
purchase of any Additional Securities, the additional time of
purchase, as the case may be, trading in securities on the New York
Stock
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32
Exchange shall have been suspended or minimum prices shall have been
established on the New York Stock Exchange or if a banking moratorium
shall have been declared either by the United States or New York State
authorities, or if the United States shall have declared war in
accordance with its constitutional processes or there shall have
occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis of such magnitude in its
effect on, or any material adverse change in, any U.S. or
international financial market which, in each case, in your judgment
or in the judgment of such group of Underwriters, makes it
impracticable to market the Securities. If you or any group of
Underwriters elect to terminate this Agreement as provided in this
Section 7(b), the Trust, TXI and each other Underwriter shall be
notified promptly by letter or telegram.
(c) If any Underwriter shall default in its obligation to
take up and pay for the Firm Securities to be purchased by it
hereunder and if the number of Firm Securities which all Underwriters
so defaulting shall have agreed but failed to take up and pay for does
not exceed 10% of the total number of Firm Securities, the
non-defaulting Underwriters shall take up and pay for (in addition to
the aggregate principal amount of Firm Securities they are obligated
to purchase pursuant to Section 1) the number of Firm Securities
agreed to be purchased by all such defaulting Underwriters as
hereinafter provided. Such Securities shall be taken up and paid for
by such non-defaulting Underwriter or Underwriters in such amount or
amounts as you may designate with the consent of each Underwriter so
designated or, in the event no such designation is made, such
Securities shall be taken up and paid for by all non-defaulting
Underwriters pro rata in proportion to the aggregate number of Firm
Securities set opposite the names of such non-defaulting Underwriters
in Schedule A.
(d) If any Underwriter shall default in its obligation to
take up and pay for the Firm Securities to be purchased by it
hereunder and if the number of Firm Securities which all Underwriters
so defaulting shall have agreed but failed to take up and pay for
exceeds 10% of the total number of Firm Securities, and arrangements
satisfactory to you, the Trust and TXI are not made within 48 hours
after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter.
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33
(e) Without relieving any defaulting Underwriter from its
obligations hereunder, the Trust and TXI agree with the non-defaulting
Underwriters that the Trust will not sell any Firm Securities
hereunder unless all of the Firm Securities are purchased by the
Underwriters (or by substituted underwriters selected by you with the
approval of the Trust and TXI or selected by the Trust and TXI with
your approval pursuant to Section 7(d)). If a new Underwriter or
Underwriters are substituted for a defaulting Underwriter or
Underwriters in accordance with Section 7(d), the Trust and TXI or you
shall have the right to postpone the time of purchase for a period not
exceeding five business days in order that any necessary change in the
Registration Statement and the Prospectus and other documents may be
effected. The term Underwriter as used in this Agreement shall refer
to and include any Underwriter substituted under this Section 7 with
like effect as if such substituted Underwriter had originally been
named in Schedule A.
(f) If the purchase of the Securities by the
Underwriters, as contemplated by this Agreement, is not consummated
for any reason permitted under this Agreement or if such purchase is
not consummated because the Trust and TXI shall be unable to comply
with any of the terms of this Agreement, the Trust and TXI shall not
be under any obligation or liability under this Agreement (except to
the extent provided in Sections 4(l), 5 and 8), and the Underwriters
shall be under no obligation or liability to the Trust or TXI under
this Agreement (except to the extent provided in Section 8).
8. Indemnity by the Trust and TXI and the
Underwriters.
(a) The Trust and TXI, jointly and severally, agree to
indemnify, defend and hold harmless each Underwriter, each person that
controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, and each Underwriter's agents,
employees, officers and directors and the agents, employees, officers
and directors of any such controlling person (collectively, the
"Underwriter indemnified parties") from and against any and all
losses, claims, damages, judgments, liabilities and expenses
(including the fees and expenses of counsel and other expenses in
connection with investigating, defending or settling any such action
or claim) which, jointly or severally, any Underwriter indemnified
party may incur as they are incurred (and regardless of whether such
Underwriter indemnified party is a party to the litigation,
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if any) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the registration
statement relating to the Securities or the Prospectus or any
Preliminary Prospectus, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, judgments,
liabilities or expenses arise out of, or are based upon, any such
untrue statement or omission or alleged untrue statement or omission
based upon and in conformity with information with respect to any
Underwriter furnished in writing by any Underwriter through you to the
Trust and TXI expressly for use therein with reference to such
Underwriter. This indemnity agreement will be in addition to any
liability the Trust or TXI otherwise may have.
