EXHIBIT 1.1
NVR, INC.
8% SENIOR NOTES DUE 2005
UNDERWRITING AGREEMENT
April 8, 1998
Xxxxxxx Xxxxx Xxxxxx
Xxxxxxx Brothers Inc
Credit Suisse First Boston
Friedman, Billings, Xxxxxx & Co., Inc.
c/o Salomon Brothers Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
NVR, Inc., a Delaware corporation (the "Company"), proposes to sell to the
several underwriters named in Schedule I hereto (the "Underwriters"), for whom
you (the "Representatives") are acting as representatives, $145,000,000
principal amount of its 8% Senior Notes due 2005 (the "Notes"), to be issued
under an indenture (including any supplemental indenture to be entered into in
respect of the Notes, the "Indenture") to be dated as of April 14, 1998, between
the Company, NVR Homes, Inc. (the "Subsidiary Guarantor") and The Bank of New
York, as trustee (the "Trustee"). The Notes are to be unconditionally guaranteed
(the "Subsidiary Guarantee") as to the due and punctual payment of the principal
of and interest on and all other amounts due and payable on the Notes by the
Subsidiary Guarantor. As used herein, the term "Securities" shall mean the Notes
and the Subsidiary Guarantee, and the term "Issuers" shall mean the Company and
the Subsidiary Guarantor. To the extent there are no additional Underwriters
listed on Schedule I other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires. Any reference
herein to the "Registration Statement," a "Preliminary Prospectus" or the
"Prospectus" shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of the Registration Statement or
the issue date of such Preliminary Prospectus or the Prospectus, as the case may
be; and any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration Statement,
or the issue date of any Preliminary Prospectus or the Prospectus, as the case
may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof.
1. Representations and Warranties. The Issuers represent and warrant to,
and agree with, each Underwriter as set forth below in this Section 1.
(a) Each Issuer meets the requirements for use of Form S-3 under the Act
and has prepared and filed with the Commission a registration statement (file
number 333-44515) on Form S-3, including the related Prospectus for the
registration under the Act of the offering and sale of the Securities and the
Preliminary Prospectus for the offer and sale of the Securities, each of which
has previously been furnished to you. The Registration Statement was declared
effective by the Commission on February 27, 1998. The Issuers will file with the
Commission a final Prospectus in accordance with Rules 415 and 424(b). As filed,
the Prospectus shall contain all Rule 430A Information, together with all other
such required information, and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest Preliminary
Prospectus) as the Issuers have advised you, prior to the Execution Time, will
be included or made therein. If the Registration Statement contains the
undertaking specified by Regulation S-K Item 512(a), the Registration Statement,
at the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did, and when the
Prospectus is first filed (if required) in accordance with Rule 424(b) and on
the Closing Date, the Prospectus (and any supplements thereto) will, comply in
all material respects with the applicable requirements of the Act, the Exchange
Act and the Trust Indenture Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement did not or
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; at the Execution Time the Preliminary
Prospectus did not contain and the Prospectus will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; on the
Closing Date the Indenture will comply in all material respects with the
requirements of the Trust Indenture Act and the rules thereunder; on the date of
any filing pursuant to Rule 424(b) and on the Closing Date and any settlement
date, the Prospectus (together with any supplement thereto) will not include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the Issuers make
no representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of the Trustee or (ii) the information
contained in or omitted from the Registration Statement, or the Prospectus (or
any supplement thereto) in reliance upon and in conformity with information
furnished herein or in writing to the Issuers by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(c) Each of the Issuers and their respective subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the
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jurisdiction in which it is chartered or organized with all requisite corporate
power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such qualification, except in each
case as would not, singly or in the aggregate, have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or
properties of the Issuers and their subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business (a "Material
Adverse Effect"), except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto subsequent to the Execution Time, other
than the prospectus supplement with respect to the Securities first filed after
the Execution Time pursuant to Rule 424(b)).
(d) All the outstanding shares of capital stock of each of the Company's
significant subsidiaries, as defined in Rule 1-02 of Regulation S-X under the
Exchange Act (each a "Significant Subsidiary"), including the Subsidiary
Guarantor, have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of such subsidiaries (including the
Subsidiary Guarantor) are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any security interests, claims, liens or
encumbrances.
(e) The Company's authorized equity capitalization is as set forth in the
Prospectus.
(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as required. The
statements in the Prospectus under the headings "Description of Notes,"
"Description of Debt Securities" and "Plan of Distribution" are accurate in all
material respects.