(b) If any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be
brought or asserted against any Underwriter indemnified party, with
respect to which indemnity may be sought against the Trust or TXI
pursuant to this Section 8, such Underwriter indemnified party shall
promptly notify the Trust and TXI in writing, and the Trust and TXI
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Underwriter indemnified party and
payment of all fees and expenses; provided that the omission so to
notify the Trust or TXI shall not relieve it from any liability that
it may have to any Underwriter indemnified party under this Section 8,
unless the failure to give such notice materially prejudices the
Trust's or TXI's ability to defend such action or proceeding. An
Underwriter indemnified party shall have the right to employ separate
counsel in any such action or proceeding and to assume the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter indemnified party unless (i) the
employment of such counsel has been authorized in writing by the Trust
or TXI, (ii) the Trust or TXI has failed promptly to assume the
defense and employ counsel satisfactory to the Underwriter indemnified
party or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both the Underwriter
indemnified party and the Trust and TXI and such Underwriter
indemnified party shall have reasonably concluded that there may be
one or more legal defenses available to it that are different from or
additional to those available to the Trust or TXI (in which case
neither the Trust nor TXI shall not have the right to assume the
defense of such action on behalf of such Underwriter
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35
indemnified party), in any of which events such fees and expenses
shall be borne by the Trust and TXI and reimbursed as they are
incurred. It is understood, however, that the Trust and TXI shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriter indemnified parties, which firm shall be designated in
writing by SBC Warburg Dillon Read Inc., and that all such fees and
expenses shall be reimbursed as they are incurred. The Trust and TXI
shall not be liable for any settlement of any such action effected
without the written consent of the Trust or TXI (which consent shall
not be unreasonably withheld or delayed), but if settled with the
written consent of the Trust or TXI , or if there is a final judgment
with respect thereto, the Trust and TXI agree to indemnify and hold
harmless each Underwriter indemnified party from and against any loss
or liability by reason of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify,
defend and hold harmless the Trust and TXI, their respective directors
and trustees, their officers who sign the Registration Statement, and
any person that controls the Trust and TXI within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (collectively,
the "TXI indemnified parties") to the same extent as the foregoing
indemnity from the Trust and TXI to the Underwriter indemnified
parties, but only with respect to information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Trust and TXI expressly for use with respect to
such Underwriter in the Registration Statement, any Preliminary
Prospectus or the Prospectus. In case any action shall be brought
against any TXI indemnified party based on the Registration Statement,
any Preliminary Prospectus or the Prospectus and in respect of which
indemnity may be sought against any Underwriter pursuant to this
Section 8(c), such Underwriter shall have the rights and duties given
to the Trust and TXI by Section 8(b) (except that if the Trust and TXI
shall have assumed the defense thereof such Underwriter shall not be
required to do so, but may employ separate counsel therein and
participate in the defense thereof, provided that the fees and
expenses of such separate counsel shall be at the expense of such
Underwriter, except as provided in Section 8(b)), and the TXI
indemnified parties shall have the rights
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and duties given to the Underwriter indemnified parties by Section
8(b).
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless any Underwriter
indemnified party or any TXI indemnified party, then the party
required to indemnify such indemnified party under this Section 8, in
lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages, judgments, liabilities and expenses (i) in
such proportion as is appropriate to reflect the relative benefits
received by the Trust and TXI on the one hand and the Underwriters on
the other hand from the offering of the Securities, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the
relative fault of the Trust and TXI on the one hand and the
Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Trust and TXI on the one hand
and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Trust bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault of
the Trust and TXI on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether
the untrue statement or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Trust or TXI or by the Underwriters and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, claims,
damages, judgments, liabilities and expenses referred to above shall
be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending
any claim or action.