(g) This Agreement has been duly authorized, executed and delivered by each
Issuer and constitutes a valid and binding obligation of each Issuer enforceable
against each Issuer in accordance with its terms, except as may be limited by
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights and except as may be limited by the exercise of judicial
discretion in applying general principles of equity (regardless of whether the
matter is considered in a proceeding in equity or at law).
(h) The Notes have been duly and validly authorized by the Company and,
when issued and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by you in accordance with the terms hereof and the
Indenture, will conform to the description thereof in the Prospectus in all
material respects, and will be the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as may be
limited by bankruptcy, reorganization, insolvency, moratorium, or other laws
affecting creditors' rights, and except as may be limited by the exercise of
judicial discretion in applying general principles of equity (regardless of
whether the matter is considered in a proceeding in equity or at law).
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(i) The Indenture has been duly authorized by each Issuer, and when duly
executed and delivered by each Issuer (assuming the due execution and delivery
thereof by the Trustee), will be a valid and binding obligation of each Issuer
enforceable against each of them in accordance with its terms, except as may be
limited by bankruptcy, reorganization, insolvency, moratorium, or other laws
affecting creditors' rights, and except as may be limited by the exercise of
judicial discretion in applying general principles of equity (regardless of
whether the matter is considered in a proceeding in equity or at law).
(j) The Subsidiary Guarantee has been duly authorized by the Subsidiary
Guarantor and, when issued and delivered against payment for the Notes in
accordance with the terms hereof and the Indenture, will conform to the
description thereof in the Prospectus in all material respects, and will be the
valid and binding obligation of the Subsidiary Guarantor, enforceable against
the Subsidiary Guarantor in accordance with its terms, except as may be limited
by bankruptcy, reorganization, insolvency, moratorium, or other laws affecting
creditors' rights, and except as may be limited by the exercise of judicial
discretion in applying general principles of equity (regardless of whether the
matter is considered in a proceeding in equity or at law).
(k) Neither of the Issuers nor their respective subsidiaries is and, after
giving effect to the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, neither of the Issuers nor
any of their respective subsidiaries will be an "investment company" as defined
in the Investment Company Act of 1940, as amended.
(l) No consent, approval, authorization, filing with or order of any court
or governmental agency or body is required in connection with the transactions
contemplated herein, except such as have been obtained under the Act and such as
may be required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters in the
manner contemplated herein and in the Prospectus (as supplemented to the date
hereof).
(m) Neither the issue and sale of the Securities nor the consummation of
any other of the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or violation or imposition
of any lien, charge or encumbrance upon any property or assets of either Issuer
or any of their subsidiaries pursuant to, (i) the charter or by-laws of the
Issuers or any of their subsidiaries, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which either Issuer
or any of their subsidiaries is a party or bound or to which its or their
property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to either Issuer or any of their subsidiaries of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over either Issuer or any of their
subsidiaries or any of their properties, except, in the case of clause (ii) or
(iii), as would not, singly or in the aggregate, have a Material Adverse Effect.
The use of proceeds of the Securities as described in the section entitled "Use
of Proceeds" in the Prospectus will comply with the terms of (and will not
constitute a default under any of the documents described in clause (ii)
above)).
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(n) No holders of securities of either Issuer has rights to the
registration of such securities under the Registration Statement.
(o) The consolidated historical financial statements of the Company and its
consolidated subsidiaries and the consolidated historical financial statements
of the Subsidiary Guarantor and its consolidated subsidiaries included or
incorporated by reference in the Prospectus and the Registration Statement
present fairly in all material respects the consolidated financial condition,
results of operations and cash flows of the Company and its consolidated
subsidiaries and the Subsidiary Guarantor and its consolidated subsidiaries,
respectively, as of the dates and for the periods indicated, and comply in all
material respects as to form with the applicable accounting requirements of the
Act and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved (except
as otherwise noted therein). The selected financial data set forth under the
caption "Summary Financial and Other Data" in the Prospectus and incorporated by
reference in the Prospectus under the caption "Selected Financial Data" from the
Company's Form 10-K filed under the Exchange Act for the year ended December 31,
1997, fairly present, on the basis stated therein, the information included
therein.
(p) No action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving either Issuer or any of
their subsidiaries or their property is pending or, to the best knowledge of
either Issuer, threatened that (i) could reasonably be expected to have a
material adverse effect on either Issuer's performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii) could
reasonably be expected to have a Material Adverse Effect.
(q) Each of the Issuers and each of their subsidiaries owns or leases all
such properties as are necessary to the conduct of its operations as presently
conducted, except as would not have a Material Adverse Effect.
(r) Neither the Issuers nor any of their subsidiaries is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject, or (iii) any
statute, law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Issuers or such subsidiary or any of its
properties, as applicable, except, in the case of clause (ii) or (iii), as would
not, singly or in the aggregate, have a Material Adverse Effect.
(s) KPMG Peat Marwick, who have certified certain financial statements of
the Company and its consolidated subsidiaries (including the Subsidiary
Guarantor) and delivered their report with respect to the audited consolidated
financial statements included in the Prospectus, are independent public
accountants with respect to the Issuers and their consolidated subsidiaries
within the meaning of the Act and the applicable published rules and regulations
thereunder.
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(t) There are no material transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery of
this Agreement or the issuance by either Issuer or sale by either Issuer of the
Securities.
(u) Each Issuer has filed all foreign, federal, state and local tax returns
that are required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not have a Material Adverse Effect)
and has paid all taxes required to be paid by it and any other assessment, fine
or penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material Adverse Effect.
(v) No labor problem or dispute with the employees of either Issuer or any
of their subsidiaries exists or is threatened or imminent, and neither Issuer is
aware of any existing or imminent labor disturbance by the employees of any of
its or its subsidiaries' principal suppliers, contractors or customers, that, in
either case, that could reasonably be expected to have a Material Adverse
Effect.
(w) Each Issuer and each of their subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; all policies of insurance and fidelity or surety bonds insuring each
Issuer or any of their subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; each Issuer and
their subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and neither of the Issuers nor any of
their subsidiaries has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
(x) Except as described in or contemplated by the Prospectus (including the
carve-outs set forth in the covenant set forth under "Description of Notes--
Certain Covenants--Limitations on Restrictions Affecting Restricted
Subsidiaries"), no Restricted Subsidiary (as defined in the Prospectus) of the
Company is currently materially restricted, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary of the
Company, in any case, to any extent that the Company deems necessary.
(y) Each Issuer and each of their subsidiaries possesses all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither Issuer nor any of their subsidiaries has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit, which, in either case, singly or
in the aggregate, either through failure to possess such certificate,
authorization or permit or
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through such certificates, authorizations or permits being the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(z) Each Issuer and each of their subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that, in
all material respects, (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(aa) Neither Issuer has taken, directly or indirectly, any action designed
to or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of the Issuers to facilitate the sale or resale of the
Securities.
(bb) Except as would not, singly or in the aggregate, have a Material
Adverse Effect, each Issuer and each of their subsidiaries is (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) has received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) has not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants. Except as set forth in the Prospectus,
neither of the Issuers nor any of their subsidiaries has been named as a
"potentially responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(cc) Each Issuer and each of their subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx xxx
Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to each "plan"
(as defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of either Issuer or their subsidiaries are
eligible to participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such regulations
and published interpretations. The Issuers and their subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.
(dd) Each Issuer and each of their subsidiaries owns, possesses, licenses
or has other rights to use, on reasonable terms, all material patents, patent
applications, trade and service marks, trade and service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets, technology, know-
how and other intellectual property (collectively, the "Intellectual Property")
necessary for the conduct their respective business as now conducted or
7
as proposed in the Prospectus to be conducted, subject to such limitations on
the use of such Intellectual Property that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
(ee) Neither Issuer intends to, nor does such Issuer believe that it will,
incur debts beyond its ability to pay such debts as they mature. Neither Issuer
will permit its Significant Subsidiaries to incur debts beyond such
subsidiaries' ability to pay such debts as they mature. Upon the issuance of the
Notes, the present and salable value of the assets of the Company and its
subsidiaries will exceed the amount that will be required to be paid on or in
respect of its existing debts and other liabilities (including contingent
liabilities) as they become absolute and matured. The assets of the Company and
its subsidiaries, upon the issuance of the Notes, will not constitute
unreasonably small capital to carry out its business as now conducted, taking
into account the projected capital requirements and capital availability of the
Company and its subsidiaries. The assets of the Subsidiary Guarantor, upon the
issuance of the Subsidiary Guarantee, will not constitute unreasonably small
capital to carry out its business as now conducted, taking into account the
projected capital requirements and capital availability of the Subsidiary
Guarantor.
(ff) Neither Issuer nor any of their subsidiaries or any agent thereof
acting on the behalf of any of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Securities
to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System.
(gg) 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 the rules and regulations of the Commission
under the Exchange Act.
(hh) Except as disclosed in the Prospectus, neither Issuer, to its
knowledge, (i) has any material lending or other relationship with any bank or
lending affiliate of Xxxxxxx Xxxxx Barney Holdings Inc., Credit Suisse First
Boston Corporation, or Friedman, Billings, Xxxxxx & Co., Inc. nor (ii) intends
to use any of the proceeds from the sale of the Securities hereunder to repay
any outstanding debt owed to any affiliate of Xxxxxxx Xxxxx Barney Holdings
Inc., Credit Suisse First Boston Corporation, or Friedman, Billings, Xxxxxx &
Co., Inc.