The Trust and TXI and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation or
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37
by any other method of allocation (even if the Underwriters were
treated as one entity for such purpose) that does not take account of
the equitable considerations referred to in this Section 8(d).
Notwithstanding the provisions of this Section 8(d), no Underwriter
indemnified party shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities
underwritten by such Underwriter indemnified party and distributed to
the public were offered to the public exceeds the amount of any
damages which such Underwriter indemnified party otherwise has been
required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 8 are several in
proportion to their respective underwriting commitments and are not
joint.
The statements under the caption "Underwriting" and the legend
on page two in the Prospectus (to the extent such statements relate to
an Underwriter) constitute the only information furnished to the Trust
and TXI in writing by such Underwriter expressly for use in the
Registration Statement, any Preliminary Prospectus or the Prospectus.
(e) The indemnity and contribution agreements contained
in this Section 8 and the representations, warranties and covenants of
the Trust and TXI contained in this Agreement shall remain in full
force and effect, regardless of any investigation made by or on behalf
of any Underwriter indemnified party or by or on behalf of any TXI
indemnified party, and shall survive any termination of this Agreement
or the issuance and delivery of the Securities. Subject to the
provisions of Section 8(b) and Section 8(c), the Trust and TXI and
each Underwriter agree promptly to notify the other of the
commencement of any litigation or proceeding against it in connection
with the issuance and sale of the Securities or in connection with the
Registration Statement or the Prospectus.
9. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered
or sent to SBC Warburg Dillon Read Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Syndicate Department; and if to TXI , shall be sufficient in
all respects if delivered or sent to TXI at the
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offices of TXI at 0000 Xxxx Xxxxxxxxxxx Xxxx, Xxxxxx, Xxxxx 00000-0000,
Attention: Xxxxxx X. Xxxxx; and if to the Trust, shall be sufficient in all
respects if delivered or sent to TXI Capital Trust I, c/o Texas Industries,
Inc., 0000 Xxxx Xxxxxxxxxxx Xxxx, Xxxxxx, Xxxxx 00000-0000, Attention:
Administrative Trustees.
10. Construction. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS
AGREEMENT HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE
NOT A PART OF THIS AGREEMENT.
11. Parties at Interest. The Agreement herein set forth
has been and is made solely for the benefit of the Underwriters, the Trust,
TXI, the Underwriter indemnified parties and the TXI indemnified parties, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
12. Counterparts. This Agreement may be signed by the
parties in counterparts which together shall constitute one and the same
agreement among the parties.
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If the foregoing correctly sets forth the understanding among
the Trust, TXI and the Underwriters, please so indicate in the space provided
below for such purpose, whereupon this letter and your acceptance shall
constitute a binding agreement among the Trust, TXI and the Underwriters,
severally.
Very truly yours,
TEXAS INDUSTRIES, INC.
By:
-------------------------------------
Name:
Title:
TXI CAPITAL TRUST I
By:
-------------------------------------
Name:
Title:
TXI CAPITAL TRUST I
By:
-------------------------------------
Name:
Title:
TXI CAPITAL TRUST I
By:
-------------------------------------
Name:
Title:
Accepted and agreed to as of
the date first above written,
on behalf of themselves,
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated,
Xxxxxx Xxxxxxx & Co. Incorporated
and the other several
Underwriters named in
Schedule A
SBC WARBURG DILLON READ INC., as
Managing Underwriter
By:
-------------------------------------
Name:
Title:
40
SCHEDULE A
Number of
Underwriter Firm Securities
----------- ---------------
Xxxxxx, Read & Co. Inc . . . . . . . . . . .
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated. . .
Xxxxxx Xxxxxxx & Co. Incorporated
___________
Total
============
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SCHEDULE B
SHAREHOLDERS WHO HAVE EXECUTED LOCK-UP AGREEMENTS