(ii) Except as described in the Prospectus, each Issuer is in compliance
with the Commission's staff legal bulletin No. 5 dated October 8, 1997 related
to Year 2000 compliance.
(jj) Any certificate signed by any officer of an Issuer and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by such
Issuer, as to matters covered thereby, to each Underwriter.
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2. Purchase and Sale; Underwriting Compensation. The Company agrees to sell
to each Underwriter, and each Underwriter agrees, subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, severally and not jointly, to purchase from the Company, at a purchase
price (the "Purchase Price") of 98.75% of the principal amount thereof, the
principal amount of the Notes set forth opposite such Underwriter's name in
Schedule I hereto. The Company agrees to pay to each Underwriter underwriting
discounts and commissions equal to 1.25% of the principal amount of the Notes
set forth opposite such Underwriter's name in Schedule I hereto (the
"Underwriting Compensation").
3. Delivery and Payment. Delivery of and payment for the Securities and
payment of the Underwriting Compensation shall be made at 10:00 AM, New York
City time, on April 14, 1998, or at such time on such later date not more than
three Business Days after the foregoing date as the Representatives shall
designate, which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities, and payment of the Underwriting
Compensation, shall be made to the Representatives for the respective accounts
of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof by wire transfer in same day
funds. Delivery of the Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Securities for sale to the public from time to time in one
or more negotiated transactions, or otherwise, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices, as set forth in the Prospectus as supplemented to the
Execution Time.
5. Agreements. Each Issuer agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Issuers
will not file any amendment of the Registration Statement or supplement to the
Prospectus or any Rule 462(b) Registration Statement unless the Issuers have
furnished you a copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the filing of the Prospectus is required under Rule
424(b), the Issuers will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Representatives of such timely filing. The Issuers
will promptly advise the Representatives when the Prospectus, and any supplement
thereto, shall have been filed (if required) with the Commission pursuant to
Rule 429(b) or when any Rule 462(b) Registration Statement shall have been filed
with the Commission, (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been filed or
become effective, (4) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional
information, (5) of the issuance by the Commission of any stop order suspending
the
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effectiveness of the Registration Statement or the institution or threatening of
any proceeding for that purpose and (6) of the receipt by the Issuers of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. Each Issuer will use its reasonable best efforts to
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the Exchange
Act or the respective rules thereunder, the Issuers promptly will (1) notify the
Representatives of such event; (2) prepare and file with the Commission, subject
to the second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance; and (3) supply any supplemented Prospectus to you in such quantities
as you may reasonably request.
(c) As soon as practicable, the Company will make generally available to
its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Issuers will furnish to the Representatives and counsel for the
Underwriters, without charge and upon request, conformed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits thereto), as
filed pursuant to XXXXX, and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of each
Preliminary Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request. The Issuers will pay the expenses of
printing or other production of all documents relating to the offering.
(e) The Issuers will arrange, if necessary, for the qualification of the
Securities for sale under the laws of such jurisdictions as the Representatives
may designate, will maintain such qualifications in effect so long as required
for the distribution of the Securities and will pay any fee of the National
Association of Securities Dealers, Inc., in connection with its review of the
offering; provided that in no event shall the Issuers be obligated to do
business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities in any jurisdiction where
it is not now so subject.
(f) Neither Issuer will, without the prior written consent of Xxxxxxx Xxxxx
Barney, for a period of 90 days following the Execution Time, offer, sell or
contract to sell, or otherwise dispose of (or enter into any transaction which
is designed to, or might reasonably be
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expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by either
Issuer or any affiliate of either Issuer (or any person in privity with either
Issuer or any affiliate of either Issuer), directly or indirectly, or announce
the offering of any debt securities issued or guaranteed by either Issuer (other
than the Securities, and up to an additional $30 million of 8% Senior Notes due
2005 of NVR, Inc. (with the related guarantee) issued under the Indenture and
any Indebtedness incurred pursuant to any revolving credit agreement to which
such Issuer is a party or becomes a party as contemplated in the Prospectus).
(g) Neither Issuer will take, directly or indirectly, any action designed
to or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of either Issuer or their subsidiaries to facilitate
the sale or resale of the Securities.
(h) The Issuers will use the proceeds of the Securities as described in the
section entitled "Use of Proceeds" in the Prospectus.
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Securities shall be subject to the accuracy of
the representations and warranties on the part of each Issuer contained herein
as of the Execution Time and the Closing Date, to the accuracy of the statements
of each Issuer made in any certificates pursuant to the provisions hereof, to
the performance by each Issuer of their obligations hereunder and to the
following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, will have been
filed in the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) On the Closing Date the Representatives shall have received the opinion
of Xxxxx & Xxxxxxx L.L.P., counsel for the Issuers, dated the date of its
delivery, addressed to the Representatives, and in form and substance
satisfactory to counsel to the Underwriters, substantially to the effect that,
on the Closing Date:
(i) The Company was incorporated and is validly existing and in good
standing under the laws of the Commonwealth of Virginia as of the date of the
certificate specified in the opinion. The Subsidiary Guarantor was incorporated
and is validly existing and in good standing under the laws of its jurisdiction
of incorporation or organization as of the date of the certificate specified in
the opinion. RVN, Inc. was duly incorporated and is validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization as
of the date of the certificate specified in the opinion. Based solely on
certificates of public officials, each Issuer is qualified as a foreign
corporation and is in good standing in the respective jurisdictions and as of
the dates set forth on Schedule I to such opinion. Each Issuer has the corporate
power and corporate authority under the Virginia Stock Corporation Act and
11
under its articles of incorporation to own or lease its properties and to
transact the business in which it is currently engaged as described in the
Registration Statement and the Prospectus.
(ii) The authorized capital stock of the Company as of December 31,
1997 was set forth in the Capitalization table in the Prospectus. All shares of
common stock of the Company shown as issued and outstanding in such table are
duly authorized and, assuming receipt of consideration therefor as provided in
the resolutions authorizing issuance thereof of the board of directors of the
Company, are validly issued, fully paid and nonassessable under the Virginia
Stock Corporation Act, and were not issued in violation of or subject to any
preemptive or, to such counsel's knowledge, similar rights that would entitle
any person to acquire shares of the Company upon the issuance thereof. The
issued and outstanding capital stock of the Subsidiary Guarantor, and each other
Significant Subsidiary, has been duly authorized and, assuming receipt of
consideration therefor as provided in the resolutions authorizing issuance
thereof of the board of directors of the Subsidiary Guarantor or such
subsidiary, is validly issued, fully paid and nonassessable under the
corporation law of its jurisdiction of incorporation, was not issued in
violation of or subject to any preemptive rights and is owned of record by the
Company or a subsidiary of the Company, to the knowledge of such counsel, except
as described in the Prospectus, and, based solely on the stock records of the
Subsidiary Guarantor and such subsidiaries, there are no outstanding rights,
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interests, of the Subsidiary
Guarantor and such subsidiaries, except as described in the Registration
Statement or the Prospectus.
(iii) The Notes have been duly authorized by the Company and, when
duly executed and authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the Underwriters in accordance with this
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as may be
limited by bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights (including, without limitation, the effect of
statutory and other laws regarding fraudulent conveyances, fraudulent transfers
and preferential transfers) and as may be limited by the exercise of judicial
discretion in applying general principles of equity, including, without
limitation, requirements of good faith, fair dealing, conscionability and
materiality (regardless of whether the matter is considered in a proceeding in
equity or at law). The Notes conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus under the
captions "Prospectus Supplement Summary - The Offering" and "Description of
Notes."
(iv) The Subsidiary Guarantee of the Subsidiary Guarantor has been
duly authorized by the Subsidiary Guarantor and, when duly executed and
delivered against payment for the Notes in accordance with the terms of this
Agreement and the Indenture, will constitute valid and binding obligations of
the Subsidiary Guarantor enforceable against the Subsidiary Guarantor in
accordance with its terms, except as may be limited by bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
(including, without limitation, the effect of statutory and other laws regarding
fraudulent conveyances, fraudulent transfers and preferential transfers) may be
limited by the exercise of judicial
12
discretion and the application of general principles of equity, including,
without limitation, requirements of good faith, fair dealing, conscionability
and materiality (regardless of whether the matter is considered in a proceeding
in equity or at law). The Subsidiary Guarantee conforms in all material respects
to the description thereof contained in the Registration Statement and the
Prospectus under the captions "Prospectus Supplement Summary - The Offering" and
"Description of Notes."
(v) This Agreement has been duly authorized, executed and delivered by
each Issuer.
(vi) The Indenture has been duly authorized, executed and delivered by
each Issuer, and (assuming due authorization, execution and delivery by the
Trustee) constitutes a valid and binding obligation of each Issuer, enforceable
against each Issuer in accordance with its terms, except as may be limited by
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights (including, without limitation, the effect of statutory and
other laws regarding fraudulent conveyances, fraudulent transfers and
preferential transfers) may be limited by the exercise of judicial discretion
and the application of general principles of equity, including, without
limitation, requirements of good faith, fair dealing, conscionability and
materiality (regardless of whether the matter is considered in a proceeding in
equity or at law). The Indenture conforms in all material respects to the
description thereof contained in the Registration Statement and the Prospectus
under the captions "Prospectus Supplement Summary - The Offering" and
"Description of Notes."
(vii) The Indenture has been duly qualified under the Trust Indenture
Act.
(viii) Each Issuer has the corporate power and corporate authority
under the corporation law of the jurisdiction of its incorporation, and under
its articles of incorporation and by-laws to execute, deliver and perform as of
the date hereof its obligations under this Agreement and the Indenture.
(ix) Neither Issuer may avail itself, by way of defense or otherwise,
of any of the provisions of the Code of Virginia relating to usury to avoid or
defeat its payment obligations pursuant to and in accordance with the terms of
the Notes and the Indenture.
(x) The execution, delivery and performance, as of the Closing Date,
by each Issuer of this Agreement, the Indenture and of the Securities, and the
consummation of the transactions contemplated thereby, do not, as to each such
party, (A) constitute a breach of any of the terms or provisions or constitute a
default (or an event which with notice or lapse of time, or both, would
constitute a default) under any agreement filed as an exhibit to the Annual
Report on Form 10-K of the Company for the fiscal year ended December 31, 1997,
(B) violate any provision of its articles of incorporation or by-laws, (C) to
the knowledge of such counsel, violate any applicable statutory law, rule,
regulation, order, judgment or decree of any court or any federal or State of
New York or Commonwealth of Virginia governmental or regulatory authority having
jurisdiction over either Issuer or any Significant Subsidiary of an Issuer or
any of their respective properties or assets, or (D) result in the creation or
imposition of any lien,
13
charge or encumbrance upon any property or assets of the Issuers or any
Significant Subsidiary of an Issuer pursuant to any agreement filed as an
exhibit to the Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, 1997. No consent or approval of, or registration or filing
with, any court or any federal or State of New York or Commonwealth of Virginia
governmental or regulatory authority having jurisdiction over either Issuer or
any Significant Subsidiary or any of their respective properties or assets is
required to be obtained or made in connection with the execution, delivery and
performance by each Issuer of this Agreement and the Indenture, the issuance,
sale and delivery of the Securities, or the performance of their respective
obligations to make all payments required under the Securities, except for (1)
such as may be required under state securities or Blue Sky laws and the Trust
Indenture Act in connection with the purchase and distribution of the Notes by
the Underwriters (as to which such counsel need express no opinion), and (2)
such as have been made or obtained.
(xi) The Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, complied as of their respective
effective or issue dates (except for the financial statements and supporting
schedules and other financial data included therein or omitted therefrom, and
the exhibits to the Registration Statement and the Statement of Eligibility of
the Trustee on Form T-1, as to which no opinion need be rendered), complied as
to form in all material respects with the requirements of the Act and the Trust
Indenture Act and the Regulations. The documents incorporated by reference in
the Prospectus (except for the financial statements and supporting schedules and
other financial data included therein or omitted therefrom, and the exhibits to
the Registration Statement and the Statement of Eligibility of the Trustee on
Form T-1, as to which no opinion need be rendered), at the time they were filed
with the Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
under the Exchange Act.
(xii) The Registration Statement has been declared effective under
the Act and any required filing of the Prospectus pursuant to Rule 424(b) and
the Act has been made in the manner and within the time period required
thereunder and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are threatened by the Commission.
(xiii) To the knowledge of such counsel, there are no holders of
securities of either Issuer who, by reason of the filing of the Registration
Statement under the Act or the execution by either Issuer of this Agreement,
have the right to request or demand that either Issuer register under the Act
securities held by them.
(xiv) Neither Issuer is an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
In addition, such counsel shall state that during the course of the
preparation of the Registration Statement and Prospectus they have participated
in conferences with officers and other representatives of the Issuers,
representatives of the independent certified public accountants of the Issuers,
and yourselves and your representatives and, although such
14
counsel has not undertaken to determine independently, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements in
the Registration Statement or the Prospectus, on the basis of the foregoing, no
facts have come to the attention of such counsel which cause them to believe
that (i) the Registration Statement at the time it 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, as of the date thereof or on the date of such opinion,
contained or contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no belief or opinion with respect to the
financial statements and supporting schedules and other financial data included
therein or omitted therefrom and the exhibits to the Registration Statement or
with respect to the Statement of Eligibility of the Trustee on Form T-1) or (ii)
there are any contracts or documents of a character required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or referred to therein or so
filed.
In rendering such opinions, such counsel may rely as to matters of
fact, to the extent they deem proper, without independent review or
investigation, on certificates of responsible officers and other representatives
of the Issuers and any material subsidiary of the Issuers, certificates of
public officials, and certificates or other records or documents of officers of
agencies or departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Issuers and their
respective subsidiaries, provided that copies of such statements or certificates
shall be delivered to counsel to the Underwriters.
The foregoing opinions may be rendered subject to such assumptions,
qualifications and exceptions as are reasonably acceptable to counsel to the
Underwriters, including, without limitation, an assumption that the Issuers
perform their obligations in accordance with this Agreement. In rendering such
opinions, such counsel may (i) set forth the scope of the investigation
conducted and (ii) state that such opinions are based as to matters of law on
the Federal laws of the United States, the laws of the Commonwealth of Virginia
and the laws of the State of New York and related regulations, it being
understood that such counsel shall not be deemed to be giving any opinion with
respect to the applicability or effect of any other laws, statutes, ordinances,
rules or regulations (such as state securities or "blue sky" laws).
(c) The Representatives shall have received from Xxxxxx & Xxxxxxx, counsel
for the Underwriters, such opinion or opinions, dated the Closing Date and
addressed to the Representatives, with respect to the issuance and sale of the
Securities, the Indenture, the Registration Statement, the Prospectus (together
with any supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass upon
such matters.
(d) Each Issuer shall have furnished to the Representatives a certificate
of such Issuer, signed by Xxxx Xxxxxxx, Chief Financial Officer, and Xxxxx
Xxxxxxx, Vice President and Controller, dated the Closing Date, to the effect
that the signers of such certificates have
15
carefully examined the Registration Statement, the Prospectus, any supplements
to the Prospectus and this Agreement and that:
(i) the representations and warranties of each Issuer in this
Agreement are true and correct in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date and each Issuer has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date;
(ii) to each Issuer's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or threatened; and
(iii) since the date of the most recent financial statements included
in the Prospectus (exclusive of any supplement thereto subsequent to the
Execution Time), there has been no material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties of either
Issuer or their subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto subsequent
to the Execution Time).
(e) At the Execution Time and at the Closing Date, KPMG Peat Marwick shall
have delivered a comfort letter to the Underwriters confirming that they are
independent accountants within the meaning of the Act and the Exchange Act and
the respective applicable published rules and regulations thereunder and giving
comfort on other data in the Prospectus, such letter being in form and substance
reasonably satisfactory to the Representatives and counsel to the Underwriters.
References to the Prospectus in this paragraph (e) include any supplement
thereto at the date of the letter.
(f) Subsequent to the Execution Time, there shall not have been (i) any
change or decrease specified in the letter or letters referred to in paragraph
(e) of this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
earnings, business or properties of the Issuers and their subsidiaries, taken as
a whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto subsequent to the Execution Time) the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the sole judgment of
the Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto subsequent to the
Execution Time).
(g) Subsequent to the Execution Time and prior to the Closing Date, there
shall not have been any decrease in the rating of any of either Issuer's debt
securities by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
16
(h) The Company shall have applied for listing of the Securities for
trading on the American Stock Exchange.
(i) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters here under may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered
at the office of Xxxxxx & Xxxxxxx, counsel for the Underwriters, at 0000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxxxxx, X.X. 00000, on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Issuers to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Underwriters, the Issuers will reimburse the Underwriters severally through
Xxxxxxx Xxxxx Barney on demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) Each Issuer jointly and
severally agrees to indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person who controls
any Underwriter or the QIU (as hereinafter defined) within the meaning of either
the Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement for the registration of the Securities as amended
through the Execution Time, or in any Preliminary Prospectus or the Prospectus,
or in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made (in the case of the Prospectus) not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action. In
addition, the Issuers hereby
17
confirm that at their request Credit Suisse First Boston has without
compensation acted as "qualified independent underwriter" (in such capacity, the
"QIU") within the meaning of Rule 2720 of the Conduct Rules of the National
Association of Securities Dealers, Inc. in connection with the offering of the
Notes. Each Issuer will jointly and severally indemnify and hold harmless the
QIU against any losses, claims, damages or liabilities, joint or several, to
which the QIU may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon the QIU's acting (or alleged failing to act) as such
"qualified independent underwriter" and will reimburse the QIU for any legal or
other expenses reasonably incurred by the QIU in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred.
(a) Notwithstanding the foregoing, the Issuers will not be liable in any
such case (I) to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Issuers by or on behalf of
any Underwriter through the Representatives specifically for inclusion therein
or (II) to any Underwriter with respect to any Preliminary Prospectus to the
extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Securities to a person as to
whom it shall be established in the related proceedings that there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
Prospectus (or of the Prospectus as then amended or supplemented if the Company
shall have furnished such Underwriter with such amendment or supplement thereto
prior to the written confirmation of such sale), if such delivery was required
by the Act, and such loss, claim, damage or liability results from an untrue
statement or omission of a material fact contained in such Preliminary
Prospectus that was completely corrected in the Prospectus (or of the Prospectus
as then amended or supplemented if the Issuers shall have furnished such
Underwriter with such amendment or supplement thereto prior to the written
confirmation of such sale) (it being understood that no Underwriter shall be
required to send or give any amendment or supplement to any document
incorporated by reference in any Preliminary Prospectus or the Prospectus to any
person in order to benefit from the indemnification provisions herein or
otherwise).
This indemnity agreement will be in addition to any liability which the
Issuers may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Issuers, each of their directors, each of their officers who
signed the Registration Statement, and each person who controls the Issuers
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Issuers by or on
behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Issuers acknowledge that (i) the statements set forth in
the last paragraph of the cover page regarding delivery of the Securities, (ii)
the legend in block capital letters on the inside of the cover page of the
Prospectus related to
18
stabilization, syndicate covering transactions and penalty bids and (iii) under
the heading "Underwriting," the sentences related to concessions and
reallowances, the paragraph related to stabilization, syndicate covering
transactions and penalty bids and the paragraph related to the "qualified
independent underwriter" any Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under this Section 8 unless and to the extent it did not otherwise
learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in this Section 8. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be satisfactory to
the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Issuers and the Underwriters severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Issuers and one or more of
19
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Issuers on the one hand and by the
Underwriters on the other from the offering of the Securities; provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Issuers and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Issuers and of the Underwriters in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Issuers shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Issuers on the
one hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Issuers and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), 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. For purposes of
this Section 8, each person who controls (within the meaning of either the Act
or the Exchange Act) an Underwriter and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls any Issuer within the meaning of
either the Act or the Exchange Act, each officer of an Issuer who shall have
signed the Registration Statement and each director of an Issuer shall have the
same rights to contribution as an Issuer, subject in each case to the applicable
terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Securities set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the
20
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a de fault by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Prospectus
or in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Issuers and any nondefaulting Underwriter for damages occasioned by
its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Issuers prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission, the American Stock Exchange or trading in securities generally on
the NYSE or the American Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on either of such Exchanges, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any out break or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto subsequent to the Execution
Time).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Issuers or
its officers and of the Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or the Issuers or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to the Xxxxxxx Xxxxx Xxxxxx General Counsel (fax no.: (212) 816-
7912) and confirmed to the General Counsel, Xxxxxxx Xxxxx Barney, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General Counsel; or, if
sent to the Company or the Guarantor, will be mailed, delivered or telefaxed to
(000) 000-0000 and confirmed to it at 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, XxXxxx,
XX 00000, Attention: Chief Financial Officer.
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
21
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or becomes effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean the preliminary prospectus supplement
and attached prospectus, each dated April 6, 1998, as filed with the
Commission pursuant to Rule 424(b) on April 6, 1998.
"Prospectus" shall mean the prospectus (including any related prospectus
supplement) relating to the Securities that is first filed pursuant to Rule
424(b) after the Execution Time.
"Registration Statement" shall mean the registration statement referred to
in paragraph l (a) above, including exhibits and financial statements, as
amended at the Execution Time and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes
effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as the
case may be. Such term shall include any Rule
22
430A In formation deemed to be included therein at the Effective Date as
provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration statement
and any amendments thereto filed pursuant to Rule 462(b) relating to the
offering covered by the initial registration statement.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Xxxxxxx Xxxxx Barney" shall mean Xxxxx Xxxxxx Inc. or Salomon Brothers
Inc. to the extent that any such party is a signatory to this Agreement.
23
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among each Issuer
and the several Underwriters.
Very truly yours,
NVR, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
NVR, HOMES, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
SALOMON BROTHERS INC.,
for itself and Credit Suisse First Boston
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.,
for itself
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
24
SCHEDULE I
----------
Principal Amount of Securities
Underwriters to be Purchased
------------ ----------------
Salomon Brothers Inc. $101,500,000
Credit Suisse First Boston 21,750,000
Friedman, Billings, Xxxxxx & Co., Inc. 21,750,000
Total: $145,000,000
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